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Education and Employment Legislation Committee - 10/10/2014

BORTHWICK, Ms Jessie, Acting Deputy Secretary, Higher Education Reform and Support, Department of Education

GRIEW, Mr Robert, Associate Secretary, Higher Education, Research and International, Department of Education

HART, Ms Virginia, Acting Group Manager, Research Funding and Policy, Department of Education

WARBURTON, Mr Mark, Acting Group Manager, Higher Education Funding and Implementation, Department of Education

CHAIR: Welcome. The Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given a reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy. It does not preclude questions asking for explanations of policy or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for that claim. The committee has your submission. I now invite each of you to make a short opening statement.

Mr Griew : We welcome the opportunity to appear. I want to make a few brief comments, not to restate our submission. The drivers for this reform are embedded in the Australian higher education sector, as they are in the higher education sectors of most advanced economies. The generational increase in the higher education participation rate since the Dawkins reforms has inevitable implications. The proportion of 25 to 34 year olds with a bachelor or higher degree has nearly tripled from 12.5 per cent, in 1991, to 36.8 per cent, in 2012. The latest surge in domestic bachelor enrolments since demand driven funding has seen a 27 per cent increase since 2008. This increase in the size of the system has made a huge contribution to economic growth, through both labour market and innovation impacts. The high resulting cost to taxpayers has been a challenge to governments, and I will return to this.

With close on 40 per cent of young adults going to university, compared to just over 10 per cent 20 years ago, the education challenge of responding to less-well-prepared students has increased significantly, with the need for better pathways. We need providers to innovate and diversify to respond to a more and more diverse population of students. This highlights the inequitable treatment of students choosing to study at a private or non-university institution. Some students will always want the education a research-intensive university can offer, but the student population we have now will also include those wanting a degree with a different emphasis. These reforms respond to this set of drivers.

We have watched the debate and would offer a number of comments. Universities refer to the inadequacy of public funding levels per student, and they refer to uncertainty and instability in their environment. Others deny this and point to increased overall government funding growth. The growth of the system at least partly explains this. Over time, inexorably increasing student numbers leads to funding increases, followed by savings measures. Universities want a funding system that rewards more than volume.

The sector has drawn attention to the increases and decreases associated with the introduction of the demand driven system. The uncapping of student places, together with the increased indexation system, the Higher Education Grants Index, is estimated to have increased Commonwealth Grants Scheme funding by $7.6 billion over the five years from 2013-14. Yet, successively from 2011-12 to 2013-14, savings measures totalling $6.6 billion over a series of four-year periods were announced in MYEFO and budget statements. Belinda Robinson from UA said yesterday that universities hold their breath every six months as these budget updates come out and they wait to see what is coming next. To be fair this is a phenomenon affecting many advanced economies, and the ups and downs of university funding have occurred under governments of different political parties here and in those other countries. This package aims for stability in university funding and sustainability of growth in participation.

The OECD has noted an increase in the share of private funding for tertiary education between 2000 and 2011 in more than three-quarters of the countries for which it has data. This indicates an international trend towards greater private share, for both fairness and sustainability reasons.

International evidence is that participation outcomes are not prejudiced so long as countries have good loan systems. Ours does. In the UK, fees increased substantially at many institutions in 2012—in our view partly because their reforms involved a capped increase. Our considered view is that fees here will not increase anywhere near the levels many commentators have talked about. We also think that caps, hard or soft, risk exactly this sort of perverse outcome. Even in the UK, which we would regard as an outlier in terms of fee increases, a complementary increase to the cap on student loans cushioned the impact for full-time students. There was only a single-year dip in accepted applications. It is considered that about half of this was caused by students in the previous year electing not to defer their studies for a gap year. Enrolments jumped back to their previous high one year later.

Interestingly, in the more than 40 university open days, expos and fair days that our staff have attended we found the most common question students asked about these reforms was to seek assurance that HECS still exists. This is worrying in terms of wrong messages getting out there but also reinforces the European Union report I just outlined, that loan schemes are essential.

Quite apart from rebalancing financing, this package also responds to a deregulatory policy direction that has been introduced in a number of stages—not all at once. Governments have come to accept the view that it is not necessary or desirable for bureaucrats to be looking over the shoulders of vice-chancellors and making decisions for them. This is not the first step on this journey. One could identify three progressive steps. The first was the introduction of a demand driven system for public universities. The second was the establishment of a strong national regulator in TEQSA, together with a review of the relevant standards. Now, third, we are embarking on the final step to open the demand driven system to sub-bachelor qualifications and all registered higher education providers, and to allow all of those providers to set a price on the qualifications they offer.

Quality depends on having strong regulators with clear focus on core tasks of registration and accreditation. With growth in recent years, we have no reason to expect large numbers of new market entrants, and we have a strong regulator in place. By 30 June 2014, 110—over 60 per cent—of TEQSA registered providers had undergone a regulatory process such as registration, re-registration or course accreditation. Quality also depends on informed consumers, and the focus on improving real information for students and potential students in this package will be powerful.

The stepwise deregulatory reform I have described has involved serial independent reviews by leaders of our sector. These have included Bradley, Lomax-Smith, Lee Dow, Braithwaite, Kemp and Norton, and the Commission of Audit. All have fed into the thinking behind this package. All have pointed towards deregulation in one way or another—opening this sector up with a demand driven system, letting in more providers and courses, or getting the regulator's scope and focus right—or they have focused on getting the structure of funding right, or they have made contributions in both broad areas.

Since the budget, all university vice-chancellors, peak bodies and many non-university higher education providers have been consulted—some multiple times. We have held 25 peak-body meetings and 13 national or state based group information sessions. The Quality, Deregulation and Information Working Group met four times. The Legislation and Finance Working Group met six times, and we have attended 45 university open days and tertiary skills career expos, reaching at least 8,000 people—mostly students.

We have been impressed by the unanimity of views in the sector. I have to make the observation that this is not usual. With one exception, universities have supported the core deregulatory direction and there is support for a number of individual measures in the package, including for example the funding of NCRIS and Future Fellows. There has also been a convergence of issues raised—and you have heard many of those and read them in submissions made to the committee.

Our secretary, Lisa Paul, made the point at estimates that this is in fact a complex, interacting and balanced package. Obviously, the committee may want to consider recommendations for change. There have been many views put and, as I said, some common themes. We would reiterate that it is also worth considering the implications, for the overall package, of changing particular elements. That said, the minister did commission the Dewar and Shergold groups. I have put some numbers here to the consultations. We have been consulting constantly for months now. The minister has been listening to the views put through all these processes, as he will, no doubt, to the recommendations of this committee.

Senator KIM CARR: Can I just go through to the development of the RIS. The covering letter to your submission, Mr Griew, talks about the department's role including drafting the regulatory impact statement. Did you in fact draft the whole lot—150 pages?

Mr Griew : We did contract some technical work to Ernst & Young, one of the big four consulting firms.

Senator KIM CARR: That is in section 6, is it?

Ms Borthwick : Cost-benefit analysis, yes.

Senator KIM CARR: How much of section 6 was actually written by Ernst & Young?

Ms Borthwick : In essence we drafted the whole report. We subcontracted some of the cost-benefit analysis to Ernst & Young.

Senator KIM CARR: Why did you do that?

Ms Borthwick : In order to do two things: (1) to provide the information in the time frame in which we were looking to deliver and (2) to get some outside and independent advice on those matters.

Senator KIM CARR: So you are now saying consultants provide you with independent advice?

Mr Griew : No; they provided us with expert advice.

Senator KIM CARR: The department did not have the capacity to provide the government with independent, expert advice?

Mr Griew : We absolutely do have the capacity to do that. In this case, the expertise that one of the other large accounting firms would have in technical cost-benefit analysis is a useful complement, especially in a tight time frame, to what we do.

Senator KIM CARR: How much did that cost?

Ms Borthwick : I would have to take that on notice.

Senator KIM CARR: How long did they have to provide this expert, independent advice?

Ms Borthwick : I think it was a matter of weeks, but I would have to check that as well.

Senator KIM CARR: Weeks? It was a detailed study then?

Ms Borthwick : It was a thorough analysis of the facts, yes.

Senator KIM CARR: And what did it cover? Cost-benefit across the entire university system in Australia? What exactly was the cost-benefit analysis that was undertaken in weeks?

Ms Borthwick : It was the economic benefit.

Mr Griew : And the benefit within the government's regulatory impact framework. It is a regulatory impact statement.

Senator KIM CARR: When was this RIS prepared?

Ms Borthwick : I will have to get the dates for you.

Mr Griew : In the period leading up to the introduction of the legislation. So it is an integral part of that process, as you would be aware.

Senator KIM CARR: I have a figure here of $79,000. How much was the Ernst & Young study?

Mr Griew : We have already taken that on notice.

Senator KIM CARR: Yes, I know, but how much do you think?

Mr Griew : We are not going to guess. We will take it on notice.

Senator KIM CARR: You do not have that?

Mr Griew : We do not have that figure with us.

Ms Borthwick : I do not have that figure with me, no.

Senator KIM CARR: The RIS appears to have been signed off in August 2014. Would that be fair?

Mr Griew : That would be right, yes. It would have been signed off just before the legislation was introduced.

Senator KIM CARR: The guidelines for cutting red tape—I always love these expressions—which are in themselves extensive, go to the question of when you should prepare these regulatory impact statements. It says here:

The earlier the better. Don't wait until your submission is due to go to Cabinet … Leaving it till last is not only bad process, it may result in bad policy outcomes or leave you open to unfavourable public scrutiny.

Mr Griew : Let us be clear: there are a number of stages of government consideration of policy proposals. The publication of the decision RIS is the last stage of the regulatory impact analysis stream of that. There are earlier consideration RISs—I forget the technical name of the first one—and these are included in the cabinet documentation. This is a RIS prepared for the public at the time of the legislation and the final decision. It would be a mistake to conclude from that that there was no analysis by cabinet.

Senator KIM CARR: Did Ernst and Young prepare their cost-benefit analysis for the cabinet process or was it for this process?

Mr Griew : The work that they did, which was on the cost-benefit within the government's regulatory red tape reduction process, was for this period.

Senator KIM CARR: Can you tell me the dates on which that work was undertaken?

Ms Borthwick : I think we will take that on notice.

Mr Griew : We will take that on notice.

Senator KIM CARR: Was it before or after the proposal went to cabinet?

Mr Griew : We have already answered that, I think.

Senator KIM CARR: No, you have not.

Ms Borthwick : If I could add to Mr Griew's statement? There was a short-form RIS done as part of the cabinet consideration.

Senator KIM CARR: I thought you just told me that Ernst and Young prepared their cost-benefit analysis for the public RIS?

Mr Griew : No—I am sorry: let's be clear: Ernst and Young did some work of a technical nature on contract for us, which was used in the drafting of the RIS. I would not want it to be your view that we contracted out the writing of that RIS, the signing off of that RIS and the ownership of that RIS. The work was done by my staff.

Senator KIM CARR: This will be clarified, won't it? We need this back for our report and so he will need to come back to us fairly smartly on this. I would like to know the amount you paid for the contract, obviously, and also the period of time in which the work was undertaken.

Ms Borthwick : Certainly. I can actually give you the figure for the contract now. It was $71,925, GST—

Senator KIM CARR: it was 71—

Ms Borthwick : It was $71,925, GST exclusive.

Senator KIM CARR: Sorry—I had a figure of $79,000, but that is obviously incorrect; $71,000—

Mr Griew : Probably includes GST—

Senator KIM CARR: Sorry?

Mr Griew : Yours probably includes GST by the sound of it.

Senator KIM CARR: I see. Are you able to tell me the date that the contract was issued?

Ms Borthwick : I am sorry, not yet. I do not have that with me.

Mr Griew : What we are saying to you is that it was done for the decision-form RIS, which was released recently. So it will have been done—

Senator KIM CARR: Sure—it would have been done before August 2014, obviously.

Mr Griew : Yes.

Senator KIM CARR: I would like to know when before August 2014 and over what period of time. We will establish from that whether or not it was a quick and dirty, won't we?

Senator RHIANNON: Can you describe what you mean by 'technical matter'? That is how you have described what Ernst and Young did.

Mr Griew : They were doing a cost-benefit analysis—quantitative.

Senator RHIANNON: Yes, quantitative data; they are not writing anything out for you that you have then adapted?

Ms Borthwick : They provided a report to us, but the final regulation impact statement is a departmental document over which we had drafting control, obviously.

Senator RHIANNON: Yes, I am not doubting that. But to what degree have you adapted what they have set out for you? Is it 50 per cent of it? Or 80 per cent of it? Did you—

Ms Borthwick : I cannot give you a quantification of it in that way. They provided us with advice—

Senator RHIANNON: But was it acceptable to you in that you then used it? Was it in line with what you wanted?

Ms Borthwick : Yes, it met the requirements that we set out for the contract.

Mr Griew : The percentage you are asking for is the amount of their work that Ms Borthwick used in the drafting of the RIS?

Senator RHIANNON: Yes.

Mr Griew : It itself would not have constituted a large portion of those 150 pages.

Ms Borthwick : No, that is right.

Senator RHIANNON: But I was just talking about the section that you have asked them to do. So you have largely adopted what they did for you?

Mr Griew : I think so.

Ms Borthwick : In large part, because they met the requirements that we set for them.

Senator KIM CARR: The RIS was certified by an associate secretary of the department, I am led to believe. That is right, isn't it?

Mr Griew : That would be me.

Senator KIM CARR: That is you? Yes, I thought that would be the case. And you certified that the RIS was compliant with the Australian Government's Guide to Regulation by the Office of Best Practice Regulation.

Mr Griew : The Office of Best Practice Regulation agreed as well.

Senator KIM CARR: The problem is that the Office of Best Practice Regulation:

… did not consider that the RIS represented best practice, given the scale and significance of the higher education reforms and the likely impacts on the higher education market.

That is true, isn't it?

Mr Griew : The Office of Best Practice Regulation certified that the RIS was compliant with its requirements. It also said that there were some respects in which it could have been improved.

Senator KIM CARR: In fact, didn't it say that the impact statement:

… was not sufficiently accessible to a range of stakeholders.

Have I quoted it accurately?

Mr Griew : That is the gist of what it said. Obviously, in a spirit of constructive engagement with Commonwealth colleagues, we would take that fully on board. I, having read it a number of times and in its development and knowing this sector reasonably well, would beg to say that it does a pretty good job of making the issues transparent. But it is their job to lift our aspirations to be the best we can be, and of course we will take on board what they said.

Senator KIM CARR: When they say it is compliant it does not necessarily mean it is best practice.

Mr Griew : That is the case. There are three possible states of certification. One is 'not compliant', which is a more serious matter. One is 'compliant', which is that it has met the policy and process requirements of the government of the day and has analysed the right issues in the right way and drawn the correct conclusions. It also holds it open to itself to say, 'You could have done a better job,' in some respect.

Senator KIM CARR: I presume you have taken up with the Office of Best Practice Regulation its comment that it 'was not sufficiently accessible to a range of stakeholders'.

Mr Griew : There were a number of discussions of a collegial nature that we had with the Office of Best Practice Regulation in the process.

Senator KIM CARR: In the collegiate nature of these discussions, did it actually inform you which stakeholders found this not to be sufficiently accessible?

Ms Borthwick : No, they has not.

Senator KIM CARR: It has not said that?

Ms Borthwick : No.

Senator KIM CARR: Do you know?

Ms Borthwick : No, we don't.

Senator KIM CARR: You don't know. The Office of Best Practice Regulation has not been able to communicate what it meant?

Ms Borthwick : No, it has not given us that level of detail. As Mr Griew outlined earlier, there are a number of technical aspects that any regulation impact statement needs to meet. This regulation impact statement met them all, including on the level of consultation required to be compliant.

Senator KIM CARR: I am surprised that the observations of the Office of Best Practice Regulation have not been able to be clarified—in a collegiate way.

Mr Griew : It has been a fairly busy period for us. I am sure that we will seek its detailed input and guidance before we do the next RIS that undoubtedly it will be our duty to do some time in the future.

Senator KIM CARR: Are you able to provide the committee with a full copy of the report of the Office of Best Practice Regulation? I am sure it would be available publicly somewhere, wouldn't it?

Ms Borthwick : As I understand it, it is on the website. I think you have already quoted from it.

Senator KIM CARR: I have quoted from section of it. I just want to make sure I have at all. You know what it is like in this business. I may well have missed something.

Ms Borthwick : Not that I am aware of.

CHAIR: On the process of the RIS for significant pieces of legislation, it is my understanding that the previous government did not produce a regulation impact statement for the carbon tax, the mining tax or the NBN. Do you know whether that is correct?

Senator KIM CARR: I am sure that will look well in your report.

Mr Griew : I will have to take that on notice. I am not sure about—

Senator KIM CARR: It would be outside your portfolio wouldn't it?

Mr Griew : Yes. I have been involved in RISs that have not been certified to meet best practice, before.

CHAIR: Such as?

Mr Griew : In our department there was a RIS done on school-funding reforms previously, which the Office of Best Practice Regulation felt could have been of a higher standard in a similar way.

CHAIR: So it was also given a compliant?

Mr Griew : Again, it is not my area of the department, and I would have to take that on notice as well.

CHAIR: Could you check on that for me too, please?

Mr Griew : They take their job very seriously as a scrutineer of these things.

Senator KIM CARR: More seriously than you do?

Mr Griew : I do not think that is a fair comment.

Senator KIM CARR: You don't?

Mr Griew : No.

Senator KIM CARR: What did you mean by it?

Mr Griew : I am making the comment that I do not agree that we in any way do not take our responsibility to comply with government analysis, documentation and consultation seriously. I think we take it very seriously indeed.

Senator KIM CARR: The Office of Best Practice is stipulating that there be a review of the policy package within five years because of its scale and significance. Have you accepted that recommendation?

Mr Griew : I could be corrected, but I think that is actually in the form of a stipulation.

Senator KIM CARR: It is . So you are going to comply with that?

Mr Griew : My point is simply that we will be required to comply with that. But, with a policy reform of this size, we would expect to be keeping it under detailed notice for the whole period of the next five years.

Senator KIM CARR: Would it be a fair conclusion to draw that the Office of Best Practice is saying that there was not sufficient consultation—that the policy processes were not properly aired?

Mr Griew : I think the comment you quoted was more about the expression. I think it would be very hard to sustain an argument that there has not been proper consultation, given the extensive consultation that has happened since the budget which I outlined and put some numbers to, and also the number of serious review processes commissioned by both the previous government and this one that raise the series of issues to which this package responds.

Ms Borthwick : Could I add that I think most of this is covered in the regulation impact statement. You would be aware that we met with all vice-chancellors of all universities to discuss the reforms; we established two working groups—you have already spoken to the chairs of those working groups; we had roundtable information sessions in Melbourne, Brisbane, Sydney, Adelaide, Perth and in Darwin and Hobart by teleconference with providers including private providers; and we met separately with all peak university groupings over that period.

Senator KIM CARR: Was that before you did the RIS?

Ms Borthwick : Indeed.

Senator KIM CARR: Did you meet with the National Union of Students?

Ms Borthwick : No, we did not.

Senator KIM CARR: Why not?

Ms Borthwick : The minister did meet with the National Union of Students. The National Union of Students was also invited to our briefing session on budget night.

Senator KIM CARR: On budget night?

Ms Borthwick : Yes.

Senator KIM CARR: I see. Is that part of the RIS?

Ms Borthwick : Certainly the promulgation of the reforms on that night were part of our communication of the reforms, yes.

Senator KIM CARR: I am trying to be clear about this. You are doing a regulatory impact statement and you are saying that going to a budget briefing is part of the consultation for the regulatory impact statement?

Ms Borthwick : It is not the sole communication. As I have just noted, there were extensive other consultations as part of that process.

Mr Griew : The requirement of consultation is not entirely a matter of the RIS. The RIS is an analysis of the impact on the burden of regulation on industry, and that is an important dimension of the work we do in analysis. Their consultation has been continuous, extensive and geographically covering all parts of Australia for the entire period since the budget. You have picked one example. We—the department, the minister and his staff—have been in constant communication with all parts of the sector not only for the purpose of the RIS but also for the fine tuning of the design and the implementation planning of this entire package. The RIS is just one part of the analysis.

Senator KIM CARR: I am talking specifically about the consultation around the RIS. You are putting to me the various meetings you have held about the package. I am wondering when you met the National Tertiary Education Union?

Ms Borthwick : We did not meet the National Tertiary Education Union. But, back to your point on students, as Mr Griew noted in his opening comments, we were at 45 university campuses and expos talking directly to students. Our estimate—it is only an estimate—is that through that process we spoke to around 8,000 students and parents.

Senator KIM CARR: The fact that you did not meet with the NTEU is probably why I cannot find any reference to them in the RIS—they were not part of your consultations. Would that be right? They are not referred to in the RIS, are they?

Mr Griew : The information in the RIS will be accurate.

Senator KIM CARR: That is right. Given the changes to the higher degree research students, when did you meet with CAPA?

Ms Borthwick : I do not believe we had formal meetings with CAPA, but let me take that on notice.

Senator KIM CARR: You want to take it on notice?

Ms Borthwick : Yes.

Senator KIM CARR: But it would be appropriate to meet with CAPA, wouldn't it?

Ms Borthwick : It would be appropriate to seek views from a range of people who could advise us on the impact of the RTS, and we did that.

Senator RHIANNON: You said a range, so would CAPA be within that range?

Mr Griew : I am not sure whether we have met them or not, to be honest.

Senator RHIANNON: That was not the question. You answered a question by saying 'a range', and my question is whether CAPA is in that range.

Ms Borthwick : CAPA is a representative body, yes.

Senator KIM CARR: If you have not met with them, why is that the case?

Mr Griew : It could be a range of reasons. They may not have sought a meeting, or we may not have been able to meet them.

Senator KIM CARR: I would be very interested in that explanation, if they did not seek to meet you. I go back to the issue of consultation. The RIS discusses four recent reviews into the higher education sector. There is the Kemp Norton Review of the Demand Driven Funding System, the Review of Higher Education Regulation by Lee Dow and Braithwaite, the Review of Reporting Requirements for Universities by PhillipsKPA, and there is the National Commission of Audit. We can go back to the Lomax-Smith review of 2011. The RIS tells us that the submissions each of the reviews received included 159 received by the National Commission of Audit and only a small minority, 20, went to higher education. In making submissions to the various reviews, were they put together in the context of where people knew that the government was considering a major overhaul of the budget processes?

Mr Griew : I think I clarified in my opening statement the connection that we are claiming between those reviews and both the government's policy deliberations and the analysis in the RIS, and that is that the reviews went to a series of questions that were core, though different in each case, to the issues addressed in the government's reforms package. They informed the government's thinking and they informed our thinking in the RIS.

Senator KIM CARR: Take Mr Norton, who is cited quite high in your list. He gave evidence yesterday and told the committee that the central elements of the government's budget package were not in the terms of reference of his review. He said that while some of the submissions he received mentioned fee levels, the submissions focused on his actual terms of reference for the review of the demand-level model of funding. Is it appropriate to claim that as part of the consultation process?

Mr Griew : One of the terms of reference of the Kemp and Norton review was the fiscal sustainability of the higher education system and a number of submissions they received and the people they spoke to addressed that issue. In fact, in their report they went explicitly to the issue and addressed the view that there were options that would be consistent with maintaining an open, affordable and accessible higher education system that would involve higher student fees.

They also made the clear statement that they thought the degree of regulation of fees structures was seriously open to question in the current higher education system. So given that conclusion that they drew and the term of reference, I think it is entirely fair to say—and I am making this not as a claim but an observation—that their deliberations and report fed into both the government's and our thinking about package.

Bear in mind also that an absolutely central part of this package goes to the opening up of the demand-driven system to non-university providers and sub-bachelor places, and that was also a very central finding of the Kemp and Norton review following on from their analysis of the impact of the demand-driven system and the need for better pathway places and more diversity and competition in the sector. I think their review deserves a place of prominence in the record of the development of this package.

Senator KIM CARR: I would recommend you have a look at Mr Norton's evidence to the committee yesterday.

Mr Griew : I saw it.

Senator KIM CARR: I am not certain he would share your enthusiasm for being cited in the way that you have now. Mr Griew, how long have you been involved in the education field?

Mr Griew : I have been in my current position since 2009 with different responsibilities in the education department and, for your interest, I started work in early childhood as an educator—quite a while ago now.

Senator KIM CARR: Ms Borthwick, how long have you been involved in education?

Ms Borthwick : Since 1988.

Senator KIM CARR: That would be right; I would agree with that. Mr Warburton, can you refresh my memory: how long have you been engaged?

Mr Warburton : About nine years.

Senator KIM CARR: Between you, you have quite extensive experience. How do you think the level of consultation compares with this package which Universities Australia have described as the biggest package in 30 years? How do you think it compares, for instance, with the Dawkins changes? What was involved with the Dawkins changes? Ms Borthwick, you would recall those, wouldn't you?

Ms Borthwick : I was in New South Wales at the time. There was a circulation of a paper around the changes.

Senator KIM CARR: A green and white paper?

Ms Borthwick : I don't recall.

Senator KIM CARR: The usual consultations?

Ms Borthwick : Yes, I believe there were but I think the point that Mr Griew and I are trying make is that there have been extensive consultations and deliberations around this package of changes as well over the last three years and intensively since the budget.

Senator KIM CARR: Three years?

Ms Borthwick : Yes, I think as Mr Griew said in his opening statement, we would say the beginning of the demand-driven system and the consideration of financing through that report was the beginning of this process.

Senator KIM CARR: What about Brendan Nelson's changes? How does it compare to the program of consultations that Dr Shergold was responsible for when he was the secretary of the education department? How does it compare to that?

Ms Borthwick : I think it is comparable and I think that is the point Professor Shergold made when he gave evidence on Tuesday afternoon.

Senator KIM CARR: I tell you what: we have a very different interpretation of his evidence. You think this is comparable.

Mr Griew : I think the observation I would make is that the set of issues to which this package responds was abroad in the sector at the time I moved into responsibility for tertiary education in the department and have featured in regular discussion across sectoral organisations. That is the reason that we make the point that all of those various reviews have in some way or other been addressing a set of issues which I tried to give some non-party political context to in my opening remarks. These are the issues confronting the higher education sectors in our country and in all similar advanced economies. I have been at higher education conferences and higher education meetings since I arrived in this area for several years now, where exactly this set of issues has been debated, with views put from various parties around the sector.

Senator KIM CARR: It is certainly true that the deregulation issue has been debated.

Mr Griew : And the question of the educational challenge of having such a broad part of the community now accessing higher education and the role of private providers.

Senator KIM CARR: Surely there is a difference between a discussion about the overall philosophical nature of deregulation and this government's proposals.

Mr Griew : With respect, these discussions have involved very explicit proposals at various points from various sector leaders, and those have been hotly debated around the sector. There is not much new here in terms of the set of issues and questions and challenges to which this package is responding—in the same way that the demand driven system was not a complete surprise to the sector then, although at the time there were people pro and against.

Senator KIM CARR: And I would agree that the ideological divisions on these issues are not new, but this government's package is new—the scale of it, the complexity of it, what some people refer to as a number of different moving parts, the interaction between the different parts. All of that is new. The point of a RIS is to examine the regulatory impact of these arrangements and it clearly cannot be done in the abstract; it actually has to be done in the specific. I am putting to you that that has not been done and that is why the Office of Best Practice has been critical of your work.

Mr Griew : I will make a couple of points there. The nature of the cabinet budget process is that the detail of government reform packages is developed in the confidentiality of the budget process, and the Public Service take our responsibilities in that extremely seriously. There is always with budget announcements a degree of detail that is new—that is the nature of making the budget package every year public—but the issues have often been extensively canvassed in the sector prior to that. The second point I would make is that I would beg to differ in your characterisation of the Office of Best Practice Regulation's certification of our RIS. They have certified our RIS as meeting all the requirements of government.

Senator KIM CARR: As compliant, but not best practice—we have been through that.

Mr Griew : We have gone through that, but it is not fair to characterise the observations that our colleagues in OBPR have made that there is room for better practice as in any way indicating that there is some substandard consultation, analysis or presentation here—quite the contrary. They have indicated that the RIS meets the requirements of government.

Senator KIM CARR: On page 4 of your submission you refer to international ratings. You say that under the two international ratings systems Australian universities that are highest fell by one place in 2014 compared to the previous year. What can you tell me about the long-term trends in regard to Australia's international ratings?

Mr Griew : Colleagues will amplify with more detail. The Group of Eight presentation yesterday made the point well, I thought, that, while Australia's top universities have in the last rounds held up fairly well, there are fast-moving universities from the region who have bumped a number of our universities from the next 100 from that ranking. The main point, however, is not that we or the government thinks that there is some crisis in the quality of universities. The issue is about our very good university system being sustainable with three times the volume of students going through it and putting the universities in the best position to both work out what they are contributing and to be the best they can be in whatever mission they choose.

Senator KIM CARR: The department would have studied the Times Higher Education index that has been released, wouldn't it?

Mr Griew : Yes, we do. We look at them and take them seriously. They are not the be all and end all of our analysis.

Senator KIM CARR: Which universities have moved up?

Ms Hart : Senator Carr, we do regularly review the outcomes, particularly for the three key ranking systems. The most recent one is that which was released on 2 October, which is the Times Higher Education World University Rankings, and that shows Australia with five representatives in the top 100. We are ranked fifth on the list of countries who are represented in the top 100. The other ranking systems showed that, for example the QS times higher education, Australia had eight representatives in the top 100, which was one better than 2013. For the Academic Rankings of World Universities, formally known as the Shanghai Jiao Tong, Australia's representation in the top 100 was four, which did fall one place from five in 2013. We regularly monitor the trends, and we are also aware that there needs to be some caution applied to the interpretation because slightly different factors and methodologies are used across the three main ranking systems.

Senator KIM CARR: Is there a crisis? Let us just be clear about that. Is there a crisis in the Australian university system?

Mr Griew : We have made it clear that this package does not depend on, assert, stand or fall on some notion of a crisis. The point is about the sustainability of the system.

Senator KIM CARR: As a fact it has been pretty good to the university system, as a whole.

Mr Griew : I do not think anybody is suggesting to the contrary.

Senator KIM CARR: That is right.

Mr Griew : There is a question about the sustainability of the system, given the changing environment and the changing nature of the work it is taking on.

Senator RHIANNON: Is it correct that the department is implementing the efficiency dividend as announced by the former Labor government despite the legislation not having passed the Senate?

Mr Griew : The amount of funding that has been advanced to universities for this year is based on the proposition that the parliament will pass that legislation. That is completely consistent with the legislation in that we are making an estimate.

Senator RHIANNON: Does that mean that, if the bill does not pass the Senate, you will be further implementing the cuts it contains? Firstly, will you continue to do what you are doing at the present time and, secondly, will you change anything else?

Mr Griew : If the parliament does not pass that legislation, then we will not enact it. The parliament might then reconsider it. It might end up being passed. If the parliament in the end does not pass the legislation, we will not be implementing it.

Senator RHIANNON: So, you would not continue with what you are doing at the moment with the financial arrangements that you have changed?

Mr Griew : That is right.

Senator RHIANNON: Thank you. The 2014 budget papers state that the HECS debt was projected to reach a total of $42 billion in 2017. I want to clarify whether that figure is based on projections under the current system?

Mr Griew : Which year did you say?

Senator RHIANNON: Sorry, 2017, $42 billion by 2017. I am trying to work it out.

Mr Griew : Sorry, which budget papers said that?

Senator RHIANNON: This year's.

Mr Griew : It is likely that they do contain one year of the effect of the assumption of the implementation in the first year of the new system.

Senator RHIANNON: So, it is based on the new system, not the current system?

Mr Warburton : The new system. Sorry, could you just tell me the figure?

Senator RHIANNON: Could you just clarify by what you mean by 'new system'?

Mr Warburton : Could you give me that figure again?

Senator RHIANNON: The current budget papers state that the HECS debt was projected to reach a total of $42 billion in 2017.

Mr Warburton : The figure I have in front of me is $43.6 billion for the 2016-17 financial year. That figure is our estimate of the fair value of the HELP asset in that year, and that is based on the policies announced in the budget just passed.

Senator RHIANNON: Right. So, the new system, now what we are working off at the present time.?

Mr Warburton : The new system from 1 January 2016, broadly, or a relatively short period of it.

Senator RHIANNON: Does that mean it includes any potential fee increases under deregulation or the extension of HECS to potentially 100 private providers? Is that what you have included?

Mr Warburton : It would include loans to private providers. HECS-HELP loans, yes, Senator.

Senator RHIANNON: Thank you. Will HECS be administered to private providers in a similar way to VET FEE-HELP in the sense that payments will be made to private providers based on estimates of student numbers and then reconciled at a later period?

Ms Borthwick : There are some implementation details to be worked through, but that is a process which has worked very effectively for our administration of both VET FEE-HELP and FEE-HELP.

Senator RHIANNON: Therefore you are anticipating that it probably would be the same?

Ms Borthwick : As I said, there are implementation issues to be worked through, and we will do that with providers, but that is certainly a process which has proved effective.

Senator RHIANNON: If you go with that, who would be conducting these reconciliations, and how much staff time do you expect it will take?

Ms Borthwick : The department would, obviously, administer the HECS, as it does now. I cannot give an estimate of staff time.

Senator RHIANNON: It was about the reconciliation, so it is particularly interesting.

Mr Warburton : We collect student load files from providers that contain a range of information about what the students are studying, their fees, how much has been paid up-front, and how much has been deferred, onto HECS-HELP—their loan amounts effectively. They come in during the year. There are a range of submission processes in place. We normally do not get absolute final data for a calendar year until in the following calendar year. We have programs that produce the final results for us. These are all built into our IT systems and we try to streamline it. It is a bit hard to give you an estimate of the exact staff times involved. What would you include in the development of the program time? Once your programs are developed it is pretty streamlined, but there is obviously development work in that.

Senator RHIANNON: The whole thing does sound quite exhaustive in the way you describe the feed-in of the information. To do it properly it sounds like it would be a considerable amount of work. Have you factored—

Mr Warburton : I would not deny that. We have some fairly significant systems that collect the data, and we try to put some decent program management around them. We are talking pretty significant sums of money that we provide to the sector.

Mr Griew : The operation that would get built on here currently handles hundreds of thousands of students through universities. We are talking about a smaller number, albeit through a different set of providers. The department is well equipped to do this work. The staff have good systems that are very efficient. Yes, they do work very hard, but we are not seeing that as an insurmountable challenge at all.

Senator RHIANNON: In terms of verifying the data, can you explain how the work is undertaken and how you ensure that you are confident of the data you receive in this reconciliation process?

Ms Borthwick : We have a range of things we can do. We seek financial information from all providers. We have our own internal qualified accountants who examine the data. We can seek further information and we can indeed, if we feel the need—this is in terms of private providers—make spot visits and audits of information as well.

Senator RHIANNON: How often do you do spot visits? Do you have a certain number you have built into the system?

Ms Borthwick : I do not believe we do, but I can take that on notice. We have a risk arrangement, which points us to where we think there might be issues, and we follow that risk strategy.

Senator RHIANNON: Thank you. Please take on notice if you have a regular process for spot visits, how that is organised and, if you do not, how may there are. Either way, please tell us if it is regulated or if it is spontaneous or irregular—however we describe it—and how many you undertake.

Ms Borthwick : I would describe it as risk based.

Senator RHIANNON: Do you mean you have come to an assessment that there might be a problem and you send somebody in?

Ms Borthwick : That is right.

Senator RHIANNON: As you have not been able to give us an assessment of how much staff time you expect it to take—and fair enough—can you indicate how much staff time is spent presently on this?

Mr Griew : It would be part of the duty of a significant number of staff. I think that is why Ms Borthwick and Mr Warburton are reluctant to quantify it. It is some part of the time of a group of staff who have several other responsibilities. We can take on notice the best estimate we can give you, but it is not a completely separate activity.

Senator RHIANNON: It would be useful to have that on record, because if the bill happened to pass and we did move to you doing this work for private providers it would be interesting to make the comparison. It would be useful.

Mr Griew : We are confident we can do that work with private providers.

Senator RHIANNON: Thank you for taking that on notice. Immediately after the budget you would have been very busy explaining the proposals. Do you remember that there was some confusion or inaccurate information given when your department originally stated on the website that the changes to HECS would not have an impact on former students?

Mr Griew : I do not think that was ever on the website.

Senator RHIANNON: I understand it was on the website and the Guardian reported it on 30 May, and it was not denied.

Mr Griew : I would have to take that on notice. I do not think—

Mr Warburton : There were some clarifications to the material that was on the website. Students are in a variety of complex circumstances and it does take us some time to refine our words so that everybody is absolutely clear whether or not they are grandfathered. I thought that story stretched the point. It claimed there was a significant problem with the website when we were making some relatively minor corrections, but we were making some minor corrections and I think we are pretty clear on who is grandfathered now.

Mr Griew : I do not recall that. I recall an interchange at estimates about this and looking at the changes. The ones I am thinking of did not go anywhere near as far as suggesting there was something inaccurate about the HECS changes, to suggest that there was grandfathering involved.

Senator RHIANNON: I suppose what one person might call a clarification another might call a mistake.

Mr Griew : I am making the point that it would be more of a stretch of what actually happened.

Senator RHIANNON: Right. Although I did notice that what Mr Warburton said seemed to have a slightly different emphasis. But then, on 1 June, we had the minister speaking to Fran Kelly. Fran Kelly said:

… those students who are enrolling now or next year, they will be repaying their HECS debt at the higher rate, won't they?

The minister replied:

Anybody who was enrolled before May 14, nothing will change in terms of their arrangements.

That is a direct quote. I note in your submission that you state that many students and parents were confused about when the proposed changes to HECS would take effect and that this reinforces 'the importance of responsible commentary on what changes are proposed'. So you are talking about the confusion and you are reinforcing the need for responsible commentary. Do you think that the minister's comments—and I would add what the department said on the website, but we will leave that aside as you are disputing that—were factually incorrect and that this has also added to the confusion in the community?

Mr Griew : Let me be clear. My statement was that the clarification on the website was not an inaccuracy of that order. Secondly, on the minister's comment, I saw that interview—I think a fair number of us did. It was a long interview and my interpretation was that, with the question the minister was answering at the end, if you take those words—

Senator KIM CARR: You get the full context.

Mr Griew : You have to get the context. The context was a long conversation between the interviewer and the minister about the general issue of the level of debt and repayment that students would face, and I note that the minister clarified that very, very quickly. My interpretation is that it was an absolutely understandable flow of conversation and I do not think it has contributed.

Senator RHIANNON: Even though it was a really clear question?

… those students who are enrolling now or next year, they will be repaying their HECS debt at the higher rate, won't they?

We all do long interviews and it gets to a point where you answer the question. Are you saying the minister was answering another question?

Mr Griew : There were a whole series of questions in a row. The minister's point about grandfathering was absolutely germane to the flow of the conversation. Look, I have given you my view and my interpretation. I do not think it led to a lot of confusion, but that is my interpretation.

CHAIR: I think asking the officers to offer any further opinion on an interview—

Senator RHIANNON: No, it is not an opinion; I will ask if it is correct. The minister said:

Anybody who was enrolled before May 14, nothing will change in terms of their arrangements.

Is that correct?

Mr Griew : That is correct in relation to CSP funding levels and fees because of the grandfathering arrangements. The proposal before the Senate has the HECS changes applying to all extant debt.

Senator RHIANNON: In your submission, you state:

… fee levels for higher cost courses are set at a rate that falls slightly below the cap, possibly indicating that these institutions use the lifetime limit as a guide to pricing.

By removing the fee cap, aren't you guaranteeing that fee levels for higher cost courses will increase over and above the current limit?

Mr Griew : That is not our interpretation. The point we are making is that in those particular cases—and there are not a lot of providers in that situation or category at the moment—our concern is that caps discourage diversity of price points and encourage the providers to move to the same fee level. The additional danger of caps on loan limits is that you have to set them high enough to cover higher cost courses. So, to the extent they semaphore some sort of government approved limit, they could in fact have the perverse effect of dragging up prices for low-cost courses towards what might be perceived as the government semaphored preferred pricing, which is our analysis of exactly what has happened in the UK, as I said in my opening statement. We are dead against either, as I said, hard caps or what some people have called soft caps precisely because they provide a magnetic attraction for pricing. So it both converges and can go up. That is what we think has happened in some of the private sector when they became eligible for fee help and there was that limit.

Senator RHIANNON: But that is very speculative, isn't it?

Mr Griew : It is our interpretation—there is an amount of evidence you can adduce to that argument. The UK example is the best. Another is that when price caps went up by 25 per cent in Australia in one of the previous rounds of reform the universities almost all moved to that amount.

Senator RHIANNON: In your submission you state:

The Government recognises the need for a well-resourced, flexible and adaptive capacity to monitor the impacts of the reforms, particularly fees.

Would you say that by cutting TEQSA's funding by, I think, 41 per cent the government is ensuring that well-resourced monitoring will occur?

Mr Griew : There is a reform of the regulator that sets the context for that. It follows from the Lee Dow and Braithwaite review, which directs TEQSA to stick to its core business of registration and accreditation. We have worked very closely with TEQSA and are impressed with the leadership being provided by the commissioners and management there to streamline their processes to engage in effective risk management. They have impressive workload data that shows that they are starting to move effectively through the processes that they administer. In answer to your question, or from another senator, in the estimates committee I pointed to the comparative resourcing of TEQSA for the number of providers that it regulates with that of ASQA or the UK regulator, which shows that, after the cuts, TEQSA is relatively well resourced for its job.

Senator RHIANNON: Isn't 'streamlined processes' just nice terminology for cutbacks?

Mr Griew : No, it is a description of the kind of analysis anybody will do in setting up a new organisation—you refine your processes. We do it as well by looking at the level of delegation, who should be making decisions, avoiding multiple handling of cases and files, ensuring that the right service providers have their material treated appropriately and with proper follow-up. Such things are a benefit to your organisation in terms of using your resources most effectively and a benefit to the providers who have the least no-value-add intrusion into the business.

Senator RHIANNON: Are you really saying that a cutback of 40 per cent or more ends up with something more efficient?

Mr Griew : I can absolutely guarantee that there will be greater efficiency as a result of the leadership being shown by the TEQSA commissioners and management at the moment.

Senator RHIANNON: Future estimates will be interesting. I put a question on notice earlier this year and you confirmed that the fee revenue would only be diverted into a university pool for Commonwealth scholarships once universities had increased their fees to compensate for the government's average 20 per cent cut to student subsidies. I am interested to know how this method will work for private providers.

Mr Griew : The proposition for private providers is to work out what they would have been funded, were they part of the funded system in 2015, and then additional revenue beyond that amount would be subject to that scholarship requirement. We are not intending to go and look at the books of private businesses operating with no funding from the government during those periods. We would not think that was appropriate. We will be looking at the amount they would have got, were they in the system for that student load.

Senator RHIANNON: Does that mean that the 20 per cent of all fees paid to private providers will be diverted into a fund for Commonwealth scholarships? Is that how it works?

Mr Griew : No. We will construct a figure for private providers and non-university providers that join the system. The combined fee and government revenue will be compared to that base figure. Twenty per cent of the amount of government and fee revenue combined that is greater than the figure they would have got were they in the system in 2015—that is the amount to which the 20 per cent will be applied.

Senator RHIANNON: I am still trying to get my head around it. I will work on it. Do you have someone monitoring the current provider fee levels to determine the baseline?

Mr Griew : Let me be clear. We are not going to use their current fee levels as a baseline. We are going to construct a baseline for them based on what they would have got were they in the funded system.

Mr Warburton : I will have a go at trying to make what is happening clearer.

Senator LINES: I think we need a whiteboard.

Mr Warburton : I do not think I need a whiteboard.

CHAIR: But we might need the whiteboard.

Mr Warburton : Let me have a go here. We have grandfathered students in the system. For grandfathered students, the CGS rates and the student maximums are staying the same. They are being indexed as they always were. In fact, grandfathered students are allowed to move between institutions. Think about it this way. We are going to look at an institution and we are going to work out what they get from the CGS and tuition fees. Then we are going to take away from that what they would get if all of their students were grandfathered students studying the same things. The difference between the two is what we apply the 20 per cent to.

Senator RHIANNON: I will read over it and see how I go. I just want to go back to the issue of the HECS debt. According to the minister, one of the main reasons for charging real interest rates on HECS debts is to ensure they reflect the real cost of borrowing. This implies that all money loaned to students for HECS is borrowed. Is this in fact the case?

Mr Griew : Let me answer by questioning the assumption in the question. If less than a real interest rate is offered, if you discount the interest rate, then what you are doing is imposing a cost on the budget. That cost can only be funded from money that the government either has in a surplus or borrows. The opportunity cost of that money is best measured as the bond rate. We are not making an assertion, with this measure, that the money is borrowed to lend to the students. We are simply making an observation, a kind of public financing observation, that, if you discount the rate, that is an implicit subsidy. It is a cost to the budget that is real. The measure here is to make explicit the subsidy that otherwise is going to students in a hidden way.

Senator RHIANNON: In your submission, you referred to the loans fees charged to FEE-HELP students and VET FEE-HELP students as inequitable. Would you agree, if a loan fee were extended to other forms of student loans, that would also be inequitable?

Mr Griew : That is one of the options that has been floated by Bruce Chapman and Tim Higgins in their work. Technically, they are simply making the point that you can pay for that discount I referred to in a number of ways. Paying for it up-front is potentially a budget neutral way of doing it. That is the point they were making yesterday. It is inequitable if it is applied to one part of the system and not to the rest of the system . That is the point we were making. So we are not at odds there with what they are saying, but it is inequitable that it applies at 25 per cent to one part of the system, 20 per cent to another part of the system and zero to another, and the government wants to resolve that inequity by making it zero for all of them. So it is actually reducing a cost for some of the students in some part of the system, therefore removing an inequity. That is the point we are making.

Senator RHIANNON: On 1 October, The Australian reported that payments under the VET FEE-HELP scheme had grown 50 times in recent years. The biggest factor for the significant growth, it was argued, was in the private college sector. Will we see similar growth when the HECS scheme and the Commonwealth subsidies are extended to private providers?

Mr Griew : Again, the assumption in the question is important. Firstly, we are not expecting anything like that growth, partly because we have had such large growth in the bachelor degree market in the last 20 years and we just think the demand has largely been met. So we are not expecting that sort of growth. Secondly, the rate of growth in VET FEE-HELP was largely driven by the extension of eligibility for VET FEE-HELP to publicly funded VET providers. Previously it had only been for non-funded provides, so it was just a policy change as a result of a Commonwealth-state agreement that meant that all VET providers, both public and private, that were getting state funding could access VET FEE-HELP for diploma courses.

Senator RHIANNON: What sort of growth would you expect if it is not similar?

Mr Griew : There would be an initial growth because of the group that joined, but then we would expect very low growth for bachelor courses. I think we have estimated some growth for sub-bachelor courses, because we think there is more demand there, but it is still nothing like of that order. We could take on notice what we—

Senator RHIANNON: Can we take it on notice? I think Mr Warburton had some figures. Could you give us some data about what estimates you have made of growth?

Mr Griew : Sure.

Senator KIM CARR: What modelling have you done of the fee structures that universities will charge?

Mr Griew : We have not modelled the fee structures that universities will charge.

Senator KIM CARR: Have you modelled the likely take-up of students amongst non-university providers?

Mr Griew : We have estimated the rate of growth of both non-university entrants to the system and of sub-bachelor courses, and, as I said, we estimate low growth in non-university providers and slightly more growth in sub-bachelor. I think we have just taken on notice—

Senator KIM CARR: Yes, I know you have. You have indicated a figure of 80,000 extra places.

Mr Griew : That is right, yes.

Senator KIM CARR: What is the basis for that claim?

Mr Warburton : The 80,000 figure is 80,000 additional students by 2018. That consists of 48,000 students undertaking sub-bachelor courses. We have broadly assumed that all existing full-fee-paying sub-bachelor places are converted from 2016 and that there is an increase equivalent to around three per cent of VET sub-bachelor students each year and a small growth to allow for increases in year 12 completions. On the bachelor side, again, we took our fee payers from extending the system to private providers, if you like—other providers—and we have converted the places and assumed a growth factor of three per cent per year. We did that in places and then we used a factor to convert that into students.

Senator KIM CARR: So the 80,000 is students and not places?

Mr Warburton : The 80,000 is students.

Senator KIM CARR: Not places?

Mr Warburton : New Commonwealth supported students.

Senator KIM CARR: New? To be clear, we are not talking about transferring existing students into another course? We are talking about new students?

Mr Warburton : No, a mix. Students achieving Commonwealth support, some of whom were previously unsupported and some of whom start studying. This is a figure in 2018, so a lot of them will not be studying now.

Senator KIM CARR: I am trying to work out how many additional places there will be in the system, which is a different question to the number of students.

Mr Warburton : The number of additional places in the system is a function both of growth that is naturally occurring in the system anyway as well as new measures. You can quite readily see the growth in the number of places in the data that is in the PBS, because it has the totals. Those figures look at bit like the 80,000, but that is a coincidence. The 80,000 figure, which is the high-profile public one, is about how many extra students will get Commonwealth support. But the places are in the PBS. I do have them.

Senator KIM CARR: Do you think it will be about the same?

Mr Griew : No, there is factor for growth in there.

Senator KIM CARR: Remind me what number is in the PBS. You do not surprise me by having it at hand. What does it say?

Mr Griew : While Mr Warburton is looking for the number, let me just say that the 80,000 figure reflects two policy objectives. One is growth in the system and diversity in the system and all of those things. It is also a fundamental equity issue about students who are otherwise paying for the same kind of education that others are currently getting, significantly subsidised by the taxpayer. So there is an equity measure in here, too, which says that you should not have to pay full fees to do a Bachelor of Nursing or a Bachelor of Education or any other course at a private provider that meets the same regulatory conditions.

Senator KIM CARR: In 2013 there were 540,000 undergraduate places in the system.

Mr Warburton : That is correct—540,100.

Senator KIM CARR: I have 540,700, but you are saying it is slightly different to that.

Mr Warburton : For undergraduates we have here 540,100, growing to 623,000 places in—which year is it?

Mr Griew : 2018.

Senator KIM CARR: The advice you gave me previously was that the number of places in the system at public universities in 2013 was actually 577,700. That included, though, 540,700 that were undergraduate places. Are you saying the figures have changed?

Mr Warburton : One is total Commonwealth supported postgraduate places—

Senator KIM CARR: That is the 577,700 places funded at public universities in 2013. You have previously advised me—

Mr Warburton : I think you may have an estimate there, and we now have final figures. The final is 576,900 places. We have done the 2013 reconciliation—

Senator KIM CARR: Sure, I can understand the difference between an estimated figure and an actual one. You are saying that is an actual figure.

Mr Warburton : I believe so.

Senator KIM CARR: Would you like to confirm that for me.

Mr Griew : We can confirm that if we can find the figure you are referring to. We will look back at what we have published.

Senator KIM CARR: I am sure you can find the figure I am referring to. But Mr Warburton has proposed to me that the figures were the difference an estimate and the actual.

Mr Warburton : I think that is the case. My belief is that the figures I have in front of me are actuals, and if that is not correct, I will make sure that the committee is advised of that.

Senator KIM CARR: Are you proposing that by 2018 the number will go to 623? That has to be an estimate, of course, because it is 2018.

Mr Warburton : The figure that we just talked about was total Commonwealth support of places, so that includes postgraduates. If you want the comparable 2018 figure, it is 665,100—but that is an estimate, obviously. What is driving that is projected growth under current policy as it was prior to the last budget, and also the particular policy measures of the last budget. So these figures are different from the 80,000 extra student figure, which is in media releases about the reforms, but the figures are consistent.

Senator KIM CARR: Are they consistent? I am trying to get to an understanding, so can you take this on notice—precisely how do you arrive at the 80,000 figure: is it students or places?

Mr Griew : It was students. It is a different measure, because you get more than one student per place. If you are talking EFTSL, and then students.

Senator KIM CARR: I will give you an example: under the previous government, there were 149,000 student places provided between 2007 to 2013. That translated to 190,000 students—that is the equivalent.

Mr Warburton : They are additional places due to the demand-driven system, if my memory serves me correctly.

Senator KIM CARR: So there is a difference between a place and a student?

Mr Warburton : Correct.

Senator KIM CARR: Because there are part-time students, and a whole series of factors. I am trying to establish whether your figure of 80,000 students is realistically translated into 80,000 places, because they are different ideas.

Mr Griew : We can do that for you. We will attempt a reconciliation for you.

Senator KIM CARR: With regard to fee levels—you say you have done no modelling on fee levels.

Mr Griew : I did. We have canvassed this before at estimates. There are obviously some estimates upon which calculations have been done before budget and for the HELP system, but we have not attempted to model what universities will do.

Senator KIM CARR: Sorry?

Mr Griew : The word 'modelling' implies modelling predicting university behaviour on the basis of some data as to what they will do with regard to fee levels. We have not done that.

Senator KIM CARR: How do you get to your calculation of how much this program is going to cost?

Mr Griew : We made some estimates in the budget context for cabinet of the range of parameters that were needed to work out the impact on the budget and on the HELP loan system.

Senator KIM CARR: On notice, can you provide me with the range of estimates that you have used to calculate the cost of these measures?

Mr Griew : I think we canvassed this at estimates too—that the estimates that we have provided in the budget context to cabinet and in addition include—

Senator KIM CARR: I am not asking you for a cabinet paper; I am asking you for the basis of the estimates for the funding of this package, which is an entirely legitimate question for this committee to have an answer on.

Mr Griew : Sure. We have also said previously that we think that it is of dubious use and, potentially, of undesirable effect for us to be publishing the behaviour that we anticipate from the university sector, at this time.

Senator KIM CARR: You cannot tell us it is 'of dubious use'. I have asked a question. You cannot put to me as the reason for not answering that you think it might be 'of dubious use'. Are you claiming executive immunity now—executive privilege?

Mr Griew : I am suggesting that the fee levels will be determined by universities and that government semaphoring in some way what we think appropriate fee levels are has a very, very large risk for—

Senator KIM CARR: I am interested to know the evidential basis for your claims about the costs. I think I am entitled, and I think this committee is entitled, to know: what is the basis of the government's claim? I will ask you to take that on notice, because, if need be, we will have to go back into the chamber to actually deal with it. You cannot ask the parliament to expend this sort of money without knowing the basis for your costs.

Mr Griew : The basis of the costing is primarily driven by the number of places and the Commonwealth Grant Scheme levels which are in the bill. We have just given you the number of places; those are transparent and before you.

Senator KIM CARR: Mr Griew, you have heard the question. I look forward to your answer on notice. You do use an estimate of $42 billion in terms of the HELP debt. How did you arrive at that?

Mr Griew : We arrived at that in cooperation with the Government Actuary on the basis of estimated student debt, including the bank of existing debtors and those to come.

Senator KIM CARR: You must have made some assumptions as to fee levels to get to that level?

Mr Griew : That is what I stated at the beginning—yes.

Senator KIM CARR: I ask you to take on notice: what assumptions have been made?

Mr Griew : Yes. That is what I just heard you ask us to take on notice before.

Senator KIM CARR: Yes, I know. I am asking you an additional question in relation to the estimate that you have put before this parliament, the $42 billion. I come back to the issue of demand. You indicated before that you thought that the level of demand had largely been met; did I understand you correctly?

Mr Griew : The level of demand for bachelor level courses, yes.

Senator KIM CARR: Yes, for bachelor courses.

Mr Griew : There is some evidence for that in the fall-off of applications on the tail of the implementation of the demand-driven system, yes.

Senator KIM CARR: I happen to agree with you, as you well know I agree with you. Are there areas of unmet demand—in regional areas, for instance? Are you able to give me any advice as to what the department's current thinking is on the level of unmet demand, particularly in the regions?

Mr Griew : 'Demand' is an interesting term there. You are not referring to labour market demand; you are referring to demand for—

Senator KIM CARR: No, I am talking about demand for bachelor places.

Mr Griew : There are areas of the country which have lower levels of higher education participation. In some ways, the sector and government would want to increase demand in some of those areas, and we have programs that are aimed at doing that. In claiming some success for those programs, paying tribute to the universities both in regional areas and in the cities who have achieved this, there has been a greater take-up from some of those areas over the demand-driven-system period than in the previously better-represented areas and populations. And, yes, it would be desirable to see further take-up again, but whether that could be characterised as demand—in a sense, the problem is that it is not demand.

Senator KIM CARR: Yes, but on the traditional understanding of 'unmet demand', because that is a hypothetical, what could we do to increase the level of aspiration? That is an entirely hypothetical question.

Mr Griew : But that is sort of the challenge at hand, though, isn't it?

Senator KIM CARR: Yes, but what do we know about the level of unmet demand at a regional level in this country?

Mr Griew : We know that the participation level is lower in some areas and for some populations.

Senator KIM CARR: Do we have any expectation of what the demand levels are—for instance in the south-east?

Ms Borthwick : Senator, it might be helpful if you perhaps could explain in a bit more detail what you mean by unmet demand?

Senator KIM CARR: How many people who want to go to university cannot go to university at the moment in Australia?

Ms Borthwick : In a demand-driven system, anybody who wants to go can go.

Senator KIM CARR: Mr Griew indicated before that the level of demand had basically been satisfied for bachelor's courses. Did I correctly quote you there?

Mr Griew : That is absolutely right, and what I am saying does not contradict that. There are still new students coming on the scene, making the decision to go to university all the time. But the level of growth in the system to accommodate new demand has fallen right away. The point I was making is not that we have unsatisfied demand. The point I was making is that we have people about whom we might make a judgement it would be good if they would express some demand. But at the moment they are not demanding.

Senator KIM CARR: Where are those areas where there are unsatisfied expectations at this time?

Ms Borthwick : We might take that on notice and come back with a bit more detail.

Senator KIM CARR: With regard to the proposition of doubtful debt, are you aware of the evidence that Dr Higgins has given the committee in regard to the proposition that if universities raise fees the HECS doubtful debt level will rise. Have you done any assessment on that?

Mr Griew : We have done assessment of that in collaboration with the Australian Government Actuary. I think we answered some questions on this at estimates as well—and Mr Warburton will advise you. Essentially we see the level of debt not expected to be repaid rising partly with the flow-through effect of the demand-driven system and partly as a result of this set of reforms but still below 25 per cent within the estimates period.

I would make the point—perhaps anticipating another question or perhaps not—in relation to Dr Higgins's evidence that we do actually expense the asset depreciation cost of the HELP system each year. So it is actually accounted for properly in the government's budget.

Senator KIM CARR: Have you ruled out either of the proposals that Professor Chapman and Dr Higgins have advanced?

Mr Griew : Those propositions—among the others that have been put to your committee and raised through various organisations—and any consideration of those is really a matter for government. It is not a matter for us to comment on.

Senator KIM CARR: When is the government likely to propose amendments to their package?

Mr Griew : That is absolutely a matter for government and inappropriate for me to express a view on, but it would at this point only be a view.

Senator KIM CARR: I would expect that answer. However, the committee has to look at the package that is before us. There are no amendments, are there?

Mr Griew : The legislation reflects faithfully, as the minister said it would, the government's budget announcement.

Senator KIM CARR: We are considering the package that the government has put before the committee.

Mr Griew : Far be it for a humble public servant to suggest to senators how you do your job, but I would imagine you might consider the evidence that has been led by the various people who have come before you as well.

Senator KIM CARR: There are lots of aspirations that have been led. What do you think of the proposal that we have a special fund of $100 million over perhaps a 10-year period?

CHAIR: That's my question, Senator Carr. For regional structural adjustment as suggested by Henry Ergas yesterday.

Senator KIM CARR: This is the bail-out fund. What about the bail-out?

CHAIR: Structural adjustment, Senator Carr.

Mr Griew : I hate to disappoint both of you, but I think you are asking me for an opinion.

Senator KIM CARR: That is very good!

CHAIR: It was very poor chairing on my part; I do apologise.

Senator KIM CARR: Have you given any consideration to the question of cost shifting with the establishment of new providers, particularly with the vocational sector moving into the higher education sector, moving away from state-based funding to Commonwealth-based funding?

Mr Griew : The kinds of qualifications that it is proposed to fund here are higher education qualifications. Higher education qualifications in our federal system are financed almost entirely by the Commonwealth government. It is not proposed to fund VET qualifications through this system. As somebody who has been involved with both systems intimately for some years now I know there is a world of difference between a curriculum-based higher education qualification and a skills-based VET qualification. To be honest, yes, there is an opportunity for TAFEs and some other higher education providers who also operate in the VET system—including some universities—to increase their sub-bachelor load here. We do not see that as cost shifting at all; we see it as a chance to develop up a set of pathways, and I do not know any serious commentator who says that is not needed.

Senator KIM CARR: We have actually heard in evidence to the committee that there is an incentive there for the states to withdraw from diploma and advanced diploma programs.

Mr Griew : But the states, with respect, are not funders of diploma and advanced diploma higher education qualifications.

Senator KIM CARR: Why aren't they?

Mr Griew : They are funders of diploma and advanced diploma VET qualifications.

Senator KIM CARR: They might be currently called that, but what is to stop them being transferred to the higher education registration?

Mr Griew : The fact that they have to be individually approved, course by course, as higher education qualifications. The requirements for that include a whole range of academic governance, curriculum specification, assessment—

Senator KIM CARR: So your assessment is that is not going to happen; is that the claim?

Mr Griew : Not without substantial work on those qualifications which have the potential to be of significant educational advantage and opportunity for the students involved.

Ms Borthwick : As you would be aware, Senator, the VET sector works very closely with industry and regulated occupations, so it is unlikely, I would have thought, that industry would not have a view about the sorts of skills that it wants from the VET sector, as opposed to the higher education sector.

CHAIR: I have a question on the regional structural adjustment package that has been mooted by several stakeholders. With your long experience in the higher education sector, have there been other periods of reform within the sector which have required structural adjustment packages?

Mr Griew : The introduction of the demand-driven system is the one that I have been here for, and there was a structural adjustment fund during the implementation of that which did focus on regional and some other university providers. So there is, to that extent, a precedent for the idea.

CHAIR: In the context—and we have heard this consistently—of the government's reforms representing the next step in the evolution of the higher education sector within Australia, would there be a policy rationale for a reform of this magnitude to similarly require a structural adjustment package, in light of precedents?

Mr Griew : The test that you would apply to that from a policy point of view would be: are there market reasons why a particular set of providers would be more challenged than others to adjust to a more open market, a more deregulated market? The argument the regional universities have put and I think Universities Australia as a general group have adopted is that there are smaller numbers of aspirant and available students for some universities. Those would include regional universities and some of the outer metropolitan universities, I think, in the minds of those who made the argument. The regional universities probably tend to stick up for their own but some of the outer metropolitan universities have made similar points.

The other test would be that at the other side of such a process you had more viable sustainable education providers. There has to be—adjustment is enactive to something. Leadership, vision and analysis and all of those things are part of the process as well. Those are the tests you would provide. That argument is essentially the argument that regional universities and some of the outer metropolitan universities and Universities Australia have been making.

CHAIR: IRU suggested in their evidence that funding per student during the previous government's expansion of the demand-driven system was due to the opening of demand in particularly more heavily subsidised programs. Do you have any comment to make on that?

Mr Griew : Colleagues may want to add to this. That is not usually the way in which we would characterise it. I would agree that during the opening up of the demand-driven period we saw a strong growth in a number of professional and high-demand courses. Students found their way, by and large, towards good outcomes for themselves. It is true that a lot of those are in the top half of the costs, with lab, practicum and other costs. I did listen to that and I thought it an interesting way of putting something that we have tended to express slightly differently. But yes, it was a good outcome. The other area we were pleased to see was a higher-than-average growth in some of these science and maths based courses as well.

CHAIR: There has been consistent disagreement with witnesses and members of the committee—and sometimes between members of the committee—on whether the previous government actually found $6.65 billion worth of savings within the higher-education grant and student-support budgets. Could you please clarify for the committee, once and for all, whether that figure is correct?

Mr Griew : That figure is correct over the period 2011-12 to the 2013-14 budget, taking account of savings over the forward estimates period from a number of measures in the higher-education, research and student-income-support programs which, during that period, were all in one department.

CHAIR: Could you run us through the savings the previous government found for the 2011 budget?

Mr Griew : There was a reduction in the HECS-HELP discount and voluntary repayment bonus that saved $607.7 million through to 2016-17.

CHAIR: And for the 2011-12 MYEFO?

Mr Griew : There was a $487.8 million reduction in the reward funding program and a reinstatement to student contributions for maths, statistics and science units, which saved $1.031 billion.

CHAIR: The 2012-13 budget?

Mr Griew : There was the removal of eligibility to CSPs and HELP loans for overseas students, which saved $41.9 million; increased student contributions for maths and science students, which saved $324.9 million; and a reduction in the participation component for the Higher Education Participation and Partnerships Program, HEPPP, which saved $26.5 million.

CHAIR: The 2012-13 MYEFO?

Mr Griew : There was a general interest charge introduced on student-income-support debt which saved $7.5 million; in Student Start-Up Scholarships, there was a pause in indexation which saved $103.6 million; there was a $563.7 million saving to the Sustainable Research Excellence program; and there was a delay by a further three years to the extension of student income support to coursework masters program students which saved $199.9 million, and the cessation of facilitation funding which saved $384.6 million.

CHAIR: And in the 2013-14 budget?

Mr Griew : There is an efficiency dividend—

CHAIR: Is that the Emerson efficiency dividend?

Mr Griew : That was the efficiency dividend announced by a former minister, Craig Emerson.

CHAIR: It was referred to earlier.

Mr Griew : It is $902.7 million. Also, there is the removal of the 10 per cent HECS-HELP discount and the five per cent HELP repayment bonus of $276.7 million and the conversion of the Student Start-Up Scholarships to student loans which saved $1.182 billion, and a cap on tax deductibility for self-education expenses which did not proceed after the change of government, and that was a $520 million saving.

CHAIR: I have three quick questions.

Senator KIM CARR: How much of that last lot, the $2.17 billion, has been realised?

Mr Griew : That is sitting in front of the Senate in legislation at the moment.

Senator KIM CARR: How much of that has been realised?

Mr Griew : We had an exchange with Senator Rhiannon earlier where we explained that we have not advanced at this point, awaiting the outcome of the Senate. We have implemented some part of the efficiency dividend through those instruments.

CHAIR: I have three questions that I want to go to; then I will go back to Senator Carr.

Senator KIM CARR: No. It is quite an important point because this dodgy table—

CHAIR: Senator Carr, you have had the bulk of the time. You can go back to it.

Senator KIM CARR: makes an assumption that is not realised.

CHAIR: You can go back to it. I have the call. I want to get your comments on the importance of student mobility in terms of a deregulated higher education system.

Mr Griew : One of the things that a deregulated system would want to achieve is the opportunity for students both to move between sectors and, by seeking better access to pathways that may be suitable for them, to access the system without such a significant—as they might perceive it—risky move personally. So instead of moving from the country to the city they could seek out a pathway program, a sub-bachelor program, with a greater range of providers closer to home and seek a pathway that way.

CHAIR: What if you want to go to the ANU?

Mr Griew : So that was the first aim. The second aim is that the scholarship program as proposed in the package should see students from much greater geographic and socioeconomic backgrounds access, with scholarship support, degrees at our best universities.

CHAIR: Are the guidelines for that set?

Mr Griew : Where are we up to on those?

Ms Borthwick : The guidelines for what, Senator?

CHAIR: Commonwealth scholarships.

Mr Griew : I think they require passage of legislation.

Ms Borthwick : Yes, they do.

Mr Griew : They require the passage of the legislation before we will be able to finalise them. I know we have been doing work on them in consultation with the sector but I think the minister would be unable to authorise them until the legislation is passed.

Mr Warburton : That is right. They cannot be made until the legislation is through.

CHAIR: Do you know what the focus of the guidelines that are being imposed is?

Mr Griew : Yes.

Ms Borthwick : Yes, they allow a wide range of activities within the universities to support students from disadvantaged backgrounds including tuition, mentoring and assistance in a variety of ways.

Mr Griew : Accommodation. Yes. One of the issues that have come up repeatedly is the particular circumstances of the not insignificant number of students who, for example, have family responsibilities. A student income support grant is not going to be sufficient for someone who is middle aged and mid-career and has children. Many of those people, who are from regional areas and also from a number of the equity target groups, are well placed and would be able to contribute well following a degree experience. But something more is needed than the range of programs government administers. We have had approaches before from universities wanting to do that sort of thing, and some have managed to. This is the sort of thing we would see this scholarship being able to do.

CHAIR: Has there been any discussion around adjusting the repayment of HECS debt for those students who are working overseas—maybe for Goldman Sachs for decades? For their HECS debt, is there procedure? Why haven't we adjusted it to that?

Mr Griew : This is one of those issues that do come up. We have been keen to pursue it a number of times. There are some not insignificant obstacles in terms of the cost of the tax office pursuing those—working with revenue services in other countries and so on. I was intrigued listening to evidence yesterday. Between meetings, I heard a witness—I cannot remember who it was—

CHAIR: Professor Chapman.

Mr Griew : Yes. He suggested there were other more innovative ways.

CHAIR: Could you present evidence, please, and provide us with some advice.

Mr Griew : Yes. The other thing I was going to say is that the advice I would normally give on that would be to the minister. That is one of those perennial issues that comes up. If the minister wants us to, we will of course go and look at new ideas for how we might pursue those issues.

CHAIR: Do you have an idea of how much that debt is?

Mr Griew : How much debt we lose overseas?

CHAIR: Yes.

Mr Griew : Have we quantified that?

Mr Warburton : We do have some estimates. They are based on the work of Bruce Chapman and Tim Higgins, who have done —

CHAIR: So we have completed the circle.

Mr Warburton : Yes, you have.

Mr Griew : If you want us to take that on notice, we can.

CHAIR: That is fine. That would be great. Finally, I have been intrigued by the fact that we want to move to a deregulated market and we have this demand-driven system except for medical places. Is there—

Mr Griew : What is the policy rationale for that?

CHAIR: Yes.

Mr Griew : This is a health policy issue as much as it is an education policy issue. There are very significant cost implications for the health system. In a health system that is funded as our health system is, the number of doctors is the primary driver of the expenditure of the Medicare benefits system. Producing more doctors does not necessarily by itself locate those doctors in parts of the country where there is still an undersupply—and I say that as someone who used to run the Northern Territory health system. So when you think about that as a public policy issue, there is a question, which is primarily a health workforce policy issue—and it is something you might want to take up with the health department as well—as to whether more medical schools and more medical places would address that issue or whether there are other policy levers to encourage doctors to go and seek a career in the—

CHAIR: It just seems odd, in a deregulated market, that the whole market is not deregulated.

Mr Griew : Sure. The driver from that is not within education policy. The driver from that is from within health and health financing policy. That is a significant decision for government.

Senator KIM CARR: It is always troublesome for public servants to play in this field, with the conflict between political parties. I notice the minister has tabled a statement in the House recently about savings measures of the previous government. Going into the files is always tricky. First of all, can you tell me how many of these savings measures announced—there is the word 'announced' as distinct from 'realised'—were used as offsets for other education initiatives?

Mr Griew : I would have to take that on notice. Primarily, if you step back, the big driver of increased costs in the higher education system over the period we are talking about was the demand-driven system and the fact that the demand-driven system, because universities and students took up the opportunity at a faster rate than had been estimated, cost considerably more than initially estimated. That is the big cost driver. If you go back to the points I was making at the beginning, we are not alone as a country in wanting to respond to demand for higher education and the opportunities—

Senator KIM CARR: I am specifically interested to know what these measures are used for—do they go to consolidated revenue? How much of this money went to consolidated revenue and how much of it went back into some other education initiative?

Mr Griew : Measure by measure we would have to take that on notice.

Senator KIM CARR: My recollection is that all of this went back as offsets for another education initiative. Can you tell me what was the growth in funding in real terms under the Labor government for its expenditure on universities. Let us use 2013 budget dollars—you need a constant dollar number.

Mr Griew : I presume you are talking about real funding per student.

Senator KIM CARR: I am going to come to that. I want to know in real terms he increase for expenditure on universities in the period from, let us say, 2007 through to the out years for the last Labor budget. That allows you to conclude your efficiency dividend claims.

Mr Griew : I have a table here which is in 2014 dollars and the point of the table is to calculate per student place.

Senator KIM CARR: I will ask you to provide that for me on notice and I will update my table, but what I want to know is the total amount of money spent by the Commonwealth on universities. The Commonwealth spends a lot more on universities than just on student places.

Mr Griew : So you are after total Higher Education Support Act and youth student allowance—

Senator KIM CARR: Expenditure on universities, in real, constant dollars.

Mr Griew : Research, teaching and student support?

Senator KIM CARR: Student teachers, research, equity funding—how much money was spent on universities and what was the growth in that funding over the period 2007 through to the end of the forward estimates for the last Labor budget. That allows you include the efficiency dividends announced by Dr Emerson.

Mr Griew : That is clear, as a question.

Senator KIM CARR: Dr Emerson announced an efficiency dividend of $902 million. Has that been realised?

Mr Griew : Part of it has been realised.

Senator KIM CARR: How much?

Mr Warburton : Around $200 million or $210 million.

Senator KIM CARR: Has the other $700 million been rejected by the Senate at any point so far?

Mr Warburton : There were some guidelines that sought to reflect some aspects of the measure that were disallowed. They dealt with very minor amounts of money. The majority of the rest of the money is in a bill that is currently before the Senate. The Senate has not finished considering the bill.

Senator KIM CARR: Let me cut this short. The Senate, on three occasions, has rejected reductions in university education expenditure since the election. There has been a disallowance motion. In fact, think there have been two separate pieces of legislation—

Mr Warburton : The scholarship guidelines, the Commonwealth Grant Scheme guidelines and caps on other grants.

Senator KIM CARR: You came to see me about one of those, didn't you?

Mr Warburton : I did.

Senator KIM CARR: I am sure you enjoyed the experience! The government reneged on the Gonski reforms. It was money put aside for Gonski. So the claim here of $6.5 billion assumes a $2.7 billion figure, the bulk of which has yet to be realised. That is true, isn't it?

Mr Griew : Was the precise question, 'Has $700 million at this point not been realised?

Senator KIM CARR: Yes.

Mr Griew : Yes, we have already—

Senator KIM CARR: In fact, I would say it is a bit more than that. I can go through each of these matters. How about the $276 million from the 10 per cent HECS-HELP discount—has that been realised?

Mr Griew : No, that has not been realised.

Senator KIM CARR: The conversion of student start-up scholarships—has that been realised?

Mr Griew : There are two measures there which are now the responsibility of the Minister for Social Services. I believe they are also sitting in bills before the—

Senator KIM CARR: That is right.

Mr Griew : Then there is the question of the cap on tax deductability. The government has actually withdrawn that matter, hasn't it?

Mr Griew : I said that at the time when I went through the list. After the change of government, the Treasury—

Senator KIM CARR: How much of that has been realised?

Mr Griew : I already answered that question—the $500 million in that measure was rejected by the current government.

Senator KIM CARR: How much has been realised?

Mr Griew : None of it, therefore.

Senator KIM CARR: So the claim of $6.6 billion is grossly inaccurate, unless you mean an announcement is different from realising it.

Mr Griew : The question I thought I was answering was, 'What savings measures have been announced in successive—

Senator KIM CARR: Check the Hansard. You said that the first time. The second question was entirely different and you answered using the same answer, which is inaccurate.

Mr Griew : We went through each of those MYEFO and budget—

Senator KIM CARR: The answer you gave was inaccurate. If you mean announcements, that is one thing. I put to you that realising them is an entirely different matter.

Mr Griew : We take budget measures very seriously and we attempt to implement them.

Senator KIM CARR: So do we and that is why we are rejecting them.

CHAIR: The committee is now adjourned.

Committee adjourned at 17:18