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Wednesday, 17 September 2003
Page: 20241

Dr NELSON (Minister for Education, Science and Training) (9:58 AM) —I move:

That this bill be now read a second time.

Australia, and the next generation of Australians in particular, is moving into a world which is quite different from that of the past. The government's vision of education, science and training is that our ambitions and our policies should enable every human being—especially every young person in this country—to find and achieve their own potential. To recognise that policy, particularly in higher education—from which much of Australia's economic and social development will be driven, certainly for the first quarter of this century—we will need to adapt to economic and social changes in Australia that see this country moving from agrarian, land and labour intensive industries increasingly into services based industries. Learning how to learn and to produce ideas—and from them technologies—will increasingly need to be applied not only to traditional commodities and industries to maintain economic and environmental sustainability but also to new and emerging ones and those that, today, we may not know even exist.

Australia's universities, Australia's 38 publicly funded universities in particular, are in need of reform. The case for reform rests on two inescapable but unpalatable truths: the first is that Australian universities need access to more money—and a lot more of it in the long term; the second is that money is only half the problem. The way in which universities are regulated, managed and administered is as much at the root of the challenges facing Australian higher education as is the level of resourcing.

Australians—wherever we live; whatever our circumstances—have nowhere to hide from the winds of change. The pressures for the international benchmarks against which Australian universities will be judged are increasingly drawing down upon us. Those pressures include: the move from elite to a mass form of higher education; a revolution in telecommunications; globalisation with sweeping economic and social change, which still many Australians feel ill-prepared to face; and, importantly, the move to lifelong learning where the next generation can no longer expect to do one form of education and think that it will equip them for 40 or 50 years of a working life.

This government has recognised that, in order to build an economic and social legacy for the next generation in which we can have confidence, it is essential that Australian higher education be reformed. The government announced early last year that there would be an extensive review of Australian universities. On behalf of the government I established a reference group to give me advice through the course of the review. Seven discussion papers were released, 49 focus groups were held to which 800 people were invited and over 200 hours of evidence was taken from the length and breadth of Australia. More than 700 submissions to the review were received. The Productivity Commission was commissioned to examine the funding, administration and management of universities in North America and Europe and to compare them with that in Australia. The review process was also informed by a two-day session in Canberra comprising a variety of individuals and organisations including businesspeople, unions, academics, schoolteachers and everyday Australians.

The result of the review process is that, today, we introduce a piece of legislation that is absolutely essential to equip Australia for the 21st century—educationally, culturally, socially and economically. This legislation gives effect to the government's budget announcement that in the next four years it will invest $1.5 billion of additional public funding in Australian universities, and over the next 10 years there will $10.6 billion additional public funding invested in universities: $6.9 billion of it directly and some $3.7 billion additional support for students.

The reforms are complex, and necessarily so because of the complexities of the issues that face the sector. In no particular order, the problems that we are seeking to address include the fact that every university in Australia is currently funded and administered in exactly the same way; that under the current policy framework the country cannot—nor ever will—boast a university in any international top 50 or 100 league table; we face a situation where the sector has students that are overenrolled—we have university students who are overenrolled by about eight per cent across the sector; we have some 30,000 to 40,000 students, in recognised private higher education institutions, who receive no form of public assistance whatsoever despite the fact that they are Australian taxpayers.

We currently fund and run every university in exactly the same way. Sydney University and the University of New South Wales compete with one another, but increasingly they are competing with the rest of the world. Australians need to know that already universities in Singapore, North America and increasingly Europe are seeking to recruit the best and brightest Australian students to their universities on the basis that if they want `a world-class university education they will need to leave Australia'. I ask Australians to think about how they would react if other countries were recruiting our best swimmers or athletes on the basis that the only way that they would be able to receive world-class training would be to go to another country.

Charles Sturt University, Sunshine Coast University, Edith Cowan University and University of South Australia are all outstanding institutions, but they are all different. Under the current policy framework, we do not recognise nor fund the increasingly onerous and complex community service obligations that are being placed upon non research intensive universities that are in the regions of Australia. This package seeks to address that. The financial barriers that students face are not those of tuition fees, which are met through the Higher Education Contribution Scheme once they have graduated; the costs that students meet are compulsory union and guild fees, computers, textbooks, living expenses and a whole variety of things for which they receive Youth Allowance and Austudy on an income-tested basis. The government is seeking to provide further financial assistance to students whilst they are students.

At the moment, the commercialisation of intellectual property in Australian universities is patchy at best. Only 0.16 per cent of university revenue is derived from royalties, trademarks and licences; world's best practice would take it to about five per cent. Even with cashed-in equity, we peak at around three per cent. We also have a very narrow range of remuneration for Australia's academics in this sector—some 38,000 of them. Whilst the Productivity Commission report found that by international standards Australian academics are relatively well remunerated, the range of remuneration is relatively narrow.

In addition, the government have recognised the need to increase the resources available for the training of teachers and for the training of nurses. We also found, unfortunately, that academics in Australian universities are appointed and promoted not on the basis of their ability to do what Australians need them to do and do well—that is, teach—but rather on their ability to attract and maintain research activity and resources within their own universities.

The government is also determined—in the words of Dean Mary Kalantzis, the President of the Australian Council of Deans of Education—to `bring students from the periphery to the centre of the higher education experience'. In this bill, the government is introducing measures that will see much greater emphasis placed on quality of teaching and learning in higher education. There are also significant challenges to be met in ensuring students from lower income backgrounds get access to university education—and no more so than amongst Indigenous Australians.

In response to requests from every one of the vice-chancellors of Australia's 38 universities, the government has also recognised that it is important that universities respond positively to the request that they need the flexibility to determine the value of their courses and to set HECS charges. The government has said that, whilst it will not allow any increase for the 14 per cent of students in universities who are undertaking teacher education or nursing, it will allow universities—for the first time in Australia—to determine the value of the HECS charge levied on the student on the courses which are undertaken.

This package comprises many components and each is interlinked. It is not possible to maintain the fundamental integrity of the package by removing key elements from it. What the government is seeking to do with this package is to change the fundamental way in which universities are being funded—to move the universities to a discipline mix for funding; to fund the universities on the basis of what they actually do provide and deliver to students—so that a student undertaking a course in one university, whether it be business administration, nursing, veterinary science or law, will receive the same level of public support as does a student in any other university.

An additional $404 million will be available in the first three years under what will be called the Commonwealth Grants Scheme, which will represent respectively over the first three years a 2.5 per cent, a five per cent and then a 7.5 per cent increase in core funding to universities. In addition, the Commonwealth will be making $122.6 million available to universities and campuses in the regions of Australia. Some 32 universities in more than 55 campuses will receive an additional loading—from 1.5 per cent for the University of Wollongong through to 30 per cent for the Northern Territory University and Batchelor College in the Northern Territory—to recognise that those universities are operating from a much narrower commercial, industrial and economic base.

The government will also require that, in order for the first $404 million extra money to be available, two things must be undertaken. Firstly, there must be governance reform of the universities—the universities must be compliant with national protocols for best practice in governance. We cannot say today that governance and administration arrangements that were appropriate for the early and mid parts of the 20th century will equip institutions for the 21st century and a world that is quite different.

University governing councils have business expertise which ranges from zero to 64 per cent. Commercial expertise is sadly wanting in most university governing councils. Council size average is 21 but can be as high as 35 for the University of Queensland. The government does not consider it appropriate that working members of parliament—whatever their respective merits might be—should be serving members of university governing councils. There should be professional development provided for people going on to university governing councils who will be running budgets of up to almost $1 billion a year.

The second thing that is very important is that the universities be compliant with the government's workplace relations policies. That means that any employee of a university should be free to have negotiated on their behalf an enterprise agreement by the organisation or union of their choice. Equally, any employee should be free—as they currently are—to negotiate a common law contract or an Australian workplace agreement. Once those two conditions have been met in governance and workplace relations, the universities will then be able to access the first $404 million of additional public investment.

The government is also investing $40.4 million, representing a 7.1 per cent increase in funding, for the training of nurses to assist them in leaving university to spend more time in hospitals training for the careers of their choice. The government will also be increasing, by 9.7 per cent, the money that is available for the teaching of teachers, so that education students can spend more time in classrooms.

The number of HECS places will be increased in this package. At the moment, on average, eight per cent of the students in the university sector are overenrolled. Almost 40 per cent of the students at Charles Sturt University are overenrolled—in part because of arrangements with the police academy—ranging down to 2½ per cent at the University of South Australia. In the package that was announced in the budget, the government said that it would allow the universities to overenrol only up to two per cent.

In response to arguments that have been put to us by the Australian Vice-Chancellors Committee and Mr Mullarvey—whom I commend for his advocacy on behalf of the vice-chancellors who argue that that overenrolment range is too narrow—this legislation will enable universities to at least have a tolerance band of up to five per cent. The government will fully fund, at a cost of $347.4 million over four years, 25,000 of those currently overenrolled places in Australian universities. One of the reasons that students are packed in like sardines in university lecture theatres is that in many cases the students are overenrolled.

The government will also be funding 1,400 additional growth places, at a cost of $10.9 million, in 2007. There will be 1,400 additional medical school HECS places over the first five years, there will be 574 places specifically for nursing in regional universities and there will be 745 priority places in nursing and teaching; these are extra places. In addition, the Commonwealth will be locking in on a long-term basis the 655 places in teaching and nursing at Avondale College. The government will also be funding a further 2,850 growth places in 2008.

One of the most important changes in these reforms is the recognition that, as the world and the needs of Australian universities are changing, Australians should be no less free to take up, if they are academically qualified, a full fee paying place in an Australian university than a citizen from another country. The government will allow the universities, once they have filled all of their HECS places and if they choose to, to then offer a full fee paying place to an Australian citizen who is academically qualified and considered to be so by the university. For the first time, the Commonwealth government will lend those students money on the same income contingent arrangements as HECS, except there will be a 3.5 per cent interest rate added to the CPI indexation of that debt. The interest rate will be capped at 10 years, and the loan to the student will be $50,000. Students will also be able to take those loans to recognised, private higher education providers. So, for the first time, students who may not currently have the resources may choose to go to Bond University, the University of Notre Dame, the Australian Institute of Music in Sydney, Tabor College, Christian Heritage College or a myriad of other excellent higher education providers.

In relation to regional loading, this bill will respond to another request from the vice-chancellors—that external load also be counted in terms of receiving additional funding. Students who are enrolled externally will also receive additional resources. One of the other important pieces of reform is that, for the first time, a signal will be sent to Australian students that they cannot repeatedly go on doing undergraduate courses. Four per cent of students who enrolled in an undergraduate course last year already had an undergraduate degree. We cannot allow a situation to continue where some students perpetually enrol in one undergraduate degree after another. That causes a logjam in the system and denies places at the other end to young people and not so young people who are trying to get into university.

A Commonwealth learning entitlement will be introduced. It will be for five years or whatever is the minimum period of time for a vocational qualification—and for courses that are five years or longer, an additional year will be added. Beyond that period of time, if students wish to continue doing undergraduate degrees, they can continue to do so, but they will be able to access a loan from the Commonwealth government. The loan schemes provided by the government will be renamed in this bill to the Higher Education Loan Program—HELP. There will be HECS-HELP and FEE-HELP for full fee paying students and those who go to recognised private higher education institutions. Also for the first time there will be OS-HELP—overseas HELP. One of the critically important things for us is to not only attract foreign students to Australia but also encourage Australian students to spend some of their time as undergraduates studying in universities in other countries. So, for the first time, up to $10,000 will be lent to students by the Commonwealth government—again on an income contingent basis—to allow them to spend some time undertaking some of their undergraduate studies in another country.

With this package, the government will also be undertaking a number of important reforms to support Indigenous participation in higher education. An additional $10.4 million will be added to the Indigenous Support Fund. The government will require universities to ensure that there is Indigenous participation in decision making in universities and that outreach programs are being run to support and encourage Indigenous students to enrol and to support them once they have enrolled. The government will also ensure that an Indigenous Higher Education Advisory Council is established to give advice to the Australian government on what initiatives it should take in relation to supporting Indigenous students. With this bill, the government will also be announcing a further $6.9 million of additional support over the next three years for equity programs. Universities will be required to run outreach programs to support equity students. The universities will also be required to run a scholarship program within their own institution and to manage the Commonwealth's scholarship programs.

One of the other major problems, which I outlined earlier and which is addressed in this bill, is the financial support of students. A Commonwealth learning scholarship program will be introduced, and 25,100 scholarships will be made available to students over the first four years at a cost of $161 million. Students from low-income families will for the first time have available to them scholarships to support their education costs. There will be 17,665 scholarships, each worth up to $8,000 over four years. In addition, there will be 7,550 accommodation scholarships, which will each be worth some $16,000 over four years to students to support their accommodation costs.

This bill will also recognise a number of performance issues that were argued to us throughout the review. The first is that, to improve the quality of teaching in Australian universities, universities will for the first time have access to $138 million over the first four years for a quality learning and teaching performance fund. In order to access that fund, universities must have systematic student evaluation of the quality of teaching in that institution and it must be published. Probation and promotion within that university will depend as much on teaching as it does on research.

There will be $55.4 million available for a workplace performance pool. For access to that, universities will need to ensure that there is a genuine performance based pay scheme available in their university and a genuine culture of performance and rewarding performance. There will also be a $36.6 million collaboration and structural reform pool, the intent of which is to support, for the first time, universities undertaking innovative projects which, for example, co-locate universities with TAFE and senior secondary college; importantly, the government will be focusing on proposals which have the support of the business communities and/or state governments. The process of examining research in Australian universities is currently under way with a number of reviews. I will be announcing on behalf of the government early next year the outcome of a series of reviews looking at the way in which Australian research is funded.

This package also gives focus to arts, humanities and social sciences with the establishment, amongst other things, of an advisory council in support of them. The government will also be establishing a higher education business advisory council, and I will shortly be announcing its composition. There is currently a process under way being led by Treasury to examine innovative ways of funding Australian universities, again at the request of the Australian Vice-Chancellors Committee and others within the sector. Throughout the debate on this package, an argument put repeatedly by those who are opposed to it will be that students who get a place at university should do so only on merit. There will be those who will argue stridently against opportunities in full fee paying places in Australian universities being offered to Australian citizens that are currently offered to foreign students—whom we welcome—and against the government for the first time providing loans in support of them.

I say to the parents of Australia, not only as Australia's Minister for Education, Science and Training but as a parent myself, that it is critically important that we realise we will do our children and our future no service whatsoever if we leave them a higher education sector which is racked with mediocrity—where access might readily be available but the quality and the standard of the education being provided is ranked poorly by international standards. This package increases substantially the number of publicly funded places in universities. It ensures a significant increase in public investment in universities. The Australian taxpayer will continue to pay almost three-quarters of the cost of providing university education, and those who benefit from that university education, once they have graduated and are earning in excess of $30,000 a year, will subsequently pay back their HECS contribution.

For the very first time, the universities will have to sit down and decide themselves what is the value of their courses to prospective students. Meaningful information will have to be available to prospective students and their families about the quality of what is being provided. The maximum possible increase that students could face being added to their HECS debt per year is $2,000 if they are training to be a lawyer, a dentist, a vet or a doctor; $1,600 if they are training to be an economist, an engineer or a scientist; $1,200 per year if they are training in arts, humanities or social sciences; and absolutely no change whatsoever if they are undertaking teaching or nursing. For every last dollar that is invested in the universities by students—every additional dollar—there will be at least two extra taxpayer dollars, and every last dollar will be spent on improving the quality of the education that will be received by the current and the next generation of Australian students.

The HECS cut-offs are determined by competition, not by academic merit. One in 15 students who got a place at university this year did so not on merit; they got there because they were educated in difficult educational circumstances—and I support that. But let us not as a country then turn our backs on those who missed out on a HECS place with an entry score of 99 and deny them the opportunity, if they choose, to take up a full fee paying place—an opportunity that is offered and taken up by foreign students—and force them to do a HECS place in a course that they do not want to be in.

These reforms are critically important to the future of our country. I implore Australians to go beyond what is being said by the opponents of this package and look for the truth. I implore parents in particular to examine the best interests of their children and their children's future, and to look in particular at what needs to be done to put Australian higher education on a sound footing for this century. It is my belief that when they do so they will appreciate that, whilst not all measures in this package may be popular in all sections of the community, they are long overdue and are needed. I present the explanatory memorandum to the bill.

Debate (on motion by Mr Griffin) adjourned.