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Tuesday, 14 October 2003
Page: 21365


Dr WASHER (7:30 PM) —Together the Higher Education Support Bill 2003 and the Higher Education Support (Transitional Provisions and Consequential Amendments) Bill 2003, along with the Higher Education Support Amendment (Abolition of Compulsory Up-front Student Union Fees) Bill 2003, outline reforms to the way we fund and deliver higher education in Australia. They have been drawn up as a result of an extensive review of Australia's universities. The last 20 or 30 years have seen huge changes in the socioeconomic structure of the world with the revolution in telecommunications and globalisation. University education has moved from being delivered by elite institutions that foster traditional professions to being a mass form of higher education. Our economic and social development is increasingly being driven by service based industries rather than by land and labour intensive industries. The report from the National Innovation Summit, which was held in February 2000, states:

... we are in the midst of a revolution from which a new order is emerging. The solutions of past decades will not suffice in the new knowledge age. Intangible assets—our human and intellectual capacity—are outstripping traditional tangible assets—land, labour and capital—as the drivers of growth.

The government recognises that, as a result of these sweeping changes and in order to build a sustainable economic and social legacy for the next generation, it is essential that higher education in Australia be reformed.

The Higher Education Support Bill 2003 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 that over the next 10 years there will be $10.6 billion of additional public funding invested in universities—$6.9 billion directly and $3.7 billion in additional support for students. I am particularly keen to see this legislation passed because one of the campuses of Western Australia's second largest university, Edith Cowan University, is situated in my electorate of Moore. ECU is a market leader in education for the service professions and delivers more than 330 courses to almost 23,000 students. It is interesting that, although Western Australia is the gateway to Asia, the highest proportion of overseas students at ECU are from Norway. ECU's vice-chancellor, Professor Millicent Poole, spoke enthusiastically about the proposed reforms to higher education after being briefed in Canberra in May. In her media release of 14 May 2003 she said:

A Federal Government, for the first time in a long time, recognises the key role of higher education in building a knowledge-based economy.

She went on to say:

I believe the vision that drives the reformed blueprint and its over-arching themes will serve Australia well. The flexibility being injected into the system is commendable. Moving away from a `one-size-fits-all' approach should deliver the diversity, flexibility and sustainability our system needs.

Two of the key elements of this bill are the establishment of the Commonwealth Grants Scheme, creating a transparent framework for the funding of student places, and the provision for institutions to determine student contribution levels within a range set by the Commonwealth. There are also changes to the arrangements for full fee paying students. For the first time, institutions themselves will have the flexibility to decide what the value of their courses is to prospective students. The maximum possible increase per year that students could face to their HECS debts is $2,000 if they are training to be a doctor, dentist, vet or lawyer; $1,600 if training to be an economist, scientist or engineer; and $1,200 if training in arts, humanities and social sciences. There will be absolutely no change in fees for students undertaking courses in teaching or nursing.

For every last dollar that is invested in universities by students there will be at least two taxpayer dollars, and every last dollar will be spent on improving the quality of education that will be received by the current and the next generation of Australian students. One of the most important elements in these reforms is the recognition that Australians who are academically qualified should be free to take up a full fee paying place in an Australian university. Once their HECS places are filled, universities will be free to offer full fee paying places to academically qualified Australians.

The Commonwealth government will lend these students money on the same income-contingent arrangement as HECS, but with 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 capped at $50,000. This will give students the opportunity to undertake their first choice of course, even if no HECS places are available, rather than switching to a course they are less interested in because a HECS place is available.

Representatives of the ECU Student Guild came to my office recently to put forward their arguments against the reforms contained in this bill. They were specifically concerned about the prospect of an increase in student fees and a greater cost to study medicine or dentistry. It is a fact that the cost of teaching the medical sciences is far greater than the cost of teaching arts, but it is equally true that a young graduate of medicine today starts his or her career on a median salary of $40,000 with significant enhancements to their salary after the first year. So, yes, the loan is greater because the course is more expensive and of greater duration, but the long-term financial rewards for the graduate are well worth the investment. Having spent 26 years in medicine I can say that my years at university in the 1960s were a solid investment in my future. Of course university was free then so there was no financial burden on me as a student apart from the expense of books and accommodation. When I began studying medicine at the University of Western Australia in 1962 the population of Australia was just over 10 million. The median house price in Sydney, if with a currency conversion, was $10,000. There are no figures available for Western Australia at that time, but the cost of a house there would have been significantly lower than that. Average income was $2,350 per annum or $45 per week. There was free milk in schools and petrol was 36c per gallon, which is roughly equivalent to 8c per litre. We had gallons, not litres; miles, not kilometres; and pounds, shillings and pence, not dollars and cents. It was all very different.

Today we live in a globally competitive environment and a world dominated by information technology and rapid telecommunications. Everything within our world changes, and it is vitally important that we reform the way we fund and deliver higher education so that we can move forward as a nation and provide the absolute best for our young undergraduates—our potential scientists and innovators. Cash-strapped universities become mediocre universities in Australia. They cannot afford to be mediocre in an ever-competitive global environment. Our universities need to be funded properly so that we are at the cutting edge in higher education research and innovation. Opponents of these reforms, and a great many of them are, understandably, students—after all it would take a very forward looking, altruistic young person to warmly embrace the prospect of paying more for their education—may say that they will saddle our young graduates with a larger debt at the beginning of their careers. But nothing that is worth having comes cheaply. It is an irrefutable fact that to equip our universities for the 21st century—to ensure that our students have access to a world-class university education—we need to reform the way that universities are funded and managed. The plain fact is that Australian universities need access to more money. These students confirm their desire to see a future of globally competitive education with globally competitive low taxation rates.

When we want something badly enough, even if it is not essential to our lives, we are prepared to pay for it in different ways. We rack up hundreds of dollars in interest so that we can have what we want now. Australians put billions of dollars on plastic and hire-purchase agreements every year. Even students, with lower incomes, spend on plastic. We all want the goods now, even if we do not have the money. But there is a huge difference between hire purchase and HECS. When you buy your stuff on HP, you take your goods home and defer your payment, or pay in monthly instalments over a number of years. By the time you have paid off your home theatre system, car, stereo system or computer, its value is virtually negligible. You have paid off the capital amount of your loan plus interest and fees and your goods are worth considerably less than what you paid for them. But with HECS, it is the other way around. You still get your goods—that is, your education—immediately and you still defer payment if you choose. When you pay it back, you pay the capital loan plus CPI to maintain the real value—and, in the case of full fee paying students, 3.5 per cent interest. But the real difference between hire purchase and HECS is that with HECS, by the time you pay back the loan, your goods—that is, your education—are worth considerably more. Your education has provided you with significant earning potential as you embark on your chosen career.

Other measures contained in this bill include a learning and teaching performance fund of $54.7 million in 2006—increasing to $83.8 million in 2007—to reward those institutions that best demonstrate excellence in learning and teaching. The Commonwealth Learning Scholarships Program will be introduced from 2004 for students from low socioeconomic backgrounds, including Indigenous students and students from rural and regional areas. Over the first four years, 25,100 scholarships will be made available to students at a cost of $161 million. Of these, 17,665 scholarships, each worth up to $8,000 over four years, will support students' educational costs. The remaining 7,550 scholarships will each provide $16,000 over four years to support students' accommodation costs.

The Higher Education Support Amendment (Abolition of Compulsory Up-front Student Union Fees) Bill 2003 is another important piece of legislation. It will amend the Higher Education Support Bill 2003, once enacted, to make it a condition of approval as a higher education provider—as well as a condition of any grant under the act—that an institution adhere to the Commonwealth's voluntary student unionism policy. Under that policy, higher education providers must not require membership of a student association, union or guild as a condition of enrolment, or collect any amount required to be paid as a condition of enrolment that is not directly related to a student's course of study. The government is strongly committed to the principle of freedom of association throughout Australian society, and that includes university campuses. Students should have the right to unhindered freedom of association—and the right to choose the goods and services they want and the causes and organisations they support. The government is not anti student organisations—students should be free to organise, to develop representative structures and to undertake advocacy on behalf of other students—but these things should be voluntary. Currently, students are forced to pay between $100 and $559 a year to student organisations as a condition of enrolment, whether they wish to use the services of the organisation or not. The reforms contained in these three bills are complex because of the complexities of the issues that face the higher education sector. They are critically important to the future sustainability of our universities and the economic and social development of Australia. I commend these bills to the House.