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Wednesday, 15 October 2003
Page: 21517

Mr WILKIE (5:07 PM) —I wish to speak on the Higher Education Support Bill 2003 and the Higher Education Support (Transitional Provisions and Consequential Amendments) Bill 2003. I am concerned about the possible deterrent effect of increased HECS fees on participation, especially for those from disadvantaged and rural backgrounds. I am also extremely concerned about the potential for the cost being imposed by this government to outweigh the benefits of higher education. Since HECS was first introduced in 1989, there have been a number of studies into the scheme. There seems to have been no detrimental effect on participation due to HECS prior to the 1997 increases. However, it is plain from more recent studies that HECS has affected males from lower socioeconomic backgrounds. Their participation in the most expensive courses has declined by 38 per cent. This is a statistic I believe we should be very concerned about.

As a result of this government's policies there are already far too many talented people missing out on a university place. Unmet demand for university places for 2003 in my state of Western Australia was in the range of 1,300 to 1,600. We have encouraged young people to stay at school to maximise their potential, only to make it impossible for up to 20,000 qualified, capable Australians to get a university place. These are young, motivated people who have the qualifications and capabilities to achieve a degree but, because of this government's policies in higher education, are still unable to gain a place in university.

Australia has the second lowest increase in the rate of enrolment in universities in the OECD. The Howard government is not creating enough fully funded university places to even maintain current numbers for the next three years. Australian universities are being forced to cut around 8,000 HECS places by 2007. The Howard government's policy of making students and their families pay for the $5 billion in cuts from our universities via the staggering fee hikes is not the way to encourage the uptake of university studies. This action to charge exorbitant fees by the government significantly impacts on our young people, leaving them with HECS debts, at the end of their study time, of up to $50,000.

The education minister has been misleading the public by promising that no more than 50 per cent of places in a university course would be allowed to be full fee places and that all full fee places would be in addition to the HECS places. He now admits that full fee places are going to replace all HECS places in some courses. The minister intends to exempt whole courses from the 50 per cent limit, meaning no public funding at all for some courses and forcing all students to pay full fees. The courses on the minister's hit list are those that he claims are `not in the nation's interest'. What is in the nation's interest is apparently entirely up to him.

The Howard government is stopping thousands of Australians from realising their potential and gaining the skills and education they need for better job opportunities. The government's own figures show that the number of Australians starting an undergraduate degree has dropped for two years running. Due to its own policy, the government is not creating enough fully funded university places to even maintain current numbers for the next three years. Our universities are being forced to cut around 8,000 HECS places by 2007 because the Howard government is not properly funding enough student places. As a result, thousands more school leavers will miss out on a university place over the next three years. By 2008, publicly funded places will not even keep pace with population growth. This means a diminishing proportion of Australians will be going to university because of the Howard government. A responsible government should be creating new full- and part-time university places every year for Australians starting a degree. This would go a long way to meeting unmet demand for university and it would mean more young Australians could get a university qualification.

The benefits of higher education for the individual in terms of employment and income are also evident from the surveys of the Australian Bureau of Statistics. The unemployment rate for people with a bachelor's degree is 2.7 per cent compared to 9.1 per cent for those people without nonschool qualifications. The earnings for higher education graduates and people with other educational qualifications were $1,108 per week for full-time work and $555 for part-time work. In 2001, the earning capacity for people who had only completed year 12 was $737 full time and $277 part time. I would have thought that the highest taxing government in Australia's history should be able to work out that these people who are earning more money as a result of their degree are paying more tax over their lifetime than are those who are less qualified. When one compares the amount that the government spends on higher education to the tax receipt the government gains as a result of that higher education, the government has to be in front.

Work done by J. Borland and others showed that, on average, the total gain in earnings over a working lifetime that a graduate can expect is estimated to be around $300,000. Therefore, the $5.3 billion spent on university teaching would ultimately generate approximately $8 billion in additional receipts from the taxes of graduates. The average rate of return to the government from their investment in higher education is estimated at around 11 per cent. Notwithstanding these figures, under the Howard government's policies on higher education, cost will become a barrier to a university education, and young graduates will spend a large part of their working lives weighed down by massive debt. This in turn has the potential to cause reduced home ownership, delayed parenthood and an increase in the brain drain. The government policy is to let universities increase HECS fees by up to 30 per cent. These new fee hikes could see average student contributions more than double since 1996. Fees for some courses, like law and veterinary science, could increase by over 240 per cent. Labor will not support any measures to increase fees for Australian students and their families.

Thomas Jefferson described education as the defence of a nation. I believe in that notion and further believe that higher education should be available and affordable to all those who aspire to take part in it. I do not agree with the Howard government's attempt to create an American style system where money, more than marks, opens up university doors. Under this government since 1998, full fee payers have been able to buy a university place ahead of people with higher marks. Degrees costing as much as $150,000 are available to those who can afford to pay. It is appalling that, for a price, a person can get preferential treatment over those infinitely more qualified.

All Australians should have equal access and opportunity to go to university, based on their ability. Access to university should be based on achievement and potential, not on how much you or your family can pay. The Howard government is intent on increasing the number of full fee paying places so that half of all university places go to people who buy their way in. That means that more university places will be reserved for the wealthy and more $100,000-plus degrees will be bought. The government defends its proposals by saying that this does not mean that only the rich can participate. It is magnanimously offering to introduce a loans scheme, with a six per cent interest rate, to encourage more Australians to pay full fees. Six per cent translates into a repayment of $4,300 in interest alone, over and above the cost of living.

I advocate none of that nonsense but rather merit as the only criterion for admission to university, no full fees for Australian undergraduates and the abolition of real interest rates on postgraduate loans. For seven years this government has been cutting funding to education. Since 1996 it has slashed $5 billion from universities, with Australia's public investment in universities declining by 11 per cent—a decline greater than that in any other country in the OECD. Average OECD growth is 21 per cent. As a result of budget cuts and falling investment, our universities are struggling to perform at the highest possible standard. Our universities are in a serious state of disrepair, with overcrowded classrooms, insufficient student resources, fewer tutorials and less individual contact. All of this compromises learning for students. Over the past six years the number of students per teaching staff has blown out by 31.3 per cent; at some institutions the increase has been over 50 per cent.

This government should be investing more money in higher education. Instead it has hijacked over $400 million of desperately needed university funding and is now attempting to blackmail universities into implementing industrial relations conditions—conditions that are so unpopular and irrelevant to universities' core functions of teaching and research that they have caused massive disruptions across university campuses. Under this government we have seen a massive drop in skills growth—from a 28.6 per cent rate of productivity growth in the late eighties and early nineties to just 2.9 per cent in the late nineties, which is a drop of 75 per cent.

The Productivity Commission found that more Australians must attain higher skill levels to raise living standards. There are severe skill shortages in key industries in Australia. The need for more skilled workers in areas like nursing, teaching, multimedia, vehicle trades and metalwork is getting to a desperate level. In spite of this, under this government tens of thousands of talented Australians are being turned away from university and TAFE every year. Despite this, there is no new assistance for funding future growth or meeting unmet demands in TAFE. This government's policies result in Australians being denied access to the skills they need for a good job. More funding is needed, not less. We need more HECS funded nursing and teaching places, full- and part-time, at undergraduate and post-graduate levels.

The Howard government wants to limit to five years the amount of time a student can have a HECS place. A standard undergraduate degree takes three years of full-time study and a master's degree takes six years of full-time study. What is the value of offering HECS for five years? Figures show that Australian students already spend the shortest amount of time at university out of any country in the OECD. This limit to five years of study limits people who decide on a career change or who want to upgrade their skills.

Australia's university system needs investment and longterm reform, not cost cutting and increased student costs. We must support Australians in their pursuit of higher education. This is an investment for all Australians. People with TAFE and university qualifications are more likely to get a good job and contribute to social and economic development. This means benefits to Australians, including higher living standards, a higher tax base, improved productivity, increased business investment and greater skills growth. A wider distribution of these benefits can be achieved by increasing opportunities for people to go to university or TAFE, raising standards and ensuring that cost is not a barrier to study. To achieve this, we have to make a commitment to adequately fund our universities and TAFEs and keep student fees affordable.

Of course students should contribute to the cost of their university study. That is why Labor introduced the Higher Education Contributions Scheme in 1989. But students and their families already contribute a substantial amount to the cost of study. An increase on these levels of contribution risks turning too many Australians away from university. Higher education at universities and TAFEs should be viewed by all as a shared investment which has important public as well as personal benefits.