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Tuesday, 24 February 2015
Page: 1131

Mr LAURIE FERGUSON (Werriwa) (16:46): I rise to speak on the Higher Education and Research Reform Bill 2014. I note at the outset there was a very cute citation by the previous speaker in saying that an academic had indicated that there would not be a 'standard' $100,000 university fee. The most harsh detractors of this legislation have not alleged that it will be the standard. So for that academic to say that it will not be standard is actually saying nothing.

I broadly associate myself with the opposition to this legislation—nearly $2 billion in cuts to Australian universities, a thrust against equity programs at a time when they are even more necessary because of the danger to equity access in this country, cuts to the Research Council et cetera. I heard the assurances from the member for Barker that because his university was going to have a jazz course with James Morrison, nobody in regional universities—and I include regional city universities such as that in Western Sydney—had anything to fear. If that is the case, I do not think the government, as concerned as it is with deficits et cetera, would actually be offering a $100-million transitional phase over three years for these universities if they do not have any danger coming to them—of course it is only one-fifth of what they sought.

I divert briefly from the other points made by opposition members to talk about one specific issue that in a way has the support of the whole House but, unfortunately, the government has refused to delete it from the controversial aspects of the bill—that is, the question of special category visa students from New Zealand. There is a provision that they would in future be eligible for HELP assistance.

We have a situation in this country where New Zealand citizens are allowed, as we know, to come here forever and a day. Basically they do not require visas to come here but their children are treated as foreign students. I do not in any way support the overall campaign by Australian New Zealanders to be given access to every aspect of welfare. Essentially they would not be here if we did not have a visa-free system. However, when we are talking about access to university for the children, I think this is a very real social issue for the country.

We have a situation where the median age of Maoris in this country is 25 years. Thirty-one per cent are under 15 years of age with only 2.3 per cent over 65. I have a bit of self-interest in this because my electorate has one of the greatest concentrations of Polynesians and New Zealanders in the country. In actual fact, my electorate has a 16th of the total Polynesian population in the country. To give you an example of some of the social dangers that we are talking about, the incarceration of the 88 Samoans in Australian jails in 2013 represented a rate of 500 people per 100,000—the second highest rate of incarcerations in this country. So I think we have a very real social problem if we do not do something about giving these children access to university and to HELP assistance.

It follows a mistake made by the previous government where we accidentally—I would say—deleted access to English courses for New Zealand citizens believing somehow that every Polynesian that lived in New Zealand for some time was fluent in English, which is not the case. I would have hoped that the government would have seen a bit of sense and deleted that particular section from the bill.

I have heard assurances from many opposite that there is nothing to worry about, that essentially university fees will not increase greatly, that there will be competition and, as one speaker said, the halls will be empty if the fees are too high. I think their views are interesting but I think a guy called Ross Gittins, who is a fairly acknowledged economic commentator in this country, might have a bit of credibility. He said in an article in the Sydney Morning Herald on 31 May 2014 under the headline Ignore the PM, university fees will rise steeply:

The 20 per cent cut will give the unis an immediate and pressing reason to use their new freedom to increase the fees they charge, and the less generous indexation will maintain the pressure for further increases.

He said further:

In the tertiary education 'market', however, we have a relatively small number of large and larger organisations selling differentiated products of uncertain quality. We have oligopoly rather than 'perfect competition'.

He went on to say in conclusion:

On the basis of all this, my guess is the sandstone unis will raise their fees a long way and the less reputed unis won't be far behind them. Their notion of competition will be to make sure no-one imagines a lesser fee than the big boys is a sign of their lesser quality.

In actual fact one of the challenges for universities such as Western Sydney is that they will not move their fees as much as that. It is also quite possible that there will be a bit of an image problem for those campuses.

There have been many comments about why we have to do this—we are not up there with the top international universities, we are falling behind, et cetera. However, there are models overseas which show what really happens. In the United Kingdom, a study by the Higher Education Commission last year found that 73 per cent of students would be unable to repay their loans within 30 years, at which point debts are automatically wiped. This would amount to 45 per cent of the total debt remaining unpaid. It means that the majority of students who do actually repay will be paying back their university loans well into their 50s. It was noted by the Institute of Fiscal Studies that the average student debt incurred would be £44,000, up from the previous average under the old system of £24,750. The UK pattern has been one of a huge increase in costs and, even though we have heard comments that it would be limited to £900 when higher education was deregulated, it is not so. In the real world by 2015-16 only two of the 123 universities in the UK will not be charging the maximum.

In the United States student debt has reached $1 trillion. Since 1978, the cost of a college degree has risen 1120 per cent—four times the CPI—while food has only increased by roughly a fifth of that. Two of every three students leave college weighed down by debt; one in 10 has a debt greater than $40,000; 41 per cent were behind by over five years in repayments; $8 billion was owed in loans. The author of the article which cited those figures, Jason Ritchie in the HuffPost blog of 8 April 2014, gave this scenario of his family:

My grandfather suffered from black lung, which he caught during his years toiling in the coalmines of Kentucky … Sending his son to college meant that my father would never develop his same chronic cough and back pain. … Student debt means slower and higher unemployment … less money flowing through the business … less money to buy a home … fewer and fewer students attempting to gain a degree and fighting for the promise of a better future.

According to the Federal Reserve Bank, a credible authority in the United States, 40 per cent of those under the age of 30 have outstanding student debts of an average of $23,000.

The member for Herbert earlier spoke about a heroic resistance to the Labor government—with the Whitlam government for wiping university fees, et cetera—and the way Labor had backed away from that approach in favour of loans, but here we have a far more significant move. The member for Herbert is defending a far more draconian future for students. This government is bringing in the private sector. The London Review of Books five years ago carried an interesting article about the US experience. It noted:

The money that would once have been reserved for academic salaries is spent on marketing, which eats up as much as 25 per cent of expenditure: the Apollo Group spent $1 billion on marketing and student recruitment in 2010. Education is neither here nor there: if that is the fastest way to generate profit then no one will worry if a quarter of the funds are drained away from teaching.

Howard Hotson further commented in that article:

In April Willetts announced—

that is in the UK—

that from 2012 students starting courses at private institutions will be able to take out government loans of £6000 per year. Worse still, in September public funding for teaching in the humanities and social sciences will cease in England. The fear is that the most lucrative courses will be cherry-picked by profit-driven institutions.

I believe this is a very backward step; it represents a real threat to the non-sandstone universities. The sandstone group has been very vocal—and who would not be in their situation with $2 billion of public money ripped out? They are saying that we do not need to worry about a sharp rise in the price of education. Clearly, there is very little alternative for those universities; they will get away with what they can. That has been the experience overseas.

It is interesting that the Minister for Education and the Treasurer were on the public record as opposing any increase when they were students. They are now saying that Australian students should face greater pressures than they did. I condemn this legislation. It presents a gamble on life; they say those with university degrees can earn more. That may be true, but not everyone is in the same situation as the member for Herbert who assured this chamber that, when he had asked his two daughters whether they would be affected by price rises, they had said, 'No, they wouldn't be.' I am afraid there are a few people out in voter land who do not have the income of the member for Herbert and whose children may be more affected by price rises. He also mentioned a survey, which he said was unscientific—and I agree with him—that at the university up there he and his staff found out that the majority of students did not know how much they paid in university fees. That might be the case under the current arrangements, but, I tell you what, they will know what the fees are when there is a gross expansion under these provisions. I join opposition members in strongly condemning this legislation.