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Tuesday, 2 September 2014
Page: 9483

Dr HENDY (Eden-Monaro) (20:24): I will start this speech by saying what I said in a speech earlier today in this chamber, which is that I have a question for the Leader of the Opposition, and that is: 'Where is the money coming from, Mr Shorten? Where is the money coming from to pay for all these things that you think need to be done?'

I am very happy to speak on the Higher Education and Research Reform Amendment Bill 2014 and support its second reading. This bill forms part of the significant macroeconomic reform contained in the May budget. I believe it is both necessary and vital for the Australian economy. We all know that a first-class higher education system is a necessary condition for maintaining a First World economy. It is the difference between having a wealthy and an also-ran country. Australia is a first rank economy and one of the most developed in the world. That is not a matter of luck. Many countries have abundant natural resources but have poor and weak economies because they do not possess the intellectual fire power to utilise those natural blessings.

As John Howard often said, economic reform is like participating in a running race with an ever-receding finish line. The reform task can never end if Australia is to stay in the front rank of nations. As a former chief of staff of a former minister for education, I know a little bit about this issue. At the time I was in that position during the Howard government, we tried to initiate some university reform. It was a hard task and we got a little way down the road. I wish all strength to the current Minister for Education for the hard battle he has ahead. He can be assured that members on this side of the House understand the task at hand and fully support him.

Some people point to the fact that we have 39 universities and that the higher education sector in Australia is robust. However, I note that when I lived and worked in Bahrain, in the Middle East, they also had 39 universities for a population of only 700,000 indigenous people and another 700,000 foreigners. However, that was no indicator of quality, I can assure you.

This package of reforms has a large number of key elements, and I want to catalogue them to indicate the breadth of the reform process that is going on here. The government is expanding the demand driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees—costing $371.5 million over three years. We are extending Commonwealth funding to all Australian higher education students in non-university higher education institutions studying bachelor courses—costing $449.9 million over three years. Over 80,000 students each year will be provided additional support by 2018. This includes an estimated 48,000 students in diploma, advanced diploma and associate degree courses and 35,000 additional students undertaking bachelor courses. This is a huge reform.

Putting a lie to the opposition's scare campaign, there will be more opportunities for students from low socioeconomic status backgrounds through new Commonwealth scholarships—the greatest scholarship scheme in Australia's history. This would effectively mean free education for the brightest students from the most disadvantaged backgrounds.

Critically, we will be freeing universities to set their own fees and compete for students. This competition will enhance quality and make higher education providers more responsive to the needs of students and the labour market. It is our firm view that, when universities and colleges compete, students win. That is backed up by historical evidence. Just ask the Labor Party members who originally introduced the fee system with the Dawkins reforms in the Hawke government. We are strengthening the Higher Education Loans Program, which sees the taxpayer support all students' tuition fees upfront and ensures that students only repay their loans once they are earning a decent income—that is, over $50,000 per annum. As the minister says, no-one needs to pay a cent upfront. Removing all FEE-HELP and VET FEE-HELP loan fees which are currently imposed on some students undertaking higher education and vocational education and training will help thousands of students.

We will secure Australia's place at the forefront of research, with $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy; $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships scheme; $26 million to accelerate research in dementia; $42 million to support new research in tropical disease; and $24 million to support the Antarctic Gateway Partnership. These are a fantastic boost to research and will be complementing the $20 million Medical Research Fund that the government is also setting up.

Of course we also have to make some tough decisions. We will be reducing the Commonwealth Grant Scheme by 20 per cent and we will be adjusting the interest rate on student HELP loans—the money taxpayers lend students up-front for their tuition—to instead the 10-year bond rate with a capped maximum of six per cent, away from the current interest rate which is CPI. I note that taxpayers borrow the funds at the bond rate.

My electorate of Eden-Monaro is a rural and regional electorate so a lot of constituents, alarmed by the scare campaign of the ALP and Greens, asked me what the implications of the changes will be for regional areas. I can assure my constituents that the reforms are overwhelmingly positive. The government's higher education reforms offer many advantages and opportunities for regional universities and the regional communities they serve. Many will take advantage of the new-found freedom to offer funded places in higher education diplomas, advanced diplomas and associate degrees. This will advantage people in regional communities, especially those who might not have done so well at school but who deserve the chance to develop their skills and prove that they have what it takes to succeed at higher education.

In addition to providing pathways to higher degrees, many sub-bachelor qualifications provide a ticket to a job in their own right. They provide training for engineering technologists, paralegals, construction managers and aged care professionals—the kinds of skills that many regional communities need. To attract more students, some regional institutions may seek to offer their courses at a lower cost than their city counterparts. If towns and cities get behind it, this could see more students from urban areas choosing regional cities and towns to undertake study, which would be a boon for regional economies. Indeed, the Cooma-Monaro Shire Council in my electorate has been working with the ANU and the University of Canberra in just this manner. The Eurobodalla Shire and the Bega Valley Shire in my electorate have been talking to the University of Wollongong as well as the other last named two universities.

The government's higher education reforms are also likely to see a bigger higher education footprint in regional areas with non-university higher education institutions including some TAFEs and private colleges being able to offer subsidised places to students. TAFE and universities have the freedom to work together to deliver the kind of education opportunity students need. The new Commonwealth scholarship scheme will ensure that more students from regional areas have the opportunity to study at a range of universities. The scholarships will help to cover fees, living expenses and relocation costs as well as mentoring and tutorial support.

In reducing per student funding under the Commonwealth Grant Scheme, the government has taken care to ensure that the reduction does not impact regional universities disproportionately. Teaching and nursing courses, which are the mainstay of many regional universities, are particularly looked after. But you do not only have to take the government's word for this matter. There are many endorsements of our position. For example, on 13 April this year the Regional Universities Network put out a media release welcoming the release of the review of the demand-driven student funding system otherwise known as the Kemp-Norton report. The regional universities network stated:

The provision of demand-driven places to non-university providers could build on the significant partnerships or dual arrangements that already exist between regional TAFEs and regional universities. More options for higher education study including sub-bachelor pathways will be available to regional Australians including low SES students.

The reforms would be good for regional Australia. More highly skilled graduates are what our economy and communities need. Extension of the demand driven system to sub-bachelor places would allow universities to be more responsive to the needs of less academically prepared students.

The Regional Universities Network chair, Prof. Peter Lee, noted in another release on 29 April:

… given the current funding climate, RUN is open to robust discussion of fee deregulation in a broader context of university funding, including research and regional loading funding.

If there is fee deregulation, there should also be support, including scholarships, to ensure the continued growth in the participation of low SES students in higher education.

That is what they asked for and that is what we are doing. Or, as Prof. Scott Bowman, Vice Chancellor of the Central Queensland University said to The Australian newspaper on 2 July 2014:

There are two types of universities. Those that see change, wring their hands and say, 'Oh woe is me,' and then there are others that lick their lips and say, 'We are a lip-licking university.'

Prof. Jim Barber, former Vice-Chancellor of the University of New England, said on ABC radio on 19 May 2014:

If premium Universities now do start to lift their fees substantially, then the regional Universities and UNE in particular, if it holds its prices, might find that it can compete on price and retain its student load.

The good professor went on to say in an article published in the Australian Financial Review on 16 June 2014:

Taken together, these budgetary and regulatory developments should increase the range of educational options on offer in Australia providing students with genuine choice rather than Mao suits.

And Paul Wellings, Vice-Chancellor of the University of Wollongong, wrote in an article in the Australian Financial Review on 23 June 2014:

there is a real chance that [Education Minister] Pyne's reforms will ... the sector while maintaining our ability to offer university education free at the point of delivery to all students, irrespective of their social circumstances.

That is a ringing endorsement both on the need for change and what the government is actually proposing.

The ALP has been running an unprincipled scare campaign on these necessary reforms. The genesis of this scare campaign runs deep in the ALP. Interestingly, that astute political observer, Paul Kelly—the member for Mitchell was referring to him with respect to another quote—comments in his recent book, Triumph and Demise, on the character of the Rudd-Gillard-Rudd circus of a government. On page 57 he wrote:

But Beazley—

That is Kim Beazley, the former Leader of the Opposition and when he was the ALP leader—

made a contribution that shaped Labor's thinking for more than a decade—his 2001 Knowledge Nation policy, a manifesto for office. Its central idea was that the next wave of economic reform would arise from public investment in education, skills and technology. Beazley was seeding agent for the Rudd Gillard 'education revolution'. His starting position, critically, was that the Hawke-Keating pro-market reforms were completed.

But what was Kelly's assessment of that change? He made this observation:

It implanted a false choice in Labor's head: investment in education was essential but not as the substitute for the next round of market-based economic reform.

And who in the Labor Party did not actually support what Kim Beazley was saying those many years ago? It was actually someone who is on the front bench of the Labor Party now, the shadow assistant Treasurer, the member for Fraser.

In a book entitled Imagining Australia: ideas for our future, which he co-wrote with a number of other people, he said a number of really interesting things. On page 104 he said, 'Contrary to popular opinion, HECS did not reduce the fraction of poor students attending university, giving the lie to those who say that abolishing HECS would improve educational access for students from poorest families.' He also said on page 105, 'Indeed we believe that HECS should be extended to cover those tertiary students not currently covered under the scheme, including those attending TAFE, accredited private trainers and the small number of private Australian universities,' something that we are actually doing in the Minister for Education's reforms.

He also said this—amazingly. How he remains on the frontbench of the Labor Party I do not know. He said on page 106, 'We propose that Australian universities be free to set student fees according to the market value of their degrees. A deregulated or market-based HECS will make the student contribution system fairer, because the fees students pay will more closely approximate the value they receive through future earnings.' Well—very good, member for Fraser. That is really what we are proposing in these reforms. I hope that he will actually cross the floor and vote for us when we get to the time of the division, which I expect will happen because of, as I said, the unprincipled scare campaign of the opposition on this matter.

In conclusion, I strongly endorse the reforms of the Minister for Education. They are far-sighted and will massively boost Australia's economic performance in years to come. I commend the bill to the House.