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Thursday, 4 October 1984
Page: 1285


Senator RYAN (Minister for Education and Youth Affairs)(9.42) —I move:

That the Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

OVERSEAS STUDENTS CHARGE AMENDMENT BILL 1984

The purpose of the Bill is to amend section 6 of the Principal Act to set the upper ceiling for the new levels of charge to be fixed by regulations. The new levels, representing about 15% increase on the existing charges, were considered necessary in order to keep pace with the increase of costs in providing higher education. It is also equitable from the Australian taxpayer's viewpoint that overseas students make a fairer contribution towards the cost of their education in Australia.

As from 1 January, 1985, the new levels of student charge will be, subject to regulations, as follows:

$3,350 for masters and doctorate degrees;

$3,100 for courses in medicine, veterinary science or dentistry; and

$2,500 for all other courses.

As honourable senators will recall, two reports, the Gold- ring Committee Report on Private Overseas Student Policy and the Jackson Committee Report on Overseas Aid, were tabled in both Houses on 6 and 7 June respectively.

The Goldring Report advocated:

a planned approach making overseas students an integral part of eduction planning and funding;

fees covering only part of education costs (as at present); and

a modest increase in scholarships.

The Jackson Report on the other hand advocates:

a market approach to the promotion of education;

fees covering the full economic cost of student's education;

an increase in numbers and types of scholarships to meet development assistance aims.

Both reports raise important and complex issues which will require very close examination before the government draws any definite conclusions with regard to future policy directions.

For this purpose, an interdepartmental task force was set up to examine the issues involved and report to the Government in the near future during these sittings. The aim is for any new policies to be implemented in time for the 1986 intake. The proposed amendment to the legislation is not intended to preempt any future government decisions on overseas student policy following its consideration of the task force report. The overseas students charge raised $25. 5m in 1983-84 and is expected to raise $32.3m in 1984-85. This is due to increases in the charge rate ($3.8m) and an increase in the number of students liable for the charge ($3m). I commend the bill to the Senate.

INTERNATIONAL DEVELOPMENTASSOCIATION (FURTHER PAYMENT)BILL 1984

The purpose of this bill is to authorise a contribution by Australia of $A200 million towards the seventh replenishment of the International Development Association, or IDA as it is commonly called. IDA, established in 1960, is the concessional lending affiliate of the World Bank. It assists its poorest member countries by providing long-term, interest-free credits for sound development projects, utilising in the main grant funds provided by donor countries. The poorest countries have great need for development assistance on concessional terms. They therefore depend upon loans from IDA which bear no interest and can be repaid over 50 years with a 10 years grace period. Honourable Senators will recognise that IDA, in its turn, depends upon developed donor countries like ourselves to provide most of the resources to carry on its work; donor funds are critical to the development needs of these countries.

This, the seventh replenishment of IDA's resources, has been beset with problems including the postponing of the replenishment for one year. Australia helped tide the Association over this period by making a special contribution of $A68 million. After a long series of meetings, all donors including Australia but with the exception of the United States were prepared to support a replenishment of US $12 billion. However this level of replenishment was not achieved. The United States announced that it would not take up a share in the replenishment above 25 per cent and that its annual contribution would be US $ 750 million, implying a maximum replenishment of US $9 billion. Australia and other IDA donors considered the result to be ''gravely inadequate'' and expressed regret and disappointment. However, by January this year, they felt that to avoid a hiatus in IDA's lending they must accept the figure of US $9 billion. Many, including Australia were prepared to examine together and with IDA Management the possibility of mobilising additional resources. Unfortunately due to complications in reaching agreement on the related issue of a selective capital increase in the Bank adoption of the replenishment resolution by the Bank's Executive Board was delayed until 24 May.

Our share in the replenishment based on our usual share of 1.91 per cent was $ A192.58m. In addition to this we have responded to a request by Mr Clausen, President of the World Bank, for Australia to increase its share to help fill a shortfall of 3.12 per cent in the US$9 billion target. In this regard the Government has agreed to increase our contribution by $A7.42m, to bring our total contribution to $A200m. As in previous replenishments, Australia has the option of paying its contribution either in cash or by lodging non-negotiable, non-interest bearing promissory notes encashable on demand as and when funds are actually required by IDA for loan disbursements. In accordance with past practice, and in line with the practices of most other members of IDA, we propose to lodge promissory notes. This will spread the impact on the Budget over about 10 years starting with a small encashment in this financial year.

During the discussions on the seventh replenishment, it was agreed that essentially the same voting power arrangements under the sixth replenishment should continue to apply. Accordingly, although contributions to replenishments, as opposed to the original subscriptions to IDA do not carry voting rights, a small proportion of donors' contributions is counted as a subscription. This is designed to ensure that the relative voting power of each of the developed member countries of IDA can continue to correspond broadly to the relative share of total resources contributed by these countries. The calculations undertaken by the staff of IDA indicate that, included in the total amount which Australia will make available under the seventh replenishment, an amount of $A161,410 will take the form of an additional subscription with voting rights. The balance will represent an additional contribution. This distinction is provided for in Clause 4 of the Bill.

Honourable senators will be disturbed to learn that assistance from IDA to the world's poorest countries, including India, China, Bangladesh and countries in sub-Saharan Africa, will be reduced in real terms to levels significantly lower than under the previous replenishment. The IDA-7 replenishment of US$9 billion is significantly smaller than the IDA-6 replenishment of US$12 billion in 1980. Because of the emphasis on helping the poorest countries, IDA credits are increasingly concentrated on the countries I have just mentioned. They serve to complement our own, relatively limited bilateral aid efforts to these countries. Australia was willing to support proposals by the World Bank for the provision of supplementary resources for the IDA Seventh replenishment. We are disappointed that it has not been possible to achieve international donor agreement to hold negotiations. The Government has the matter under review and will consider how best it might further assist.

Honourable Senators will know that Australia has a solid record of support for IDA since its inception. There has been general agreement, on all sides of the House, that IDA is a highly effective channel for disbursement of development assistance to the most impoverished countries of the world. That view was strongly expressed by the Committee to Review the Australian Overseas Aid Program whose report the Honourable Bill Hayden tabled in the House of Representatives on 7 June. This Bill provides an opportunity once again to demonstrate support for IDA and our willingness to recognise, through our support for this institution, the development assistance needs of the poorest developing countries. I commend the Bill to honourable senators.

Debate (on motion by Senator Reid) adjourned.