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Wednesday, 3 December 1986
Page: 3237

Senator MACKLIN(11.36) —The Australian Democrats are opposed to the Overseas Students Charge Amendment Bill and the Overseas Students Charge Collection Amendment Bill. As the Opposition has already indicated that it will support the Government on these Bills, we propose nevertheless, since we will have a Committee stage, to move some amendments at that stage. I would like to spell out why we believe that the Government is on a track which is not beneficial to Australia and which ultimately will be detrimental to our interests. The Bills, particularly the Overseas Students Charge Amendment Bill, propose higher charges for overseas students and extend that charge to students who hitherto have not been liable for such a charge.

As the Government foreshadowed in 1985-Senator Peter Baume has already pointed this out-the overseas student charge for higher education students who commenced their courses in 1986 will now move to 45 per cent of full average costs from 1987. For new higher education students the rate will also be 45 per cent of full average costs, and students who commenced their study prior to 1985 will pay a 15 per cent increase in 1987, bringing that charge to the equivalent of 32 per cent of full average costs. From 1987, the charge is also to be extended to overseas students in schools and colleges of technical and further education. TAFE students who have commenced their courses prior to 1 January 1987 will pay 32 per cent of the average Commonwealth contribution to TAFE costs, and new students will pay 45 per cent. Secondary students will pay a flat rate of $300 a year. For higher education courses-that is, for university and advanced education courses-the overseas student charge from 1 January 1986 will now be $3,850 per student in medicine, dentistry and veterinary science, and $3,056 for students in other courses. Overseas students who commenced their courses after 1 January 1986 will be paying $5,506 per student in medicine, dentistry and veterinary science, and $4,666 for students in other courses.

Because of the debate we had last night, I think it is important that people know at this juncture that overseas students in higher education will be paying the $250 fee. This charge, of course, is incorporated into the fees I have already mentioned. If the administration charge had not been introduced, the overseas student charge for students commencing courses before 1 January would have been $4,100 or $3,306 or, for those who commenced after 1 January 1986, $5,756 and $4,916. So there has been a shuffle with regard to the overseas student charges. The Minister for Education (Senator Ryan) last night said that overseas students would not pay the fee. That is not the case; it has been incorporated into the charges.

The equity with regard to these charges certainly should be questioned. I believe that there is a danger that the charge is reaching, or may already have reached, a level where students from low income families will no longer be able to afford an Australian education. In other words, we are now looking at students coming from wealthy overseas families who will, of course, be able to afford the average cost, with subsidies of probably up to 55 per cent. The level of the charge and/or its administration, I believe, is acting as a disincentive to students to embark on an education here. I think this has been accepted by the Government, if one looks at the Budget Papers. Budget Paper No. 1 states that the increased charges to apply in 1987 are estimated to yield an additional $7.3m in revenue `after allowing for reductions in overall student numbers compared with 1985-86'. In other words, the Government knows that it is cutting back on the absolute numbers as well because of these charges.

Unrealistic assumptions are being made of the extent to which our education system can be marketed overseas simply to earn foreign currency. When Australian fees reach a certain level the benefits of an Australian education drop compared with the status of an American or British education for what might in fact be marginal additional costs. This applies at least for wealthy families in the region. Meanwhile, the poorer families, of course, increasingly will miss out. The report of the Goldring Committee of Review of Private Overseas Students Policy, which was delivered in 1984, pointed out that most overseas students come from families which are not wealthy by Australian standards. Hence, I think we are impinging on a significant group.

It is unfortunate that we will be moving into the more elitist area with our education, which of course is still subsidised. I believe that the Indian institutions will become much more attractive, particularly to students from Malaysia and Hong Kong. Since the Indian institutions do not differentiate between home students and those from abroad and all government and grant-aided higher education institutions charge the same low level of fees to all students, and since the subsidies in the Indian circumstances are over 90 per cent for medicine, 75 per cent for engineering and 70 per cent for other graduate courses, fairly obviously those institutions will now be much more attractive than those in Australia. I believe that increasingly that will put India in a position to be of major assistance and it will, of course, allow India, in terms of its foreign affairs, to be much more successful than Australia in years to come.

The question is whether our overseas student system is becoming one that will neither provide assistance to the poor and middle class students of developing countries, with all the intangible but real benefits that come to Australia from their education, nor generate much foreign income, as the so-called hard-headed economic rationalists take over and run this Government. The Opposition has declared in this debate its intention, if it comes to government, to raise the private overseas student charge to full cost recovery by the mid-1990s, as a reiteration of that which was mentioned in the House of Representatives. The charge will be paid directly to the institutions and the aid component of education for overseas students would be provided solely and directly through the Australian Development Assistance Bureau of the Department of Foreign Affairs in the form of a government to government scholarship. That is to say, education aid would go through that government to government mechanism rather than through the present mixture of ADAB-funded students and private overseas students.

Those who support totally going through a government to government scholarship system only would argue that subsidised private education student schemes advantage students from wealthier families to too great an extent. We believe there are problems also with the government to government scholarships because they are prone to policies of patronage by receiving governments, no matter how insistent the donor government-and no matter how insistent our Government-might be on the type of students it would ideally like to see gain from the scholarships. A generously subsidised private overseas students scheme will provide access to students from poorer families in developing countries to an Australian education system, and we believe that this would be of great advantage to Australia. In passing, it is interesting to note that New Zealand in May this year abolished its overseas student fee for quota students, New Zealand, like India, also seeing the advantage that can come from attracting overseas students and providing that support to them. All senators would know and have experience of significant overseas projects which have been very economic to Australia because the people conducting them have had their education in Australia. That goes without saying. We are possibly cutting off our nose here to spite our face.

On the Overseas Students Charge Collection Amendment Bill, in the Committee stage we intend to seek the support of the Opposition to reduce the burden by allowing students to make payments in four equal instalments throughout the year. We are concerned that this Bill extends the liability for the payment of the overseas students charge to holders of overseas post-graduate student scholarships and other awards. We are totally opposed to such an extension. It will damage research and teaching in Australian universities and, more generally, damage Australia's contribution to the exchange of ideas between different countries. I think the short term financial gains from this extension are highly dubious. The extension of the charge to this category of student means that either the number of awards offered will be reduced so that the remaining awards can be increased in value to cover the charge, or that scholarships will no longer be attractive to gifted students as they will have to pay more than half their stipend to the Government simply to pay the visa fee. The chief effect of the Bill as it stands will be to extend liability for the charge to holders of new post-graduate scholarships awarded by Australian institutions, new students provided with awards by Australian institutions and new students provided with awards by Commonwealth departments or authorities granted after 1 January this year.

It also removes exemption for holders of post-graduate scholarships from the Australian-American Education Foundation. Existing as well as new students on Foundation awards are to pay the charge. Of course, the Bill exempts a number of categories-holders of scholarships awarded by United Nations agencies and Commonwealth and secondary school students under short term exchange schemes, as provided, for example, by Rotary. The latter category was included in the Bill which was introduced in the House of Representatives. I raised this matter here with the Minister for Education. She said that that had not been the intention, although the Bill introduced in the House of Representatives showed that it was the intention. The Government moved an amendment in the House of Representatives in line with the Minister's statement to the Senate so that those categories are now exempt.

It is illogical to require Australian-American Education Foundation scholarship holders who begin study before 1 January 1987 to pay the charge while holders of university granted scholarships are not liable until after 1 January. I am not sure whether this is a pay back to the Americans because of trade or what it is, but it seems a bit odd. What post-graduate students do in universities, and particularly their role in teaching, and the repercussions of the legislation on them, may not have been evident to some of the Minister's advisers. Such students have always played a very important, and increasing, role in teaching. If their teaching function in universities is lessened because of this charge, there will have to be more face to face contact by university staff. That will take them out of their research and significant problems will come from this. I should like to quote various people from universities as to the type of effect these people who actually work at the coal face, as distinct from the bureaucrats who draw up these types of Bills, see in the introduction of such charges. Professor Lennon, Dean of Earth Sciences at Flinders University, has said:

Over the last decade, reduction in financial resources available within universities has resulted in significant staff reductions, thus making it more and more difficult for staff to devote adequate time to personal research effort as well as to teaching. In recent years, many research projects have continued to be pursued successfully only because of involvement of research students. Another effect, perhaps not very widely recognised outside the departments involved, concerns teaching. As reductions in university funding began to bite, some of the earliest casualties were junior fixed-term academic appointments (tutors, demonstrators, senior tutors and senior demonstrators). Science and Engineering teaching generally involves a very long commitment to tutorial and practical classes and many of the front-line teaching staff positions in these areas have disappeared. Most departments have managed to continue such classes until now, mainly through strong part-time support by postgraduate students. If the supply of able postgraduate students were to dry up, our system of practical and tutorial classes is likely to be at risk.

This is interesting considering the problems with science and engineering that Australia is suffering, which have been documented extensively, oddly enough, by the Minister for Science, Mr Jones, in the other place in recent times. This is a most extraordinary situation. Also, Professor Clyne, of the German Department at Monash University, pointed to another area which people might not think would be damaged. He said:

Many of our own graduate students study abroad on scholarships provided by overseas governments or universities. Some of them are engaged in research on languages other than English and need this experience to perfect their language skills--

I interpose that a number of those students are involved in Australia in studying Aboriginal languages and they study overseas to perfect the skills that are necessary for the study of Aboriginal languages. Professor Clyne continued:

Such scholarships are not, on the whole, subject to reciprocity by Australia. It would be unreasonable to expect foreign countries to let our students study at their universities free of charge if we impose such exorbitant fees on our visiting scholarship holders.

That problem has not impinged on the bureaucrats or the Minister, or they have chosen to ignore it. In a very interesting Science Show on 22 November 1986 Professor Fred Smith, Head of the Department of Physics at Monash University, referring to the problems with engineering and science in particular, put the situation clearly when he said, amongst various other things:

In the face of this massive, long-term shortage of trained personnel, the Federal Government appears determined to shoot itself in the head by placing many areas of university research in jeopardy through the extension of the overseas student charge to encompass higher degree candidates receiving university scholarships. Approximately 40 per cent of university research is conducted by postgraduate students undertaking higher degree studies.

He went on to say:

Currently approximately one in five postgraduate students in science and engineering is from overseas. These students have become vital to the continuity of research programs essential for the training of Australia's future R and D workforce. It would be wrong to believe that the benefit lies entirely with the students. The stark reality is that without them research in certain areas, much of which has potential commercial benefit, would cease.

Research programs require several years from conception to reach fruition, extending well beyond the candidature of an individual student. It is essential for the continuity of the program that there are succeeding generations of graduate students who have the opportunity to benefit from the skills and expertise of their more senior colleagues.

This would not be possible without overseas students. Aside from the direct benefits that Australia derives from the research undertaken by overseas graduate students, the training they receive here further establishes the links with the research communities in their home countries. These have been instrumental in establishing Australia's prominence in the Asia-Pacific scientific community. The barrier that the overseas student charge will place before the very highly qualified applicants from the People's Republic of China-

I raise that in particular because the Minister was there recently making a lot of rhetorical statements-

is particularly inappropriate at a time when the Australian Government is actively promoting stronger industrial links between the two countries.

I think that is an item for which we will pay dearly in the years to come. It is another of the short-sighted operations which is damaging our relationship with a country which is incredibly important to our development and our links in this region. I finish the quotes from Professor Smith by referring to something which I think is absolutely true. He said:

But in the case of the post graduate students, I believe quite honestly that they are bringing more benefit to the country than the actual benefits that they are taking away.

Anybody who has had anything to do with teaching in universities in recent times will know that that is perfectly true. I have alluded to holders of post-graduate awards from the Australian-American Education Foundation who come from America to study in Australia and get a stipend of about $8,100 which is roughly equivalent to that paid to the holders of Australian Government post-graduate awards. An extension of the charge will not affect many students but again I believe that it makes little sense. As far as I have been able to establish about 12 Americans who are studying or are about to study will be picked up by this charge. I understand it is probable that the Foundation will bear the liability for the charge for existing award holders in Australia and possibly for those about to take up the 1987 awards, should these students no longer be exempt. Of course, that is the case. If the Foundation does this, surely it will have to reduce the levels of its other awards or the number allocated. This could include awards made to Australians studying in the United States. According to the Foundation's report for 1985 released in September this year a total of 32 Australians were assisted in their studies in the United States by the Foundation. Twelve Americans are assisted here and 32 Australians are assisted there. Who will suffer? It will be the Australians.

The funds for both awards-awards to Americans who come to Australia and Australians who go to the United States-are out of the same pool. That pool is administered by the Australian-American Education Foundation in Canberra. Quite frankly, I do not think we can squeal too much because, if we look at page 107 of Budget Paper No. 6, we see that the estimates for the Foundation are $240,000. Let us then look at the agreement in Article 10 under which these funds are given. Article 10 of the agreement between the Government of the Commonwealth of Australia and the Government of the United States of America provides for the financing of certain education and cultural exchange programs and fees are made available. That Article very clearly states that we shall:

. . . make available to the Foundation one half of the new funds needed to finance the approved annual budget.

I seek leave to incorporate in Hansard the article.

Leave granted.

The article read as follows-

Article 10

Funds and property of the United States Education Foundation in Australia derived from sums made available to such Foundation by the Government of the United States of America pursuant to the Agreement of November 26, 1949, as amended, shall be available to the Foundation to be used for the purposes of this agreement.

The Government of the Commonwealth of Australia shall, as and when requested by the Government of the United States of America for the purpose of this agreement, make available to the Treasurer of the United States of America such portion of the funds provided for in the Agreement of November 26, 1949, as amended, as has not been made available to the Treasurer of the United States of America by the time such agreement is terminated and superseded by this agreement.

In addition to the funds described in the preceding paragraphs, there may also be used for the purposes of this agreement any other funds held or available for expenditure by either Government for such purposes and contributions to the Foundation from any source.

Beginning in the financial year 1964-65 (United States fiscal year 1965) the Government of the Commonwealth of Australia and the Government of the United States of America shall each make available to the Foundation one half of the new funds needed to finance the approved annual budget. The performance of the commitments made in the preceding sentence shall be subject to the availability of appropriations to the Secretary of State when required by the laws of the United States of America, and to such internal procedures as may be required by the laws of the Commonwealth of Australia.

All such funds and any accruals, as interest or otherwise, arising from investment or other use thereof shall be available for expenditure by the Foundation for purposes of the present agreement, within the budgetary limits established pursuant of Article 3 hereof.

Senator MACKLIN —So we are not paying our full way and we have not pulled our full weight. We are now down to about 40 per cent of that funding and the United States is paying 60 per cent. So when our students in the United States are damaged I do not think we will have a leg to stand on. We really will not be able to squeal and Australian students will suffer yet again.

The final category of student holders we are concerned with are those in receipt of awards by Commonwealth departments or agencies. These include schemes such as the Commonwealth scholarship and fellowship plan which is administered by the Department of Education, in the case of those students from developed Commonwealth countries such as Canada, and by the Australian Development Assistance Bureau in the case of students from other countries. I understand that the imposition of the charge in such cases will almost certainly reduce the number of scholarships available. The relevant departments will pay the charge out of the funds reserved for the awards. Those who are still getting the awards will not have to bear the cost of the charge. But to achieve this situation there will have to be fewer awards. It is a pity that only a certain number of students are currently able to take up those awards. The overall situation is that our best students are the ones likely to be affected-that is, students who receive institutional and Commonwealth awards. I think it is a pity that we will be able to afford fewer of those people who will provide the backbone for Australia's research and development. Overseas students are not the only ones who will be affected. Graduate and undergraduate students will be affected because of the reduction in teaching capacities in our universities and colleges of advanced education.

Australia has argued very strongly in the international market-place for a free flow of, for example, its agricultural products and an imposition of free trade in that area. I had hoped that Australia would have been in the forefront in attempting to get these types of student exchanges acknowledged by the various countries. I believe that the extensions contained in the Overseas Students Charge Collection Bill will inhibit that type of flow and the type of work that Australia is doing in the international arena. I think it is likely to bring Australia into difficulties with a whole range of other countries and I think the long term effects will certainly outweigh the short term financial benefits that the Government is seeking to gain.

As I have already mentioned, I am particularly concerned about the circumstances between ourselves and China. In anybody's terms China must be seen as one of the major areas that we have to develop. I had hoped that the Minister's recent trip to China would have deflected the impact of the charge, at least in that area. Unfortunately, that has not been the case. I think we will suffer extensively and, to our detriment, these students will be picked up by New Zealand which has removed its charge and they will be picked up by India which, as I have already pointed out, has very low charges.