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Thursday, 1 September 1994
Page: 846


Senator MARGETTS (6.50 p.m.) —The States Grants (General Purposes) Bill 1994 puts in place the agreement reached with the states on general revenue assistance over the next three years and on the formula for determining future apportionment between states. It also deals with some specific factors on roads and higher education grants. While this is a bill attached to the outcome of negotiations between the states and Commonwealth, it must be noted that the Commonwealth, as the primary collector of revenue, has a disproportionate power in any negotiations. This can be seen as what the Commonwealth has been able to impose and what it has conceded in order to impose it. It is not a states based or states driven agenda.

  Commonwealth funding, to a considerable extent, sets the options the states have. Commonwealth agendas can be pushed—and indeed are pushed here. It makes a lie of any claims the Commonwealth makes in regard to some issues that they are state matters. The Commonwealth can and does use its economic power to pursue its own agenda.

  There are a few substantive issues in this bill and some general issues that this bill relates to. Overall, this bill relates to the economic fundamentalist push that the Commonwealth and many state governments have been pursuing. While the bill assures that financial assistance grants to states and territories will be maintained in real terms over the next three years, it does not even account for all general purpose revenue.

  On other fronts, we have seen the states squeezed, both through direct funding and through the Loan Council, as part of the agenda of increasing productivity by limiting funds and asking states to do the same things for less money. In practice, it has often meant that the states make do on less money by reducing services or reducing the quality of services. Many of the cuts in education, health and other social service programs can be put down to this sort of squeeze to tighten economics.

  While financial assistance grants are held constant in real terms, Loan Council capital grants will now disappear, leaving the better cities program as the only source of general purpose capital payments. The total for general purpose capital grants will now decrease from $543 million to $260 million. Capital works will increasingly need to be funded from external borrowings. States are also required to pay off loans taken on their behalf by the government at an accelerated rate, nearly doubling this year from $927 million to $1,761 million—a transfer of funds from state to Commonwealth larger than the total transfer the other way through general revenue grants.

  This transfer is likely to be funded largely through state based commercial debt. The last meeting of states saw the next ratchet of funding squeezed as an agreement to the national competition policy recommendations traded against an untying of grants. While this can be seen as an improvement since it reduces the apparent power of the Commonwealth, I cannot feel good about this. Firstly, states are often more arrogant than the Commonwealth in their assumption of centralist power and, secondly, the nature of state governments is likely to mean that more control at state level means the progressive erosion of social infrastructure, particularly that designed to promote equity in the states own New Right economic push.

  I cannot see a lot of joy in a shift from Commonwealth slash and burn economics to the scorched earth policies under the Kennett government, for instance. The national competition policy, with its emphasis on privatisation and corporatisation of state social infrastructure—power, water and so on—is also nothing to rejoice in. It simply pushes the agenda of the New Right further. This is the context of this bill. Specific issues include the treatment of states on the basis of population. This will impact particularly on my state of Western Australia and on Queensland and the Northern Territory. These states and territory add disproportionately to Australia's economic wellbeing and have the problems of vast areas and low populations. There are measures for special grants, but they are one-off measures and, afterwards, the territory and these states will be left to their own devices.

  The treatment of less populous states does not reflect the basic needs of rural people or incorporate equity principles and can only lead to a further erosion of rural services. Health and education are among these services. It will also affect a plethora of smaller service areas such as the provision of libraries and their quality, access to government offices, and so on.

  The argument that these are state affairs and so Commonwealth policy has no impact on them is arrant nonsense. The erosion of rural services will continue through the push for privatisation and corporatisation of public utilities, as organisations try to improve competition policy by adopting user pays policies which will see the prices rural people pay for basic needs go up. They will pay the same kind of premiums that these people now pay for all kinds of other goods, from food to consumer durables.

  I hope the opposition, and particularly the National Party, takes note of this. It will require a lot of careful scrutiny of legislation and will require the moral fortitude and political will to make sure that obligations to rural people are enshrined in any framework for privatised services that comes up.

  We already see the sort of thing that I am talking about in the increase of electricity prices for rural users in Victoria. Premier Kennett has said he would announce further details of the new pricing structure today ahead of the privatisation of the State Electricity Commission. It is the wave of the future, as the principle of value that all Australians should have equal access to basic services, including price equality, gives way to the economics which say that the only value the community is allowed to have is the value of the dollar, and it is not allowed to see any market factors involving dollars incorporate the strong community value of a fair go.

  I was interested in the comment by Senator Ian Macdonald in relation to roads and the cost of petrol. Just a few days ago I pointed out that the indications are that the amount of liquid petroleum in the world market is about to peak. Because of our reluctance to see this kind of information, the price of petroleum products, because of the market, will increase incredibly in a relatively short time. Unless we actually start doing things which incorporate equity and look at ways of reducing our dependence on such things as liquid petroleum in our farming and other industry sectors, then we are going to be extremely vulnerable. When we talk about equity we have to talk about future equity at the same time.

  The Greens have always supported the principle that basic services should be equally available to all Australians. We believe the community supports this idea and has done so for many years. We believe this is why there have been equal price policies in most states on electricity and so on. But with privatisation it is hard to make this work. Companies like to come and pick the eyes out of a market and then use this to undersell other companies, including public ones.

  The only options to such circumstances are highly regulated private industries, public industries that only serve the people who would otherwise be disadvantaged, or the abandonment of the community value of support for rural users. No-one has asked the community, and it appears that the Premier of Victoria prefers to abandon the rural members of his state rather than enact any regulation of community obligation. I give warning that this might be one of the first such cases, but it is not likely to be the last. We will see government progressively abandon its obligations of equitable service provision to the community.

  I note that this bill sees identified road grants nearly double from $175 million to $350 million. As the Senate realises, we believe there are better ways to deal with transport, both rural and urban, than building more roads. However, we do note that this $350 million must be taken in the context of a transferral of funds from specific purpose grants, where road grants under that program declined by $193 million. I note that not only are these road grants no longer tied to specific purposes but now, under clause 11, they are not even tied to roads, and the intention is that the classification will disappear in 1996-97 and be absorbed into general purpose grants.

  I do not think this is so bad, especially if state governments can be convinced to use this funding, or some of it anyway, to actually address some of the transport and urban structure issues I bring up frequently. Maybe the better cities program can work to facilitate a change in the way such funding is often committed. The better cities program, which, incidentally, had a display in parliament house yesterday, is a limited period program and is liable to be winding down over the next few years unless government commits some funding to replace or extend it. If not, the other source of general capital grants to states will also disappear.

  The final issue relates to student unions, which others have already emphasised. Clause 15 clearly shows that the Commonwealth can push an issue if it wishes. We support this issue and feel it is important from an equity standpoint. We feel it is consistent with the proper role of the Commonwealth to assure that basic social standards are met for all Australians, regardless of where they are. The issue is not one of choice by students; it is one of provision of services.

  For political reasons, some states wish to break down student organisations. They are not about replacing or providing the services in another way; they are about eliminating these services or operating them under an individual user-pays basis, which would effectively eliminate many of the services or see them distributed unequally along the lines of wealth.

  In much the same way as citizens are able to engage in the political process, students are able to participate in their organisations and are able to control their organisations' policies and actions. They have an obligation to support the society they take part in, either through general taxation or through union dues. State electors pay tax, federal electors pay tax and local electors pay rates. Student unions are the democratically elected bodies representing students.

  Contrary to coalition myth, state governments such as Victoria are attempting to starve student unions of funds as an attack on their independence. Fees are higher and compulsory, and student unions are disempowered at the same time. We support the federal government in providing the shortfall.

  State governments, such as the Court government of Western Australia, jump up and down about liberty whenever it means they can put at disadvantage some group that is able to raise a voice against anything they do. It is hypocrisy, sham and cynical opportunism. I am glad that the federal government is taking a stand against it in this case.

  The aim of anti-student guild legislation in Western Australia and Victoria is to completely disempower students. Such actions in the state governments are ill-conceived and morally bankrupt. Student associations are essential for countless services such as cheap food and drink, photocopying, housing, sport, recreation, social clubs, appeals, complaints, career counselling, sexual assault counselling, and services for international students. The other essential role of student associations is as a vehicle to further the student cause, to fight attacks against students, and to make certain that a tertiary education system is available on a merit basis without cost excluding anyone.

  Students need student associations for their services in collective representation in organisations. Campaigns cannot be waged without this level of networking and organisation that student associations provide. The state and national anti-VSU campaigns are a testimony to the vital role that student associations play.

  The Greens are very pleased to see clause 15 in this bill. That clause makes the payment of financial assistance to a state conditional on certain payments to the Commonwealth, which will be a reimbursement of amounts paid out to student organisations under the Higher Education Funding Act 1988. Payments to the state will be reduced where a payment has not been made to the Commonwealth.

  The Greens are very glad to see the federal government sticking up for students and acknowledging the role of services, organisation and politicisation that student associations provide. However, under this system the Greens firmly believe that, as part of ensuring that students have control of their affairs, student associations must keep their degree of financial independence from the government. The government must treat that money as student association money and not let it be slowly eroded away by enforcing conditions and cutbacks, as happens with other federal funding.

  The necessity of keeping student associations is clear. While the federal government will help student unions survive state attempts to abolish them, it is ironic that student associations are even more necessary now to fight the attacks on students that come from the federal government itself.

  The list of ways the federal government has mounted its attack on students is growing. Under the Labor government, we got HECS instead of free education, and Austudy loans instead of payments, which now leave students $30,000 in debt before they have even begun looking for work. With HECS the government could hide fees under the guise of tax on education. Now the government is happy about removing the `r' from what was once `free education', to `fee education' with no qualms.

  In the budget before last we got full fees for post-graduates, and this month undergraduates in Canberra got their first taste of full fees at ANU. Yesterday I visited ANU to talk to the students who were to pay $9,000 to do a law workshop. They have got the figure down to $3,500, but realise that if any up-front fee is introduced the figure will just keep going up and up.

  There is no regulation on the level of full fees except for the existential wonder of market forces. The more popular the course, the more students will have to pay. The more expensive courses like law and medicine will exclude socioeconomically disadvantaged students. It is extremely ironic that the first known case of full fees for undergraduates applied to a law course, when the law merits itself on justice, fairness and equity—which full fees certainly are not.

  However, the government looks keen to spread this trend of burgeoning fees to all undergraduates. In the recent DEET-Higher Education Council working group report Resource allocation in higher education, the dismal options were spelled out. These entrenched the view that little or no more public funding would be spent on tertiary education because market needs can be met by the current system. The report proposes some options for funding, including redistributing existing funds and places; charging different amounts of HECS for different courses, which would be totally inequitable; and charging up-front fees of between $500 and $1,000 for every student on top of HECS.

  There is in this document absolutely no regard for the benefits of public funding in tertiary education. If this document signals the trends for higher education, I shudder because it is totally concerned with economic imperatives, corporate managerialism and education for the privileged.

  The presence of student associations is needed to fight these moves. It is the greatest hypocrisy that the federal government is willing to save student associations so students can fight for their rights—rights that the federal government is insistently trying to take away from them.