A strong university system is essential to providing Australians with the skills and knowledge required to build a prosperous, democratic society. Investing in the education and training of our young people, in updating the skills and knowledge of the workforce, and in generating knowledge through research are all essential requirements for Australia's long-term growth and competitiveness. To achieve this Australia requires a university system which is flexible and responsive, with the vision and capacity to make and sustain the connections necessary to capitalise on the endeavours and achievements of individuals.

As part of a more flexible and responsive system, this Government has sought to create an environment in which universities can develop steady and diverse sources of income. Universities have responded well to this challenge with the sector now able to call on revenues of around $9 billion per annum, a massive $900m more than in 1995, the last year of the Labor Government.

The basis for this continued growth has been the maintenance of a substantial and reliable public investment in higher education. Although in a period of budgetary restraint, the Government is maintaining operating grants in real terms.

The policies of freeing universities from the constraints of the past, while maintaining their funding, has meant that Australian universities are in a position to offer a record level of opportunities for young Australians to attend university and obtain an initial post-school qualification. Under this Government undergraduate places have increased by an estimated 35,000 and total numbers of students by an estimated 42,000. This is a remarkable achievement, and reflects the Government's policy of making higher education more accessible to all Australians.

At the same time the Government has recognised the need to ensure Australia's global reputation as a provider of quality higher education is maintained. The Government is currently implementing a historic quality assurance framework for the higher education sector that will maintain Australia's international reputation for quality university teaching and research. The new framework is a cooperative venture with the States and Territories and will see a new agency - the Australian University Quality Agency - established in 2000.

This Government has also introduced measures to further improve the management practices of universities and to increase their responsiveness to student and community needs. The Workplace Reform Programme is providing $259m in additional funding to universities as an incentive for them to address the industrial relations and management rigidities that are a significant impediment to their further development. The first three universities to qualify for this funding will each receive over $4m in additional operating grant.

Late last year the Government released its new policy for research and research training, Knowledge and Innovation. This White Paper puts in place mechanisms to ensure universities focus on providing high quality training environments that give students a wider range of approaches to learning, as well as giving students the opportunity to experience a wider range of settings in which to develop their knowledge and skills. Research students are central to a vibrant innovation system.

The White Paper also recognises that an effective innovation system must be built on strong links between the different elements of the system. To this end it has put in place a policy framework which encourages collaboration across the academic, industry and community sectors.

Reflecting its commitment to knowledge and innovation, in this bill the Government boosts funding for higher education research and research training. The bill provides Budget funding of an additional $79 million over the next few years for two key research funding schemes - the Strategic Partnerships with Industry - Research and Training Scheme and the Research Infrastructure Equipment and Facilities Scheme.

The additional funding for these schemes will help to further encourage research collaboration between universities and the end users of research and to maintain an international competitive level of research infrastructure in our universities.

This bill also contains measures that are an important part of the Government's $562 million Country Health package. The package is the largest effort yet by an Australian Government to redress the historical imbalance between rural and city health services.

The bill creates an additional 100 places a year for medical students who are holders of new bonded scholarships for students committed to practising in rural Australia for at least six years. After 5 years an additional 500 medical students, who will eventually practise in rural areas, will be studying in Australian universities.

This Government is the first to recognise the particular health care needs of regional communities, and has taken action to provide more doctors for regional areas.

The bill also updates the funding amounts in the Higher Education Funding Act to provide supplementation for price movements and to reflect revisions to the estimates for HECS contributions and expenditure on the Workplace Relation Programme, and the re-allocation of unspent funds from 1999 to other funding years. In addition, the bill establishes the base level of funding for universities for 2002.

Other technical amendments in the bill reflect the name change of Batchelor College in the Northern Territory to the Batchelor Institute of Indigenous Tertiary Education and update the definition of the term “year to which this Act applies”.

The measures in this bill are designed to continue the development of Australian higher education and to create a system that is financially viable, responsive to the needs of students and the community and that provides as many opportunities as possible to young people.