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Wednesday, 16 October 2002
Page: 5304

Senator CARR (3:50 PM) — by leave—I move:

That the Senate take note of the document.

I begin by acknowledging the courtesy of the President in providing me this morning with a copy of Dr Nelson's response to the resolution of the Senate of 28 August 2002 which dealt with the failure of the government to respond to a Senate committee report entitled Universities in crisis. This is a report which the government was given on 27 September 2001. This is a report which the government has had for 13 months. This is a report which the government has failed to respond to.

What the minister's letter today tells us is that the government is going to continue to fail to respond to this Senate report, on the basis this time—and I must say that the government is becoming more creative—that the government's response is currently being printed. It must be a telephone book if it requires this level of delay in responding to a committee report! I would have thought, with the number of photocopiers around this building, that the government could have organised a much more speedy method of communicating with the Senate. We now have the new excuse that the report is being printed; I suppose that that is progress and I should look at it in those terms.

We have a response to a Senate committee report which I understand, as a result of the questions I asked at Senate estimates hearings, has been on the minister's desk since February this year. The minister says that when considering the failure of the government to respond to the Senate committee's report, in breach of the standing orders, I should take into account the fact that there has been a federal election and a change of minister. The fact that the report has been on the minister's desk since February suggests to me that the two points that are put in this letter from the minister to the President of the Senate are, in fact, quite spurious indeed.

It has been put to us that the government is undertaking a comprehensive review of higher education and, as a consequence, the Senate committee report presumably, in the government's mind, is not as relevant. Of course, that is not the case at all. The government for the last 13 months has been running around saying that the university system is not in crisis. The government has been claiming that the university system is, in fact, quite sound. I remind the Senate that the Senate committee that examined the state of the universities in this country came back with the report Universities in crisis, which was a study based upon quite extensive investigation. It spoke to some 219 witnesses and it received 364 submissions. This was no quick and dirty inquiry; this is quite a detailed and comprehensive assessment of the problems facing the university system. In fact, it is so much so that I am of the view that the government obviously considered it to be so difficult to deal with that it has been not been able to respond to this report for 13 months.

We heard from the Australian Vice-Chancellors Committee, a number of individual vice-chancellors, various elder statesmen in the education system—such as Professor Peter Karmel, Professor Ian Lowe and Professor Kit Carson—state premiers, Commonwealth departments, the Australian Research Council and learned academies. We heard from all sorts of significant groups of scholars, staff and students in higher education. We heard from individual staff members at schools and former staff members at universities. The report highlighted the extent to which there was in fact a crisis in the higher education system in this country. Now the government is saying that the situation is entirely different—that there is no financial crisis. This is the lie that the government has run since Dr Kemp was the minister. It points to the facts that the assets sector is now at $20 billion, that liquid assets are worth $4.4 billion, that revenue is said to be $10.4 billion and that there is a low debt to equity ratio. These are the sorts of arguments we have heard throughout the terms of the last two education ministers.

There is another dimension to this. The truth of the matter is that staff-student ratios in our education system have increased from 16 to one in 1996 to 19.7 to one in 2001, and the universities' collective financial position—their operating balance—on the latest figures is at $450 million, which is down from $555 million in 1997. I acknowledge that there was an improved result in the last year as a result of international students—in fact, a 20 per cent increase in enrolments— with the situation being assisted by the exchange rate remaining relatively stable. This is in the context of a massively unstable international situation and in the context of an enterprise bargaining agreement which is about to be commenced throughout universities.

The triennial report that was presented by the government further highlighted the fact that our university system was in deep trouble. The last triennial report indicated that 10 institutions—that is, 25 per cent of the system—had a negative operating margin in 2000; they actually had a deficit. Five institutions had run current liquidity ratios of less than 1.0, which of course is the measure of the safety margin within our university systems. If you go through the system, there was an examination of the universities' annual reports, and they were all published, showing that 24 out of 40 of the higher education institutions—that is, 60 per cent—had a serious deterioration in their operating result in 2000 when compared with the four-year previous average. There is a serious deterioration in the financial system across the country. The government has acknowledged that, while revenue has grown by 71 per cent, expenditure has grown by 91 per cent. The costs for the universities are outstripping their revenue at quite a dramatic level. I understand the government has tried to revise those figures down. It said there were a few errors in theirCrossroadsreport—their official published report—and it is now saying that the revenue has grown by 71 per cent but that expenditure has grown by only 89 per cent, not 91 per cent. It does not matter. The fact is there is a serious structural problem within the finances of the higher education system in this country.

A very large number of institutions are seeking assistance from the government through forward advances on their operating grants. In the last annual report there were revelations that the University of New England had requested a $2 million dollar advance, Deakin requested a $3.5 million advance and the University of Adelaide requested a $10 million advance. What we are seeing is that over a period of time the number of universities in deficit is increasing and the number of universities seeking emergency assistance is increasing. That is all in the context of an enterprise bargaining round which, as I said, is commencing in the next few months—an enterprise bargaining round that all the inside information has said is likely to produce results somewhere around nine per cent to 12 per cent. There is one university already offering a 22 per cent increase. So the finances of the sector have been thrown out quite dramatically on the estimates that we have already seen.

We have a situation where the Senate has required the government to provide information about the forward projections of the finances in the system. We do that because we are very concerned that you cannot really have a debate about the future of higher education when you do not know the financial health of the university system as a whole. The minister has in recent times indicated that he is prepared to look at this issue. I say to the minister that I have directly contacted a number of vice-chancellors and they have agreed to provide certain documents that the government said could not be provided. A couple of vice-chancellors said they could not provide them, but not on the basis of commercial-in-confidence. Not one vice-chancellor has written to me on the question of commercial-in-confidence. The reason that some of them have said the documents cannot be provided is that the information that government provided was wrong. It underestimated the financial crisis in the higher education system. It underestimated, in particular, those institutions.

I put to the government that we are looking for a response to this report. We want to know what the government's response is to the Senate committee report. We say that in the context of Crossroads—and the vice-chancellors are discussing this matter today—there cannot be a proper debate unless we get to the bottom of this serious question about the state of the finances of the universities in this country. We know that universities are in a difficult situation. We know that there cannot be a resolution of that difficult situation unless the government puts its money where its mouth is and addresses the structural financial problems within our university system.