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Monday, 28 October 1996
Page: 4556


Senator STOTT DESPOJA —My question is directed to the Minister for Employment, Education, Training and Youth Affairs. Minister, do you acknowledge the findings of a World Bank study presented to this morning's Senate Employment, Education and Training Legislation Committee hearing that shows that, after your government's fee hikes, individual student contributions to the cost of public higher education in Australia will be the highest in the Western world and second only to South Korea in the entire world? Are you also aware of evidence presented today by the architect of the HECS scheme, Dr Bruce Chapman, that your HECS changes constitute the most radical changes ever to higher education and would shift the composition of the student body towards the wealthier sections of our society? Given these facts, do you stand by your commitment, as reported in the Bulletin , to reconsider the higher HECS fees if they keep low income students out of universities?


Senator VANSTONE —I thank Senator Stott Despoja for the question. The World Bank study does not immediately come to mind and I was not at your committee meeting this morning, but I will have a look at the evidence that was presented and get back to you with a comment on that at a later time.

As to Dr Bruce Chapman's view that the proposed changes to HECS will skew the university population towards those who are the most wealthy in the community, it is not a view that I share. I do not say that that is a fact simply because it is Dr Chapman's view. It is worth noting, Senator Stott Despoja, that in the time when university education was free to students—that means that other people pay—the most disadvantaged people in the community got the least access.


Senator Carr —Cut it out.


Senator VANSTONE —Senator Carr does not necessarily agree with me, but that is my view. When HECS was introduced, people said it would be the end of higher education. It clearly was not and the numbers have grown steadily ever since.

It is also my view that it is completely unfair to ask of a teacher, who has a low course cost and, relatively speaking, a lower income, the same contribution per annum that you ask of a doctor, who has a high course cost and a higher income afterwards. I think that is completely unfair.

In the policy we have put forward we have shifted the HECS arrangement from being a flat charge where everyone pays the same to more properly reflect both the cost of the course—that is, the benefit given by other taxpayers to that student in cash terms—and the private benefit that students receive from higher education, which is largely reflected by the income that they get. That is why we propose to keep nursing, for example, which is an expensive course, in the lower band. As you would well know, nurses do not achieve higher incomes for the rest of their lives.

To shift to a three-tiered HECS that purely reflected the cost of the course would, I believe, be inequitable. But one that has a blend of that—that acknowledges some have lower incomes and some have higher incomes—is a good thing. In summary, what we have done here is acknowledge that what Labor did when it introduced HECS was correct. We think it is correct that there is a public benefit in a well developed, higher education student and it is without question that there is a private benefit to the students who participate. The HECS contribution is an acknowledgment of that.

We are maintaining the excellent aspect of HECS—that you do not pay as you learn; you pay as you earn. We think that is a fairer system. Neville Wran, the former Labor Premier of New South Wales, suggested not charging everyone equally because everyone does not get an equal cost course and everyone does not get an equal private benefit. We are following his suggestion that it would be more equitable to shift to a three-tiered HECS. We think that is a much fairer way to go.


Senator STOTT DESPOJA —Madam President, I ask a supplementary question. Thank you, Minister. I did ask you whether you would stand by an earlier commitment you made to review those changes if the HECS hikes kept students from lower socioeconomic groups out of higher education. Given early evidence which suggests that enrolments for engineering and applied science courses are down in lower socioeconomic regions by as much as 50 per cent in some cases, is this enough evidence for you now to review those changes? If not, what exactly will make you reconsider those changes?


Senator VANSTONE —I have consistently said, Senator Stott Despoja—whether or not I have said it to the Bulletin is another matter—that any government that introduces a policy and discovers that the policy in practice is not working for one reason or another, has some unintended consequence or has adverse effects would naturally seek to change that policy. It would be completely irrational to do otherwise.

So we want to proceed with the policy as is. If that is clearly demonstrated—and I do not think early advice on enrolment arrangements is a clear enough demonstration—when it is in practice, we will seek to change it.