Higher Education and Research Reform Amendment Bill 2014

Mr HAWKE (Mitchell) (09:14): It is painful to follow the member for Franklin in relation to this bill because this is one of the most important reforms to the higher education sector in many years. In opposition, the coalition took the view that if the government put forward sensible reforms that would benefit the sector then we would endorse those reforms, including, importantly, Labor's deregulation of student numbers. So I would say to the member for Franklin that, once again, we are in this ridiculous situation. You cannot deregulate the numbers without addressing the fees. And that is what Labor has done. Labor deregulated student numbers. That is a good reform; it is something we agree with. But if you do not deregulate the fee structures you cripple the universities' capacity to grow, reform and to become great institutions. And that is what this is really all about.

We are here in the second iteration of this bill, listening to the concerns, I might add, of the crossbenchers and listening to the concerns of the people who will decide the fate of this legislation. We are listening very carefully. There are no savings, now, attached to the bill, except for a minor amount, which should alleviate Labor's concerns. This is not a savings bill; this is a reform bill. This is about the reform of the higher education sector.

Why is this so important? Why does it have the support of Labor figures like John Dawkins, Maxine McKew, Peter Noonan, Gareth Evans and, notably, Dr Andrew Leigh, the shadow Assistant Treasurer. It has their support because this is an important package. They know. That is why it has the support of university vice-chancellors. We must have reform in this country. We must be able, as a parliament, to accept levels of reform, by working together and being able to realise that we may not be able to put our agenda through as we would like, but listening to the Senate, as we have done with this latest bill, and returning it here. We must be able to achieve levels of reform.

This is so important because we do not have a university in the top world rankings. We have a situation where, under Labor, we saw our education sector suffer in so many ways. Export income fell by billions of dollars from a 2009-10 peak. There is a neglect of the education sector—not just the university sector but the private education sector as well. There has been billions and billions of dollars of lost revenue. Education exporting should perhaps be one of our biggest and best industries. It really is the biggest opportunity for reach to our friends and neighbours in Asia.

We have seen the third largest export—and the no. 1 knowledge export—suffer very much. Enrolments fell by 130,000 between 2009 and 20012—a decline of 16 per cent. That is bad for our economy. It is bad for all those who work in education and the service sectors that support education. I know, from speaking to the private sector in education, that they suffered enormously under the previous government. But this reform is important because we have to make the system sustainable for the future, and we have to deregulate the fees, giving universities flexibility. It is not accurate to say that university degrees will now be $100,000. In fact, the Queensland University of Technology—I say this to the member for Fairfax—has published fees for 2016 at a massively different set of rates than what the scare campaign has been saying.

The University of Western Australia has set fees which are less than half of what the scare campaign is claiming. Already the evidence is in that there will not be $100,000 degrees. Not all degrees will be the same. Labor struggles to understand the operation of markets, but not every degree will cost the same. There is no argument that they can put forward that says all degrees will rise in cost. Some degrees will fall commensurate with the demand and the supply in the market. That is the way it will go. Some degrees will be cheaper. Not everybody wants to do the same degree. There is not the same volumes in every degree. If we allow the market to operate a little more properly, with more flexibility, there will be a better outcome for universities and a better outcome for students. There will be a better outcome for students.

Labor is ignoring its roots. It is not thinking about those who do a trade or those who never go to university. And that is a legitimate pathway for people still in Australia today. Not everybody has to go to university. Not every university degree leads to a job. In fact, most university graduates I know, who are just of out university right now are struggling to get work because they do not have a skill. Their university degree has not equipped them with the skills to do their job. So it is not automatically the case that going to university is good. It is not automatically the case that doing two or three degrees will lead to better work or employment. That is not the automatic case in our employment market today.

If the Labor Party still represented the working class, they would understand that those people pay a big subsidy to allow people in Australia to go to university. It is a good system. The government is not only maintaining this system; it is expanding it and making it sustainable into the future. That is what this bill is about. We have a situation that is unique in almost any education market in the world, whereby nobody has to pay a cent up-front to go to university—not a cent. But that is at the expense of all those people who decide to get a trade or to do something else in their life and not go to university. That is the system we have. And it is very important to understand that, because I do not think there is anybody left in the Labor Party who has a trade; I am pretty sure they do not have that. Well, there might be one, or there might be two, but not very many. They forgot those people, and they are the bulk of people in our society.

I went to university. There is nothing wrong with going to university. And yes, I did not pay a cent up-front. And yes, I have paid it all back. It is a good system we have. The government is not touching it. The government is not altering the fundamentals of the higher education system in this country. We are doing nothing radical. What we are doing is undertaking the inevitable task of reforming the sector. There is no doubt that anybody in government right now would have to be addressing the higher education sector and making further reform to make it more flexible and make it more deliverable. Labor knows it. The shadow Assistant Treasurer has proposed these exact proposals in his own academic work. He is an academic. I would say to the Labor Party, listen to your shadow Assistant Treasurer when he says that these reforms are vital for the future of the education sector. It is what the university vice-chancellors say. It is what Gareth Evans says. It is what Labor figures of all ilk who are genuinely about achieving good-quality reform are saying. They are saying it because they know that if we do not deregulate fees we are missing an important mechanism for our universities to be sustainable and to make progress.

And we have a real challenge in front of us in relation to this bill, because we have an obstructionist Senate, even when the government is listening very carefully to the views of the Senate. And they are right about the indexation and the bond rate. They are right to send us the feedback that it should remain at the consumer price index for all the loans that are taken out by students. So, the government has listened, and one of the key amendments in this legislation that is before us today is of course retaining the consumer price index for HECS debts. And that, from Senator Day, is sensible, it is reasonable, it is constructive and it is something the government has listened to.

We have also introduced an interest rate pause on debts for primary carers of children aged less than five years who are earning less than the minimum repayment threshold, once again taking into account feedback, looking at the disadvantaged—people who may not be able to access this system. But the bulk of students, the bulk of our society, can live with this reform, they can cope with this reform and they can adjust to this reform. And the reform will benefit not just the education sector but also all students, because universities will be able to provide better-quality education and better-quality services and compete internationally, which is most critical for the future of our education export sector.

I have not even started on the measures to address disadvantage. The Labor Party has a lot to say about fairness, but they really do not think about this deeply. The government has come up with a good program that will take a package of scholarships funded by the Commonwealth, which will mean that thousands—many thousands of places, from rural and regional communities—of students from disadvantaged backgrounds will have access to help to get to university, especially in their local area. So, this is a government that is being fair. It is considering all the reasonable and possible objections to university reform. People from regional areas cannot access it, so we have a scholarship scheme to address that. People from disadvantaged backgrounds were worried about an increase in some fees, so we have a scheme to address that—remembering that no student will pay a cent; the indexation will remain at the consumer price index so that everyone is able to repay it when they get the right job. They do not start repaying this loan until they have a really good job, earning a really decent income. That is the system as it has been, and that is the system as it will be.

So, in terms of fairness, the arguments fall flat. There is not a fairness argument against this bill. This is a constructive reform bill about building the foundations of our university and education future. The fairness arguments are gone. Let us talk to what is in front of us today, the new bill. Let us deal with the concrete proposals that the government is putting forward, listening to the will of the Senate and being reasonable in its approach to ensuring that we can still in this place and in this era achieve some meaningful reform without having to have so many political fights.

The government has again made an important concession asking the ACCC to monitor university fees. That is an important thing. The ACCC will monitor those universities fees to ensure they are not getting out of hand, recognising that, so far, of the universities that have put out fees for the coming years those fee increases are nothing like the scare campaign that the Labor Party is running. In fact, it is less than a third in some cases.

As more universities come forward and more knowledgeable commentators and experts in our field speak about what they think will happen, we hear they do not believe our markets can sustain a huge increase in fees. It is impossible because there is not a market for it. I know Labor does not understand markets, but if there is no demand for $100,000 degrees then there will not be $100,000 degrees. You cannot artificially set a price so high at a price point that people are not willing to pay.

That is what the experts in the education sector repeatedly tell us: there is no price point, because people in this country cannot afford to pay for $100,000 degrees. That is why there will not be $100,000 degrees; that is why there cannot be $100,000 degrees. That is the prime reason. There is no market for those degrees. Coming from Western Sydney and growing up in a simple household, I could not have afforded a $100,000 degree, and that is why I would not have taken a $100,000 degree. That is why there will be no $100,000 degrees.

The member at the table looks confused, and I understand why she is confused. We will get back to market economics some other day. I know you pretend to love markets, but you do not. This bill before us today is, of course, reasonable. It is a reforming bill. It is something that will allow—

Ms King: How much do you think a medical degree will cost? Medicine will not be $100,000?

Mr HAWKE: I will take up the member at the table's objections about medicine. Medicine is a very particular area. What about those apprentices doing a trade who are subsidising a medical student to get a degree and to earn very good income for the rest of their lives? What about those tradies? What about those workers? What about those people who are never going to get degrees? They are paying twice for someone to go and get a medical degree—so you are saying they should not make a contribution to that degree; is that what you are saying? What about ordinary people? I think you have forgotten them You really need to get out of Canberra more.

What this bill and legislation is about is improving the capacity of universities to function better. You deregulated the numbers. This means as many people can go to university as universities want, but they cannot alter their fee structures. Why would you set any business or service that charges a fee to deregulate the numbers but not deregulate the fees? It is not feasible. It is not practical. It is not what the shadow Assistant Treasurer thinks. It is not what Gareth Evans thinks. It is not what John Dawkins thinks. It is not what the vice-chancellors think. It is not what the sector thinks. They know these reforms are needed. They know they are vital. They know reform in this country cannot be constantly obstructed by the Labor Party just because they are trying to win elections.

We backed your deregulation of numbers. You should back our deregulation of fees, recognising that the government is going out of its way to ameliorate any unfairness and anything that can be perceived to be unfair. I commend the minister for education on the work that he has done, in so many ways, including Australian Research Council Future Fellowships, the concessional scheme that the government is implementing, all of the indexation arrangements that the government has changed and everything else that the government is doing in this bill. It is going out of its way to show the Labor Party and the Senate that we are genuine about pursuing reform. There are no more savings left in this bill. This is not a savings measure. This is about the future of our higher education sector in Australia.

Paul Kelly has been around a bit. In The Australian, on 27 November 2014, he wrote:

If the eminently defensible university reform compromise is not passed the result, as Universities Australia says, is that higher education will face an “inevitable decline in quality, performance, competitiveness and reputation”.

Too much is at stake. This sector is vital for our nation's future. We must have ongoing reform, and this parliament must have the ability to pass good quality reforms into law.