University education should not be a rich man's privilege

Mr STEPHEN JONES (Throsby) (19:37): When the subject matter of these bills first came before the House, I said some rather unfair things in the context of the budget debate. I characterised the minister responsible, the member for Sturt, as a person who—when he looks at the graduation halls and sees them full of shabby students from the suburbs and regions—sees not the operation of an equity program, but universities that have lowered their standards, because they are undermining the elitism that he thinks should be the feature of the Australian university system. That was a bit unfair because, whilst there is the truth in that statement, it runs the risk of trivialising what in effect is a very serious set of reforms. Make no mistake about it: the legislation which is before the House today is going to have the effect of transforming a sector of our economy, which is one of our greatest exports and one of our most important assets. It is going to be the only driver of productivity for our workforce into the future it and it is that sector of the community which we rely on to produce educated and productive citizens.

I will make a harsh criticism of the minister by saying this: normally you would expect some of the most intelligent contributions in a debate to be made by the minister who is responsible for a particular set of bills. That is not the case in the course of this debate. I had the benefit of being in the chamber earlier today and listening to the contribution of the member for Pearce. I will have a few observations to make about his contribution. I note that he has been in the news quite a bit today. Apparently, he had a spat with the Treasurer in the party room and apparently the Treasurer came off second best. But that is not the force of my argument. The point I want to make is this: an intelligent contribution can be made but we have not heard it from the minister and we did not hear it from the member for Bass just now. I will also have something to say about his contribution and some of the things he did not say. I fundamentally disagree with the points that have been made by the member for Pearce but they do need to be joined.

The measures before the house are a part of a series of reforms in the education space. In part, they relate to the dishonouring of the commitment made by the now government before the 2013 election to match Labor's commitment to implement the Gonski school education reforms. That is the first part a three-pronged education reform by the government. The second part is the streaming of students, in which the government is effectively saying: 'We see a university sector which is there for elite students; and we see a vocational education system for those who are not the elite students and we think it is the role of government to somehow stream and encourage those who would otherwise go to university to go to the VET sector.' That is the proposition that I fundamentally reject. Both sectors have an important part to play, but one should not be given primacy over the other.

The bill before the House does three important things—all of them very dangerous. It takes the cap off student fees, and I will have something to say that the consequence of this. They reduce the Commonwealth per capita funding to universities, via the Commonwealth grants for undergraduate places, by an average of 20 to 30 per cent. This is a point I would make in response to the contribution from the member for Bass: this becomes the baseline for the increase in fees that university students will have visited upon them from next year—this 20 per cent cut in funding becomes the baseline. This must be increased by next year if universities are going to have a chance in hell of keeping their heads above water—a 20 per cent increase to make up to the 20 per cent cut that this government is imposing. The third change is the change in the HECS payment indexation rate and the threshold at you start repaying your HECS debt. The bill changes HECS from the current CPI indexation, which is approximately 2 per cent to the government bond rate capped at six per cent. What this effectively means is a tripling of the interest payments on the ever increasing HECS loan.

These are dangerous propositions and they will serve to put more obstacles in the way of students—particularly students from regional Australia. I have personal experience in this: I attended a regional university; I have the benefit of having put myself through two university degrees by working part-time through both of them. There is no way that I would have attended a university if there was not a first-class regional university in my town to provide me with that first step into higher education. It is going to hit hard in regional Australia—we know that for a fact. The cost of university courses is going to go up, and the vice-chancellors themselves are saying that the cost of fees will go up. My own vice-chancellor—the vice-chancellor of the university of Wollongong, Paul Wellings—says that international student fees will become the yardstick for what our domestic students might pay. He has some experience of a deregulated market, because previously he was the vice-chancellor of Lancaster university when the UK government brought in changes that allowed university fees to be tripled. On deregulation, Professor Wellings has this to say: 'We should expect to see fee hikes across the country. It means the level of HECS debts will rise and I am sure that will be a concern for students and their families.'

I put that to the member for Bass, who has said there is no evidence, and no university vice-chancellor around the country is saying, that fees are going up. Well, there is the evidence, straight from the horse's mouth, from the vice-chancellor of my university. I am sure other universities are saying the same—why on earth would they be arguing for deregulation of university fees and the uncapping of university fees if they did not intend that university fees would go up? It just does not make sense.

We have heard it said that we are scaremongering when we contemplate the prospect of $100,000 university degrees. Leaving aside the examples of the United Kingdom and the United States, there is already a domestic benchmark. Look at the price of a law degree, looking at my own profession, at Bond University. It is the only university in the country that is currently providing a law degree on a full fee-for-service basis to domestic students. It is $127,000 for a law degree from Bond University. You do not need to look overseas; we can look to our own country to see where some of the benchmarks might be. As I have said, we know what the floor on increases in university fees is going to be. The floor on the increase of university fees is going to be 20 to 30 per cent—which is the slashing of funding that we have seen as a result of this bill and as a result of this government's rotten budget—on per capita funding to each university in the country.

The member for Bass had a bit to say about a higher education forum that he attended when the shadow assistant minister for education was in Tasmania recently. I have got to say I was very surprised that he stood in this place and made reference to that forum, because I understand he copped a bit of heat at that forum. In response to the heat and the anger that he received from university students in that forum, he undertook to come back to this place and to lobby his own side—the government—to scrap their proposal to introduce changed interest rates on the HECS loan and to try and moderate other aspects of the package. I ask the member for Bass how he has gone on that score. He made a big promise when he was in his electorate. He was a lion in his electorate but a lamb when he came to Canberra. It is not as if there was not a bit of argument going on in the government party room today! I understand the member for Pearce got up and he had a bit to say to defend his state. Where was the member for Bass? He promised his electorate that he was going to get up and speak about this and there was not a word of it. No doubt he will come back and correct the record on his failure. He will maybe come back in here and explain why he failed either to take it up with the minister, as he promised to do, or deliver for his state.

I said I was going to address some of the claims made by the member for Pearce. I thought he made an intelligent contribution, albeit one that I disagree with. He made an intelligent contribution, which was much more intelligent than the contribution from the minister responsible. He referred to a paper entitled Social justice in Australian higher education policyauthored by Gale and Tranter. It is a good read and I commend it to all of you on that side of the House. Unfortunately, he quoted selectively from the paper. The crux of the member for Pearce's argument was this: we have tried for 100 years to introduce price-based equity measures into the higher education system, but those measures have failed because there is a complete inelasticity of demand when it comes to the demand for higher education services in this country. Put in layman's terms, the member for Pearce's argument is simply this: we have tried equity measures by providing some regulation on price; that did not work and in fact it does not matter how much you charge, as people still demand and pay for a university degree and the HECS scheme introduced by Labor is helping to offset any inequities in the scheme.

I did read the paper with great interest. The claim that we have not seen any improvement in equity is simply not true. The authors themselves have said that we have seen great advances in improving the equity outcomes for higher education over the last 50 years, as a result of successive government policies. That is, I have got to say, a tribute to the Menzies government—who had a commitment to higher education in this country, to building new universities and to expanding access, so I pay tribute to those on the other side for that—but it is also a tribute to the Whitlam government, who had a vision for opening up access to educational institutions in this country, and to the reforms of the Hawke-Keating and Rudd-Gillard governments.

The member for Pearce said that the equity measures introduced in relation to higher education had had no impact on demand or the entry of people from low-SES backgrounds into the university system. Although he did give an intelligent contribution, he did not quote the observation from the authors that our failure to improve the participation of people from low-SES backgrounds in our higher education system did not have as much to do with our higher education pricing policy as what we were doing at the primary and secondary school level. Effectively, what the authors are saying here is that if you invest in school education, you will see more people from modest backgrounds finding their way into university.

I return to where I started. You need to have a joined-up policy when it comes to education. There are the Gonskis that these guys like and the Gonskis that these guys do not like. Actually, Gonski had a vision for the entire education system. He said, 'Invest in school education and you will see a greater improvement and a greater participation of people from low-SES backgrounds into the higher education system.' He is right. This is a message to those on the other side, including the member for Bass. (Time expired)