Monday, 15 March 2010
Higher Education Support Amendment (Fee-Help Loan Fee) Bill 2010
Debate resumed from 10 February, on motion by Mr Clare:
That this bill be now read a second time.
I rise to speak on the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010, which seeks to increase the amount of FEE-HELP debt for fee-paying undergraduate students from 120 to 125 per cent of the FEE-HELP loan. FEE-HELP, which is an income-contingent loans scheme, is available to students to cover their tuition costs in higher education. There are currently two types of places available for eligible Australian students at undergraduate level: Commonwealth supported places where the Commonwealth contributes to the cost of students’ units of study and students pay a student contribution amount towards the cost of their units of study, and fee-paying, non-Commonwealth-supported places where students must pay full tuition fees for their studies and where the Commonwealth does not contribute towards the cost of their education but students may be eligible for a FEE-HELP loan to help pay their tuition fees.
The FEE-HELP scheme introduced by the coalition in 2003 operates similarly to HECS-HELP—that is, the student applies when enrolling and then the loan amount is aggregated with all loan balances and automatically repaid to the taxation system once the student earns above a certain income threshold. The loan is heavily subsidised by the government or taxpayers, since students do not pay a commercial rate of interest on their loans and repayment of the loans is contingent on various factors that a commercial loan would not take into account.
To partly recoup that subsidy the government adds 20 per cent to the value of the loan as a loan fee for fee-paying domestic students enrolled in an undergraduate course. The Bradley review into higher education recommended an increase in the FEE-HELP loan fee from 20 per cent to 25 per cent. This recommendation to increase the FEE-HELP loan is in the bill today and partially gives effect to recommendation 37 of the Bradley review. The government estimates that this measure will bring in $17.6 million over the period 2010-11 to 2012-13. That recommendation was based on studies by Professor Bruce Chapman, the architect of the HECS scheme.
The rationale for why the FEE-HELP fee applies only to full-fee-paying students is, we are told, that the loans they take out to cover the costs of their studies tend to be substantially higher than for Commonwealth supported places; therefore, the implicit subsidy is much higher and, hence, so is the desire of the government to recover something. Even with a FEE-HELP fee and even with a FEE-HELP fee increase, as proposed in this legislation, these students, even if treated differently to those in Commonwealth supported places, are still much better off than they would be if there were no FEE-HELP available to them.
FEE-HELP covers those students doing postgraduate studies at university, undergraduate and postgraduate studies at private higher education providers and in the vocational education and training sector, including TAFE, for diplomas and advanced diplomas. If no FEE-HELP existed they would have to take out commercial loans to cover the costs of their education—the situation that exists in the United States, for example.
I would like to remind the House that Professor Denise Bradley, someone who I know and respect, made a suite of recommendations—many of which the coalition are broadly supportive of. But I note that this measure has attracted some degree of concern from the sector. For example, Universities Australia, in their response to the Bradley review, noted they do not:
… see any need to increase the loan fee for FEE-HELP, particularly given the Bradley Review’s broader conclusion that the burden on domestic students should not increase.
Similarly, the Australian Council for Private Education and Training is against the charge as it perceives it will add an additional burden on students and further entrench the inconsistent treatment of students in public and private higher education institutions. However, given that Professor Bradley’s recommendation is an economically responsible measure that seeks to recoup from students while still offering a significant government subsidy toward meeting the costs of their education, I see no reason to oppose this measure. This is particularly so since the measure will only impact on the minority of undergraduate students whose course choices necessitate higher loans and therefore receive a higher subsidy from taxpayers.
I would like to acknowledge, though, that there are a number of anomalies and inconsistencies in the HELP loan schemes that should be closely examined in the future. The HELP system is currently complicated and it treats different students differently by applying different rules to them, particularly with respect to FEE-HELP. For example, VET FEE-HELP remains at 20 per cent. VET FEE-HELP in Victoria has a zero per cent administration fee, as it was removed as part of the skills reform agreement, and the OS-HELP loan fee was removed in the 2009 budget following the government’s acceptance of another Bradley recommendation.
These anomalies are further pronounced when a student has a combined debt in different categories. Higher education researcher and commentator Andrew Norton has pointed out that the duration of a course may not be as important as the total HELP debt actually accrued:
Students who go onto FEE-HELP courses while they still have a HECS-HELP debt will have larger overall HELP debts than students who just do one undergraduate FEE-HELP course.
He suggests that:
… the surcharge should be adjusted to the total existing HELP debt, rather than being based on undergraduate/postgraduate distinctions that entrench unfair anomalies in the system.
Norton calls for a broad review of the HELP scheme and argues for a system that would simplify the different HELP categories and streamline common conditions for all students. The coalition’s consultation with education stakeholders and providers suggests that there is a solid rationale to undertake a comprehensive review of the HELP system. A coalition government would have a closer look at the whole system to see if it could be simplified and improved.
I would now like to talk about another topic while on the subject of FEE-HELP. As of 1 January 2009 public universities have no longer been able to offer full-fee-paying places to commencing domestic undergraduate students, except in certain circumstances. Fee-paying students who are enrolled in a fee-paying place prior to January 2009 are able to continue in their course on a fee-paying basis. Other approved higher education providers can still offer full-fee-paying places. Other approved higher education providers include, for example, theological colleges and natural therapy colleges—of which there are more than 150 operating in Australia.
Now we have the crazy situation under the Australian Labor Party, for example, where a student might just fall short of the score to get into law or medicine and miss out on a HECS supported place, but they can move overseas and pay full fees to get an education. And this works in reverse: where an Australian student is denied the opportunity to pay for their own education but the option is still available to overseas students, denying universities a growing source of additional revenue at a time when universities are feeling the pinch.
The government provided funds for the transition period phasing out full-fee-paying places but at the time this announcement was made several vice-chancellors noted that while the funding was welcome, it fell short of the amount they would otherwise be making by charging full fees. If, as the Bradley review stated, ‘The public-private divide is no longer a sensible distinction’, why does the Minister for Education and the Rudd government insist on such a discriminatory decision?
Feedback that the coalition receives from the sector indicates that it is unclear exactly what private providers mean in today’s world, when many are run by government agencies or public universities, or are joint ventures with them. We note that the Bradley review, in its executive summary, clearly makes mention that the public-private divide is no longer a sensible distinction. The key message outlined in the Bradley review is that a more deregulated system in higher education is necessary in order to increase participation from students from low socioeconomic backgrounds. Specifically, Professor Bradley suggests that we must support a system that allows institutions the flexibility to decide the courses they will offer and the number of students they will admit.
By abolishing full-fee-paying places, the Rudd government directly undermined the capacity of universities to flexibly respond to demand by offering a mix of places. In contrast to Labor, who speak of a stronger education sector that is more independent, only a coalition government will truly deliver on this promise. The coalition understands that, to be competitive, universities must be able to respond in a flexible way to ever-changing circumstances and needs. They must be free to specialise or diversify in a way that they feel will best address their weaknesses, build on their strengths and provide the best benefit to their students.
I thank the member for Moreton for enabling me to jump the queue and proceed before him. I speak in support of the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010. This bill will amend the amount of FEE-HELP loan fees for undergraduate full-fee-paying courses. This is a recommendation of the review of Australian higher education institutions. This bill will increase the amount of the FEE-HELP loan fee from 20 to 25 per cent of the loan. This bill is another important recommendation from the Bradley review of the higher education sector. The review recommends that the loan fee be increased from 20 to 25 per cent for full-fee-paying undergraduate courses. This recommendation has been implemented because of its clear nature in the review and also the need for fiscal sustainability. This bill is consistent with the recommendation of the Bradley review.
These reforms will not apply to postgraduate courses of study, enabling courses, units of study with Open Universities Australia or briefing study for overseas-trained professionals. The loan will not count towards the FEE-HELP limit. For example, a student who uses $80,000 of FEE-HELP will have a HELP debt recorded at the ATO of $96,000. In enabling more students to attend university, this bill is consistent with the government’s agenda. The FEE-HELP debts will be indexed by applying CPI increases, there will be a real rate of interest and, of course, repayments will be required when a person’s income hits the income threshold. The loan fee will recover part of the cost of the government while providing interest-free loans that are on an income contingent basis.
The Bradley review recommended that the loan fee be increased to 25 per cent to enable the government to recover a higher proportion of the costs associated with providing FEE-HELP. The increase will apply to commencing and continuing undergraduate students who take out a FEE-HELP loan from 1 July 2010. These changes will affect a small proportion of students. Based on the 2008 student data, it is estimated that some 9,900 students will be affected. This number will probably come down due to the government’s decision to abolish full-fee-paying undergraduate courses at public universities.
This decision will be very helpful in my electorate, where there are large rural areas. My electorate has many students that have relocated for their studies. Deakin University has a campus in my electorate. Deakin is recognised as being in the top 10 public universities, which are phasing out full-fee-paying students. This means that Deakin University in Corangamite will be dramatically less affected by this reform next year than it would have been last year.
This goes to the heart of the Rudd Labor government’s reforms to higher education. This government is giving more opportunities to more people to attend university. The student income support reform is a great example of that. That, of course, would have enabled more regional students to attend university. I am very proud to watch the contribution which the Deputy Prime Minister is trying to make with respect to student income support, which is just another example of legislation continuing to be blocked in the Senate. Many students in my electorate have had to relocate to attend university, and the student income support reforms would have provided them with much needed financial support. Unfortunately those opposite continue to oppose that reform that is based on encouraging regional and rural kids right throughout Australia to attend university. The Leader of the Opposition thinks climate change is ‘crap’ but his actions in this regard are crap as well.
My apologies, Mr Deputy Speaker. As I was saying, the changes to FEE-HELP loans will affect students who are paying full fees for undergraduate courses. For example, Bond University, which is a private university, offers 100 per cent of courses as full-fee-paying courses. I do not think that many of my rural constituency will be going to Bond University. Out of the 100 per cent, 70 per cent will be affected by this bill. To go further, around 75 per cent of students who enrol with private providers for undergraduate courses access FEE-HELP to pay their tuition fees.
This is one of those issues that go to the heart of the difference between the government and the opposition, the Labor Party and the Liberal Party. I am very proud to be a member of a Labor government that has a terrific record with regard to higher education. The Whitlam government brought in free higher education in about 1974, as we all know. This is a great example of a Labor government giving opportunities to all people to attend university on merit. That was a fantastic decision made by that government. Unfortunately, at the first opportunity that the Liberal Party had in government under Malcolm Fraser, they started to erode those provisions.
This is an example of the Liberal Party believing that higher education is for those who can afford it, not for those who merit it. It was left to another Labor government to bring in a new scheme. That scheme was HECS. It was a wonderful day for higher education policy in this country when that scheme was brought in. It meant that many people were able to access university education based on merit. HECS was essentially based on progressive taxation. The fees for university courses would be deferred and paid off over time when that student earned a reasonable income per year after finishing that course.
Then the Howard government came along. That government set about destroying higher education. The Howard government took money away from all levels at universities. I will not mention all of the previous government’s slashing of the system but there are a few examples that I must raise. Money was taken away from student associations, associations representing the interests of students. The Howard government raised HECS fees to a level unaffordable by many people. They brought in large numbers of full-fee-paying positions for undergraduate courses, eroding the merit based selection process.
The previous Liberal government did not believe that all people should have the opportunity, based on merit, to attend university. That is why this government has had to bring in so many reforms through the last two years: to address this concern. This government is abolishing full-fee-paying undergraduate courses. This government has tried to provide student income support for those who need it most, particularly in electorates such as Corangamite and your electorate of Braddon, Mr Deputy Speaker. The Liberal Party is again opposing these reforms to higher education and is again trying to establish a system where wealth, not merit, determines access to education. We believe in higher education and that is why this bill must not be opposed. The Liberal Party must get out of our way in the Senate. I commend the bill to the House.
I rise to support the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010. In my reading of it, it looks as though it contains relatively small administrative changes. It changes the FEE-HELP loan fee from 120 per cent to 125 per cent. I understand that that brings it into line with HECS-HELP but not with OS-HELP or VET FEE-HELP. My reason for getting up to speak is that, in the post-Bradley environment, you will hear from me on every piece of legislation relevant to this kind of change coming through this place, no matter how small or big. For the last 16 months, I have represented the electorate of Lyne on the mid-North Coast of New South Wales. This electorate has been in existence for roughly 60 years, and only 12 per cent of year 12 students go through to tertiary education. That is roughly one in six students making it through to tertiary education in some form. I think, and I hope this House thinks, that is appalling. We are a long way short of the aspirational targets of 40 per cent of 25- to 34-year-olds having bachelor degrees by 2025. That is part of the Bradley target, and it is a wonderful target. For a growing region such as ours, to get from 12 per cent to 40 per cent in 15 years means a call to arms within my community and a call for those within the ranks of government to do some serious structural work and really do some heavy lifting in turning that around.
I see two points as critical. The first is lifting the aspiration for education at a community level. When generation after generation has not accessed tertiary education, that is a very tough nut to crack. I know many people within the area who are trying to go through the practical steps to be the first in their family to go on to higher education. It is a daunting prospect when members of your own family do not even understand what you are doing and why you are doing it, let alone your broader community not really throwing support behind you for what you are doing. That aspiration for education is not given the airtime it deserves in this serious structural reform of trying to lift the number of students with a bachelor degree or higher.
The second point is the issue of length of stay in education. Whilst it is still in the ballpark of anecdotal evidence, I think we are starting to get to the point where, if we are serious about issues of long-term unemployment in this country, we can draw some direct correlations between lengths of stay in education and the ability to change jobs, stay out of the unemployment queues and, in particular, not be caught in long-term unemployment.
There is almost a direct correlation between length of stay in education and the inability of many people to get off the unemployment queues. So all of us, particularly the executive and the minister, need to promote the very general but very substantial point to many people who are flirting with the education system that a value should be placed on staying in education for as long as possible. It does matter. In a modern economy, the ability to be flexible and to move from one job to another is important and does have value. I hope that we see more and more of those two concepts over the next couple of years in this post-Bradley environment.
The reason I make those two points is that the 12 per cent figure of students from the electorate of Lyne who are going through to higher education, the very low level of tertiary engagement, is almost mirrored by some of the lowest income levels in Australia. I know many people in this place think of my electorate as having wonderful beaches and being a great place for a summer holiday—and, by all means, I welcome you—but we have some real challenges. We have some of the lowest income levels in Australia, some of the highest unemployment levels in Australia and, in particular, some of the highest youth unemployment levels—and you can almost add another five per cent on Indigenous unemployment within the local area. There are entrenched issues, and many are now starting to realise that Bradley—and this aspiration for education as a community—is the meal ticket to address some of the entrenched disadvantage within our area.
That is why whenever one of these bills comes before us I will do my best to get on my feet and promote its importance to an area such as mine—a lower SES area. We are sensitive to reform and realise the importance of the benefits of reform, but if it in any way makes it harder for our community, who want to overcome some of these entrenched challenges, I will certainly be fighting it tooth and nail. But the government generally have my support in the targets they are setting from Bradley and they generally have my support in the funding shake-ups for the university sector. But, as various recent discussions with the minister’s office have, I hope, made clear, these targets will not be reached unless we get down and dirty on some of these issues with regard to the university sector and its inability at the moment to engage with many regions such as mine and the importance of that changing alongside funding models.
In response to the figures that I have found, we have now established an education and skills forum in the local area. I was surprised at how difficult it was to get all the various education providers—public sector, private sector, secondary and tertiary—from the Hastings Valley and, in particular, Port Macquarie to sit around a table and talk, to show a bit of trust and a bit of openness and put together a combined battle plan to address some of these targets. I am pleased that that is now starting to kick some goals of its own. We are starting to see some issues dealt with just because this group is meeting. It is also a group with intent, and that broader intent is to address and lift significantly this figure of 12 per cent. To the credit of the local council—which are also involved in the education and skills forum—they have quite ambitiously adopted the government target of 40 per cent of 25- to 34-year-olds having bachelor degrees by 2025 as the local area’s target. Whilst it is ambitious for government to set that target, it is even more ambitious for a region such as ours to set that target. So we are nailing our colours to the mast with regard to Bradley, and we hope government assists us in going down this path.
What we are seeking now in a more substantial sense is some engagement from the federal government with respect to the next step. The concern that I have is that we are repeating the problems with funding models that only provide federal government funding for a post-Bradley environment through existing institutions—so that it is the universities themselves that are being given the autonomy to decide where and how they spend their money. As a region we are probably not that attractive for an existing institution to spend money on. We bring with us all the challenges that low SES and the need for social inclusion bring. If the process that government is going to follow into the future is just to tip money into the universities and say, ‘You’ve got to have a social inclusion agenda and you’ve got to engage low SES; work it out,’ I do not think that is going to be enough to hit these targets and get this issue across the line.
Government has to push harder and take more of an ownership role. For example, where some lovely, prestigious sandstone universities may not want to go, they have to be forced to go if we are serious about changing the game of higher education in Australia. So, while this is a small administrative change, I think it will help an area such as mine, where people have to leave their homes to go to universities because, fundamentally, we do not have a bricks-and-mortar campus anywhere in the area. Any tweaking of HECS or FEE-HELP that can assist is appreciated.
The issue that is stuck in the Senate at the moment sits neatly alongside this issue and was raised by the previous member. It would be remiss of me to stand in this place and talk about education without talking about the most embarrassing example of policy development in my 16 months in this place. I think the youth allowance issue is critical for future students and for this issue of the aspiration for education and I would ask both sides to resolve that issue as quickly as possible—preferably this week so that some students and their families can start to make some genuine decisions about their financial situations and how they are going to tap into education and higher education in the future.
I have tried to speak to some of my crossbench colleagues in the upper house. I once again take the opportunity to do so. I urge coalition colleagues to look closely at this and to recognise that the stalemate we have at the moment, which does not allow lower income families to access youth allowance and also does not provide Commonwealth scholarships, is a lose-lose all around. Someone, somewhere, has to give something. We need this legislation to get through. I urge some sense to come into this process, which I now openly describe as the most embarrassing example of policymaking in my time. Please resolve it.
This is good legislation. I hope there is more that comes out of Bradley. I hope it comes soon and I hope we are now starting to see genuine engagement with lower SES areas, with Indigenous communities and with regional and rural communities such as the mid-North Coast of New South Wales. I hope we are not just repeating the folly of the last 60 years that has got us to this problem in the electorate of Lyne in the first place.
I am pleased to speak in support of theHigher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010 and note the opposition’s support of this government initiative as detailed by the opposition spokesperson, the member for Sturt. I also commend the member for Lyne on his contribution immediately prior to me. I was quite shocked to hear of that percentage—only 12 per cent in his electorate. Certainly the electorate I grew up in would have similar data. I know how hard it can be to be the first and I am sure that he will be working well with the government to get up to that 40 per cent target. I am sure he will not be letting the minister get away with that target without him making sure that she is aware of his desire to get it up to 40 per cent.
This bill before the House amends the Higher Education Support Act 2003 to slightly increase the amount of the FEE-HELP debt from 120 per cent to 125 per cent of the loan. Just to explain: the word ‘fee’ is not an acronym, but the word ‘HELP’ is. HELP stands for the Higher Education Loan Program. For history buffs, this replaced the HECS—the Higher Education Contribution Scheme—which superseded Austudy. Austudy was the scheme that went from 1987 to 1998 which had itself replaced the Tertiary Education Assistance Scheme, the scheme under which I obtained my teaching qualifications. It was interesting to hear from the member for Lyne, but I was certainly the first person in my family to complete tertiary education. From my research, the Tertiary Education Assistance Scheme seemed to be about people not having to pay for study. It was a different scheme entirely. It is amazing how much things have changed in what has seemed like a few short years since I was at teachers college.
Nevertheless, under the Higher Education Loan Program, FEE-HELP is available to fee-paying undergraduate and postgraduate domestic students. This modest increase in the loan fee implements the Bradley review recommendation to ensure the government recovers more of the costs associated with providing FEE-HELP loans to students studying with private higher education providers or those in their third year and beyond who have full fee-paying places at our public universities. The modest rise in the cost of FEE-HELP loans will affect only a small number of students. Fewer than three per cent of students at public universities are enrolled in full fee-paying places. This number will continue to decline as, from the beginning of last year, the Rudd government began phasing out full fee-paying places at public universities. The loan fee also applies to fee-paying students enrolled in undergraduate courses at private universities and other private higher education providers approved to offer FEE-HELP.
The Rudd government is committed to ensuring that higher education remains accessible and affordable for all Australians. A FEE-HELP loan will continue to offer helpful conditions for students. Loans do not attract interest, as commercial loans do, but they will continue to be indexed annually. A FEE-HELP loan also requires no security and students are not required to begin repayments until their income reaches the minimum repayment threshold—currently this is $43,152. As previous speakers have noted, this is nothing like the loans schemes in places like the United States. I have had friends who have had to go into that scheme and it takes forever for them to meet what are basically commercial loan arrangements and it can take forever to pay off those loans. Obviously, the government meets the cost of FEE-HELP loans if the student can never repay the amount—that is if, for some reason, their income never reaches that threshold which, as I said, is over $43,000 at the moment.
The Rudd government is right behind our higher education sector. We believe in opportunity for all; academic freedom and autonomy; research that advances knowledge and critical thinking and what then flows from that, which is productivity; and access to university based on merit, not just the ability of the student or the student’s parents to pay. It is why we set up the Bradley review in March 2008 to examine our higher education sector. In handing down the report, Professor Denise Bradley AC said the report revealed the urgent need for the country to understand that its future depends on a strong education system, particularly at the tertiary level. She said:
… what I think has come out of the process for us is a strong sense of the need to increase participation, to free up the funding and regulatory arrangements, but to do that at the same time as you take a much more comprehensive approach to quality.
It is an important balance.
Our tertiary education sector had been punished for too long by the Howard government. In November 2007 the then NUS president, Michael Nguyen, said:
The Coalition has failed to ensure that young people have the opportunity to go to university regardless of their parent’s bank balance. The political parties can be assured that in this election young people will be voting on issues like higher education to ensure that their future is worth looking forward to.
But the opposition continued to champion their own shameful record of neglect and hostility towards higher education under John Howard. Unfortunately, it was one of the most neglected sectors for the 12 years of that government. And, when they were not neglecting higher education, they were taking an ideological axe to its heart, making changes to voluntary student unionism and depriving students of fundamental amenities and services.
Between 1995 and 2004, total funding per tertiary student increased by an average of nine per cent across the OECD. However, in Australia it increased by only one per cent. This blatant neglect hit us hard, affecting graduations in critical areas like science, agriculture and engineering. It also badly impacted on research. While research output has grown in similar countries such as Singapore, Korea, Taiwan and mainland China, over the last 10 years in Australia it has remained static. When we look at innovation and research, we can be guided by the words of Lewis Carroll in Alice in Wonderland, where the Queen told Alice, ‘But, remember, you have to run fast to keep in the same place and run twice as fast if you want to go somewhere different.’ That is the case with innovation and research. Our neighbours and competitors are pouring money into research and gaining advantages that we do not have.
It is not just students and universities that were negatively impacted by the Howard years; it will take years to catch up and to deliver on skills, services and productivity gains that might have flowed from research. Therefore, the coalition neglect has impacted on every Australian, in a way. Every Australian has experienced a health system under pressure from a shortage of Australian-trained doctors, nurses and allied health professionals. Every Australian knows about the shortage of early childhood educators and schoolteachers, especially in those crucial areas of maths and science. Every Australian has experienced the traffic bottlenecks or housing shortages that come from a shortage of qualified engineers and logistical workers for our booming resources and construction sectors.
I met with some representatives from the mining community last week, and what was their No. 1 issue, as it was two years ago? It was the skills shortage. It is funny: two or three years ago, when Work Choices was in full bloom on the lips of those opposite, the mining sector were not talking about IR. No, they were talking about a skills shortage—and they are still talking about it. Every Australian feels the pinch because these skills shortages are driving up the cost of doing business, as anyone involved in the mining communities in Western Australia and Queensland would know. We are all paying more through higher inflation and higher interest rates. And every Australian knows that we cannot continue to neglect our universities and higher education sector like the previous government did. It is as the President of the Business Council of Australia, Greig Gailey, said:
More than ever, governments need to focus on fiscal policies and broader reform agendas in areas such as infrastructure, education, skills and workforce participation that collectively enhance the nation’s capacity to grow.
That is why the Rudd government, in our first budget, allocated an additional $500 million to Australian universities towards capital investment—and that was just the start. Through the education revolution we are ensuring that every upper secondary student has access to a computer. We are not investing in flagpoles; we are not investing in the past. We are investing in the future: the future industries and the future jobs for the 21st century. It is why we are creating more than 450,000 new VET places over four years to address the skills gap. We are also phasing out full-fee-paying places at public universities and increasing the number of the Commonwealth funded places. To encourage more students to study the core disciplines of maths and science, we have reduced fees for new students studying maths and science by approximately 50 per cent. We are creating more nursing places, as part of a range of measures to attract 9,250 extra nurses into the workforce, and 1,500 extra early childhood education places. By 2012 we will have doubled the number of Australian postgraduate awards.
The Rudd government believe that quality and accessible education is a fundamental right for all Australians, and we are committed to ensuring our higher education sector is well resourced and sustainable for the long term. I commend the bill to the House.
I rise to make a contribution to this debate on the Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010, which is currently before the House, and put forward some perspectives concerning higher education more broadly. The bill before us increases the FEE-HELP loan fee from 20 to 25 per cent for the cost of full fee undergraduate university places at our public universities. It does not diminish the value of borrowings available to students; it applies to loans taken out by full-fee-paying students for units of study with a census date of 1 July 2010 or thereafter. This amendment will make some contribution toward the affordability of the FEE-HELP scheme, but as full-fee-paying undergraduate awards are being phased out at our public universities, its effect will be naturally limited in terms of numbers of students over time.
Any debate about our education sector has to come back to what type of economy we have now and what we hope to have in the future. This nation has been seriously blessed throughout the last century. We were the nation that rode on the sheep’s back for many years. We then became the world’s mine, and continued to provide vast resources for the ongoing compounding eruption that is the Chinese economy, with India following closely behind. But our population itself will not be sustained by this. The vast bulk of our workforce will work in other areas, and naturally we look to having work rewarded with remuneration that increases our standard of living across this country.
The Australian Bureau of Statistics data points to miniscule change in the proportion of our workforce engaged in professional and managerial work over recent decades. There has been something like a one per cent increase in the workforce in these areas over 30-odd years. We know that our communities will not become wealthy or retain wealth pumping out cheap manufactured goods. The competition that our workforce faces from underdeveloped nations around the world with much cheaper wage structures makes that almost impossible. As important and necessary as tourism, transport, retail and other sectors are—given the overseas dollars they may bring into the country—we still know that we need to do a lot more.
I think our population will still have its needs met, even if we see a greater proportion of our workforce engaged in work that transforms and adds value—that deals with higher value exchanges that engage the intelligence and creativity of a highly skilled workforce to provide that bit more than the workforce of any other nation. I think we can afford to have a greater proportion of our workforce engaged in work that adds value and is not simply a wheel in a conveyor belt reliant on greater and greater volumes of domestic consumption and waste. This is a commonly held view here in Australia and in both developed and developing countries around the world. Value added workers have a much greater capacity to earn more through driving innovation and benefiting from it. They deliver increased productivity and value for work undertaken.
I know it, and countries the world over know it, and this Rudd Labor government knows it very well, both through investment in skills and the development of expanded high-value labour markets. This government is actively seeking, for instance, the creation within Australia of a regional financial hub—a centre of economic service that uses our stable political and economic environment to facilitate work and investment around the region. This is precisely the type of thing I am talking about—the provision of increased quantities of high-value, professional services. I think it is an incredible blight on this nation that we have an education system that is very, very good—or at least has every reason to be—and yet we have not even been able to train enough doctors for our own needs, let alone to provide services to our rural areas and neighbours. Instead of being a service exporter, we have to import professionals. This is totally unacceptable for our health system, for the workforce itself which is ageing and experiencing burnout. It is unacceptable that our own population, including our own children who may want to develop a career in medical fields, cannot access that requisite education. Thankfully, this shortfall in medical professionals is another area that this Rudd Labor government is addressing. But similar areas of undersupply of skilled labour exist now as they have for years, rewarding value-adding and wealth generating opportunities for our people.
The provision of high-quality tertiary education to our region is another industry that is worth a great deal to our nation and the workforce that supplies that demand. This area of our economy too needs to be protected with appropriate quality control and, where appropriate, investment and facilities that will enable sustainable high-value opportunities to be captured and retained. This area of activity was also contained in the reports to the government that led to the amendment we are now debating, which itself was recommended within the review of Australian higher education, commonly referred to as the Bradley review. Twenty nine per cent of Australians aged between 25 and 34 have degree-level qualifications. Some countries around the world are targeting 50 per cent. Australia has slipped over the last decade in our international standing from seventh to ninth highest proportion of this age group with such qualifications. This is not at all surprising. As the Bradley review observes:
Australia is the only OECD country where the public contribution to higher education remained at the same level in 2005 as it had been in 1995.
It was the last Prime Minister who attempted—and to some extent succeeded—to cast degree-level qualifications as an elite and therefore negative and undesirable pursuit that working-class people need not bother with. Working-class kids getting a job digging ditches and lugging boxes was appropriate, according to John Howard, but a university degree was not. But this is not adequate from the perspective of this government. We know that it is not the way forward because it is not in our nation’s best interests, nor is it in our children’s best interests, for us to tell them that we do not expect much of them. In so doing we are saying that we do not expect much of the future for them.
The Bradley review went so far as to advocate setting national targets for attainment of degree qualifications and national targets for participation of students from low socioeconomic backgrounds, coupled with institution specific targets for participation and for performance. Also the review advocates national benchmarking against OECD countries performance in education system quality. The Bradley review puts this focus on expanded opportunity in terms of finding enough young people to train the number of professionals we as a country wish to skill.
It could also be put in terms of delivering observable equality of opportunity. I have long held the view that a society with real equality of opportunity would probably see something like similar proportions of people raising their socioeconomic or professional standing as those who drop in the level of professionalism of career compared to their background. Equality of opportunity would see it being as easy for a child of a very poor working-class background to get a degree and be a professional as it is for a child whose parents are professionals to become something less well renumerated. These are statistics that we would just love to see.
In the 2009-10 budget we saw the beginnings of our tertiary education rebuild. The government supported the higher education and research sectors at a cost of an additional $5.4 billion over four years and will commit additional resources over the next 10 years. This includes funding of $1.5 billion for teaching and learning, $0.7 billion for university research, $1.1 billion for the Super Science initiative and $2.1 billion from the Education Investment Fund for education and research infrastructure. Funding over the next few years for infrastructure is almost unparalleled. We have seen unprecedented investment in capital works around the nation at our local primary schools, with much needed investment interest in the facilities relied on by the majority of children of a majority of families—multipurpose halls, classrooms and libraries by the dozen. What an exceptionally fine action of this government to use the stimulus money required by our national economy for the benefit of this nation’s next generation—an investment that will serve to give multiple generations of Australians wealth for many, many years to come, as will this investment in our universities.
The higher education sector really has transformed over time since John Dawkins was the minister responsible and our system became a mass—not elite—system. This was, critically, an important step. After the previous government’s decade-long sabbatical, we now have the opportunity to take tertiary education to the next level so that it can equip our population and our workforce for this new century, which will see as much change around the world and in our lives as did the last century. To this end, I commend the bill to the House.
Australia faces a critical moment in the history of higher education.
The member for Hindmarsh described the previous government as being on a ‘sabbatical’. I think the members were like Rip Van Winkle; they were simply having a sleep when it came to higher education. It is almost as if they said, ‘When it comes to higher education, we shouldn’t compare ourselves with our OECD partners.’ Certainly the Bradley review was absolutely damning when it came to the previous government’s performance. The member for Hindmarsh correctly quoted the Bradley review where it said:
Australia is the only OECD country where the public contribution to higher education remained the same level in 2005—
when the coalition was in power—
as it had been in 1995—
when Labor was last in power under Prime Minister Paul Keating. It is an absolute disgrace that the coalition failed so miserably with respect to higher education in this country. The legislation that is before the House follows one of the recommendations of the Bradley review—that is, to amend the Higher Education Support Act 2003 to increase the amount of FEE-HELP debt to 125 per cent of the FEE-HELP loan.
The background to all of this is that many of us here in this place were benefited by the wonderful educational reforms to higher education undertaken by the Whitlam Labor government. As I stand here before you, I can truly say as the first person in my family ever to go not just to high school but to university—I studied arts-law at the University of Queensland—I thank every day the Whitlam Labor government for their wonderful initiative with respect to higher education in this country. Certainly in 1989 undergraduate students were required to pay a contribution towards the cost of their courses under what became known as HECS, or the Higher Education Contribution Scheme. If they did not want to pay upfront and receive a discount, they could elect to repay the Commonwealth government for the loan, through the taxation system, when their income reached a certain threshold. This was changed in 2005, and the Higher Education Loan Program, commonly known as HELP, was brought in to replace HECS. It was expanded to include FEE-HELP for fee-paying undergraduate and postgraduate domestic students and overseas HELP, or OS-HELP, for Commonwealth supported students who complete part of their course overseas. The year 2007 will be known as the year that VET-HELP was introduced for students studying a diploma and advanced diploma courses in what we call vocational education and training. So what happens with respect to those university students who apply for a loan in the form of an income-contingent loan is that their outstanding debts are indexed according to the consumer price index. The FEE-HELP scheme does allow a domestic student—and I have two daughters of mine studying at the University of Queensland—to enrol in a full-fee-paying course under FEE-HELP assistance of up to $80,000 for full tuition fees or $100,000 for medicine, dentistry, veterinary science et cetera.
What is happening here is that we take into consideration the implicit subsidy, and that was recognised by the Bradley review. There are circumstances, by reason of someone’s death or by reason of income-earning capacity—a whole range of factors—which could result in the debt not being repaid to the Commonwealth. Effectively those persons would be getting an implied subsidy—in effect they have borrowed money from the Commonwealth for the purpose of their education. Modelling was undertaken and the Bradley review recognised the modelling and the challenges here and recommended strongly that we should undertake to change the current low fee of 20 per cent which applies to FEE-HELP loans and increase it. So the legislation before the House today deals with that recommendation, and the Parliamentary Secretary for Employment, the Hon. Jason Clare, who is in the House today, correctly pointed out in his second reading speech in relation to the matter that:
The Bradley Review of Australian higher education’s final report noted that the implied subsidy offered through a FEE-HELP loan increases significantly with the level of debt. This means the government’s subsidy varies considerably by course.
Anyone who has been at university knows that is the case. The recommendations are that we increase the loan fee from 20 per cent to 25 per cent for undergraduate courses. I can see the benefit of that, and I understand entirely why that has been recommended. The Rudd Labor government is not just doing this with respect to higher education. Unlike the previous government whose sole commitment to higher education was to impose Work Choices on the higher education scheme and to link funding to the higher education sector with the imposition of AWAs, the Rudd government has listened to the experts and is following the recommendation of the Bradley review.
We have about 37 public universities in this country, some tremendously fine institutions that produce graduates in medicine, law, engineering and across the whole range of courses in science, the humanities, social sciences and the arts which are the envy of the world. But we have to recognise, as the Bradley review did, that higher education has changed dramatically over the last 30 years. Technology alone has had an impact—the internet, email and the availability of information for courses and the variety of courses have been dramatic changes. The Bradley review noted that we do not just have 37 public universities, but we have two private universities and 150 or so other providers of higher education, so there is a range of opportunities.
The previous government failed to invest in higher education and we see that in so many of the speeches by those opposite. When it comes to student union activities at universities, they seem to be undertaking an ideological battle that they have carried into this place from their days at university. Their view of higher education is that it is a place where you can impose Work Choices, you can criticise student unions which represent students from regional and rural areas and you can de-fund the sector. That was the experience during the nearly 12 years of tenure of the Howard government on the Treasury benches. Under the previous government, within the OECD we found ourselves in ninth position out of 30 in the proportion of our population aged 25 to 34 years with tertiary qualifications, down from seventh a decade ago, according to the Bradley review.
The trouble is that if we do not better educate our young people who want to study at a higher education level, our productivity will decline, our businesses are more likely to be less profitable and our citizenry are more likely not to have the skills, talents and qualifications to compete internationally. It will impact upon our economic growth, impact upon our GDP, impact upon our workplaces and impact upon family life and the life of our community. So investing in higher education is good for our economy, good for our trade, good for our family life and good for our communities. The Bradley review notes that work done by Access Economics clearly shows that from 2010 the supply of people with undergraduate qualifications will not keep up with our demand. We see that across the health sciences, medicine and the like.
We have some fantastic universities and a number of them are in my electorate of Blair in South-East Queensland. We have the University of Queensland Ipswich campus which offers not just business and accountancy but also medicine and nursing. I am pleased to see the Rudd government’s commitment in the announcement made today by the Prime Minister and the Minister for Health and Ageing. That will have a very advantageous impact upon young people and those who want to study medicine in my electorate. I warmly welcome today’s announcement of the massive increase in GP training places and the number of health professionals we are going to train in this country. Sadly, in the electorate of Blair and certainly the Ipswich and West Moreton part, we have about one GP for every 1,609 people. That was determined in a study undertaken by the University of Adelaide just a few years ago at the request of the Ipswich and West Moreton Division of General Practice. We do not have enough doctors, we do not have enough nurses and we do not have enough health professionals. I am really excited and thrilled about announcement made by the Prime Minister today which, by training more doctors and more health professionals, will have a direct impact on the tertiary sector, not just at a national level but also at a local level in the electorate of Blair in the Ipswich and West Moreton area.
The Rudd government is strongly committed to implementing the recommendations of the Bradley review. Education at a higher level should not be the province and choice only of the rich and powerful, the sons and daughters of the captains of industry and big business. Education should be for everyone and available to everyone. Those people from low-socioeconomic backgrounds, working-class boys and girls from Ipswich and the rural areas outside should have the same advantages in life. You should have the same opportunities in this country whether you live in the Ipswich or Indooroopilly, whether you live in Sydney or Melbourne, whether you live in Kalbar, Boonah, Lowood, Laidley or Toowoomba, from the Torres Strait to Tasmania, from Palm Beach to Perth. I am very pleased that the Rudd government has seen fit to provide further assistance in the level of support for the students. It is a crying shame that those opposite have been opposing our reformist legislation of support for students and those people in the higher education sector by their obstructionism in the Senate and their failure to support us in providing assistance to tertiary students.
Reforms to and better targeting of income support would enable students from regional and rural areas in places like Ipswich to get better access to education and more opportunities. I note also the great support of the Rudd Labor government in the electorate of Blair, particularly that part that has been redistributed into the federal electorate of Wright for the next election where the University of Queensland Gatton campus and the school of veterinary science has been transferred. I am pleased to welcome into the electorate of Blair the University of Southern Queensland at Springfield as part of the electoral redistribution. I will be very happy to support the head of that campus, Doug Fraser, and the work he does. I have had a very close relationship with the University of Queensland Ipswich campus and the Pro-Vice-Chancellor, Alan Rix and I will continue that relationship with the University of Southern Queensland’s Doug Fraser. I commend the work of the University of Southern Queensland in teaching many people from working class areas and from low-socioeconomic backgrounds who have never been to university before. In a meeting I had some months ago with Doug, I chatted with him about the demographics of the student population at the University of Southern Queensland campus in Springfield. He pointed out to me that they are hitting targets way beyond what we are suggesting here.
We want people from low-socioeconomic backgrounds to get an opportunity to go to university. We want more young people from disadvantaged backgrounds to have that benefit. We intend to invest massively to make sure that we increase the funding for higher education. Some of the data I have seen in relation to the previous government’s failures in relation to higher education is simply damning with respect to university research and the assistance given to those campuses engaged in areas like medicine, innovation, business innovation and things like the study of science et cetera. They simply failed, in that regard, to invest. So what the Rudd government is doing is undertaking a huge investment with respect to higher education. We are talking about $5.7 billion into the higher education sector. We are making sure that we attain our goals with respect to low-SES enrolment, and we are backing it up with funding. We are not just saying it; we are actually backing it up with support, because we know that the measures that we undertake here to support our higher education are crucial for our long-term economic growth, not just for social equity, social inclusion and social assistance to the disadvantaged. We know, as we get out of the global crisis, that we need to be a stronger but a fairer country, so it is so necessary to increase our funding in this regard.
The government has a very strong ambition with respect to having people from low-socioeconomic backgrounds at university and providing opportunity for them. We have a strong ambition that 40 per cent of all 25- to 34-year-olds will attain a bachelor’s qualification or above by 2025. We think that what will happen then is that our workforce will have skills, qualifications, abilities and talents that will help us compete, because that is what gives us the advantage with respect to markets and economic growth. Having a highly skilled workforce is absolutely crucial to ensuring that our future prosperity is attained and that our young people feel included in society. Higher education is not just important for economic growth and business opportunity and it is not just important in terms of social equity; it is important because those people engaged in higher education feel a greater sense of self-esteem and greater morale. They are more likely to feel part of a society and less likely to feel excluded. They are less likely to engage in criminal activities and more likely to be contributors and involved in civic and community life. So higher education has benefits not just in terms of economics and family life but in terms of civic life and adopting what I would describe as a more communitarian spirit—a desire to give back to your community and to the civic life of the country.
The legislation before the House is part of the fabric and matrix of the Rudd government’s commitment to higher education, something which I passionately support and which I believe is in the best interests of my country, the best interests of my state of Queensland and my region of South-East Queensland, and certainly the best interests of the constituents of the federal electorate of Blair. I support the legislation.
in reply—I thank the members who contributed to this debate, the members for Sturt, Moreton, Lyne, Corangamite, Hindmarsh and Blair. The Higher Education Support Amendment (FEE-HELP Loan Fee) Bill 2010, as we know, amends the Higher Education Support Act 2003 to implement the government’s decision to increase the loan fee from 20 per cent to 25 per cent of FEE-HELP loans for undergraduate courses.
An increase in the loan fee will enable the government to recover more of the taxpayer subsidised cost of providing FEE-HELP loans. Even with a five per cent increase in the loan fee, the conditions of the government’s FEE-HELP scheme continue to provide extremely favourable income-contingent loans to students. Students do not have to start repaying their HELP loan until their income reaches the minimum repayment threshold of $43,152 per annum. If students do not repay their loan, the government meets the cost. Most students will not be affected by this change, which will only impact undergraduate students who choose to use FEE-HELP for their tuition fees in a fee-paying place. I commend the bill to the House.
Question agreed to.
Bill read a second time.