Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I am delighted to rise to speak on the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011, which seeks to amend the Higher Education Support Act 2003. Firstly, it removes the restriction on the number of undergraduate Commonwealth supported places that Australian universities are able to offer. Secondly, it abolishes the student learning entitlement. Thirdly, it requires universities to enter into a mission based compact with the government and, finally, it requires universities to institute policies which promote and protect free intellectual inquiry in learning, teaching and research.

These changes in part give rise to some of the recommendations contained within the Bradley review of Australian higher education, which was handed to the government in December 2008. Professor Denise Bradley and her panel outlined a broad vision for the structure of the higher education sector. For the last 30 years the Australian university sector has been highly regulated with decisions, over how many places each higher education provider can offer for each course and how much they can charge students for each place, decided by bureaucrats in Canberra. This highly centralised system did not adequately respond to student demand. For example, if a student missed out on getting a Commonwealth supported place for their preferred course, his or her only option was to go to a private institution or to take up a full-fee-paying domestic place in that course. The Rudd government abolished full-fee-paying places upon coming into office under the then minister for education, Julia Gillard, driven by ideology rather than good policy. The system still allows overseas students access to these full-fee-paying places.

There were two recommendations of the Bradley review that were broadly accepted by the coalition which would have, firstly, increased the participation in higher education so that by 2025 40 per cent of all 25- to 34-year-olds would have a qualification at bachelor level or above and, secondly, so that by 2012 all Australian universities would be funded on the basis of student demand. The second recom­mendation has amounted to the government enacting a partial deregulation of the current centralised system of dictating places. The deregulation of places, in theory, means that the number of places that a higher education provider can offer for courses to students can no longer be dictated by Canberra but is decided by the higher education provider themselves in response to student demand for specific courses.

Labor have committed to funding Commonwealth supported places for all domestic students accepted into an eligible, accredited higher education course at a recognised public higher education provider. No students are to miss out any longer on a place for a course of their choice on account of limited places. Currently Commonwealth supported places are capped by the Higher Education Support Act 2003, preventing the almost quarter of a million additional students required annually to fulfil the Bradley target from gaining a Common­wealth place. This bill removes those restrictions from most Commonwealth places from 1 January 2012. I also note that the government are providing a further $1.2 billion for this reform in 2011-12, that is, the demand driven funding system for undergraduate places, bringing the total funding for this initiative from 2010 to the end of 2015 to almost $4 billion at $3.97 billion.

The bill does not, however, uncap the number of enrolments of medical student places as those degrees are dependent on the availability of clinical placements provided by state and territory governments, nor does it uncap the number of Commonwealth supported places for postgraduate, non-research students. The uncapping of Commonwealth supported postgraduate places has been deferred at present and the measures in this bill do not extend to those places.

The bill also gives the minister for higher education the ability to cap the number of places in particular disciplines or at particular institutions in defined circum­stances. These circumstances include the proliferation of graduates in a particular field where industry is not demanding large numbers of graduates. The coalition acknowledges that universities have welcomed the recommendations of the Bradley review and the measures contained within this bill. They are welcoming the opportunity to accept the number of places for each course that will be decided by the number of qualified students wanting to undertake the course.

However, very serious unanswered questions remain regarding the adequacy of higher education funding into the future. The most pressing question is this: as universities will now have to absorb a significantly higher number of students—both as a result of the move to a demand driven system as well as to meet the government's increased participation targets—who is going to pay for the extra infrastructure needed to cater for all of these new students? As with many of this government's reforms in education, the policy may sound good, but, as we all know, the implementation of that policy always remains contentious.

There have been various claims made about the new system's impact on student numbers and thus the adequacy of university resources. This is set to become one of the great challenges in education for the government. For example, the Group of Eight have previously made mention that the sector will struggle to maintain quality if it is forced to absorb the increased number of students created by the introduction of the uncapped student demand driven system in 2012 and if base funding does not increase to cover funding shortfalls. Another study, the results of an Access Economics analysis of funding for university teaching and research activities commissioned by Universities Australia, also found that overall university funding levels are inadequate. They found that costs and funding do not match, that there are insufficient start-up funds for new programs and that the Commonwealth contribution rates for student places:

… appear to bear little relation to the actual cost of teaching or to any clear notion of public benefit and the range of maximum student contributions appears to have no solid empirical or policy foundation.

There appear to be three broad options to address the issues at hand. Firstly, higher education providers could try to accom­modate the greater number of students within existing facilities. Secondly, higher education providers could try to find the extra resources themselves. Finally, Labor could commit itself to meeting these extra costs.

The first option is clearly unacceptable. We cannot afford a decline in quality and standards in our universities, with overcro­wded facilities or less student contact with lecturers and tutors. Any lowering of standards risks further damage to Australia's international reputation, which would in turn further damage our position as one of the best destinations for international students. The second option of higher education providers having to find the funding themselves is not straightforward. Australian universities currently receive funding from non-government sources at a much higher level than the OECD average for comparable countries. It is therefore highly unlikely that much more revenue can be squeezed either from business partnerships or from international students, students who already each year inject billions of dollars into the sector through full fees and indirectly subsidise the education costs for our Australian students.

The last option, the one in which the government foots the bill, remains unclear because so far the Gillard government refuses to commit itself to the provision of any additional funding. It is worthwhile noting here that the government rejected the Bradley review's recommendation for a 10 per cent increase in the base funding rate of student places. The government instead has committed to a review of base funding to universities. The review panel, led by the Hon. Dr Jane Lomax-Smith, the former South Australian Minister for Education, has been given the task of tackling the problems of determining the additional university funding required to meet the government's objectives and determining how it is to be raised. This review is expected to report back to the government around October 2011. This is only months before the scheduled implementation of major reforms in 2012.

Where to now? The higher education sector is far from agreement on the best way to overcome this problem. Many submissions have been made to the Lomax-Smith inquiry which will no doubt stimulate further debate about how to address the impending funding shortfall for universities in accommodating all of these new places. When the results of the review are released to the public later this year, the coalition will carefully analyse Dr Lomax-Smith's work and conclusions. We will also undertake further consultation and await the government's response to the review. But I stress again that this is yet another review from this government rather than the government actually making a decision. That leaves the higher education sector yet again wanting to know what their future will be and without a clear direction from the government. The Lomax-Smith review will inform the coalition's response in this area and to speculate about the future policy direction without having considered the recommendations regarding future funding would be premature. At the end of the day, it is up to the government to come up with the solutions. They will need to make tough decisions. They are the ones who have announced the participation targets and the decision to move to a student demand driven system. They are responsible for dealing appropriately with the consequences of their decisions and need to front up with the solutions to any resulting policy challenges.

My hopes of Labor being able to pave a clear way forward in the so-called higher education revolution and address the sector's concerns about a real shortfall in funding to achieve these targets are not high. The government, for example, have no clear plan to get back into surplus. This is their fourth budget deficit in a row and since Labor came to power they have turned a $20 billion surplus into a $50 billion deficit. Labor governments have always been heavy on spending and light on restraint, including this one. As I said in relation to the government's review into schools funding, chaired by David Gonski AM, I cannot see any Labor government having a bucketload of cash to implement options stemming from the review. I fear the same for universities when the Lomax-Smith review concludes. But, despite the coalition's concerns about the transition to a demand driven funding system, we broadly support the measures contained within this bill.

There are, however, a number of measures contained within the bill that we do have concerns about. The first of these is in relation to the mission based compacts between the government and higher education providers, which are to provide a framework for jointly achieving reform objectives. These mission based compacts are supposed to provide a strategic framework for the relationship between the Commonwealth and table A and table B providers in the act. These compacts are to set out how higher education providers' missions align with the Commonwealth's goals for higher education, research, training and innovation. Specifically, we have concerns that compacts which are funding agreements between the Commonwealth and the universities will be used to micromanage universities rather than to simply align universities' objectives with those of the Commonwealth. The new funding and policy environment through the introduction of compacts is intended to free universities from command and control government regulation and to promote efficiency, autonomy and diversity in the sector. Universities will have the right to enrol as many students as they judge eligible for a guarantee of government funding and there are supposed to be no intended limits other than in areas such as medicine, as I mentioned earlier. The mission based compacts are in theory supposed to constitute an agreement between each higher education provider and the government about mission, size and the achievement of government targets. But providers are supposed to then be left to manage how they deliver these themselves. The compact system is also designed to monitor progress towards the 20 per cent low socioeconomic status participation rate and the 40 per cent attainment target and to reward providers as progress is made.

But the coalition finds it hard to trust that these deals will actually be realised. Labor is addicted to red tape and there is a real risk that these compacts will unnecessarily burden higher education providers. We do not have to look far to realise that, under the Gillard government, this risk is very real. Just look at small business. After more than three years of Labor, small business is drowning even further in red tape. Labor promised to make life easier for business by pursuing a one in, one out rule for new regulation. No new law was supposed to be introduced unless an existing one was taken off the books but, instead, Labor has imposed 220 new regulations for each one they have removed. So the one in, one out rule became the 220-for-one rule under the current government. If Labor imposes excessive reporting and regulatory arrangements on our higher education providers, it means more time, money and effort that they have to divert from real work to filling in forms for bureaucrats in Canberra and less to spend on students. Excess red tape and regulation benefits no-one. It means more cost for business; it stifles investment; it lessens innovation; it deceases productivity; and it ultimately creates a lower standard of living for Australians.

A coalition government would have a whole-of-government approach to reducing the cost and burden of regulation by cutting the overall cost of existing regulations by at least $1 billion each year; by instituting a fair dinkum one in, one out policy—no new regulation will get through the gate unless another one is being cut; by holding politicians and their bureaucrats to account by forcing them to explain to all Australians what they have done to end the mounting burden of paperwork; and, finally, by talking with industry and asking them about the real need for regulations and stopping unnecessary red tape from being introduced in the first place. We will also make bureaucrats calculate how much it will cost for providers to deal with the regulations they have created.

Our commitment to reducing the cost regulation by a quantifiable $1 billion per annum follows a successful adoption of annual dollar based red tape reduction targets set by the Victorian government. Victoria's approach to regulatory reform is highly regarded by business. The coalition recognises the proven success of Victoria's deregulation policy and will adapt and refine it. Commonwealth departments will be required to tell us how many hours small business will spend on filling in government paperwork and how much it will cost. This will include things like new software, advice from accountants, and training and time spent away from work to learn any new requirements. Departments and bureaucrats will also have to explain how many businesses will be impacted by regulatory changes and how much they will have to do to comply. Any cost provider will need to be examined by the Productivity Commission and they will be transparently included in departmental annual reports. We will also make sure that departments and bureaucrats explore other alternatives before imposing regulations, and we will require ministers to pursue the least-worst regulatory option for all policies and programs. Ministers and their departments will have to meet these targets and they will be held to account each and every year.

We wish to place on record our doubt about the government's ability to fund this new demand driven system, without resisting their predisposition towards excessive controls. The coalition does not oppose the introduction of compacts or agreements in theory, but we find it hard to believe that Labor will deliver them reasonably. It is interesting to note that any closure of courses or shifts in load between campuses will need departmental approval. Higher education providers are also going to be required to meet a range of other specifications that include social equity and research to support their circumstances for performance and general funding. In fact, the Vice-Chancellor of the University of New South Wales, Professor Fred Hilmer, has previously suggested that asking universities to each meet a range of excessive and/or competing targets would lead not to 'diversity in excellence but to mediocrity and uniformity'. For these reasons, the coalition is proposing to move the following amendment, which states:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations and industry by the Gillard Government; and

(b) that the increasing regulatory burden represents a broken election promise whereby the Labor Government said that it would only introduce a new regulation after repealing an earlier regulation: a "one in, one out" rule; and

(2) calls on the Gillard Government to immediately adopt the Coalition's red-tape reduction policy which will seek to reduce the cost of the Commonwealth's regulatory burden by at least $1 billion per year."

No doubt that amendment will be circulated at the end of this speech.

The compact missions should be capable of reaching a range of different but complementary arrangements. It should be possible for higher education providers to choose what they do on the basis of their identified strengths rather than being forced to expand their operations beyond their capacity. Labor must have a national agenda on the reduction of red tape if they are to have compacts that are both achievable and worthwhile in meeting the Bradley objectives. Only a coalition government will reduce the cost and burden of regulation by at least $1 billion per year. Only the coalition is determined to ensure that government makes it easier, not harder, for higher education providers to prosper. The coalition also seeks to retain the student learning entitlement. The student learning entitlement was introduced by the Howard government in the Higher Education Support Act 2003 to achieve two objectives: first, to prevent students from occupying a Commonwealth supported place for an excessively long period of time, effectively denying another student a place at university; second, to prevent professional students from studying at the taxpayer's expense for decades, accumulating a large HECS debt with no intention of ever paying it back. As an aside, I was at university long enough ago to remember the professional students at the University of Adelaide, some of whom had left school when they were 17 and were still at university when they were 40. It seemed an excessively long period of time to improve their skills and knowledge in order to be able to make a contribution to the wider community.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Until they join the Labor Party to get in this place.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Exactly, until they join the Labor Party to get into this place. I might say my favourite professional student at university was also the president of the communist party at university. She was a delightfully charming person, but I did feel that she might well have had long enough at university and that it was probably time, having had several partnerships and several children, to perhaps move into the workforce and allow the taxpayer's contribution to her education to finally be realised.

The deregulation of Commonwealth supported places removes the first of the rationales, but I believe there are still very strong reasons for retaining the student learning entitlement. While the government may assert that there are very low instances of professional students in Australian universities and there are problems with effectively administering legislation, simply abolishing the entitlement is sending the wrong message to students and the taxpayer. In fact there are very low levels of these perpetual students as a result of the Howard government's reforms and indeed the introduction of the student learning entitlement. To abolish the student learning entitlement in its entirety would see the return of students doing degree after degree for decades at significant public expense with no ability for the government to recover their HECS debt. Today the minister for education, Senator Chris Evans, has accused the opposition of wanting to hold on to this measure because we want to increase red tape on universities. But as I have already pointed out, it was under Labor that red tape and bureaucracy flourished.

Students at university should never ever forget the great privilege that is being afforded them by the Australian taxpayer. Only around 30 per cent of the population attend university, but it is the taxes of all Australians that keep them operating. Students at university should accept that they owe the taxpayer a debt and pay it back. Only the Labor Party would see a benefit in scrapping a measure that stops the Australian taxpayer and the HECS system from being abused in this manner. We on this side of the House do, however, agree that there have been some substantial changes in the way some undergraduate degrees are taught and that the upper level of the student learning entitlement should be set at eight years rather than the current seven. This would, for example, allow students to undertake a bachelor of science with an additional honours year and then complete a medical degree.

We understand the government may attempt to stop this amendment on technical grounds by asserting that the extension of the term of the student learning entitlement is an appropriations measure and that the opposition may not appropriate public moneys. However, this amendment would actually reduce expenditure. The student learning entitlement provides a cap on the length of time a student may occupy a Commonwealth supported place. The government seeks to remove this cap and has provided expenditure to match this removal. Therefore our amendment would reduce the burden on the Australian taxpayer rather than increase it. As a consequence, in my view, this is not an appropriations measure and does not offend the rule of what this House can or cannot consider.

I am therefore going to move amendments that seek to reverse these student learning entitlement changes. I will table the amendment that is in my name and have it circulated at the end of my speech. These amendments, if adopted, will retain the cap on the length of time a student may occupy a place and increase the entitlement currently in place from seven to eight years. However, compared to the government's bill, which sets no limits, the opposition amendments set a limit of eight years.

The last matter I wish to address relates to schedule 3 part 1 clause 3 of the bill, which provides inter alia:

A higher education provider that is a *Table A provider or a *Table B provider must have a policy that upholds free intellectual inquiry in relation to learning, teaching and research.

To ensure crystal clarity, the coalition will amend the bill to ensure the policy applies to students as well as academics. Students have complained for many years about their work being marked not on the quality of their argument, their understanding of the material and the clarity of their thoughts, but on the basis of their political philosophy. I might at this opportunity tell you a small vignette about my own undergraduate degree, which I know will enthral the member for Braddon. In my first year at university in constitutional law 1, I chose to do my first essay on the dismissal of the Whitlam government in 1975. Amazingly I only got 30 per cent for that essay and when I went to see the lecturer in constitutional law 1 she explained to me that, while there was not anything particularly wrong with my essay, I might stay away from political subjects in future at university. I did not complain because one takes the rough with the smooth, but I think there are students who have a much worse experience at university than I had. Therefore, we do seek to include the same intellectual freedoms for students as this bill introduces for academics.

Requiring universities to have a policy on academic freedom for students as well as teachers will assist students in exploring their own philosophical underpinnings without fear that their views will offend the sensitive and indignant sensibilities of some academics. While the coalition is well aware that many higher education providers have policies and procedures in place that seek to manage these issues, we are aware of a number of examples where the different political affiliations of students and lecturers have caused problems. For these reasons, I will move the amendments standing in my name, which will be circulated at the end of my speech.

I do note also that the Nation Tertiary Education Union has commended in their press release the government, in particular Senator Carr and Prime Minister Gillard, in relation to their commitment to acknowledge through this legislation 'that one of the distinctive purposes of every Australian university is to promote and protect free intellectual inquiry.' I do hope that they can therefore provide the same acknow­ledgement to this amendment on behalf of students who also deserve this same recognition. The coalition hope that the government and the crossbenchers in this House will see the merits of these amendments and the others that I will move today on reducing red tape and maintaining the student learning entitlement so that the Australian taxpayer can continue to feel confidence that the students who attend university will at some point in the future pay back what they owe to the taxpayer. I do commend the bill to the House with the amendments as described by the coalition.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! If I can just get the attention of the member for Sturt, because I may be creating a precedent—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

A crisis!

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

No, not a crisis—there may be a crisis for either of us. At this point in time I am not sure that I can accept the second reading amendment on the basis of its relevance to the legislation, but I do not want to rule it out. What I suggest, and what I am stressing at this time, is that whilst it would not be in his name, if he would allow me to hold the amendment in abeyance until we could have some further discussions about it, I might allow it in somebody else's name and not use the rule that I have already dealt with this with the same wording. It may be that there will be a question about the wording of the second reading amendment but, even if it was the case that subsequently the chair accepted the same words, if I knock it out now that will not be possible.

I know that this is an exceptional way but, on the run, I have tried to look at the bill before us and the sentiments in the second reading amendment. I know that the honourable member for Sturt in his contribution made remarks, and even then I was trying to be alert to see the relevance of those remarks directly to the bill. I do not want to rule it out point blank with no further opportunity to have a look at the second reading amendment. As I said, one of the problems would have been, if I knocked it out now, anybody on behalf of the member for Sturt would not be able to move the same words. But I am not saying that. I am saying that there is the possibility that these same words will be allowed—or a modification—but I think it might assist if we were to have the discussion about the second reading amendment so that we can work out a way to go forward.

I apologise that I have used this complex way of dealing with this matter, but if I was to make a ruling on the run at this time it would be to not allow the second reading amendment. But I think we can at least have some discussion about it.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Can I just follow up on that, Mr Speaker.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Yes, certainly.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

This, of course, is the generosity of spirit that I talked about in supporting you for the Speaker's position late last year, which I described at the time as 'not feeling the love'. But I feel a lot more today as a consequence of the way you have described my second reading amendment, and I am grateful for that.

In your consideration of the second reading amendment, can I point you to the bill and the compacts between universities and the government that are part of this legislation. It is the submission of the coalition that these are extra red tape and are a regulatory burden, which therefore, in our opinion, means that a second reading amendment about red tape and regulation would therefore be appropriate. I am grateful that you are not ruling out the second reading amendment immediately. I am very prepared to talk to you further about this and for your consideration in concert with the clerks. You will probably report either to me privately or to the House at a future time.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I thank the member for Sturt and I will try to resolve this matter as quickly as possible.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I wonder whether the member for Sturt would like to table his essay. I would be more than happy to have a look at it in a very unbiased fashion. Being an ex-chalkie, I am sure I would find it very interesting but probably would concur with a marker that it was probably only worth 30 per cent. Anyway, I would love to have a look at it.

It is always a pleasure to talk on education in this place and particularly to support education reform by this government. Since 2007 it has had a tremendous record of investment and genuine reform, of bringing the higher education system and supporting it well into the 21st century. The Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011—for those who might have forgotten, listening to the member for Sturt for the majority of his speech—is about increasing flexibility for higher education institutions. The bill is fundamental to the Australian government's reforms to ensure that all Australians have the opportunity to gain a university education and, I might add, complements the newly legislated student support scheme, which has already seen many more students continue on to university than would have occurred, and indeed did occur, in the past. This is a vital education and economic reform.

We are moving towards a knowledge economy where the new jobs of the future will increasingly require higher levels of education. Indeed, when combined with the world-leading National Broadband Network, these new economy jobs will have no boundaries. Workers will be able to live in a city or region and work for local, national or global firms on local, national or global projects. The workplace will increasingly be more global with competition fundamentally based on brains rather than brawn.

I would like to share with you a new text that I have come across. It is called The Sixth Wave: how to succeed in a resource-limited world by James Bradfield Moody and Bianca Nogrady. It is by Vintage Books and was published in 2010. It talks about the new world, the new economy and the new age and it is relevant to this legislation because this legislation is all about preparing people to support themselves, their families and communities in this new economy. It says:

Driving all this—

the new economy—

will be a spectacular boom in technologies ranging from clean technology to digital mapping to online collaboration. Traditional physical and geographical boundaries will mean nothing in a world where everything and everyone is online. Industry will increasingly realise value from services rather than resource-intensive products and new business leaders will emerge to challenge the status quo.

And, indeed, they are. It goes on to say:

The way we organise the institutions which make up our society will also be transformed, none more so of course than our universities and institutions of higher education. The increasing competition for natural resources will pressure us to account for every tonne of carbon, joule of energy and litre of water. Things that until now have been valueless will acquire price tags, from carbon, to water, to biodiversity.

I conclude with this final comment:

In this next wave of innovation resource scarcity and massive inefficiencies will be the big market opportunities. Waste will be the source of this opportunity and nature will be our source of inspiration and competitive advantage.

That is in part the type of world that we inhabit now and will increasingly inhabit in the future. These reforms go some way to bring our people to developing the skills, the mindset and the competencies that are required for this new world.

Higher education is a major key to our future economic prosperity and the sector needs reform to allow greater opportunity and choice for students and greater flexibility for universities to determine their own direction and priorities. The bill does this because, for the first time in our history, public universities will be funded for student places based on student demand. The decades-old system of central planning, where every year universities had to negotiate with Canberra for student places, will be gone and should be gone. Universities will be able to grow with confidence and diversify or specialise in response to their student needs.

The Gillard government's higher education reforms have already given many more Australians than ever before the opportunity to get a university education. Since 2007 we have seen an extra 80,000 undergraduate students go to university and a doubling of Commonwealth supported postgraduate places of up to 33,000 a year. By 2012, the government will have increased higher education expenditure on teaching and learning by 30 per cent in real terms since 2007.

Regional universities like my own in Tasmania are now growing strongly after years of neglect under the Howard govern­ment. Enrolments at regional campuses have increased by 10,300 undergraduate students since 2007 and this number is set to grow further. This is also the case in particular in my electorate of Braddon on the north-west coast of Tasmania with enrolments and offerings at the University of Tasmania's Cradle Coast campus in Burnie increasing steadily. For those who are not familiar, Tasmania has one university with three campuses in Hobart, Launceston and Burnie.

For years before 2007, student numbers at Burnie were stuck at around 600. Under Labor we have seen rapid growth in student numbers. At the start of this year we had 890 students and are expecting there to be about 1,000 students for the second semester this year. For a small regional economy like mine this is a huge change and a testament to the campuses' pioneers and the current administration.

I want to talk more about the Cradle Coast campus in the area where I live because I think it highlights some of the key points in the reforms that the Gillard government is making. The Cradle Coast campus was established because Braddon has historically had—and continues to have unfortunately—very low post-year 10 education attainment scores. There was not a widespread tradition of higher education in my electorate. That is improving but it is still not good enough. The University of Tasmania Cradle Coast campus is changing this in a very real and significant way.

The campus offers full bachelor degrees of regional resource management, early childhood and primary education, a Bachelor of Business, a Graduate Certificate in Business, a Bachelor of Arts, a Bachelor of Social Work and also natural environment and wilderness studies. I am very glad to add that on 13 July the minister for higher education will be opening the Regional Universities of Australia Conference on the campus at Burnie. They have done very well to get that regional campus conference.

The campus also offers postgraduate degrees—a Master of Teaching; a Master of Social Work—and has many PhD candidates, especially in agricultural science and allied industries. I now employ one of those doctorate graduates. It also offers first year courses only for Bachelors of Law, Science, Economics, Social Science, Social Science (Police Studies) and Behavioural Science, along with the University Preparation Program. For a small regional campus it is doing a sterling job and increasing its offering to students, but the offerings that it is making to its students are locally contexted and locally driven. That is the key to success and, indeed, that will be the key to success for all our regional campuses throughout Australia.

As a result of these offerings we are now reaching out to those who never saw themselves going to university. Many of these students are classified as mature aged and could be mothers with school-age children, tradespeople and working women looking to upgrade their skills or workers looking to change careers completely. These students are very well serviced and encouraged, irrespective of their previous education attainment, due to the very successful University Preparation Program, which takes into account the local context of its learners and is tailored accordingly.

Importantly, the Cradle Coast campus is keeping more young people in our region. Heavens above, that is one of the key necessary resources to continue to nurture and motivate our regions and our communities. Young people in the past in my area would have had to move to Launceston, Hobart or the mainland to get a higher education. I do not think we can underestimate the impact that this outmigration has had on regional communities. For too long those with get up and go got up and left. The regional campus in my neck of the woods is doing its bit to retain our present and future human capital.

The reforms I am supporting today will now allow regional campuses like the Cradle Coast campus to tap into demand and increase enrolments by specialising to meet community and business demands. For a regional campus to work, we need to understand the region and listen to the region rather than impose centralist policies, administrative structures and capped funding of places. This legislation goes a long way to tackling those impediments. We are already seeing greater links being developed between the university and primary schools, high schools, colleges and the Skills Institute. There are also greater connections to business in the region. These connections are resulting in new offerings at the campus being developed. Most specifically, local small to medium manufacturing businesses need workers with engineering qualific­ations, so the Cradle Coast campus is responding. This reform we are proposing will mean that the university will not have to ration engineering places between its campuses but rather will meet the demands that are out there.

We know that a university education—and higher education, for that matter—is a means to a greater career choice and to highly skilled and highly paid jobs. In the case of my electorate, this is also a regional development issue. Indeed, at its heart it is a regional development issue. Braddon needs higher education to operate in the new economy, not just to survive but to operate and grow. We have seen a transition in our economy with the closure of two paper mills, the Tascot Templeton carpet factory and the McCain vegetable factory. We need the flexibility that these reforms offer.

Nationwide, by 2025, Australia will be in a position to reach the national target of 40 per cent of all 25- to 34-year-olds holding a qualification at bachelor's degree level or above. By that I do not just mean an aggregate nationwide; I want those figures to be as real in my electorate, in Braddon, as in any other part of the country, and there is no reason why they cannot or should not be. Indeed, it is an imperative.

The major reform we are discussing here has been accompanied by reforms to student income support. This has provided thousands more students with additional support to attend university. Again, this is vital for a region like Braddon with low socioeconomic indicators. Indeed, the very heart of the student support legislation was to assist people in places just like my own. They have taken up that challenge and their families are grateful for it. That is something that should be recognised by this whole parliament, not just narrowing in on inner and outer regional arguments, even though there is merit in that.

The Gillard government's landmark reforms to the student income support system have resulted in more rural and regional students receiving income support to attend university. The latest analysis confirms that the Gillard government's reforms are delivering more support than ever before to help regional students like those in my electorate go to university. As a result of our reforms, more country students are receiving more money to either study at regional universities or, if need be, to live away from home while studying in our cities. In my electorate, 749 students have benefited from changes to the parental income test, 699 students have received at least one payment of the student start-up scholarship and 239 students have received a relocation scholarship to date.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I will just touch on two points that the member for Braddon made. I will go first to the issue of income payments to students from regional Australia. I agree with the member for Braddon that this is an issue that we all hold dear to our hearts and one which we all—especially those from regional and rural campuses—would like to see progressed, but we must make note of the fact that there is a discrepancy between how those students in inner regional areas are assessed and how those in the outer areas are assessed. Although we might have seen some increase in the number of students accessing some form of payments, the figures do not show the level of those payments and how much those students are receiving. It would seem that it could be the case that a lot of those students are receiving minimal amounts, which is not going in any way to address the costs of country students accessing tertiary education.

So, as far as we on this side of the House are concerned, although we agree in principle with you that this is an area of real importance to country students, the devil, as always, will be in the detail. We need to wait and see the detail, and we also need to make sure, I think, just on the pure basis of fairness, that those in inner regional areas are treated the same as other country students. As a matter of fact, on the day that the government was heralding its changes, I received a letter from a father in Ararat, which is in the inner regional zone, expressing to me his great discomfort, unease and unhappiness about why one of his three children could not access payments to help him, struggling with higher costs of living, send the child off to a tertiary education.

I would also like to pick up on what the member for Braddon had to say—and his lovely quote—about our need to operate in a resource limited world. I think this goes very much to the heart of what we are discussing in the debate on the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011, because we have a wonderful aspiration, which is supported by the coalition, that we would like to see 40 per cent of Australians between the ages of 25 and 34 holding at least a bachelor's degree by 2025. The sad thing is, and the G8 have pointed this out, where are the resources going to come from to support this aspiration. So far, from what we have seen from this government, it is not going to come from the Gillard government. We have seen four deficits in a row. The last deficit handed down in the recent budget was $47 billion. Just to put that into some perspective, the entire budget handed down by the Victorian government this year, for health, education and police, was $47 billion. So the federal deficit was the size of the whole budget of our second largest state. That gives an indication of where our finances are at the moment. We have a rather illusory target to try and hit surplus again in 2014—

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I raise a point of order. I would ask that you return the honourable member to the subject of the bill, which is higher education funding.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I am listening to the member for Wannon, and it is about education, and I am sure that he remains relevant to the bill. But I am certainly listening to him.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. As I pointed out, this bill seeks to increase student participation in universities. It is demand driven, and that requires funding—and that funding has to come from somewhere. What I am pointing out is that every indication we get from this government is that it is not going to be able to provide that funding. I think that is directly relevant to this bill. It is all very well for us to talk about aspirations to get student numbers increased in universities. That is fine. But you also have to provide the resources to do it. I will give a very quick example so I can get back to the three important details of this bill. We only have to look at mandating hours for kindergartens for four-year-olds and what impact that is having in country areas. In my electorate it is likely that we will see country kindergartens close because the mandating of those extra hours has not seen the government provide extra resources. So this is directly relevant. I am happy to take the honourable member to my electorate and to sit him down with the relevant kindergartens so they can deal with the issues.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I again raise a point of order, Mr Deputy Speaker. The legislation is about universities, not kindergartens. I would ask you to direct the honourable member to the legislation before the House.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

There is no point of order. The member for Wannon has the call.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

The member for Fraser seems to take great dislike to the facts being pointed out to him about how good government policy is funded government policy and policy which is funded in a sensible way.

I will now get to the specific matters pertaining to this bill. Sadly, this is going to require some criticism of the government as well and I hope the member for Fraser will be able to sit there and take this criticism in the spirit in which it is meant. We need to try and get in this country some reasonable government, to get government which is not all about making knee-jerk reactions and then all the unintended consequences flowing across issues and harming great sections of the Australian community.

The first is on the first amendment which we will be putting with regard to this bill, on the student learning entitlement. This once again sends the wrong message to students who want to become perpetual students, and we had the shadow minister for education detailing this in his speech. I would assume probably all members on both sides have been to university and met a lot of perpetual students. There is a responsibility when you are a tertiary student to understand that the taxpayer is funding your place at a university in most cases. Therefore you should do your degree with speed and then step out into the workforce or out into the community to enable other people to come up and fill those places. This is why we are moving an amendment to see that the perpetual student will still face some restrictions under the Student Learning Entitlement. It is an entitlement that was introduced by the Howard government, a very sensible improvement to higher education. Melbourne University is introducing general degrees and then you go on and do your specific degree, so there is probably a need to move this limitation from seven to eight years, and that is what we are proposing in our amendment. I think it is a very sensible amendment and I would hope that both sides will agree to it.

The next amendment we are moving is with regard to compacts. While we generally support the concept of compacts, what we do not want to see is the government micromanaging our universities by placing more red tape on our universities. This is something that universities do not need, because they are burdened enough with red tape. I point out at this stage that, along with cash for clunkers, this is another policy which was talked about in the lead-up to the Rudd government. The one in, one out policy unfortunately has been ditched, along with a lot of the other policies which were put forward by the Rudd government. The shadow minister for education clearly articulated and outlined this. We have a 220 regulations in, one regulation out policy now under the Gillard government. It was meant to be one in, one out but that is what it has become. So we do not want to see any more red tape or regulation. Once again the opposition has put forward a very sensible amendment to stop this occurring under this bill. I think it is an amendment which both sides of the House should be able to support. The third amendment we are putting forward goes right to the heart of education and what education should be about—that is, both students and academics having the right to express their views and opinions in a way that will not penalise them. The bill set this out for our academics, but we need similar protection for our students. I think we all know and have heard of examples where students expressing their free will, especially their views politically, have at times been marked down when they should not have been. While this amendment will not rule out this happening, it at least sets a very clear precedent and guideline and sends a very strong signal to universities and faculties that students as well as academics should be free to express their views.

Once again, I would hope that we will see on both sides of the parliament people recognising the importance of this and understanding that our students should be able to go to university with the knowledge that the government through its actions supports their right to speak and write freely on whatever matter they would like and to make sure that, when those pieces they write are assessed, the academic understands that he has to ignore the political philosophies underpinning what has been written and just look at the merits of the arguments and how those arguments have been articulated. Of all the amendments we are putting forward, I think this one in particular, especially when we have the other side prepared to put in the bill the need for it to occur at the academic level, shows there is no reason whatsoever why we should not also make it similar for students.

This is a bill the aspiration of which the coalition supports, but we do question where the resources will come from to support this aspiration. We call on the government to show some rigour in how they set their budgetary policy to ensure that the education sector can get the funding and support it needs, so that we do not have the need for the G8, for instance, to come out and say that base funding needs to be increased. It is fine to have aspirations, but if you do not have the money you will not get anywhere with the aspirations.

I also call on the government to look seriously at the three very sensible amendments that we have put forward on the student learning entitlement, on compacts and on ensuring that red tape is limited, especially in the education sector but also across the board, and to move to implement once again the one-in one-out policy which they were very strident about when they were seeking political power in 2007. I call on them to get rid of the current Gillard government policy of 220 in and one out and to go back to their one-in one-out policy. I call on the government to support students as well as academics in making sure that students get the protection and freedoms they deserve to make sure that they can write whatever they want. (Time expired)

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Productivity lies at the heart of raising Australian living standards. As US economist Paul Krugman once said, 'productivity isn't everything, but in the long run it is almost everything.' So the challenge in raising Australian living standards in the future is to crack the nut of higher productivity. During the 1980s and the 1990s, tariff cuts, competition policy and enterprise bargaining were among the key policy drivers of raising productivity in Australia. Today, one of the policies most likely to boost the rate of productivity growth is education reform. Raising the human capital of the workforce is essential if we are to adapt to changes in the labour market. This agenda involves both raising the quantity of education—boosting the average number of years of schooling that each person receives—and boosting the quality of the school system.

Labour is focused on both of these agendas. We are keen to ensure that, as technological changes diffuse through the Australian economy, workers of the future are able to adapt and use those new technologies. In the case of schools, we want to create incentives for students, teachers and principals—the whole school community—to perform at their best. If we can do that, education reform will also be a great economic reform.

Part of this agenda also involves ensuring that Australian universities work as effectively as they can, that Australian universities serve more young people and that they do so as effectively and efficiently as we can ensure.

On coming to office, Prime Minister Gillard, as the then Minister for Education, commissioned the Bradley review to look into our higher education system. The Bradley review confirmed the need to boost student numbers in Australia. In the words of the review there was a 'decisive need for action' to boost numbers of qualified people in Australia. The report noted that, in 2003, 43 per cent of the young people in the United Kingdom aged between 18 and 30 participated in university and that, by 2020, Britain is hoping to have raised this number to 50 per cent. Ireland already has a participation rate of 55 per cent and is aiming for 72 per cent in 2020. But, by comparison, in the last years of the Howard government only 29 per cent of Australians aged between 25 and 34 had a bachelor's degree or above. This government has an unapologetically ambitious agenda in skills and training, and a critical part of that is ensuring that we boost university participation. By 2025, we hope to have 40 per cent of Australians aged between 25 and 34 years holding at least a bachelor's degree. This does not come at the cost of our trades. In fact, the two sectors complement one another. As the economy grows we will need more skilled workers across a whole range of skills.

We recognise that in the context of operating within our region we need to ensure that Australia's workers are well trained; that they have not only the skills for the jobs of today but the skills set that allows young Australians to engage in lifelong learning—to continue to adapt as technological change happens. One thing we can be sure about is that for a mechanic graduating now the cars of 30 years hence will not look much like the cars of today. For an engineer graduating today many of the engineering technologies of the future will not look like the engineering technologies of today. So we need to ensure that our education system encourages lifelong learning.

A demand driven model of university funding ensures that Australia is prepared for these opportunities. Rather than governments guessing at future labour market trends and determining numbers—a command and control approach—this government is uncapping university places. Undergraduate places will no longer have to be rationed. From 1 July universities will have the flexibility to set student numbers based on industry and employer needs.

The bill of course retains the ability for the government to respond to any new skills shortages and, if necessary, to the oversupply of graduates in particular areas. But we are responding to a key insight, which is that forecasting future labour market trends is difficult. I refer the House to a paper by the Centre for Independent Studies' Andrew Norton titled Mismatch: Australia's graduates and the job market. Andrew carefully takes the reader through a range of evidence on the poor quality of labour market forecasts. He points out that:

Some industries are cyclical. Civil engineers are in tight supply now, but during the early 1990s recession a construction downturn left 30% of recent graduates unemployed. In the late 1990s, the Australian IT industry argued that it faced severe shortages of workers. As it turned out, many IT professionals struggled to find work in the early 2000s.

The key problem with forecasting labour demand—working out from a central planner's point of view which industries are going to grow and which are going to shrink—is that often it is technology that is driving industry change. Because technology changes discontinuously—we cannot of course forecast the new innovations that are going to come in—we tend to be quite poor at forecasting the industries or occupations that will grow and those that will shrink.

I cannot say that the legislation before the House today will entirely satisfy all of the demands that my friend Andrew Norton would want, but I hope it goes at least some way to addressing his criticisms. He has very articulately set out his concerns about the mismatch between the graduates Australian universities produce and the labour market demand and the difficultly of predicting with precision supply and demand for graduates.

The bill also will require each university to enter into a mission based compact with the Commonwealth. Compacts provide assurance concerning the alignment of university missions with the Common­wealth's national goals in the areas of teaching, research and innovation. They do so in a way that recognises that the objectives of government and universities are often shared objectives. The government will continue to work cooperatively with higher education providers through compacts to ensure that individual university missions serve Australia well in teaching, research and innovation.

Consistent with the Bradley review's recommendations on demand driven funding, we are also abolishing the student learning entitlement. The student learning entitlement currently limits a person's ability to study at university as a Commonwealth supported student to the equivalent of seven years full-time study, subject to exceptions specified in the act, which allow for further periods of 'additional' SLE and 'lifelong' SLE to be allocated. The student learning entitlement has introduced an additional layer of red tape into an already complicated system and it trips up genuine students who have done nothing wrong. By abolishing it we are again going to help to free up universities and allow them to get on with the job of teaching the next generation of students and not miring them in difficult red tape.

We know that application of the SLE has resulted in instances of hardship for particular students. Take for example the instance of a student who completes a three-year undergraduate science degree and then wants to re-enrol in a six-year medical degree. In that case the student would exceed their SLE and no longer be eligible for a Commonwealth supported place. They would have to complete their degree as a full-fee-paying student. Is that what we really want? Is that what this House supports? Do we really want to say to science graduates: 'No, you cannot train as a doctor unless you are willing to pay full fees for part of your study'? I do not think that is what we want to say. That is why scrapping the SLE is good policy.

Increasingly, a degree will be necessary for people to access high-skill, high-wage jobs. We want to encourage people to pursue higher education rather than erect barriers to participating in the higher education sector. We particularly want to encourage those Australians who want to go back to university to add to their qualifications. We do not want them to be caught up in red tape.

The problems with the SLE have been recognised by those opposite. In July 2006, in a speech to the John Curtin Institute of Public Policy about university regulation, the member for Curtin described the student learning entitlement as 'red tape'. The member for Curtin also indicated that the Howard government was at that time, in 2006, considering its abolition. She said:

Turning to the ubiquitous issue of government red tape—I am happy to listen to sensible suggestions as to how I can remove impediments to diversity and increase flexibility. As a result of the AVCC 's report on red tape, I have agreed to consider the abolition of the Student Learning Entitlement, which measures a student's consumption of Commonwealth supported education.

But we are now in this extraordinary position where the coalition is fighting to defend a policy that the then coalition federal minister for education had handpicked to be scrapped. The student learning entitlement is a discredited rule dating back to 2003. It ties universities up in red tape and trips up genuine students who have done nothing wrong. Sadly, what we see today from the coalition in opposing the scrapping of the student learning entitlement, a measure which should enjoy bipartisan support, is what we are seeing across the board in other policies. It is one thing for the coalition to walk away from reforms that we have long championed and they have long opposed but, on an increasing number of issues, we are seeing the coalition rejecting coalition policies. We have seen it on climate change where, in 2007, the coalition went to the election supporting a price on carbon and are now opposing a price on carbon.

We have seen it in respect of fuel taxation. In 2003, the then Treasurer, Peter Costello, announced reform of LPG taxation, reform that we are now, after an eight-year phase-in period, implementing. But those opposite have now decided that they want to walk away from that reform. And we are seeing it with the student learning entitlement policy, which those opposite wanted scrapped in 2006 but are now pursuing the maintenance of. This Nelson-era piece of red tape should be abolished but, instead, it seems that the coalition want to tinker with it at the edges and add to the bureaucracy.

Australia's universities have long been required to divert resources to administer this costly and ineffective entitlement system. In a submission to the Productivity Commission, in 2009, they argued:

There is ... no policy objective being served by the SLE, and there are considerable savings that can be achieved from its removal. As the first students subject to the new arrangements will shortly be exhausting their SLE, it is particularly timely to solve this issue now to avoid problematic decisions having to be taken regarding upcoming enrolments.

It is extraordinary that, after almost four years of hearing nothing from the coalition on higher education, this is almost the first issue that they are prepared to take a stand on. Abolishing the student learning entitlement will free up universities and they will be able to get on with what they do best: teaching the next generation of students. Its removal has been supported by almost every higher education group in Australia: the National Tertiary Education Union, the National Union of Students, the Australian Medical Students' Association, the Australian Technology Network and the network of Innovative Research Universities. All of these organisations support scrapping the SLE. But the Liberal Party continue to block SLE reform.

By contrast, the government is getting on with the job of ensuring that more Australians can study at our universities and that those universities are doing as good a job as they can. This year we will fund more than 480,000 undergraduate places at public universities. With an anticipated four per cent growth, next year this figure will rise to over half a million places, a 20 per cent increase since 2008.

To fund this historic expansion of opportunity, the government has provided an additional $1.2 billion in this year's budget, bringing the total demand driven funding to $3.97 billion over successive budgets. I know this will be welcomed right across Australia, and possibly nowhere more welcomed than in my own electorate of Fraser where I am proud to have the University of Canberra, the Australian National University, the Australian Catholic University and UNSW@ADFA.

Finally, I want to say a few words about free intellectual inquiry. The bill will amend the Higher Education Support Act to promote free intellectual inquiry. It is an important principle, underpinning the provision of higher education in Australia. Free intellectual inquiry will become an object of the act. The government's funding arrangements should not be used to impede free intellectual inquiry. Universities will be required to have policies that uphold it in relation to learning, teaching and research. Naturally, most universities already have such policies and I know that they are all as keen as we are to support research and teaching environments that promote free intellectual inquiry.

By focusing our reform agenda on the neediest students, there is also another pay-off. I have spoken of education policy as great economic policy, but education policy is also the best social policy that we have ever developed. A great education is a first-class antipoverty vaccine. If you read biographies of people who grew up in disadvantage, so often a great education is what makes the difference. I commend the bill to the House.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011. The bill does four things. Firstly, it removes the restrictions on the number of undergraduate Commonwealth supported places that Australian universities are able to offer. Secondly, it abolishes the student learning entitlement. Thirdly, it requires universities to enter into a mission based compact with the Commonwealth government. Finally, it requires universities to institute policies which promote and protect intellectual inquiry in learning, teaching and research.

Broadly speaking, the coalition supports this bill overall, although, as you would be aware, Mr Deputy Speaker, we will be moving some amendments. I would like to go through each of those four objectives of this particular bill and make some comments in relation to them. Let me, firstly, speak on what is the most important aspect of the bill and that is making the number of Commonwealth places demand driven rather than capped. As members would probably be aware, over the last few years we have had a highly centralised university system where places have been determined by officials here in Canberra. They have determined exactly how many places will be funded in every single university, in every campus across the country. Under this system, if a student did not get a place at a university which they wanted to attend and had the qualifications to attend, they really had very few alternatives. In the past, they may have had the alternative of paying for a full-fee place at that particular institution, but the Labor government has abolished that particular provision.

The recommendation for uncapping the Commonwealth places at universities and making the system demand driven came out of the Bradley review into higher education. Two core recommendations came out of the Bradley review. Firstly, that we should set a target that, by 2025, 40 per cent of 25- to 34-year-olds should have an undergraduate degree. Secondly, that the system should be a demand driven system of places rather than a capped driven system. Broadly speaking, we support this first aspirational target. It is a reasonable target to set. Additionally, we support the second core recommendation, about moving to a demand driven system. Again, this is a good recommendation. It is a sensible measure that the government has taken up from the Bradley recommendations and is now implementing. It basically means that if a student qualifies for a particular course at a particular campus of a particular university then he or she will be able to get into that course. The Commonwealth funding will go with that student to that institution rather than the student possibly missing out on a place because we currently cap the number of places for that institution. We believe that no student who is qualified for a particular undergraduate degree should miss out on getting Commonwealth assistance in that instance.

The bill also adds almost $4 billion in appropriations to support this recom­mendation and to help implement this demand driven measure. Again, this is an important additional injection of funds to support this measure. Of course, not all places are going to be uncapped. The bill does not uncap medical places and it does not uncap postgraduate places; they will continue to be set by the Commonwealth government here in Canberra. The bill does give the minister the ability to cap places in certain and limited circumstances. I understand that, by and large, the university sector welcomes this measure of introducing demand driven funded places, and it is a good measure. The university sector has been too tightly regulated and too tightly restricted in recent years, so any measure that moves to liberalise the university sector, which this measure certainly does, should be supported.

Some serious questions remain, however, about the adequacy of the funding that complements the measure. I mentioned that the bill provides $4 billion of extra funding over four years, but it does not provide any extra infrastructure funding. Of course, if we increase the number of students who go to university—and that is the whole intent of this bill—then we need more infrastructure at the universities as well to accommodate those new students. Many students know that the lecture theatres and the campuses are bursting at the seams already. Students are consistently complaining about exactly that. So I am concerned that through the measure to make it a demand driven funding system we will have a lot more students at the university but will not have additional infrastructure to cope with that. So I put that particular issue to the government: who is going to pay for the additional infrastructure that will be required to accommodate the new students? There is certainly no additional infrastructure funding in this bill.

I also raise the issue of the level of base funding to support students at universities. Many recommendations have been made, including in the Bradley review, to increase the base funding rate so that we do not diminish the quality of the university experience. The Bradley review recom­mended that the base funding rate should be increased by 10 per cent. The government has not addressed that recommendation. It is having a review of the recommendation, and we will certainly be keeping a close eye on that. Again, we know that universities are already struggling with lack of resources to provide for the students they have and provide the high quality of education that students demand and that the community demands. Universities are faced with the prospect of working out how they get the additional resources. As the shadow minister for education outlined earlier today, there are really three options to address that. Firstly, the universities could accommodate the additional students within the existing resources—simply put more students in and try to make it work. Secondly, the universities could find additional resources themselves—somehow. Thirdly, the govern­ment could actually find the additional resources to meet the additional costs that will come with this bill.

The first option of accommodating the additional costs within their existing resources is obviously exceptionally difficult for the universities. They are already pressed to the limit. The second option of finding additional resources themselves is already very difficult for the universities. The universities are already heavily reliant upon international students, for example, who cross-subsidise Australian students. The international student market has taken a hit in recent times, in part because of the strong Australian dollar but also because there is increased competition from other countries in the international student market. I think it will be difficult for the universities to significantly increase their resources. So it really comes down to the third option of the government needing to seriously examine providing additional resources to help the university sector meet the additional cost burdens they have. As I said, the Bradley review recommended a 10 per cent increase in the base funding rate, and I think that needs to be seriously looked at.

Let me just touch on the other measures the bill introduces—firstly, the mission based compacts on universities. Again, we broadly support this measure, but we have some serious concerns with it. 'Mission based compacts' sounds very nice. It almost implies that there will be just one piece of paper that both the Commonwealth government and each university signs. I believe that in actual fact it will be significantly worse than that. It will not be one piece of paper; it will be a volume that has to be agreed upon between the universities and the Commonwealth. Our concern is that this will add considerable red tape for the universities. As outlined earlier, the universities need to be freed from the red tape and given the opportunity to provide education as they best see fit. They do not need additional red tape added to them. The government have form in adding red tape to institutions, be they businesses, nonprofits or other institutions. They came into power promising that there would be less red tape and fewer regulations. They promised that for every new regulation they put in place they would take one out. But we know the record of this government in this area since 2007. That record in fact shows that for every one regulation which they have removed they have put 220 new regulations in. So they are 1/220th of the way towards meeting their promise. We have some serious concerns that these agreements will be used to stifle the universities and just add additional red tape, which they do not need. We will be moving an amendment to express our concerns in that particular area.

Secondly, we have some concerns in relation to the abolition of the student learning entitlement, which this bill also implements. The student learning entitlement was introduced by the Howard government. I thought it was a sensible measure in essence to address the issue of professional students. It does not try to prevent legitimate students from doing their undergraduate and further degrees. But it does try to address the fact that some students do one degree after another and insist on getting taxpayer support to continue to do further degrees which may not be necessarily advancing the economy or our society. We do not believe it is sensible to abolish the student learning entitlement. It was initially set at seven years. You would get seven years of taxpayer funded support and then after that you would be on your own. We believe that, given the changing nature of higher education and the different structures within the university sector, that should probably be eight years now and of course there would still be some important exemptions to go with that. I think it is a mistake to abolish the student learning entitlement altogether.

I also want to make some comments about the provisions which support academic freedom. The bill requires universities to have in place policies to promote and protect intellectual inquiry in learning, teaching and research. That is fine. That is a good policy. Academic freedom is absolutely central to the nature of our universities. What we would like to see in addition though is for students to have those same protections as well, because we are concerned that some students, particularly conservative students, who express their views do not always get the same fair hearing as students who might express alternative views. We think it is a reasonable amendment to include not only that that freedom be given to academics and that important principle be put in place in the legislation but that that academic freedom and protection also be given to students.

The final comment I would like to make is that, while this bill concerns higher education and is in large part about addressing the 40 per cent target objective, which we broadly support, this bill should not be interpreted as meaning that tertiary education is somehow necessarily better than alternative pathways which are available to students. We should always be encouraging students to pursue their own pathway, whether that be going into an apprenticeship, going into a job straight after high school or going to university. It is important to support the broad objective of students going to university, but I also think that message is important to get across as well. Broadly, in conclusion, we support this bill, but we do have some concerns which I have outlined and we will be moving a sensible amendment which we would hope that the government would support.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today a proud supporter of the Higher Education Support Amendment (Demand Driven Funding System and Other Measures Bill) 2011. I am, as many in this House know, a big supporter and a strong supporter of any measure that will increase the access of Australians to education, particularly to vocational and trade education. Education is one of my passions, because I know from the experiences of my own life that education changes lives and creates opportunities. It leads to not only better and more fulfilling working lives but also lives which are healthy, more prosperous and generally happier. It is a fact that education is the key to unravelling systemic poverty and disadvantage. It is the key to enhancing productivity and growth in the economy, which is why governments of all persuasions should have an absolute interest in educating their population.

In my own life, because of my mother's hard work and because I had access to an excellent public education system and a well-supported public university system, my sisters and I were able to leave behind the relative poverty of my grandparents and great-grandparents to reshape our lives and those of our families. I was able to build a career in public service and business and I now serve my community in parliament. Therefore, I know the value of a quality education. I know it first-hand. I know its power to change lives. That is why I will always stand in this House to speak in favour of measures to help others receive the educational opportunities I was so fortunate to receive myself.

This is a government that understands the value of education. It is a government that has access to a quality education at its core. In primary and secondary education we have delivered the Building the Education Revolution, a program that those opposite have scorned. They have done this despite the fact that they know that the BER program has been the biggest investment in education infrastructure in this nation's history. They have done this despite the fact that they know that the BER program has dramatically improved the quality of education in our schools. The school communities I have attended in my own electorate are extremely happy with the results of their BER projects. I cannot command the program enough to this House.

Similarly, the investment by the Gillard government in trades and trade training has transformed lives. As a result of this government's policies, there has been a 5.4 per cent increase in the number of people enrolling in vocational education. This is on top of the pleasing announcement in the budget of investment in apprenticeships. As a former union president and graduate of that esteemed institution the Royal Melbourne Institute of Technology—the world's first workers college—and as a former tutor of the University of Canberra, I am a very strong advocate of vocational and trades education. One of the great results that the Gillard government's investments have gleaned in the ACT is an 11 per cent increase in those enrolling in vocational education, which is almost double the national average. That is an extraordinary achievement in the 12 months between 2009 and 2010.

This is a government that cares about education and cares about ensuring that all Australians have access to opportunities that will lead them to take part in the economy of the 21st century. This bill continues this government's education reform agenda and seeks to ensure that more Australians have the opportunity to go to university. This is a longstanding agenda of the Labor Party. It was, after all, Prime Minister Whitlam who made the first steps to opening the gates of our higher education institutions. It was Prime Minister Keating and Minister Dawkins who implemented policies that led to the largest expansion of higher education in this nation's history.

It is with this legacy in mind that the Gillard government is committed to increasing the proportion of 25- to 35-year-olds with a university degree to above 40 per cent by 2025. To deliver on this we are committed to delivering a demand driven higher education sector. As a result of this bill, the government will no longer set the number of places that a university can offer. This means that, as of January 2012, universities will be given the flexibility to respond to the needs of students, employers, industries and their local communities. With an expected growth of four per cent, this will mean an increase of another half a million places—a 20 per cent rise since 2008. This change is accompanied by the provision of $1.2 billion worth of additional funding, bringing total demand driven funding to almost $4 billion over successive budget years.

This bill also eliminates the student learning entitlement that limits a Commonwealth supported student to seven years of study. The elimination of the SLE was recommended by the Bradley review, commissioned by this government. The current limit adds complexity to an already complicated system—a system which for young students and their families is already daunting enough. I know this too well from a number of students who have approached my office seeking help with navigating the student learning entitlement rules. I therefore welcome the elimination of the SLE as part of this bill. It will make for a simpler system and one more capable of adapting to the dynamic and flexible requirements of a modern economy and its workforce.

Adding to this flexibility, the government, through this bill, will engage each university in a mission based compact. If Australia is to have a high-quality, flexible education system it is imperative that Australian universities adapt and have offerings that fit into a national framework. Through these compacts with institutions, the Australian government will ensure that universities align their teaching, research and innovation to national priorities. The result of these compacts, combined with the introduction of a demand driven funding model, will be a higher education system that can deliver high-quality education suited to the needs of not just Australia but the global community.

This proposal contrasts with the current approach that has seen a system of 38 publicly funded universities, with some of them teaching the same programs in the same way. This is no fault of the institutions or their dedicated staff. It is merely a product of the system that has developed in Australia. We must move away from this model to ensure that we are better placed to deliver on the future needs of our students, employers and economy. This bill helps create centres of excellence and clarifies difference.

Finally, this bill will also amend the Higher Education Support Act to promote free intellectual inquiry—an absolute essential to any academic institution. This bill will also require universities to have policies that uphold such inquiry. Many already do. We owe many important discoveries to such inquiry, even if we do not always understand their direct application to the real world.

This is a comprehensive and welcome bill. It is welcome because it comes after over a decade of neglect of the higher education system by those opposite. While they now try to position themselves as the great defenders of education and, most importantly, access to education, it is well remembered by those in the sector and the students at the time that they did not care about higher education. Those opposite are remembered for stripping over $1 billion of funding from the sector. They are remembered for increasing the cost of education for Australian students through tampering with HECS. In addition, they are remembered for using the higher education sector as an ideological punching bag. For example, it is not well known but, I feel, worth noting that the Work Choices legislation, which did so much damage to Australian families, was first tested using the higher education sector.

The Gillard government believes in the power of education at all levels, and this includes Australia's universities. We understand that if we are to wisely invest in our nation's future we must collaborate with them to deliver outcomes and opportunities to Australians. It is my pleasure to once again commend another major educational reform to the House.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

It is said that the purpose of education is to turn an empty mind into an open one. As a nation, we should, and do, take pride in the calibre of our universities. That is why it is important that we encourage participation in tertiary education and break down the barriers for students who want to obtain a degree. It takes commitment and dedication to complete a university degree, and for young people especially that commitment and dedication can sometimes be considered a sacrifice. However, it is difficult to put a price on the diverse benefits a tertiary education brings—higher earning potential, increased and diverse opportunities and, perhaps most importantly, the ability to analyse and to be encouraged and enthused to learn.

The Bradley review, handed down in 2008, recommended that we aspire to have 40 per cent of 25- to 34-year-old Australians holding at least a bachelor's degree by 2025. Given the benefits of higher education, the coalition supports this goal in principle. However, the current education system will struggle to achieve this. This is why we are here today discussing a measure that will assist this aspiration by introducing a demand driven funding system. This measure was also recommended by the Bradley review, to move away from the current restrictions of a government imposed system.

For the past 25 years, the university sector has been highly regulated by the federal government. The government makes a decision as to how many places each university can offer for each course and how much they can charge each student for that course. In short, both the number of places and the price of those places have been capped. These caps restrict both universities and current and potential students. The caps represent a bar to the approximately 22,000 additional students needed annually to reach the above target from gaining Common­wealth enrolment. This bill removes those restrictions for most Commonwealth places from January 2012.

The current system is highly centralised. It is bureaucratic and takes little consideration of supply and demand—what is actually wanted and needed by our universities. Students have been limited in their choice. Should they miss out on a Commonwealth supported place, they have little option but to attend a private university. Their options were even further restricted upon the election of the Rudd government, which abolished their ability to enrol in a full-fee-paying place, where they could have chosen to pay upfront in order to get their degree. Contrary to the propaganda promoted by left-wing student unionists, full-fee-paying students were not taking up a position that could otherwise have gone to a Commonwealth supported place. They provided their own funding, which gave the university the ability to provide the resources needed for their place. By abolishing full-fee-paying places, the Rudd government simply took away an avenue for a student to gain a degree.

The current system is flawed and, by taking little notice of supply and demand, does not provide what students want or what Australia needs from its graduates. It allows the centralised federal government to dictate what is available to students and what universities can in turn offer. Moving to a student demand driven system would increase options and respond to what students want and, importantly, what industry needs beyond tertiary education. It would also diversify the sector, allowing students freedom of choice. By deregulating what a university can charge and how many places they offer, we should see a much wider range of options for students. This would allow them to weigh up what they value from an institution, be it price, reputation, learning outcomes, research or teaching access.

In short, a move to a demand driven funding system is reform that would benefit our university sector. However, a big part of any reform is to ensure that it is fiscally responsible. It has been estimated that implementing these changes will cost $3.97 billion, and I implore the government to make expenditure on this program a genuine exception to its track record of financial mismanagement and to keep within this proposed budget. Having passed the buck on university funding to yet another review—this one conducted by Dr Jane Lomax-Smith—the government will have no excuse if it does in fact return to its track record of poor and reckless financial management.

This is compounded by the fact that the Treasurer has claimed that the student service amenities fee—a misleading name for what is actually just a student tax—will inject about $4 billion into the sector over the next four years. Whilst it amazes me that the Treasurer actually has the arrogance to claim this tax is a government saving when he knows full well it comes directly from the students' pockets, I am putting him on notice that the coalition will hold the government to account for the implementation of these changes.

Our university sector is vital, and student choice is critical to its success. I just hope that this Labor government acts contrary to its track record and implements this change. Education is our children's future, but equally it is our nation's future. Every barrier we remove will be repaid countless times over. Every step we as a nation take to improve access to education will open not just minds but opportunities and hope.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011. It is always apparent when you listen to the coalition members speak on education matters that they speak from timidity and resentment, whereas Labor members speak from family experience, personal endeavour and achievement and the difference that education has made in their lives. Those opposite always wax lyrical about left-wing student unions. They always use the word 'left' or 'socialist' in their speeches. They always fail to talk about what they did when they were in power.

What did the previous government think about universities? It linked funding to universities to the implementation of Australian workplace agreements: 'You put Work Choices into your universities and we'll fund you.' That is the record of those opposite with respect to university funding. They thought they would impose their ideologically driven obsession with the HR Nicholls Society's aspirations and ideals on the university sector. They talk about markets, but they left centralised university funding controlled from the top. The coalition are more soviet than Stalinist when it comes to the market. In this legislation, we are the ones opening up to students from working class and battling backgrounds the opportunity to go to university. We are the ones putting money into the sector as those opposite failed to do.

We believe that higher education is critical. It is critical to a stronger and fairer Australia. We believe it is absolutely vital for economic development, productivity and high-skill jobs. We on this side believe that giving a young person the opportunity for a higher education, a bachelors degree, makes a difference to their financial security, their self-esteem and their family's prospects. I come from a working class background in Ipswich. Neither my parents nor their parents before them went to high school. I am the first person in my family ever to go to high school. I went to university because a Labor government, the Whitlam Labor government, poured funding into universities. I went to the University of Queensland to study political science, economics and law, and then became a lawyer. My younger brother, Regan, is a doctor of education and the Principal of Kelvin Grove College. My youngest brother, Darren, is a physio­therapist in Ipswich, with about 16 physios working for him. Education made a difference in my family's life, and it will in the lives of everyone.

When I was the campaign director for the then state member for Ipswich, David Hamill, later the Queensland Treasurer, we worked hard to bring the University of Queensland to Ipswich, where we now have a University of Queensland campus. Consider Bremer State High School. I commend the state Labor government for building the $73 million replacement Bremer State High School. We put in BER funding of $200,000 to improve the educational attainment of these kids—fitness stations and an Indigenous area are there as well. That university and that high school, the biggest state high school in Ipswich, have 1,600 students right beside one another—they are connected. That is what we are about in state and federal Labor governments. We connect high school students to university, increasing the capacity and opportunity for young people to go to university. We have the University of Queensland Ipswich in Ipswich Central and the University of Southern Queensland in Springfield in my electorate. We believe that giving young people the opportunity to go to university will make a difference in their lives.

We are abolishing the student learning entitlement from 2012. I have heard members opposite speak in this place on this issue. Even the member for Curtin cast aspersions on this a few short years ago. When she had the education portfolio she thought of getting rid of it. She thought that opening up the sector was good. We hear those opposite talk about freedom. I heard one of the previous speakers talk about the fact that the idea of academic freedom for students may not necessarily be a good thing, because it might encourage left-wingism. It is absurd. They still have the angst, resentment and bitterness from their days in university student politics. That is why they always talk about these sorts of things in that way. But we have a 10-year commitment, which we believe is important, to transform the scale, potential and opportunity for young people in this country with respect to higher education. We have taken seriously the findings of the Bradley review of higher education. We believe it is important, despite the global financial crisis, the demands of government and the difficulties of getting the budget back into surplus—and we will get it back into surplus—that we remain committed to that substantial 10-year agenda. We think it is important. We made a commitment to a quality assurance regulatory framework that is in the best interests of the university sector. We put money into this sector. Those opposite talk about how important it is to put money into the sector. Let me make this point: Commonwealth expenditure on higher education through funding for teaching and learning and for research is projected to increase to $13 billion in 2012. That is a $5 billion increase from $8 billion in 2007, when we won government. It is more than $3 billion more, projected to 2012, than the coalition's funding when they were in government, based on their funding trend from 2001 to 2007. We have also put in this year's budget $1.2 billion to fund growth in university enrolments. So we are putting the money where it is needed. We are not just uncapping; we are putting the money into the sector, because we want to support the sector. This brings to $3.97 billion the investment made by this government to support the move to a higher education system that responds to student demand. That is extremely important.

Mr Frydenberg interjecting—

Those opposite can whinge and complain and carp and moan about it, but the facts about what we have put into the sector are on the table. We are not imposing Work Choices; we are taking Work Choices out of the sector. We are putting real money in to help students—for example, at the University of Southern Queensland, where Doug Fraser, who is the Director at Springfield, said to me that they are already achieving their targets for kids from low socioeconomic backgrounds getting bache­lors degrees. That university is located in the area around Goodna, Gailes and Camira, and areas like that, in the eastern suburbs of Ipswich, which traditionally do not have students going to university.

The amendments in this legislation are integral to achieving our higher education target of increasing the proportion of 25- to 34-year-old Australians with bachelors qualifications to 40 per cent by 2025. This is extremely important for the area of Ipswich. It is extremely important to see the number of students going to university now from Bremer High School, who did not go before, to the University of Queensland Ipswich campus, where there is an emphasis on business, nursing and medical education and on research. That happens to be the location of the GP superclinic run by UQ Health Care, which helped so wonderfully well during the recent floods. It happens to be the location also of the psychology clinic run by the Ipswich and West Moreton Division of General Practice. So it is not just in psychological assistance, training for nurses or medical training. We have, of course, uncapped training for doctors, which those opposite capped when they were in power, particularly Michael Wooldridge when he was Minister for Health.

The funding for these particular institutions is extremely important. It is very important for students across the Ipswich and West Moreton area at universities like the University of Southern Queensland and the University of Queensland, where Alan Rix is the Pro-Vice-Chancellor. Alan has told me, as has Universities Australia, how important are these reforms and the increased funding for the Ipswich and West Moreton region, and for other parts of Australia which are disadvantaged. Those opposite can carp and moan and whinge and carry on about education. They failed to put the money in. They opposed our BER funding, opposed the Digital Education Revolution and opposed the trade training centres, all of which have made a difference in their electorates. They know very well those initiatives have made a difference in the electorates of those on this side of House and of those opposite. They are really brave here, but back in their electorates they know the funding we put in from early education, through primary, secondary and tertiary education has made a difference.

This is important legislation. It has made a difference to the lives of kids in my electorate and it has made a difference to the lives of kids in other electorates as well. Those opposite should hang their heads in shame with respect to their position on this legislation.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted. The member for Blair will have leave to continue his remarks when the debate is resumed.