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TRANSCRIPT
Subject: Budget 2003, Higher Education, Brendan
Nelson
THE HON DR BRENDAN NELSON MP and ALAN JONES – 2GB
Date: Thursday 15 May 2003
MINISTER
Good morning, Alan.
JONES
Can I take a couple of philosophical things first
because this is called 'reform' - according to the Budget papers,
universities will receive only an extra $152 million next financial
year; the year after that, $260m; the year after that, $328m - this
is equivalent really to the $4 tax cuts so it's piddling stuff so my
philosophical question - are you saying that the only solution to
increased investment in university education is to secure it from
the private sector via tuition fees and that is what this statement
is about?
MINISTER
Certainly not, Alan. The case for reform or change
in universities rests on two unpalatable but inescapable truths and
the first is, Alan, that universities need access to get more money,
considerably more in the longer-term and secondly, that money's only
half the problem
JONES
Yeah but just stopping there, considerably more
money but you're only going to provide $152 million next financial
year so they need more money but they're going to get it from the
private sector - parents and students?
MINISTER
Well Alan, what's happening is over four years
you've got $1.5 billion and then you've got $10.6 billion over 10
years and of that $10.6 billion, Alan, over 10 years, $7 billion is
directly into the universities themselves and then the other three-
JONES
That's correct but it still comes out of my figures,
$328m- I repeat: $260 million in the year after next; $328 million
in 2005-2006; that basically is nothing so we're going to see
increased spending in defence, health, social security but the most
we can scrape up for universities next year is $152 million?
MINISTER
Well Alan, that part of the reform package which
enables the universities within limited bands to set their own fees
and be supported by HECS, that part also doesn't come on line until
the money is starting to crank up. What we're looking at here,
recognising here is whilst there's no immediate crisis, if you like,
in the sector there are serious problems to be addressed and that
what we've got is a serious long-term investment in Australia's
future with universities. In the long-term, Alan, by the way you're
looking at 840 extra million dollars a year into universities as a
result of these reforms from the public purse.
JONES
Yeah. Yeah. Just hang on, you say there's no crisis
- I would say the situation is in total crisis. Currently, there are
25,700 qualified school leavers who missed out this year on getting
into university, that is 25 per cent up on last year. If that's not
a crisis, what is?
MINISTER
Well, as the Minister responsible for Australia's
education, Alan, I'm careful about the language I use but I can
assure you I wouldn't have spent a year focussed on this problem and
trying to unscramble what I consider to be a significant mess and
then develop these proposals and then come out of the Budget in an
environment, as you know, where money is tight and we've got all
sorts of pressures on us with this kind of package if we didn't have
a problem.
I agree- in fact, I agree with everything that both
you and Bob Hawke said in the introductory remarks. What we've done
here is we've developed a comprehensive package, the amount of
investment, public investment, by the way, Alan, is far in excess of
any possible increased revenue that may come from students or indeed
from the private sector.
JONES
But see- well hang on, well, that's not quite right
because you said $1.5 billon over the next four years-
MINISTER
Yes.
JONES
Now there are already 218,202 students, 19.6% of
total HECS debtors, who've made no repayments totally $1.572 billon
so the amount that you are offering over the next four years doesn't
even equal the amount outstanding in fees from 218,000 who can't
pay?
MINISTER
Okay Alan, that is the strength - I know you might
see it as a disadvantage but that's the strength of the HECS system
- that the students, what happens is when a student goes to
university, the taxpayer pays for three quarters of the cost of the
university education, the student pays for a quarter; if they can't
or are unable to pay upfront for which they get a discount, we give
them a loan, your hardworking, taxpaying listeners lend the student
the money; the student doesn't start repaying the loan until they
earn - and under these proposals you'll be earning $30,000 a year up
from $24,000 - and then the money is taken out through the tax
system so--
JONES
But we're increasing fees in an environment where we
can't recover existing fees - $1.572 billion - it's a lot of money?
MINISTER
Well you're making a good point, Alan, because the
net cost to the taxpayer of running HECS each year is $300 million a
year. There are some student who don't ever earn enough money to
actually repay their debt and-
JONES
But the total HECS debts last year were $11 billion,
$11 billion - 103,000 Australians owe at least $16,000; 35,000 owe
between 20 and $30,000; more than 2000 owe between 30 and $40,000 -
total debts last year, $11 billion. It'd be lovely to have that
money poured into education?
MINISTER
Well, that money has been poured into education,
Alan, that's precisely the point. You see, Alan, if a student goes
to university, say, at the moment they sign up to do science and
their HECS debt per year is $5242, what happens is that the
Commonwealth Government pays the university the $5200 and then the
student pays that money back when they start working and so all of
that money, that $11 billion, that money has been put into
universities and now it is owed by the students to the Commonwealth
and some students may never repay it and that's the strength of the
loan, you only repay it when you're earning the money--
JONES
Why would you repay it if you could get away with
not paying it?
MINISTER
Well I suppose human nature is such, you would
think, that unless there were mitigating circumstances where
economic or ill health, you'd think that most people would like to
work and presumably would like to earn more than the cut-off
threshold.
JONES
But what sort of country are we running where 25,700
qualified school leavers miss out this year on getting into
university? Or put another way, where only about 30 per cent of
those who leave go to university? Surely we should have our numbers
at university, if we're going to invest in the intellectual future,
up around 60 per cent?
MINISTER
I couldn't agree with you more, Alan. Education, as
Thomas Jefferson said, is the defence of the nation; it's what will
defend us most from that which we fear as human beings and that is
change. One of the reasons why we've addressed these reforms is
unmet demand.
In fact, in this package there are 31,500 more
university places over the next five years, publicly-funded places;
in addition to that we're providing more money to actually train
nurses, to train the teachers; we're increasing nursing and teaching
places; we're giving additional money to our regional universities;
we're also putting a significant pool of money, $136 million,
available to increase the quality of teaching in the universities;
I'm also going to be standing over these universities in relation to
what I think are some questionable quality courses that are being
offered; we're also reforming the management of these institutions,
you've got up to 35 people trying to run 3,4, $500 million
operations, many of whom wouldn't have the slightest idea about how
to run a large organisation; you've also got work practices in some
cases where you've got some hardworking academics, Alan, who don't
get, who get the same rate of pay increase as someone who's bludging
off and only working a couple of days a week. These are- and then to
top it all off, Alan, we've got 38 publicly-funded universities, we
treat them all in exactly the same way and no-one can tell me that
Charles Sturt University or the University of New England is trying
to, or if you like, should be treated in exactly the same way as
University of New South Wales or Sydney, they are actually meeting
different challenges.
JONES
But Charles Sturt, Newcastle, Wollongong, New
England and Southern Cross will get money from regional institute-
support for regional institutions but they're going to get $123
million over four years with about 10 other universities nationwide?
MINISTER
What they'll do, Alan, they get depending on how far
they are from capital cities and their size, they get 2.5 or 5 or
7.5 or 30 per cent increase in their funding. In addition to that
we're proposing to increase the core funding for each university by
7.5% over three years. I might also add we're putting up 25,000
scholarships, Alan, for students, merit-based, for students to
support their education costs and to support them in accommodation
if they come from country areas where often 10,000 kids have got to
move each year. The other thing that I'd like your listeners to
understand too, Alan, is this idea of fee flexibility whereas at the
moment we set the HECS charge for the students, what we're proposing
is that the universities themselves would set their own HECS charge,
we're setting the upper limit and the maximum HECS charge that you
could face in the most prestigious courses in dentistry, medicine,
veterinary science, the greatest increase you could face potentially
is up to $2000 a year. Some of the nonsense that I've been hearing
in the last 24 hours is disingenuous at best.
JONES
Can you guarantee though that every student who has,
in fact, qualified for university will be given an opportunity to go
to university?
MINISTER
I can't guarantee it at the moment, Alan, but I can
assure you that five years from now once we've implemented this
package of reforms the level of unmet demand in this country will be
considerably less than it is now and it's quite possible that we
will approach a situation where every qualified student who wants to
go to university will be able to get a place but-
JONES
But see, see we invest in the physical and athletic
excellence of our youth through Institutes of Sport, we don't ask
our elite athletes to pay to go there?
MINISTER
Well Alan, I come back to your very good comments at
the start where you talked about the mess created with the
amalgamation of universities with the colleges of advanced education
in 1988. What we've done is we've gone to a mass system of higher
education now, we've got 700,000 students in Australian
universities, the taxpayer can't afford to pay for every one of them
in every case but 70,000 of those students, Alan, are in university
on fully-paid scholarships ordered by Governments, by industry
institution and philanthropists but at the Institute of Sport we've
got 600 students so we can afford to look after, if you like, elite
athletes; we are looking after 70,000 elite students in the
universities but what we're trying to do is to make Australia
internationally competitive for the 21st century. Increasingly,
Alan, if we're not going to be left behind, it's time that we
focussed much more on excellence in universities, that students
actually got much better quality education for what they're paying
and most importantly that as parents, our kids that really need to
be in university can get there.
JONES
Well the Labor Party say they're going to block fee
deregulation, interest-bearing loans for full-fee paying students
who wish to study overseas and the extra places for those paying
full fees - what if this doesn't get through the Senate?
MINISTER
Well Alan, you've only got one chance in public life
to do the right thing. We've spent a year working with everybody in
the university sector and the broader community, we will put it up
to the Senate, the Labor Party unfortunately, last Thursday Jenny
Macklin was at the Sydney Town Hall telling people she's going to
block it before she'd even seen it.
JONES
One critic though yesterday said that it shouldn't
be your bank balance but rather your brains that count at
university. Can we be sure that brains will get the frontline
running as opposed to bank balances?
MINISTER
Alan, I could not agree with that statement more and
under this system, no student, what we're proposing, no student will
have to pay any upfront fee. At the moment the only upfront fee that
students have to meet is a compulsory union fee which we're
proposing to make voluntary or optional. Under these arrangements
for fee-paying students who are two per cent of the system; for the
98 per cent who go through on HECS, it is the same arrangement
you've got now. If you don't want to pay it upfront then you take a
loan from the Commonwealth; the HECS loan, it has no interest rate
applying to it, you start paying it back when you earn $30,000 a
year.
JONES
Okay. We'll talk again. Thank you for your time.
MINISTER
Thank you so much.
JONES
I've got to go to the news. Dr Brendan Nelson.
MINISTER
Thanks Alan.
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