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MEDIA SPEECH
Higher Education Support Bill 2003
Second Reading
Dr NELSON (Bradfield - Minister for Education,
Science and Training) (9:58am) - I move:
That this bill be now read a second time.
Australia, and the next generation of Australians in particular,
is moving into a world which is quite different from that of the
past. The government’s vision of education, science and training is
that our ambitions and our policies should enable every human
being—especially every young person in this country—to find and
achieve their own potential. To recognise that policy, particularly
in higher education—from which much of Australia’s economic and
social development will be driven, certainly for the first quarter
of this century—we will need to adapt to economic and social changes
in Australia that see this country moving from agrarian, land and
labour intensive industries increasingly into services based
industries. Learning how to learn and to produce ideas—and from them
technologies—will increasingly need to be applied not only to
traditional commodities and industries to maintain economic and
environmental sustainability but also to new and emerging ones and
those that, today, we may not know even exist.
Australia’s universities, Australia’s 38 publicly funded
universities in particular, are in need of reform. The case for
reform rests on two inescapable but unpalatable truths: the first is
that Australian universities need access to more money—and a lot
more of it in the long term; the second is that money is only half
the problem. The way in which universities are regulated, managed
and administered is as much at the root of the challenges facing
Australian higher education as is the level of resourcing.
Australians—wherever we live; whatever our circumstances—have
nowhere to hide from the winds of change. The pressures for the
international benchmarks against which Australian universities will
be judged are increasingly drawing down upon us. Those pressures
include: the move from elite to a mass form of higher education; a
revolution in telecommunications; globalisation with sweeping
economic and social change, which still many Australians feel
ill-prepared to face; and, importantly, the move to lifelong
learning where the next generation can no longer expect to do one
form of education and think that it will equip them for 40 or 50
years of a working life.
This government has recognised that, in order to build an
economic and social legacy for the next generation in which we can
have confidence, it is essential that Australian higher education be
reformed. The government announced early last year that there would
be an extensive review of Australian universities. On behalf of the
government I established a reference group to give me advice through
the course of the review. Seven discussion papers were released, 49
focus groups were held to which 800 people were invited and over 200
hours of evidence was taken from the length and breadth of
Australia. More than 700 submissions to the review were received.
The Productivity Commission was commissioned to examine the funding,
administration and management of universities in North America and
Europe and to compare them with that in Australia. The review
process was also informed by a two-day session in Canberra
comprising a variety of individuals and organisations including
businesspeople, unions, academics, schoolteachers and everyday
Australians.
The result of the review process is that, today, we introduce a
piece of legislation that is absolutely essential to equip Australia
for the 21st century—educationally, culturally, socially and
economically. This legislation gives effect to the government’s
budget announcement that in the next four years it will invest $1.5
billion of additional public funding in Australian universities, and
over the next 10 years there will $10.6 billion additional public
funding invested in universities: $6.9 billion of it directly and
some $3.7 billion additional support for students.
The reforms are complex, and necessarily so because of the
complexities of the issues that face the sector. In no particular
order, the problems that we are seeking to address include the fact
that every university in Australia is currently funded and
administered in exactly the same way; that under the current policy
framework the country cannot—nor ever will—boast a university in any
international top 50 or 100 league table; we face a situation where
the sector has students that are overenrolled—we have university
students who are overenrolled by about eight per cent across the
sector; we have some 30,000 to 40,000 students, in recognised
private higher education institutions, who receive no form of public
assistance whatsoever despite the fact that they are Australian
taxpayers.
We currently fund and run every university in exactly the same
way. Sydney University and the University of New South Wales compete
with one another, but increasingly they are competing with the rest
of the world. Australians need to know that already universities in
Singapore, North America and increasingly Europe are seeking to
recruit the best and brightest Australian students to their
universities on the basis that if they want ‘a world-class
university education they will need to leave Australia’. I ask
Australians to think about how they would react if other countries
were recruiting our best swimmers or athletes on the basis that the
only way that they would be able to receive world-class training
would be to go to another country.
Charles Sturt University, Sunshine Coast University, Edith Cowan
University and University of South Australia are all outstanding
institutions, but they are all different. Under the current policy
framework, we do not recognise nor fund the increasingly onerous and
complex community service obligations that are being placed upon non
research intensive universities that are in the regions of
Australia. This package seeks to address that. The financial
barriers that students face are not those of tuition fees, which are
met through the Higher Education Contribution Scheme once they have
graduated; the costs that students meet are compulsory union and
guild fees, computers, textbooks, living expenses and a whole
variety of things for which they receive Youth Allowance and Austudy
on an income-tested basis. The government is seeking to provide
further financial assistance to students whilst they are students.
At the moment, the commercialisation of intellectual property in
Australian universities is patchy at best. Only 0.16 per cent of
university revenue is derived from royalties, trademarks and
licences; world’s best practice would take it to about five per
cent. Even with cashed-in equity, we peak at around three per cent.
We also have a very narrow range of remuneration for Australia’s
academics in this sector—some 38,000 of them. Whilst the
Productivity Commission report found that by international standards
Australian academics are relatively well remunerated, the range of
remuneration is relatively narrow.
In addition, the government have recognised the need to increase
the resources available for the training of teachers and for the
training of nurses. We also found, unfortunately, that academics in
Australian universities are appointed and promoted not on the basis
of their ability to do what Australians need them to do and do
well—that is, teach—but rather on their ability to attract and
maintain research activity and resources within their own
universities.
The government is also determined—in the words of Dean Mary
Kalantzis, the President of the Australian Council of Deans of
Education—to ‘bring students from the periphery to the centre of the
higher education experience’. In this bill, the government is
introducing measures that will see much greater emphasis placed on
quality of teaching and learning in higher education. There are also
significant challenges to be met in ensuring students from lower
income backgrounds get access to university education—and no more so
than amongst Indigenous Australians.
In response to requests from every one of the vice-chancellors of
Australia’s 38 universities, the government has also recognised that
it is important that universities respond positively to the request
that they need the flexibility to determine the value of their
courses and to set HECS charges. The government has said that,
whilst it will not allow any increase for the 14 per cent of
students in universities who are undertaking teacher education or
nursing, it will allow universities—for the first time in
Australia—to determine the value of the HECS charge levied on the
student on the courses which are undertaken.
This package comprises many components and each is interlinked.
It is not possible to maintain the fundamental integrity of the
package by removing key elements from it. What the government is
seeking to do with this package is to change the fundamental way in
which universities are being funded—to move the universities to a
discipline mix for funding; to fund the universities on the basis of
what they actually do provide and deliver to students—so that a
student undertaking a course in one university, whether it be
business administration, nursing, veterinary science or law, will
receive the same level of public support as does a student in any
other university.
An additional $404 million will be available in the first three
years under what will be called the Commonwealth Grants Scheme,
which will represent respectively over the first three years a 2.5
per cent, a five per cent and then a 7.5 per cent increase in core
funding to universities. In addition, the Commonwealth will be
making $122.6 million available to universities and campuses in the
regions of Australia. Some 32 universities in more than 55 campuses
will receive an additional loading—from 1.5 per cent for the
University of Wollongong through to 30 per cent for the Northern
Territory University and Batchelor College in the Northern
Territory—to recognise that those universities are operating from a
much narrower commercial, industrial and economic base.
The government will also require that, in order for the first
$404 million extra money to be available, two things must be
undertaken. Firstly, there must be governance reform of the
universities—the universities must be compliant with national
protocols for best practice in governance. We cannot say today that
governance and administration arrangements that were appropriate for
the early and mid parts of the 20th century will equip institutions
for the 21st century and a world that is quite different.
University governing councils have business expertise which
ranges from zero to 64 per cent. Commercial expertise is sadly
wanting in most university governing councils. Council size average
is 21 but can be as high as 35 for the University of Queensland. The
government does not consider it appropriate that working members of
parliament—whatever their respective merits might be—should be
serving members of university governing councils. There should be
professional development provided for people going on to university
governing councils who will be running budgets of up to almost $1
billion a year.
The second thing that is very important is that the universities
be compliant with the government’s workplace relations policies.
That means that any employee of a university should be free to have
negotiated on their behalf an enterprise agreement by the
organisation or union of their choice. Equally, any employee should
be free—as they currently are—to negotiate a common law contract or
an Australian workplace agreement. Once those two conditions have
been met in governance and workplace relations, the universities
will then be able to access the first $404 million of additional
public investment.
The government is also investing $40.4 million, representing a
7.1 per cent increase in funding, for the training of nurses to
assist them in leaving university to spend more time in hospitals
training for the careers of their choice. The government will also
be increasing, by 9.7 per cent, the money that is available for the
teaching of teachers, so that education students can spend more time
in classrooms.
The number of HECS places will be increased in this package. At
the moment, on average, eight per cent of the students in the
university sector are overenrolled. Almost 40 per cent of the
students at Charles Sturt University are overenrolled—in part
because of arrangements with the police academy—ranging down to 2˝
per cent at the University of South Australia. In the package that
was announced in the budget, the government said that it would allow
the universities to overenrol only up to two per cent.
In response to arguments that have been put to us by the
Australian Vice-Chancellors Committee and Mr Mullarvey—whom I
commend for his advocacy on behalf of the vice-chancellors who argue
that that overenrolment range is too narrow—this legislation will
enable universities to at least have a tolerance band of up to five
per cent. The government will fully fund, at a cost of $347.4
million over four years, 25,000 of those currently overenrolled
places in Australian universities. One of the reasons that students
are packed in like sardines in university lecture theatres is that
in many cases the students are overenrolled.
The government will also be funding 1,400 additional growth
places, at a cost of $10.9 million, in 2007. There will be 1,400
additional medical school HECS places over the first five years,
there will be 574 places specifically for nursing in regional
universities and there will be 745 priority places in nursing and
teaching; these are extra places. In addition, the Commonwealth will
be locking in on a long-term basis the 655 places in teaching and
nursing at Avondale College. The government will also be funding a
further 2,850 growth places in 2008.
One of the most important changes in these reforms is the
recognition that, as the world and the needs of Australian
universities are changing, Australians should be no less free to
take up, if they are academically qualified, a full fee paying place
in an Australian university than a citizen from another country. The
government will allow the universities, once they have filled all of
their HECS places and if they choose to, to then offer a full fee
paying place to an Australian citizen who is academically qualified
and considered to be so by the university. For the first time, the
Commonwealth government will lend those students money on the same
income contingent arrangements as HECS, except there will be a 3.5
per cent interest rate added to the CPI indexation of that debt. The
interest rate will be capped at 10 years, and the loan to the
student will be $50,000. Students will also be able to take those
loans to recognised, private higher education providers. So, for the
first time, students who may not currently have the resources may
choose to go to Bond University, the University of Notre Dame, the
Australian Institute of Music in Sydney, Tabor College, Christian
Heritage College or a myriad of other excellent higher education
providers.
In relation to regional loading, this bill will respond to
another request from the vice-chancellors—that external load also be
counted in terms of receiving additional funding. Students who are
enrolled externally will also receive additional resources. One of
the other important pieces of reform is that, for the first time, a
signal will be sent to Australian students that they cannot
repeatedly go on doing undergraduate courses. Four per cent of
students who enrolled in an undergraduate course last year already
had an undergraduate degree. We cannot allow a situation to continue
where some students perpetually enrol in one undergraduate degree
after another. That causes a logjam in the system and denies places
at the other end to young people and not so young people who are
trying to get into university.
A Commonwealth learning entitlement will be introduced. It will
be for five years or whatever is the minimum period of time for a
vocational qualification—and for courses that are five years or
longer, an additional year will be added. Beyond that period of
time, if students wish to continue doing undergraduate degrees, they
can continue to do so, but they will be able to access a loan from
the Commonwealth government. The loan schemes provided by the
government will be renamed in this bill to the Higher Education Loan
Program—HELP. There will be HECS-HELP and FEE-HELP, for full fee
paying students and those who go to recognised private higher
education institutions. Also for the first time there will be
OS-HELP—overseas HELP. One of the critically important things for us
is to not only attract foreign students to Australia but also
encourage Australian students to spend some of their time as
undergraduates studying in universities in other countries. So, for
the first time, up to $10,000 will be lent to students by the
Commonwealth government—again on an income contingent basis—to allow
them to spend some time undertaking some of their undergraduate
studies in another country.
With this package, the government will also be undertaking a
number of important reforms to support Indigenous participation in
higher education. An additional $10.4 million will be added to the
Indigenous Support Fund. The government will require universities to
ensure that there is Indigenous participation in decision making in
universities and that outreach programs are being run to support and
encourage Indigenous students to enrol and to support them once they
have enrolled. The government will also ensure that an Indigenous
Higher Education Advisory Council be established to give advice to
the Australian government on what initiatives it should take in
relation to supporting Indigenous students. With this bill, the
government will also be announcing a further $6.9 million of
additional support over the next three years for equity programs.
Universities will be required to run outreach programs to support
equity students. The universities will also be required to run a
scholarship program within their own institution and to manage the
Commonwealth’s scholarship programs.
One of the other major problems, which I outlined earlier and
which is addressed in this bill, is the financial support of
students. A Commonwealth learning scholarship program will be
introduced, and 25,100 scholarships will be made available to
students over the first four years at a cost of $161 million.
Students from low-income families will for the first time have
available to them scholarships to support their education costs.
There will be 17,665 scholarships, each worth up to $8,000 over four
years. In addition, there will be 7,550 accommodation scholarships,
which will each be worth some $16,000 over four years to students to
support their accommodation costs.
This bill will also recognise a number of performance issues that
were argued to us throughout the review. The first is that, to
improve the quality of teaching in Australian universities,
universities will for the first time have access to $138 million
over the first four years for a quality learning and teaching
performance fund. In order to access that fund, universities must
have systematic student evaluation of the quality of teaching in
that institution and it must be published. Probation and promotion
within that university will depend as much on teaching as it does on
research.
There will be $55.4 million available for a workplace performance
pool. For access to that, universities will need to ensure that
there is a genuine performance based pay scheme available in their
university and a genuine culture of performance and rewarding
performance. There will also be a $36.6 million collaboration and
structural reform pool, the intent of which is to support, for the
first time, universities undertaking innovative projects which, for
example, co-locate universities with TAFE and senior secondary
college; importantly, the government will be focusing on proposals
which have the support of the business communities and/or state
governments. The process of examining research in Australian
universities is currently under way with a number of reviews. I will
be announcing on behalf of the government early next year the
outcome of a series of reviews looking at the way in which
Australian research is funded.
This package also gives focus to arts, humanities and social
sciences with the establishment, amongst other things, of an
advisory council in support of it. The government will also be
establishing a higher education business advisory council, and I
will shortly be announcing its composition. There is currently a
process under way being led by Treasury to examine innovative ways
of funding Australian universities, again at the request of the
Australian Vice-Chancellors Committee and others within the sector.
Throughout the debate on this package, an argument put repeatedly by
those who are opposed to it will be that students who get a place at
university should do so only on merit. There will be those who will
argue stridently against opportunities in full fee paying places in
Australian universities being offered to Australian citizens that
are currently offered to foreign students—whom we welcome—and
against the government for the first time providing loans in support
of them.
I say to the parents of Australia, not only as Australia’s
Minister for Education, Science and Training but as a parent myself,
that it is critically important that we realise we will do our
children and our future no service whatsoever if we leave them a
higher education sector which is racked with mediocrity—where access
might readily be available but the quality and the standard of the
education being provided is ranked poorly by international
standards. This package increases substantially the number of
publicly funded places in universities. It ensures a significant
increase in public investment in universities. The Australian
taxpayer will continue to pay almost three-quarters of the cost of
providing university education, and those who benefit from that
university education, once they have graduated and are earning in
excess of $30,000 a year, will subsequently pay back their HECS
contribution.
For the very first time, the universities will have to sit down
and decide themselves what is the value of their courses to
prospective students. Meaningful information will have to be
available to prospective students and their families about the
quality of what is being provided. The maximum possible increase
that students could face being added to their HECS debt per year is
$2,000 if they are training to be a lawyer, a dentist, a vet or a
doctor; $1,600 if they are training to be an economist, an engineer
or a scientist; $1,200 per year if they are training in arts,
humanities or social sciences; and absolutely no change whatsoever
if they are undertaking teaching or nursing. For every last dollar
that is invested in the universities by students—every additional
dollar—there will be at least two extra taxpayer dollars, and every
last dollar will be spent on improving the quality of the education
that will be received by the current and the next generation of
Australian students.
The HECS cut-offs are determined by competition, not by academic
merit. One in 15 students who got a place at university this year
did so not on merit; they got there because they were educated in
difficult educational circumstances—and I support that. But let us
not as a country then turn our backs on those who missed out on a
HECS place with an entry score of 99 and deny them the opportunity,
if they choose, to take up a full fee paying place—an opportunity
that is offered and taken up by foreign students—and force them to
do a HECS place in a course that they do not want to be in.
These reforms are critically important to the future of our
country. I implore Australians to go beyond what is being said by
the opponents of this package and look for the truth. I implore
parents in particular to examine the best interests of their
children and their children’s future, and to look in particular at
what needs to be done to put Australian higher education on a sound
footing for this century. It is my belief that when they do so they
will appreciate that, whilst not all measures in this package may be
popular in all sections of the community, they are long overdue and
are needed. I present the explanatory memorandum to the bill.
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