NATIONAL CONVENTION CENTRE, CANBERRA
THURSDAY, 12 MARCH 2015
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Good morning, and thank you for inviting me to speak to your national conference.
Distinguished guests, ladies and gentlemen.
When I spoke at your conference last year, I said that it was a pivotal moment for universities.
A moment that would not only decide the future of higher education, but of the great Australian project.
The project of increasing and enhancing opportunities, for individuals and the nation.
I exhorted you to defend the fundamental principles of academic freedom, institutional autonomy and proper public investment.
And I promised that you could look with confidence to Labor to support those principles.
Shortly after the conference, the Abbott Government’s 2014 Budget revealed an unexpected threat to the future of universities and to the ideal of a fair Australia.
In Opposition, Tony Abbott had promised that there would be no cuts to education under a Coalition government.
And those of you who were present at this conference in 2013 will recall that he said “masterly inactivity” was the best contribution governments could make to a sector in a time of change.
Yet, within months of taking office, the Liberals reneged on their promise not to increase university fees and their commitment to keep the existing funding model by announcing a radical agenda with no consultation.
A plan completely at odds with earlier higher education reforms, which involved consultation across the sector and aimed at improving access and equity.
A plan motivated, rather, by cost-cutting and shifting the financial burden to students rather than improving the system.
The 20 per cent average funding cut, deregulation of student fees and the extension of Commonwealth Supported Places to private providers.
In stark contrast to Dawkins, the customary policy development, engagement and implementation process was not followed.
Since the Budget was brought down, there has been no certainty about what the future holds for Australia’s higher education sector.
To say that this past year has been a time of great anxiety for the sector would be a massive understatement.
Everything has been dominated by the political contest generated by the Abbott Government’s plan.
In that contest, the Education Minister, Christopher Pyne, and blind supporters of deregulation have stumbled from one miscalculation to another.
The Senate rejected Mr Pyne’s first higher education bill and, on the basis of senators’ public comments, it is poised to reject the second.
The wider community, too, has rejected Mr Pyne’s plan.
Even spending $15 million of taxpayers’ money on a slick but misleading ad campaign could not help him there.
The marketing wizards simply cannot conjure up a line plausible enough to persuade students and their families that they would be better off if the cost of degrees doubled or trebled.
Unsurprisingly, the overwhelming majority of Australians are opposed to deregulated fees.
But possibly the Minister’s greatest miscalculation relates to the financial consequences of his proposals.
In recent weeks, there has been mounting evidence that deregulation is simply unsustainable.
We now know that unregulated fees would drive up inflation, increasing the cost of living for all Australians.
NATSEM modelling, using the Government’s own data and conservative assumptions about fee increases, shows that doubtful debt could easily rise from 17 per cent to 30 per cent under deregulation.
And that would be 30 per cent of a much larger number than is currently the case.
The end result would be taxpayers carrying the can and funding universities through debt write-downs and interest subsidies rather than through a sustainable approach to funding.
All this was supposedly done in the name of resolving a theoretical funding crisis in universities and addressing a make-believe budget emergency.
Yet the only crisis for which there has ever been any real evidence is the contrived one arising from the Government’s own threatened funding cuts.
The financial implications of deregulation have not been lost on the sector, as submissions to the Senate inquiry into the higher education bill testify.
Professor Bruce Chapman has argued that the ability of students to defer payment of fees through income-contingent loans would increase pressures on the federal education budget.
Professor Chapman also said that there would be no real price competition between institutions, because of the deferred payment and the peculiar nature of the education market.
Anyone who has followed the experience of deregulation overseas knows this to be true.
There is no example of fees falling after deregulation because in the education market fees are perceived as an indicator of quality.
Yet Mr Pyne’s latest desperate attempt to pass his legislation – a proposal for a great big new tax (“fine” or “levy” are the Minister’s preferred terms) to be imposed on universities that raise fees too steeply – is a belated admission that his plan would lead to massive fee hikes, as Professor Chapman and others have argued all along.
This proposal appears to have been the subject of a flurry of negotiations with Senate crossbenchers last week.
But the idea has gained no more traction than any of the other desperate measures Mr Pyne has floated to win support for his bill.
And if he had taken note of the experience of other jurisdictions he would understand why.
In 2010 the UK Tory Government also considered such a proposal, but rejected it because including a tax in the deregulation mix would cause fees to spiral up, not go down.
Universities would cover their costs by passing them on to students.
It is not only students in Group of Eight universities who would be affected. Professor Chapman has calculated that 45 per cent of revenue would come from non-Group of Eight universities.
Unable to drum up support for his student tax last week, either on the Senate crossbenches or in the sector, Mr Pyne has once again resorted to threats and bullying.
He has declared that continued funding for the National Collaborative Research Infrastructure Strategy (NCRIS) will depend on the Senate passing his higher education bill.
NCRIS is not part of the bill, but the Minister who can’t win by persuasion is making it hostage to the bill’s fortunes.
He is risking the jobs of 1,700 scientists and technicians in 27 facilities; 35,000 research projects; and Australia’s future as a nation committed to pure and applied research.
This is a travesty. As Brian Schmidt has said, it is not the way a grown-up country behaves. And I am pleased to see both the sector and the crossbench standing up to Mr Pyne’s childish blackmail.
You all know the stance that Labor has taken throughout this debate.
We have resolutely opposed fee deregulation, because for Labor it is a fundamental principle that access to a university education should depend only on ability and hard work, not on the incomes of students or their families.
We reject the argument that Australia’s highly successful income-contingent student loan scheme would be sufficient by itself to take the sting out of uncapped fees.
The argument ignores the obvious fact that as the cost of degrees soars in a deregulated system, graduates would inevitably face decades of crippling debt.
Labor believes that the primary obligation of government in higher education is to defend and extend Australia’s world-class public university system.
That obligation is not compatible with degrading the system by withdrawing funding or forcing it towards creeping privatisation.
The goal must be to expand opportunity while maintaining quality, and that is what Labor has always done.
The Whitlam government removed non-academic barriers to participation.
The Hawke government introduced HECS, to ensure that funding would remain sustainable while participation increased to historic levels.
The Rudd and Gillard governments delivered a real funding increase of 12.5 per cent per student place, as Universities Australia’s briefing paper for the Senate inquiry has acknowledged.
From 2007 to 2013, total spending on universities increased from $8 billion to $14 billion.
Over the budget cycle to 2017, spending was projected to increase by more than 100 per cent from the 2007 outlay.
These figures are available in the Budget papers for anyone to check.
I noted them in my speech to you last year.
And I mention them again today because supporters of deregulation continue to argue that it is needed because both sides of politics have cut spending on universities.
That is not what the historical record shows.
Access and growth
The Minister and some supporters of deregulation have chosen to wilfully misinterpret my past remarks as a signal that Labor intends to impose an enrolment freeze.
Let me categorically reject that claim.
Mr Pyne’s so-called analysis of these claims is based on a lie.
Under Labor, the number of student places will continue to grow. Under Labor, universities will be properly funded.
Only the Coalition wants to cut university funding by 20 per cent.
Only the Coalition wants to introduce $100,000 degrees that will deter disadvantaged and mature-age students from going to university.
Access is a cornerstone value in our approach to education at all levels.
That will not change.
It follows that students should have access to a high-quality education that meets their needs.
To that end, the policy Labor takes to the next election will ensure not only that the sector will continue to grow, but that this growth is focused on attainment and equity.
It was the former Labor government that introduced the demand-driven system, with the goal of ensuring that by 2025, 40 per cent of 25-34 year olds will have a bachelor’s degree.
That goal is close to being achieved – nearly a decade ahead of schedule.
Labor’s policy of increasing opportunity has been a huge success, with attainment rates up from 32 per cent to just under 38 per cent.
We recognise that there is still work to be done in reaching the target of 20 per cent of enrolments being students from disadvantaged backgrounds.
Participation by these students has lifted only slightly.
It is timely, therefore, to reflect on how we can move forward to build on Labor’s record of reform.
Among the matters that should be considered is the increasing concern about completion rates and the achievement of satisfactory academic standards, especially among students who have entered university with low ATARs.
Quality must define our education system.
And this will not be the first time you’ve heard me say that I’m concerned about the evidence of skill shortages in some labour markets and oversupply of graduates in others.
These issues have been well canvassed in a review of teacher education chaired by the vice-chancellor of Australian Catholic University, Professor Greg Craven.
The Craven review found that there is a need for better regulation in teacher education, including the external verification of standards, greater transparency in entry requirements and greater accountability in practicums.
The review also found that among some education graduates the unemployment rate is three times higher than the national unemployment rate.
For self-accrediting institutions, these are serious issues.
And we know that these problems have not arisen only in teacher education.
There is an oversupply of law graduates, for example, and a chronic undersupply of graduates in STEM disciplines.
And some nursing students, like some education students, are admitted on ATARs lower than 50.
I have spoken elsewhere of the difficulties created by these trends.
Today I want to outline the principles that will guide our policy response, and the conversation we want to have with the sector.
Labor’s view is that participation is not enough.
Labor governments fund enrolments because we want students to succeed – to graduate and pursue satisfying careers.
All of us who are concerned with public policy – whether we are in politics or in the sector – fail in our duty to Australia’s students if we lose sight of that goal.
At present there is a drop-out rate across the system of nearly one in seven. In some universities, there is a drop-out rate from some courses of more than 20 per cent.
High attrition rates are costly for individuals and wasteful of human talent, not to mention scarce resources.
Labor’s policy principles
Labor is well advanced in devising an alternative plan for higher education – one that will be informed by consultation with the sector.
That plan is focused on the principles of equity, accessibility, quality and attainment– for all the reasons I have talked about.
Labor also believes university funding must be secure, predictable and sustainable. I can tell you we’ve heard what the sector is saying on this – your pleas for certainty are not falling on deaf ears as far as Labor is concerned.
Labor understands that voters expect Governments to fund universities properly – to meet their obligations and to pay their bills. That is what a Labor government will do. That is what Labor Governments have always striven to do.
The oft-heard claim that there is no political will for this is simply not true.
But in return for public investment, Labor expects universities to work with the Commonwealth to help address national and regional priorities in education and the labour market.
The key to making this partnership work is to find a balance between institutional autonomy and accountability for the use of taxpayers’ funds.
Governments and universities working better together
Labor is also resolved to improve the working relationship between universities and the Government.
This relationship should be collaborative, coherent, and underpinned by certainty of funding.
It should respect the autonomy of institutions, but also acknowledge national goals so that investment is directed to future economic growth and meeting regional needs.
The focus of higher education funding is crucial in a future in which educational attainment is the key to economic opportunity, for individuals and the nation.
We want universities to be more responsive to their local communities and to national priorities, especially with regard to the labour market.
Labor is continuing our discussions on how to make these partnerships effective. We are always open to better models for governance, including those at work in similar jurisdictions overseas.
The path ahead
The debate about the Government’s unfair and unnecessary proposals for funding cuts and deregulated fees will continue until the next election, irrespective of the Senate vote.
For Labor, the future of universities, of research, and of innovation will be a central argument that we make for our return to government.
Given the history of first-term governments and the current electoral cycle, that contest may be well within the next 12 months.
And, given the way this government is careening from barnacle to barnacle, who knows what will be left by the time we get to that poll.