Speech to AFR Higher Education Summit 2014_The future of universities is a political matter

Why do almost two-thirds of Australians reject the Government’s changes to universities?

Because the proposals are fundamentally unfair.

The injustices of the package have generated an enormous public response, because they go to the heart of what sort of country we want to be.

A place that elevates potential wherever it is found; or a place that reserves opportunity for those born to means.

It’s not just that people were lied to with a promise of no cuts to education, yet now they find a 20 per cent cut.

Or that the Liberals said that they would not change the arrangements for income-contingent loans, yet people now face $100,000 degrees and crippling debts with real rates of interest.

Even students who are already in the system and commenced in good faith under a different set of arrangements will be ambushed by the Coalition. Even those who have already graduated will pay more interest than they signed up for.

Nor is it that Tony Abbott promised the sector “masterly inactivity” before the election but has turned around to propose the most radical changes to universities in 40 years.

Those betrayals are real, and they are serious.

But at the heart of the people’s objection is the fact that the government has struck at a fundamental principle: the Aussie fair-go.

That is, the widespread belief in Australia that if you have the ability and you work hard, then you should have the opportunity of a quality education irrespective of income, assets or postcode. Not yours, not your parents’.

Australians recognise that students and their families already pay their fair share.

The would-be Americanisation of the Australian university system is as deeply resented as the attempts to Americanise our hospitals.

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Like the Australian people, Labor rejects these proposals because they are fundamentally wrong and immoral.

They strip equity out of our university system and have the potential to return universities to a Menzies-era two-tiered system of a few well-resourced and many under-resourced institutions.

They would have particularly savage effects for rural and regional universities, for mature age students, for people in vital but low-paying professions, and especially for women.

These proposals, if implemented, threaten the role of universities in building an innovative Australia.

These proposals not only allow universities to charge whatever they like, but require universities to gouge students.

  •  Gouge them to recover the 20 per cent cut;
  •  Gouge them again to pay for scholarships;
  •  Gouge them further to fund research.
  •  And now there is a talk of a GST - after a mature debate - on top of that

This is in the context where Australia already has one of the lowest levels of public investment in tertiary education in the OECD, and some of the highest student fees.

This move reflects an ideology of privatisation.

An ideology that advocates handing the proper functions of government by and for the people to the vagaries of the marketplace, where profit is the only motive.

It is presented in the context of a so-called budget emergency.

But the much-talked-about funding crisis is entirely of the Government’s own making.

As the Treasurer, Joe Hockey, said recently, the government “will find any way we can to take the money out of universities”.

That comment blew away any pretence that this budget proposal is about genuine reform.

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There is a fundamental divide in Australian politics about the role of universities.

Labor has taken the view that universities are critical to:

  • building our innovative capacity.
  • unleashing the talent in our people.
  • providing opportunities for all Australians, regardless of their means; and
  • fostering a rich academic community of scholars and scientists.

We have defended institutional autonomy, academic freedom and the dual research-driven missions of commercialisation and the discovery of new knowledge.

Under the Abbott Government, policy has been kidnapped by an distrust of universities – a view which sees them as dangerous centres of dissent and challengers of the status quo.

And all of this is a repeat performance of Dr Kemp’s leaked cabinet submission under Howard, which of course appears to have been the blueprint for the current policy.

Even the media strategy remains the same.

The big difference is that the Pyne package involves cuts four times the size of the Howard Government’s.

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The defenders of this package argue that no government can be trusted, that all governments cut university funding.

This is a proposition I reject.

Make no mistake: this is an argument about money; it’s about money as an expression of political will.

The government says it won’t pay its bills. Labor says governments have a responsibility to properly fund our universities.

The government argues that the private benefit derived from universities justifies fee hikes on students and their families.

Labor argues that the public benefit derived from a quality education system demands a commensurate level of public investment.

It is our view that a fair balance between public and private contributions has already been reached.

Spurious comparisons with funding levels in 1994 ignore the fact that the Howard Government increased student contributions from 18 to 40 per cent, while cutting government funding.

Labor, on the other hand, increased Commonwealth funding by over 10 per cent per capita, in real terms. And we did this while giving 190,000 extra students the opportunity to go to university.

This fact is recognised in Universities Australia’s private briefing paper, but rarely in its public statements.

Even though Labor put some money aside to help fund the Gonski reforms in our last budget, real per-student funding still went up.

And, of course, the efficiency dividend has not been legislated.

The Abbott Government repudiated Gonski, removing any justification for supporting those changes.

Under Labor, total budgeted funding for teaching and research increased by nearly 100 per cent through to 2017.

That’s a doubling of university funding in 10 years and it gives the lie to the claim that politics does not count when it comes to university funding.

It clearly strikes down the fallacy that there is little difference between Labor and the conservatives when it comes to the treatment of universities and their students and staff.

As Laureate Fellow in Economics, Professor John Quiggin observes in relation to government funding:

In the short term, restoration of the funding policy prior to the 2013 cuts would be sufficient to stabilize the financial position of the university sector as a whole.1
1 Professor John Quiggin, Submission 20, p. 3

This is the issue – what is the appropriate level of public funding to sustain a quality university system in Australia?

I emphasise quality because we want universities to thrive, not merely to survive. The country needs education to be life-changing as well as accessible.

I emphasise quality system because it is important that we treat our universities as a system – not just as a random collection of competing enterprises.

When the most recent Times Higher Education World Rankings were released, their Editor, Phil Baty said:

“Australia does not have just a few world-class universities, but a world-class system.”

Labor wants to keep it that way.

And we want our world-class system to be accessible to all who work hard and have the smarts.

The parliament has legislated funding per student place – what used to be called EFTSU – at around $10,600. The current government wants to see this reduced to $8600.

Governments need to recognise that maintaining a sustainable level of funding per EFTSU is key to a fair funding framework – one which nurtures a quality system.

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In its national platform, and in government, Labor set a target of 40 per cent of Australians under 35 with a bachelor degree by 2025.

We also set ourselves an equity target of having 20 per cent of students in universities from low SES backgrounds by 2020.

The participation targets have largely been met, particularly in the south east of the continent and for women across Australia.

The equity targets, on the other hand, have been much more difficult to achieve.

Participation rates across the nation are just under 38 per cent, up from 32 per cent – and this is 11 years ahead of schedule.

In contrast, the equity targets are up from 16.1 per cent nationally to only 16.8 per cent. We still have work to do.

This goes to demonstrate how hard the task is of making our student population more diverse right across the system is.

No gimmicks, like the so called Commonwealth scholarship scheme, will assist.

The faux scholarship scheme will not increase equity, rather as regional vice chancellors have noted, it will entrench division within our university system.

It will serve to poach the brightest students from regional universities to Group of Eight universities.

You only need to introduce elaborate new scholarship schemes if the system itself is unfair; adjustment funds if the effect is inequitable.

So the question for governments in the future will be: How do we fund growth in a system that ensures equitable participation by our most disadvantaged communities?

I maintain that it can’t be done outside the framework of increased public investment.

The Government’s proposals that students pay more, while equity funding is cut, clearly contradict Labor’s objectives of excellence and participation. Objectives that the Australian people agree with.

Some defenders of the package argue that because HELP loans are deferred, they will not deter even these students, regardless of the size of the debt.

Only people who never have to worry about how they’ll make the next mortgage payment or pay the rent could seriously hold that view.

Have they seen the cost of houses in our cities? Have the seen the cost of child-care? Have they seen the cost of groceries and transport?

Saddling the next generation with loans of this scale will undermine the ability to buy a house, have children, or live the lives that we have all taken for granted. It is simply too much.

And if this Government gets its way on privatisation, we will see too many young Australians being taken in by a snake-oil pitch that tells them a degree is a guarantee of future wealth, and then struggling for the rest of their lives to pay back the debt.

As we have seen, deregulation has not exactly worked out well for the reputation, quality and effectiveness of the VET system across the country.

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Some have suggested that the way to manage costs, if the government’s package does not pass the Senate, is to reimpose a cap on student numbers.

Labor absolutely rejects this proposition.

We do believe, however, there has to be a stronger emphasis on quality.

It is my strong view that the trend we have seen of students with entry scores in the bottom 40 per cent entering teaching and nursing courses requires attention.

Equally, we simply cannot have a system – a so-called market-driven system –

  •  that doesn’t provide us with sufficient graduates in areas of skill shortage;
  •  that creates an oversupply of graduates in other fields;
  •  that doesn’t deliver enough science, technology, engineering and maths graduates; and
  •  that seriously disadvantages those in professions that often have relatively low salaries but will see very high course fees, such as veterinarians, community lawyers, physicists, pharmacists, public health workers and the like.

Another area that requires further development is fostering diversity within the system.

Universities have three critical and complementary functions:

  • First – teaching and skills development for future workers and citizens.
  • Second – the discovery and circulation of new knowledge through research.
  • Third – contributing to the social, economic and cultural development of the nation through engagement with industry and the community.

It is not the role of governments to determine how these functions are undertaken.

For all the Abbott Government’s claims to support deregulation, it is ironic how often they complain about the decisions universities make about their own money. Most recently, of course, in the case of ANU’s decision on ethical investment.

It is often said by the defenders of deregulation within universities that they want to escape the clutches of public accountability by being free of the financial link to Parliament.

But these are public institutions. They are established for public purposes, under Acts of all the federation’s Parliaments.

It is only right and proper that they be accountable to the public – not only for their funding, but for decades (in some cases over a century) of public investment, amounting to countless billions.

So there must be a balance between autonomy and accountability. The compact was a device I developed in the Innovation Department to achieve that balance.

Its aim was to deal with the research program in a way that encouraged universities to develop their own missions, and to enter into a contract with the government about how they would pursue excellence in their areas of research strength. I believe such a model can be effectively applied in the teaching program if both sides have the will to make it work.

Given the importance of research to the innovation system in Australia, the architecture of any research program needs to deliver a coherent strategy that doesn’t leave the regions behind and that enables us to keep improving our international competitiveness.

That’s what Labor did in office.

Labor’s 10-year innovation strategy, Powering Ideas, saw support for science and innovation increase by 43 per cent between 2007 and 2013.

This Government, by contrast … This Government with no science minister and no science strategy … This Government with an Industry Minister who thinks he’s Minister for research, but doesn’t hold the purse strings … This is the Government that cut support for our science and research agencies by more than $500 million in just one Budget.

They have started as they mean to continue. You can bet there’s more to come.

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The future of universities is a political matter.

It will be resolved through the political system.

Funding is sustainable if governments have the political will to make it so. That will be an election issue. Labor will make it one, and the people will make it one.

Budgets are always a question of priorities.

The Government is determined to siphon public funds to its corporate mates and to wealthy families. It is determined to help those who benefit most from Australian resources and activities to avoid paying their way.

Labor sees things differently.

We are determined that everyone should pay their fair share, but also that everyone should get a fair go.

We believe in supporting public institutions – in funding them properly to do the job the community asks of them.

Soon, both sides will have the chance to put our cases to the Australian people. One a vision for the future, the other a blueprint for demolition.

It might come sooner than people generally think. The average duration of first term parliaments since World War II is only one year and nine months.

This will not be a hypothetical discussion. This is an issue that the Australian public cares deeply about.

The swings required to replace this government in one term are achievable. The average swing against first term governments since 1996 is 3.6 per cent. Labor needs a uniform swing of only 3.5 per cent. It can be done.

The theory that one term governments don’t get voted out will be put to the test on the 29th of November in Victoria.

The Abbott Government has come out of the blocks with a raft of punitive, cruel and insulting measures that reveal the contempt in which they hold ordinary Australians. And the people are on to them.

In no area does this disrespect for the population manifest more clearly than in education policy, the key to economic opportunity and social mobility.

That’s why Labor has committed to placing education, innovation and science at the centre of its case for re-election.

This is the case we’re putting to the Senate for rejecting the government’s proposals. Let’s shut down this ambush of ordinary Australians, and put it to the people.

Because it all comes down to the question: what kind of country do you want to live in?

You can bet that the people of Australia will have a view on this. I for one am looking forward to hearing it.


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