Sky News, PM Agenda with David Speers 23 September 2014


SUBJECT/S: University deregulation; University of Western Australia announces its fees; $100,000 degrees.

DAVID SPEERS: Back home, one of the other domestic issues being debated in Parliament today was university deregulation, something the Government wants to get through the Senate but is facing obstacles, a big barrier indeed from Labor, the Greens, the Palmer United Party as well. 

Today, the first university to announce its fees under deregulation, the University of Western Australia, said it would charge, if this gets up – complete deregulated competition – they would charge $16,000 a year for a basic undergraduate degree. That’s $48,000 for a three-year degree course. But once you do a postgraduate, which it lists as things like medicine and law, you’re talking more like $100,000. Well, we saw Labor say that’s a broken promise from the Government. Tony Abbott responded by saying, well students can still borrow the full amount up front, taxpayers will still cover 50 per cent of the cost. But Labor is unmoved on this; in fact, they say these figures today show just why deregulation is such a bad idea.

I spoke earlier to the Shadow Minister for Higher Education, Kim Carr.

KIM CARR, SHADOW MINISTER FOR HIGHER EDUCATION, RESEARCH, INNOVATION AND INDUSTRY: A two and a half times increase on the current arrangements. It’s doubling the cost of a degree in science, for instance. And, of course, it’s the basic degree because the University of Western Australia is like the University of Melbourne – you have a base degree, then you have your vocational degree on top of that. So, if you want to be a lawyer, you have to then do a postgraduate degree, or if you want to be a schoolteacher, you have to do a postgraduate qualification, a masters or some other qualification on top of the basic degree.

SPEERS: But how many just to do a base degree, how many go on to that?

CARR: Well, just about everybody goes on to do some other qualification because that’s what you do to get a job. But even on these figures, the amount of money a schoolteacher will need to find to actually get a qualification will double. So you’ll actually increase the cost of getting a degree from $30,000 to $60,000. Now for a law degree –

SPEERS: For a teacher?

CARR: For a teacher. Now, for a lawyer, it’ll be around $97,000, $95,000 – these are the sorts of figures. They vary from place to place but that’s about the range. Now already at Bond University, which is operating in a deregulated market, the fee is close to $131,000. These are the sorts of numbers you’re likely to see with this arrangement put it place.

SPEERS: It is, as I say, a top-tier university – is it possible others under a competitive, deregulated market would come in at lower costs, better-value degrees?

CARR: Well, the point is people buy the ticket. They actually buy – and that’s what they say in their submissions to the Senate Committee. The University of Western Australia has made the point, this is a sandstone university, and people are buying the reputation that stands behind that university. So you’re getting a different product, and that’s the nature of the competition. The competition really exists between the Group of Eight universities and between the other universities being treated in a different way. And that’s the real concern that’s being expressed by vice-chancellors – that you’ll see an Americanisation of the higher education system, where you’ll have some universities regarded as elite and then there’ll be the others. So you’ll get a two-tiered system.

SPEERS: What about the argument that those top universities do compete in a very global market these days for international students –

CARR: They do.

SPEERS: – they need the revenue to be able to offer the more elite course?

CARR: They do, and that’s why the Government’s got a responsibility, and that’s what shocks me so much about some of the vice-chancellors failing to defend public education. You see the amount of money that the Government spends to support our education is a real criteria about the government’s commitment to higher education.

SPEERS: There’s simply not enough government funding to do what they want to do.

CARR: That’s not true, that’s just not true. What we had under the Labor Government was a 100 per cent increase in the amount of money that the Government was spending on universities, 100 per cent. Now there’ll always be an argument about adequacy – I’ve never known a vice-chancellor that said we couldn’t do with more money, but it’s simply not true to say that governments always reduce funding. The reality is that under Labor there was a very, very big expansion and the level of public investment in universities. This is the real issue here –

SPEERS: But these vice-chancellors of the top universities say that under Labor’s changes what they’ve had to do is enrol thousands more students than they should. It’s changed their business model, their operating model – what they’d much rather do is be smaller, more efficient, more elite.

CARR: Well, let me give you the facts. The real Commonwealth contribution per student – that’s irrespective of the numbers enrolled – went up under Labor from $9,600 per student to $10,500 per student at the end of this forward estimates period. There was a real increase of 10 per cent per student – now in overall spending, 100 per cent increase if you look at all the different bits and pieces of the research program, all the other things that governments do. Now, what’s happened here is that the vice-chancellors have run away from their commitment to public education, because they think they’ve got a better deal to be done for themselves and the universities, if they’re able to charge whatever they like.

SPEERS: Getting back to the students, though, the Government points out they’d still be able to borrow every dollar up front, they wouldn’t have to pay anything up front, the Government the taxpayer still funds 50 per cent of their course fee, FEE-HELP is available – doesn’t that mean that even disadvantaged kids can still get a start?

CARR: No, what happens under those circumstances, is that you’re saying to people, ‘Look, don’t worry about paying for this, you can put it on the tick. At some time in the future you might have to pay it back.’ Now, if you’re over $50,000, you start repaying. If you’re on a low income and with real rates of interest, the debt continues to grow but your capacity under the legislation is limited to a percentage of your income for repayments. The period on which you are repaying grows, the debts continue to grow and that’s why you get these crippling debt numbers. It may take 20 to 25 years to pay off a degree.

SPEERS: But if you’ve got a degree or indeed a postgraduate degree, your chances of earning more than $50,000 are markedly increased.

CARR: That’s true, and that’s why we say there’s a public benefit and a private benefit in education, that’s why there’s got to be a cost-sharing arrangement between the individual and the public.

SPEERS: Well, that’s the Labor view there on the higher education deregulation, why they don’t support it. Kim Carr talking to me earlier.


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