BILLS;Higher Education Support Amendment (Student Contribution Amounts and Other Measures) Bill 2012;Second Reading – 15 Aug 2012

I too rise to speak on the Higher Education Support Amendment (Student Contribution Amounts and Other Measures) Bill 2012. I would like to preface my contribution to the bill by talking a bit about the history of Commonwealth support for higher education, because I think this is important in outlining the philosophy behind student contributions which underpins this bill.

The Whitlam government introduced free university education in Australia in 1974. That was a move which so many of today’s baby boomers applaud, because it gave them the opportunity to attend university when they otherwise would have been unable to afford it. While this was an important social policy, it unfortunately did not address the inequity that existed in access to education. Access to university was limited and, while some students from lower income families got the chance to attend university, high academic achievers tended to be from higher income families. So students from higher income families were going to university fully subsidised by the Commonwealth government and then gaining the benefit of higher paid jobs that a university degree qualified them for. To make higher education more equitable, the government needed a policy that recognised that higher education has both a public and a private benefit but did not provide a barrier to access for low-income families.

I know there are some in the community who would extol the virtues of free university education like that that existed under both Whitlam and Fraser as Prime Ministers—and I agree that there is a strong argument for a substantial taxpayer contribution to the higher education sector, given the enormous economic and social benefits that it delivers to Australians. But let us also recognise that an average university graduate earns an additional $1.5 million over a lifetime compared to a school leaver with no further qualifications. That is a substantial benefit, and I doubt any fair-minded person would argue that graduates should not give something back to the sector, rather than have their education fully subsidised by taxpayers who miss out on this benefit.

The Higher Education Contribution Scheme, or HECS, was the predecessor to the current Higher Education Loans Program, or the HELP scheme. HECS was introduced in 1989 and had a number of major benefits for the university sector. It provided a revenue stream for government which could be used to expand the number of Commonwealth supported student places available. It removed the inequity of students who have the privilege of the private benefits of higher education not having to make a contribution for those benefits. Finally, the genius of the scheme was that HECS payments were deferred until students reached a certain level of income—meaning they were not required to pay back their debt until they had the capacity to do so. The deferred nature of HECS, now HELP, payments removes the disincentive to rural, remote and low-income students that upfront payments present.

Of course, there are many other barriers to higher education that disadvantaged students face, and this government is working hard to address them through scholarships, changes to youth allowance and various other policies which are having a positive effect. Between the years 2007 and 2011, we have seen a 30.7 per cent increase in the enrolment of commencing students from low-SES backgrounds and a 23.7 per cent increase in low-SES enrolments overall. I could go into more detail about these initiatives, but that is probably a debate for another time.

In terms of HELP payments, there is no evidence that student contributions at their current level are a deterrent to disadvantaged students. In fact, students are far more sensitive to the upfront costs of a university education such as relocation and living expenses. However, deferred student contributions do not cover the entire cost of a student’s university tuition. In other words, students are subsidised by the Australian government, and this is in recognition of the public benefit that university education provides society more broadly.

Unfortunately, over time, we have seen a rapid decline in student enrolment in mathematics, statistics and science—an issue the Australian government is committed to addressing. That is why the Prime Minister asked the Chief Scientist, Professor Ian Chubb, for advice on how to encourage increased university enrolments in these areas of study. To explain why we should be concerned about the declining participation in maths and science study at university, I will quote from the Chief Scientist, who said:

Mathematics, Engineering and Science (MES) are fundamental to shaping the future of Australia, and the future of the world … Our future lies in creating a high technology, high productivity economy; to innovate and to compete at the high-end of provision. To do so, the technical skills and scientific awareness of the entire workforce must be raised. The number of MES graduates needs to increase to allow industry to expand in these areas. Yet our current performance is wanting, and we compare poorly to our leading Asian neighbours.

In response to Professor Chubb’s advice we provided funding of $54 million in the 2012-13 budget for measures to improve student engagement in maths and science.

This government is funding projects and courses that improve the quality of teacher training to improve the supply of qualified graduates entering maths and science teaching at school. We are funding the Australian Mathematical Sciences Institute to provide scholarships and a range of intensive short courses for later year university maths students so that they can continue to provide support to mathematics researchers and students. The government is also funding innovative partnerships between universities and schools that are experiencing difficulty in engaging students in science and maths, have poor outcomes in maths and science or have low numbers of students going on to further study in these disciplines.

One of the great aspects of the schools component of the package is the expansion of the CSIRO programs Scientists in Schools and Mathematicians in Schools, which take interesting science and maths lessons to schools across Australia including those in regional areas. The previous speaker, Senator Mason, mentioned how we need to have more of that sort of thing going on so I am pleased to be able to say that we are expanding those programs.

As with sportspeople, interesting and successful mathematicians and scientists can be the inspiration for students to pursue a career in maths or science. My own son studied physics as one of his majors at that great university, the University of Tasmania, and I know that he was very inspired by people he knew that were successful in that area. Only a couple of months ago, I was pleased to hear that the first Australian woman to win a Nobel Prize, Professor Elizabeth Blackburn, had returned to our home state of Tasmania to deliver a series of lectures aimed at inspiring high school students to study science. It is a great source of pride to me that my home state has produced a scientist of Professor Blackburn’s calibre. I am sure she will inspire many young Tasmanians to take up a career in science.

Now that I have outlined the government’s commitments to improving maths and science, I would like to turn to the Higher Education Support Amendment (Student Contribution Amounts and Other Measures) Bill currently before the Senate. The bill, if passed, will reinstate the previous maximum student contribution for units of study in maths, statistics and science from 1 January 2013. Maths, science and statistics are currently classified as national priority units of study. In 2012, students were charged a reduced maximum student contribution of $4,250. Under this bill, the maximum contribution in 2013 will be increased to $8,363.

Universities are currently being provided with transitional loading as compensation for reduced student contribution amounts; however, this will cease when the student contribution amount increases. The national priority rate for these units, which was introduced in 2009, was not delivering value for money in terms of its desired outcomes. This experience was consistent with the findings of the 2008 Bradley Review of Australian Higher Education—that is, that there is no evidence that lower student contributions have a positive impact on student demand. Not only was there not increased demand for maths and science study but also the majority of students who were studying maths and science units were not enrolled in a maths or science course or an education course, so the measure was not contributing to the overall pool of maths and science graduates or increasing the supply to schools of maths and science teachers.

The government is continuing to provide incentives to study maths, statistics and science courses through the HECS-HELP benefits of maths and science graduates. Students who graduate from a natural and physical sciences course with a HECS-HELP debt and work in a relevant field of study can have their compulsory repayments reduced by more than $1,600. Graduates who work as a maths or science teacher may qualify for both the HECS-HELP benefit for maths and science graduates and the HECS-HELP benefit for teachers and can have their compulsory repayments reduced by more than $3,200.

There is another purpose to this bill. I go back to my previous point, that the purpose of the Commonwealth subsidising higher education places is for the public benefit higher education provides. There are around three-quarters of a million Australians living overseas, either permanently or long term. The government believes that our funding priorities should be to support those students who are most likely to pursue careers in Australia to repay their HELP debts and to use their education to benefit Australia. The bill will therefore remove the eligibility for Commonwealth supported places and the HELP scheme for Australian citizens who do not reside in Australia. This measure will not affect students undertaking studies overseas as a part of a formal exchange program, or those who are engaged in a study abroad program for some units of their course. In addition, the small number of students who are currently enrolled in Commonwealth supported places but are not resident in Australia will not be affected by this measure while they complete their current course of study.

The estimated number of people who may be affected by this measure is small: about 1,000 full-time equivalents; however, with the implementation of the demand-driven system and the increase in online delivery of teaching, we expect that there could be significant future growth in the number of Commonwealth supported students not living in Australia.

What the government seeks to achieve with this bill is to have a system of Commonwealth support for university students that will encourage access to university while providing the maximum benefit to Australia’s workforce and economy. These measures will help support the additional investment that the government has made in the new, demand-driven funding system for Australian universities, and ensure that funding is better targeted and that more Australian students have the opportunity to go to university. I commend the bill to the Senate.