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Speech: Budget

Speeches in Parliament
Lee Rhiannon 18 Jun 2014

Senator RHIANNON (New South Wales) (13:09): After a group of students disrupted the normally carefully stage managed ABC Q&A program in early May, many people, particularly on the conservative side of politics, grumbled about their attitude and apparent disrespect. Not surprisingly, most of those tut-tutting are not going to be directly affected by the government's sweeping changes to higher education. Many of them were established media columnists and TV show hosts who enjoy a significant voice in our democracy. But most Australians—particularly young Australians, the ones who will be hardest hit by this budget—do not have this voice, do not have access to public discourse.

The Abbott government's budget is an attack on public higher education. For the first time, the government will give private for-profit education companies the same access to government funding as public universities, forcing our public universities to compete with private companies for funds. The government will also deregulate university fees for the first time, allowing more prestigious institutions to set their own fees, with no cap from the government. The Commonwealth subsidy per place has also been reduced, and the government will now charge interest rates of up to six per cent on student debt. Under the coalition's model, students will bear the cost of a new elitist university system though higher fees and more debt. Under this government, $5.8 billion has been ripped out of the sector. Student fees will skyrocket under deregulation. Students will pay higher interest rates on their HECS debt and be required to pay it back earlier. Postgraduate students will pay thousands of dollars a year in extra fees. And public universities will now be forced to compete with private education companies for government funding.

While deregulation of student fees and government subsidies to the private sector will drastically change the higher education landscape, the single biggest direct cut is the scrapping of current HECS debt arrangements and the implementation of a new regressive model for repayment. Students will pay an extra $3.2 billion for university in the form of a lower repayment threshold, the amount one can earn before being required to pay back the HECS debt, and the charging of real interest rates of up to six per cent on their debt. The latter change is perhaps the most insidious. Currently, HECS debt earns interest only at the rate of inflation, which is currently about 2.9 per cent. Charging real interest means an individual's debt will continue to grow over the course of their working life, at a rate higher than wage increases.

These changes are massively out of step with public opinion. Polling conducted over many years reaffirms the view that the public want our universities to be well funded. A recent poll commissioned by the National Tertiary Education Union showed that 70 per cent of Australians oppose university fee increases for students and that higher education reforms are one of the most unpopular measures in the budget. Polling by Essential Media has also confirmed that the government's cuts to higher education are one of the most despised elements of this budget. This is because Australians understand the vital role higher education plays in our society, in terms of both promoting equality of opportunity and laying the foundations for the smart and innovative economy we need in the 21st century.

The coalition's brutal budget would make our system more elitist and more unfair. Let us have no doubts about why these changes are being made. They are not in the interests of most students and future workers. They benefit a handful of the country's wealthiest people and private institutions that stand to make windfall profits from students and workers. These changes are about looking after the interests of the corporations close to the coalition. The private education sector donates large sums of money to the coalition parties. It is worth noting that the private education sector has donated hundreds of thousands of dollars to the Liberal Party in the past decade and is now poised to subsidise their profits with taxpayer funds in a deregulated free-for-all environment.

Analysis released by the Greens today reveals that the Abbott government's approach to higher education policy is to rob the public university system to subsidise private providers. The government's massive budget cuts will rip hundreds of millions of dollars out of our public universities, increase student fees and saddle students with more debt—all so it can fund almost $1 billion in public subsidies to the private sector. The Minister for Education, Christopher Pyne, needs to front up to university students who will pay tens of thousands of dollars more for their degrees and explain why he is taking money out of their pockets to subsidise the private sector.

To subsidise private profits while gutting the public sector is a stark reflection of this government's priorities. Pushing costs and risks onto those in the community who can least afford it pushes us further on the road to a US model of education. For students, this dashes their hopes of education being an equaliser. For education institutions and their staff, we have seen what this model has done to TAFE under the direction of conservative state governments. The coalition's moves to Americanise higher education will see the Australian university system mimic the worse aspects of the US system. In the United States, total student debt is over $1 trillion. Students in the US will graduate with an average debt of US$29,000 or A$31,000.

Analysis by the Grattan Institute's Andrew Norton, a higher education policy advisor to the coalition government, has estimated student fees—and, as a result, student debt in Australia—will be significantly higher under the coalition's reforms. This is very telling information. Similar analysis by the National Tertiary Education Union and Universities Australia backs up these figures from Mr Norton, the coalition's adviser. It is very likely students in Australia will graduate with more debt than students in the US. It is hard to believe, but that it is where we are heading: Australians graduating with more debt than students in the US.

But it gets worse, as the interest rate on student debt could also be higher in Australia than in the US. Students who receive government loans in the US in 2013 will pay off their loans at a fixed interest rate of 3.86 per cent. This interest rate will not change regardless of how long it takes a graduate to pay back their debt. Under the coalition's changes, current and future students—as well as anyone with an existing student debt—will pay off their loans with a variable interest rate, tied to the 10-year government bond rate, up to a cap of six per cent. The current bond rate is 3.76 per cent. However, the long-term average is 5.5 per cent. So it is very likely students in Australia will be paying higher interest rates on their debt than those in US.

Women, people from disadvantaged backgrounds and low-income earners will be the hardest hit by these changes. We know from the US example that people from disadvantaged backgrounds are debt adverse and will not consider university education if they are faced with a huge debt at the end of it. I know this very well myself. I come from a working-class family and I am the first in my family to have the opportunity to go to university. I was then, and I continue to be, surrounded by people from working-class backgrounds who do not want to start off life with a debt. That is already deterring them from even considering going to university.

The government's refusal to be open and transparent and to release its own modelling on the impact of its massive changes prompted the Greens to build the website, to help students, future students and graduates assess the potential impact of these changes. If this government was honest, it would have provided such a website—because people need this information. The website has been accessed more than two million times and thousands of students a day continue to use it.

The phenomenal response to our website shows that enormous numbers of students, graduates, future students and their families are deeply worried about the coalition government's brutal budget cuts to higher education. This concern about this issue is not stopping; it is rippling across Australia—not just through working-class families but also middle-class families. It has a very big reach. It is calculated that students will, on average, have $46,000 more student debt and take eight more years to pay it off. These changes are going to have severe financial repercussions on students and their families. Right now, parents across Australia are wondering how their kids will afford to go to university. Even university vice chancellors, many of whom have been pushing for deregulation, are calling on the Minister for Education to rethink his reforms, particularly the proposals to increase interest rates on student debt and for there to be direct cuts to Commonwealth grants.

The world is facing unprecedented economic, environmental and migration challenges. At the very time we need a smart and innovative workforce to drive a renewable energy revolution, the coalition is gutting the labs and factories. At the very time we need a more knowledgeable and empathetic community to embrace people from all over the world, the coalition is engineering a more individualistic and selfish dog-eat-dog Australia.

Already, the University of Melbourne has announced that it will cut 540 administrative jobs as part of a $70 million savings program. Victoria University will shed about 300 staff as it battles to find up to $50 million in savings. La Trobe University will axe 350 jobs. In New South Wales, Southern Cross University is looking at cutting five per cent of its general staff. Other universities are engaged in protracted battles with staff unions over job cuts, wages and conditions.

Australia is a rich country. We can afford to fund our universities. The Greens have put forward many revenue measures that could be put in place to support education—from ending subsidies to polluting industries through to taxing Australia's big banks. Instead, at the same time as this government is making savage cuts to higher education, it is rolling back the carbon tax and the mining tax, forcing the burden onto our students and researchers. Last year, the Greens' plan to increase funding to Australia's universities was costed at $1.4 billion over four years. Fuel tax credits for miners alone cost the budget $2 billion per year. Every Australian student, researcher and university staff member should remember this when they cast their vote at the next election. It is a damning indictment on this government's priorities.

In the end, this government's higher education agenda, like the rest of its budget, is unfair. The attempt to sell it as a tough but fair budget is simply laughable, and the public recognises it for the fraud that that argument is. The government is giving companies $4 billion in cuts at the same time as it is cutting the value of pensions. It is cutting a tax on polluters and replacing it with a handout to them. It is giving tens of millions of dollars in superannuation concessions to wealthy people and cutting the low-income superannuation guarantee. This budget was not an attack on waste or an attempt to make our financial situation more sustainable; it was a massive transfer of a burden away from wealthy people and corporations onto low-income people, pensioners and students. The Greens will continue to stand with Australians who want education to be a force for equality and innovation, while Mr Hockey, Mr Abbott and their mates in big business remain set on protecting privilege and profits of unsustainable and unimaginative 19th-century industries.

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