Senator REYNOLDS (Western Australia) (13:12): I rise today to speak on the Higher Education and Research Reform Amendment Bill 2014. Those opposite talk about free education a lot, but education has never been free. It is expensive. And it is subsidised by hard-working Australian taxpayers. The issue for us in this place today is to find a fair and reasonable balance to ensure that our higher education system is sustainable into the future. But it is also about ensuring our graduates are able to compete with the best and the brightest in the world in the industries of the future, and not in the industries of the past.

I want to bring the debate back to where it always should have been focused—that is, on the future. Despite what those opposite would have the public believe, these reforms are all about students, which is why the higher education sector overwhelmingly supports these reforms—because they know that a problem delayed is a problem denied. In fact, 40 out of 41 vice-chancellors in Australia support these reforms.

It was in 1974 that the Whitlam government assumed full funding for universities and abolished student fees. It was successful in increasing higher education student numbers. But in 1989 the Hawke Labor government realised it was reasonable and necessary to ensure that those who benefited from higher education make a small contribution to the cost of their education when they were in a position to repay the loan.

In 2015 we need to look at reforming the system to adapt to the challenges of our time—the 21st century. Those opposite continue to promulgate the old, outdated class warfare rhetoric—which again we have heard from the first two speakers—harking back to the good old days of 1974, when higher education became a cost borne exclusively by the Australian taxpayer.

The world today looks very different from the way it looked 40 years ago. Perhaps fittingly, in 1974 the most popular song was Barbara Streisand’s smash hit The Way We Were; and the Time Warp had just become a musical hit. In 1974, in my home town of Perth, the median house price was just over $18,000 and today it stands at over half a million dollars. In 1974, the science fiction writer Arthur C Clarke made a very bold claim: that one day a computer would be sitting on every desk. That year also saw the first use of the word internet. How times have changed in 40 years. In 1974, China’s gross domestic product stood at around US$158 per capita. It is now nearly US$7,000 per capita.

The simple fact of the matter is that the world today is not the same as it was in 1974. Times change and we must change with them. Today higher education is one of Australia’s most successful newer export industries. Education is now Australia’s fourth largest export earner and higher education comprises two-thirds of all those exports. But, without change to the funding model, Australia will start falling behind. The value of our higher education commodity will decrease, and an important part of our economy will decline, instead of increasing and booming into the future as it should. Today our students are competing with graduates from all over the world for the jobs of the future, in industries we now need to transition to. We need, and our higher education system needs, to adapt if we are to keep up with the times and the changes.

At the heart of the reforms the government is proposing is the idea that universities should be free to set their own fees and to compete for students. That is the part of the equation on which those opposite wilfully mislead the public. It is not only about increasing fees; it is about competition between the universities. Competition will enhance quality and make higher education providers more responsive to the needs of students and of the labor market more widely. The fact is that, when universities and colleges compete, students are certainly the winners. The question we should ask ourselves is: what lies ahead for our students and institutions, and in fact for the future of our nation, if these reforms are defeated? What are the consequences for our children and our grandchildren who will find it increasingly difficult to compete with international graduates as the quality of Australia’s higher education sector declines and becomes less and less internationally relevant?

The scare campaign currently being run by the opposition and the Greens is, I believe, an irresponsible attempt to shift the focus and derail the reforms. It is, pretty much, a very cheap political tactic. Currently our universities face a herculean, or mammoth, challenge, competing with the best universities in Europe and North America—and now also with the fast-developing and extraordinarily hungry universities across Asia. They, unlike our universities, are not shackled to the past. They are free to compete and to innovate and to make sure they meet the needs of the industries of the 21st century. Last week, the Times Higher Education World Reputation Rankings listed only five—that is: five—Australian universities in the top 100 in the world. That should set alarm bells ringing throughout not only this chamber but all of Australia. Only five of the top international universities are now Australian. In 2013 there were six—and the decline continues.

I am sure every politician, every teacher, every student and in fact every Australian would like to see more Australian universities ranked among the finest in the world. The question is how to make this a reality. As they say, hope is not a method. Doing nothing, or hoping things will improve for the sector, will simply continue to send us backwards. As Universities Australia have themselves warned us: if this bill does not pass, Australian higher education will certainly decline inevitably into mediocrity and will be overtaken by increasingly intense international competition. Without changes to the current funding model Australian universities will bleed financially. They will be forced to make cuts which will narrow the study options available for students. This will see student-to-staff ratios gradually decrease and reduce the overall quality of higher education in Australia. I do not for a second believe that the status quo is an option, and it is certainly not an option in the best interest of all Australians.

The unfortunate truth for those opposite is that Australian universities will continue to struggle to compete with the best in the world if they continue to be constrained by an outdated funding model. Those opposite, sadly, would rather see Australia stand still while the rest of the world is adapting, and adapting very rapidly, to changing circumstances. Their intransigence has consequences—and I think very dire consequences—for us all.

What alternative have those opposite put forward? Surprisingly, given all their rhetoric on this issue, Labor has yet to propose a single credible alternative to our higher education reforms. Instead, in fact, between 2011 and 2013, Labor announced cuts of over $6.5 billion to higher education and research. The facts are quite different to the rhetoric we continue to hear from the Labor Party today. On the reforms this government has proposed, Labor has rejected the advice of prominent people within its own party—in fact, advice from a conga line of eminent members of their own party including, most recently, Peter Beattie, who has quite clearly and unequivocally warned that we risk becoming a dumb country if these reforms are not passed. It is not us saying this; it is Peter Beattie saying that we risk becoming a dumb country if these reforms are not implemented. And it is not just Peter Beattie. There are many more on the Labor side who have been giving the Labor Party and the Greens advice that these reforms are necessary. They include Gareth Evans, John Dawkins and Maxine McKew, who have publicly pleaded with the Labor Party to support these reforms or, at the very least, engage in constructive discussions—pleas which have all fallen on deaf ears with those opposite.

Probably in the most extraordinary turn of events, last week Labor rejected the proposals of Professor Bruce Chapman—the father of HECS, an eminent education economist and a former Labor adviser. Labor rejected his proposals a mere 24 hours after his proposals were announced. I would have thought that any proposal put forward by Professor Chapman would be worthy of more than 24 hours consideration, particularly as we have just heard Senator Carr 30 minutes ago discussing Professor Chapman’s credentials and his credibility—a mere 24 hours, not remotely credible.

The old adage, ‘Don’t bring me problems; bring me solutions’ is very applicable here. Labor’s decision to block constructive ideas and proposals without offering credible alternatives is shameful and irresponsible. Quite frankly, I think it is playing politics at the expense of the next generation. Although Labor have refused to come to the discussion table at all on this important policy area, the government have demonstrated it is very willing to work with the crossbenches to achieve outcomes that are both fair and reasonable. What has happened with respect to those discussions?

Proposals from Senator Day, Senator Madigan and Senator Muir have been included in the new higher education reform bill. For example, HECS indexation will be capped at CPI rather than at the bond rate; there will be a freeze on HECS indexation for primary caregivers of children under the age of five; and additional scholarships will be offered through the higher education participation program—all as a result of the government working successfully with the crossbench to get the best possible outcome for Australian students. Just imagine if the

Labor Party or the Greens had come to the negotiation table at any point in this discussion what we could have achieved together for Australian students.

If this bill does not pass, an estimated 80,000 students will miss out on Commonwealth support each year by 2018—utterly shameful. Many of these students, often from the most disadvantaged families, will need to pay full fees to complete their studies and others will simply miss out on higher education altogether. Those who are forced to abandon their studies will be severely disadvantaged in their working lives and that is an extraordinarily shameful legacy for those opposite and a burden for them to carry.

The Commonwealth scholarship scheme proposed under this legislation is in fact the biggest scholarship scheme in Australia’s history and, despite what those opposite have claimed, it is aimed squarely at helping disadvantaged students and is one of the most important and valuable elements of this reform package. Under the scheme, institutions will be able to provide tailored, individualised support to help disadvantaged students to meet their own personal needs, including costs of attending, participating in or succeeding in higher education. Without the passage of the bill, thousands more potential recipients will miss out on this vital support.

In politics it is often the case that a scare campaign beats good policy debate and I think this is a classic example of that with what we are seeing here today. However, the future of our higher education institutions, our students and our economy is far more deserving than what we are currently getting from those opposite. Labor and the Greens continue to make wildly exaggerated and quite frankly untrue claims, and again today in this chamber, of the cost of tuition if these reforms are passed. Really, $100,000 degrees! They know and we know that that is simply not true. There is not a shred of evidence to demonstrate that that is true. It demonstrates that they have no concept of what competition can bring. Competition in this case is good. It brings out better reforms. There is no suggestion of $100,000 degrees anywhere. That is simply untrue.

Another myth, one of the many perpetuated by those opposite, is that disadvantaged students will be negatively impacted by these reforms. That could not be further from the truth and, again, those opposite know that. In fact, on deregulated fees, the shadow Assistant Treasurer Andrew Leigh has said, ‘There is no reason to think that it will adversely affect poor students.’ That is not us saying it; that is their own shadow Assistant Treasurer Andrew Leigh saying that, and their shadow Assistant Treasurer is absolutely correct.

Let us take a minute to have a look at the United Kingdom. In 2005, the Blair government lifted the cap on university fees. In 2011, the coalition government led by David Cameron almost tripled the cap. Due to the additional bursaries and scholarships that were then available, university participants from lower socioeconomic groups were not adversely affected and in fact increased significantly. The data shows that 18-year-olds from the most disadvantaged areas in England were 12 per cent more likely to enter university in 2013 than they were before the reforms.

Another myth, again perpetuated by those opposite today, is that students will have to pay up-front. The reality has been since the introduction of HECS that no student pays a cent up-front and that no graduate will have to pay anything until they are earning over $50,000 a year. Again, here is another complete untruth put out by those opposite to scare students and parents alike.

The reforms tabled in this place today will require all universities and other higher education providers to spend one dollar in every five of additional revenue on scholarships and for disadvantaged students. In fact, recent announcements from some of Australia’s top universities have indicated that there will be more support for disadvantaged students than ever before. For example, the University of Sydney alone has pledged to extend financial support to one-third of its 27,000 undergraduates. The University of Western Australia has also made a similar announcement.

I would like to finish by speaking about the positive impacts these reforms will have on students in regional areas. In my home state of Western Australia, higher education participation rates among 15- to 24-year-olds sit at 5.3 per cent, much lower than metropolitan participation rates, which are at nearly 12 per cent. Over 30 per cent of regional students relocate to study, with over 75 percent of this group relocating to Perth. Given the sheer size of Western Australia, this can result in regional students having to pay up to $20,000 a year to live in Perth away from home and away from family support in their home towns.

Under this legislation, regional education providers will have the opportunity to offer more courses and will be able to compete to attract more students in their home locations. In practice this means that a student

living in the Pilbara may not have to uproot their life 1,500 kilometres away to Perth to study. Regional education providers, such as the Pilbara Institute, will be able to expand the number of courses they offer, giving regional Australians more choice in higher education where they live. Additionally, universities operating regional campuses in Western Australia—such as UWA, the University of Notre Dame, Curtin University and Edith Cowan University—will receive a regional loading in recognition of the higher cost of operating regional campuses. The government will be investing $274 million for this purpose. That is an overwhelmingly good thing for those students and families who live in regional Western Australia and other parts of regional Australia.

Let’s make no mistake here: these changes are vital to Australia’s higher education sector, to our students and to the future of our economy. There are simply no viable alternatives to these reforms. Certainly we have heard not a single one from those opposite. Without reform, our higher education sector will stall in an increasingly competitive international market. That is a fact. Universities may not close their doors but, as the university vice- chancellors themselves have said, the quality of higher education in Australia will decrease significantly. They will become less competitive, leaving our students to bear the consequences of not being prepared for future industries and the competitive international environment. In the end, the casualties of this bill being defeated will be our students and that is in no way acceptable and is a complete abrogation of our responsibility in this place. As I said, a problem delayed is a problem denied. In this case, it would have devastating consequences. I commend this bill to the Senate. (Time expired)