Steve Price: Yes indeed, Wednesday night. Danny joins me in the studio as he always does. Danny Bielik good evening to you.
Danny Bielik: How are you Steve?
Steve Price: Good thank you, we’re going to talk in a minute to the Education Minister Simon Birmingham, he’s going to be in for a very interesting 73 days if we have this election on 2 July and I’ll ask him this but I mean clearly education along with health and the economy are going to be three of the big policy issues of the campaign and Labor always goes out and says well we look after university students, we look after kids in high school, we look after people in hospital beds, all the Coalition wants to do is cut money out of it…
Danny Bielik: Cut costs.
Steve Price: And save money and you’ll hear the phrase Gonski’s gone, $10 billion, you’ll hear that over and over and over again.
Danny Bielik: $100,000 university degrees will be the other one.
Steve Price: Will it be a vote changer though, will people do you think who are swinging voters place their vote for one or the other based on education policy?
Danny Bielik: Yeah you know I think there’s a possibility people make up their minds based on a number of things and education has been out there…
Steve Price: Very personal things but…
Danny Bielik: It’s very personal, it affects people individually in terms of the amount of money that it costs them, the decisions that they have to make about their future career and about the money that they may end up owing the Government, whether it’s going to be $5000, $10,000 or $100,000 and people are scared Steve, they talk to me about it and they’re scared.
Steve Price: There’s that argument isn’t there about whether the entry level into work, the salary that you are paid when you first get a job, post university, where your HECS repayment kicks in may come down, what, from 53 to…
Danny Bielik: Fifty-three-thousand-something to about 42,000 is a policy plan that’s out there, that was put out there by….[Indistinct]
Steve Price: [Indistinct] people’s hip pocket.
Danny Bielik: Look it does, but the Federal Government is in a big hole, is in a gigantic hole and they want to be able to make sure…
Steve Price: You know what the thing about that is and this is what you need to do, what they need to do but they need to take your advice because you’re actually only paying what, at the moment, 40 per cent of 100 per cent cost of the degree anyway.
Danny Bielik: That’s right, that’s right. If you go to university, then the Government subsidises around about 60 per cent of that off the top, you never see it, you never hear about it. You’re borrowing the rest and Christopher Pyne…
Steve Price: Yeah see people think they’re borrowing 100 per cent.
Danny Bielik: No that’s right, that’s right, they think when they borrow $8000…
Steve Price: So when Bill Shorten on TV goes $100,000 degrees, people go oh well I’m going to have to pay interest on $100,000 loan. No, 40,000.
Danny Bielik: And in fact there’s no interest at all at the moment. That’s right. But in fact it really depends on the degree, because there are some degrees, Steve, that have been $100,000 for years. Dentistry is one. Medicine is one and there’s plenty of degrees out there that receive no government subsidy at all, so a lot of post-grad.
Steve Price: It’s going to be a great election campaign issue, no doubt about that. We’ll be talking about it a lot, as I said to Danny in there at the beginning tonight, we’ve got 73 days now to run, if indeed we do go to the polls on 2 July and as we were just talking about, education and health is what Labor always campaigns on. They always try to make the point that they deliver better in the classroom and better in hospitals, as Danny and I were just speaking about but that is debatable. I mean you look at- you look back over the Julia Gillard years and the education revolution and I heard Ray Hadley speaking this morning, there’s a school up on the Hawkesbury that had all that education revolution money spent on it, it’s now shut down.
Danny Bielik: [Indistinct].
Steve Price: No it’s shut down and for sale.
Danny Bielik: [Laughs].
Steve Price: And they reckon they’ll get half a million dollars, they’re going to knock it over.
Danny Bielik: Unbelievable. All that money.
Steve Price: So I mean there’s been a lot of wastage, but we’ve been lucky enough to be joined as we said we would be by the Education Minister tonight, Simon Birmingham. Minister thanks for your time.
Simon Birmingham: Good evening, Steve, Danny, listeners, great to be with you.
Steve Price: Your Prime Minister said yesterday well hang on we’ve got a lot of governing to do between now and when we go into caretaker mode and we have an election. Indeed that won’t probably start until after the Budget so you are still governing, but you are going to face this question, aren’t you minister, over and over again, during the campaign that Tony Abbott and his dreadful ex-Treasurer Joe Hockey cut $10billion out of health and education, how are you going to rebut that argument?
Simon Birmingham: Well Steve it is quite untrue to say that there were any cuts to schools or education or health for that matter into the future. Funding grows across all of those areas, in the schools policy area, we will keep growing funding into the future but I won’t mislead your listeners, we will grow funding at a lower rate than what the Labor Party is proposing to do, so there will be a different trajectory of growth. What we will do is we will continue to deliver what’s in the Budget for schools this year and what’s in the Budget for schools next year, which are really significant growth areas. We’re seeing growth what will end up having been over four years of around 27 per cent across the school sector. So huge extra money going into schools funding.
Steve Price: So you will have though won’t you, Bill Shorten going out there saying well Simon Birmingham and Scott Morrison and Malcolm Turnbull have decimated Gonski, Gonski’s gone and the teacher unions will be advertising on television and radio saying the same thing won’t they?
Simon Birmingham: And yes they will all say that, and it won’t actually matter a jot of what I do or what Malcolm Turnbull does, that’s what Bill Shorten and the unions will say because they’ll happily say and do anything it takes to win the election from their perspective. The fact will be that from a record level of funding in 2017, having grown by 27 per cent in terms of school funding over that four year period, we will keep growing funding as a government if we’re re-elected, we will keep it growing at the cost of growth in schools, so we’ve keep up with costs, we’ll keep up with inflation plus enrolment so if a school gets more enrolment, they’ll get more money from the Federal Government. If the costs are going up in education, as of course they do, we’ll keep it up with inflation to make sure that no school, no school in that scenario should face a situation where they’re going backwards, we will keep the funding flowing but at an affordable level. Now Mr Shorten is promising much, much enhanced funding in a range of ways, he’s going to spend a whole lot more money, but of course he’s also proposing $100 billion of extra taxes…
Steve Price: Yeah we’ve just got to find the money. Just before I turn Danny loose on you, have you, during your time as Minister now, seen a whole bunch of investment in schools that was wasted during that Gillard-Rudd period?
Simon Birmingham: We certainly…
Steve Price: Did you go to schools and go gee that looks good but do you use it?
Simon Birmingham: Look absolutely in terms of some of the buildings and facilities and of course now looking at some of the old computers (*)…
Steve Price: [Interrupts] Well that example Ray used this morning, I mean that’s just tragic.
Simon Birmingham: That’s quite phenomenal, it’s a demonstration of that fact that you just can’t trust them in terms of how they fund, how they use money in that sense. It often gets frittered away on wasteful things, and you go into schools and the principals themselves say it’s nice and it’s nice to have here but gee if I’d had the flexibility to use the money in a different way I’d have done 100 different things with it and so that’s a frustrating thing for school leaders as well.
Danny Bielik: Minister, it’s Danny Bielik here, thanks for coming back on the Courses and Careers show. We all know the budget’s under pressure and these are some of the reasons why the budget’s under pressure. But because it’s under pressure now it looks like it might be under pressure in the future, you released that stuff from the parliamentary budget office a couple of weeks ago that said if we were to implement all of these things we wanted to implement, the federal budget would basically just be blown.
Now I was camping on the weekend and I had somebody come up to me and say; what about these $100,000 degrees? This $100,000 degree thing is getting traction. The 20 per cent cut to university funding stuff is still out there- I don’t if it’s still government policy, and the uncapped fees at universities is still government policy. It got stuck in the Senate, you know, what’s basically going to happen here? Because the budget’s coming up in a couple of weeks, what sort of things are we likely to see?
Simon Birmingham: So we will absolutely detail some changes to higher education policies before we get to the election to give people clarity, and I’ve been very open that I’m concerned about not just the growth in cost across higher education, but I’m concerned about making sure the loans programs who funds the students to ensure that nobody has to pay up front to go to university are sustainable into the future and affordable into the future because the last thing I want to see is a situation where we actually have the loans program buckle under the weight of bad debt…
Danny Bielik: This is HECS we’re talking about and HECS-HELP and FEE-HELP…
Simon Birmingham: HECS-HELP, that’s right, kind of- known by various acronyms nowadays, but student loans to pay for your fees. So it was HECS when I went to uni, it’s HELP nowadays, but what it means in effect is the Government pays your fees for you and you don’t pay a cent until you actually start to earn a decent wage. It’s an incredibly equitable and fair model.
Steve Price: I don’t expect you to tell me but there is speculation you’ll bring the salary threshold down from what it currently exists at what $52,000…
Danny Bielik: Fifty-two, 53,000 and there was…
Steve Price: Is that on the table?
Danny Bielik: You were going to bring it down to 42,000, is that what’s going to happen?
Simon Birmingham: There’s a lot speculation around those things. Now of course I can’t and won’t go into…
Steve Price: You could. You could but you won’t.
Danny Bielik: Your course [indistinct] Peter White [indistinct].
Simon Birmingham: I could, but I could also be sacked by tomorrow morning if I did that.
Danny Bielik: No one’s listening, just us. We’ll give you a job.
Simon Birmingham: Thanks guys, very kind of you. So the Budget will detail a range of things. It will detail our higher education policies as well. I’ve given the universities and through them all stakeholders in higher education in undertaking that the types of reforms we pursue in higher education, we will consult properly on and will go through proper process with them. So it won’t be…
Danny Bielik: You mentioned…
Simon Birmingham: We will absolutely have to meet savings targets. Higher education spending has grown at twice the rate of the economy since 2009. That’s not a sustainable rate of growth and as Danny’s rightly pointed out there’s the then projections as to where some of these student loan schemes [indistinct.
Danny Bielik: [Talks over] But Minister that’s been deliberate too right, because I mean we were trying to get- and this happened under the Julia Gillard government and it’s been extended under your government, we’ve been trying to get more people into tertiary education, so you can expect that government spend has- would go up. Part of what people who listen to the Courses and Careers show understand but probably isn’t broadly understood, when we talk about HECS and yes you borrow money from the Government, the Government puts in a huge amount of that money. If you go to university about 60 per cent of it is paid for by your office. Are you going to- to try and make this more sustainable, are we going to see you bring some of that back, are we going to see 60 per cent become 50 per cent or 40 per cent paid for by the Government?
Simon Birmingham: Well the budget does currently assume a saving that occurs by virtue of reducing the level of government subsidy that is paid and the logical flow-on from that is that the student pays more, not up front, but by the student loan scheme we were talking about before.
Danny Bielik: So can borrow more, they’ll borrow more?
Simon Birmingham: So they borrow more to essentially pay a greater share of the fee. That of course still sees the Government investing many billions of dollars directly into universities to support students. It would still ensure nobody paid one dollar up front in going to university and that they didn’t have to pay any of those fees back until they got to a decent wage. But how we actually achieve those savings into the future, whether it is entirely by virtue of a reduction in the Commonwealth grant and it’s paid to universities or whether it’s through some changes to the HELP program and so on. And the types of conversations I’ve been having with universities, and as I was saying before I’m very conscious of whatever we do in the budget which will obviously give some clear direction to policy and budget perimeters into the future that I will keep talking to universities and stakeholders to make sure that if we can ultimately do it better when it comes to legislating some of these things that we do do it better at that point of legislation.
Steve Price: Can you imagine Danny the conversation between the Treasurer and the Education Minister when it comes to these things. Danny makes a good point though- and I know Scott Morrison…
Simon Birmingham: I get to stand behind the Social Services Minister and the Health Minister in the line…
Steve Price: [Laughs]
Simon Birmingham: …but I am third in line when it comes to spending and that’s a big pressure.
Steve Price: You will be bruised and battered by the time we get there I suspect. Danny makes a good point about people raising this $100,000 degree issue. I’ve got a daughter who’s just started- she’s in her first year at ANU this year and we talked a lot about that. How are you going to get a narrative around that to convince people that’s not- that everyone’s going to have to pay to go to university and are you going to expect that you’re going to have protests on campus and on the election trail while you try and sell this story?
Simon Birmingham: Well I think I can confidently predict that there will be protests on campus and so on because, you know, socialist alliance groups and so on have been protesting there recently will always protest against higher education ministers. It’s a tradition that goes with the job. But in terms of the serious aspect of- the extent of the cost to go to university, I’m really conscious that we have to keep those costs as under control as we can, that in terms of the actual fees for undertaking a degree even though you don’t pay a dollar up front I would hate to see a situation where people saw that as being in any way an impediment to them going to university. It’s got to be aligned with the benefits you get as a student from undertaking the university degree. So as a student I want to make sure that they have good clear understanding of the admission standards to go to university, good clear understanding of what other students experiences have been while they’re at university, of what the employment outcome from that course are so that students, their parents can make rational decisions then about the value of undertaking that degree and what they will get for it at the end result.
Steve Price: Now that you’ve just been through it there’s not much rationality about it Minister.
Danny Bielik: Minister, you know we say it a lot on the Courses and Careers show, I say it, Steve says it, today Andrew Norton said it in the Financial Review; too many people are going to university who really should be going into vocational training. Now we’ve seen universities dropping their entry standards so low that the whole concept of ATAR is now just meaningless. How are we going to address this?
Simon Birmingham: Yeah, no, two things there. I mean, the ATAR, and it’s often missed, is a relative scale of performance of students, not actually an actual measure of how well somebody has done in Year 12. So if you get a 50 per cent ATAR in theory you are at the fiftieth percentile of performance in New South Wales. Now that means there are a lot of brighter students than you, a lot who haven‘t done as well, but it doesn’t mean that you scored 50 out of 100 in your final exam; you may well have excelled in your exam, it’s just that people- there are half the students who did even better than you. So I’m conscious of explaining that just because often we have the misunderstanding there that when we talk about low ATARs people think that means people are failing their subjects, they’re not failing.
Danny Bielik: [Interrupts] With respect though I mean we’re not sort of getting to the nub of the question here, which is there are kids who really should be, and not just kids…
Simon Birmingham: [Talks over] Yeah, I know.
Danny Bielik: … who should be in VET. They really, really should be at TAFE.
Simon Birmingham: Yeah.
Danny Bielik: Or they should be in vocational. They should be doing a one year course, they should be doing an apprenticeship, they’re in uni.
Simon Birmingham: [Talks over] Yeah. Yeah, yeah, so Danny to come to that… to come to that, it’s why to the transparency point I was talking about before, I really want to have as much information there as possible for students, parents, teachers, counsellors, to know what the employment outcomes of different pathways are, what the income outcomes of those pathways are. Because if you have a look especially at the traditional trade-based apprenticeships employment outcomes are better than for most university pathways.
Danny Bielik: You bet.
Simon Birmingham: Starting salaries are often better for most university pathways. The likelihood of being an entrepreneur and owning your own small business is better than for most university pathways. So there’s an awful lot going for trade-based apprenticeships, and unfortunately we do seem to have, in terms of the direction that students choose to go, too many who chose a university pathway who may well be better off according to data going down a vocational route, particularly a trade-based apprenticeship, and it is a case of getting that understanding out there, and the best we can do that is really by lifting that transparency around what the relative outcomes are. And they’re probably a bit too opaque at present in the university sector, and so I’m quite committed to pursuing some reforms in terms of better transparency and accountability for universities as to where their graduates end up.
Danny Bielik: That accountability word’s important.
Steve Price: Well on that, and last question from me and then we’ll let Danny have one more and we’ll let you go. On that, and I know you can’t rewrite history and you’ve inherited what you’ve inherited, how bad a decision was it of the Gillard Government to uncap uni spots?
Simon Birmingham: It was a bad decision to do it in isolation of any other reform. So to just uncap uni spots without having a look at the way in which universities are funded, without having a look at transparency measures for students, without having a look at sub-bachelor places, so to only do it in one category of university course offerings, was a poor decision, because it completely skewed…
Danny Bielik: Well it battered the finances didn’t it?
Simon Birmingham: It’s battered the finances, it’s increased costs, and it has skewed the way in which universities behave and the enrolment decisions that they make.
Danny Bielik: And that FEE-HELP has battered the numbers as well, I mean…
Steve Price: [Laughs] Well…
Danny Bielik: And so Minister…
Steve Price: Well that was a Howard Government decision.
Danny Bielik: Yeah it was a Howard Government decision.
Simon Birmingham: Well no in fairness when the Howard Government started VET FEE-HELP the barrier to entry for a provider was extremely high, they had to have an articulation agreement with a university etcetera. It was in 2009…
Danny Bielik: [Interrupts] Which made them beholden to universities.
Simon Birmingham: It did, I’m not saying that was the right approach per se, but it kept the finances very tight around VET FEE-HELP. It was in 2009 when the Gillard Government basically said, you know, any training provider can get access to VET FEE-HELP that we saw the phenomenal growth in the [indistinct].
Danny Bielik: [Talks over] So Minister… Minister I’m going to ask a question, and it leads on from what you were saying before about things being in isolation. Boston Consulting Group today released a report that shows the TAFE in New South Wales, the largest TAFE, is hugely, and I mean hugely inefficient. We suspect the same in other states, we’ve got this issue with VET FEE-HELP, we’ve got apprenticeships falling all over the place, we’ve got the university entry standards. You’ve got budget pressures. A lot of this- I’ve watched this over 15 or so years, and this is policy being done in piecemeal fashion, ministers not talking to each other, skills ministers not talking to education ministers, states not talking to the Federal Government, what are we going to do to address this as a nation in this super critical area of skills for the future?
Simon Birmingham: Well I just came out of a meeting with Scott Ryan the Federal Skills Minister so we’re certainly talking to each other. But look it is essential that we get the different pieces of the puzzle working harmoniously together, and the VET sector, which I used to have responsibility for as you two know, has long concerned me in terms of the inconsistencies between the states and the lack of consistency and coherence in the funding mechanisms that are there. We don’t of course fund TAFE directly as a Federal Government. We put billions of dollars through the state, through VET FEE-HELP, but we actually don’t have that power of running the TAFE [indistinct]…
Danny Bielik: [Talks over] And through the national… and through the National Agreement as well?
Simon Birmingham: That’s right, well that’s the money that goes to the states, and some of that goes to TAFEs and some of that goes into other training subsidies. But it is working really strongly with those skills ministers that I’m committed to and Scott Ryan’s committed to doing so that we actually do try to get the state’s to appreciate that the lessons over a long period of time are that a monopolistic, bureaucratic TAFE system does not provide ideal outcomes. As we’ve learned sadly over recent years, and at great cost to taxpayers [indistinct] policy in the state, a completely unfettered private market also doesn’t produce good outcomes in that we have to actually get the regulatory structures right to have competition between industry providers, private providers, community and government providers, and to make sure that there is actually real competition there, not just for a student walking through the door or for how much money they get paid, but most importantly for the quality of learning for that student and the job outcome they get, because we’re paying for all of this as taxpayers supporting it because we want to help people into jobs that grow the economy, and that’s our number one priority.
Steve Price: Well jobs is going to be the message during the campaign. I appreciate you giving us so much of your time tonight, good luck during the campaign, avoid the eggs and the oranges and the apples being thrown at you.
Simon Birmingham: [Laughs] Thank you very much Steve.
Danny Bielik: We’d love to see you… we’d love to have you back again Minister before the election.
Simon Birmingham: Well we’ll see what we can do.
Steve Price: I’m sure that we’ll have ministers knocking the door down in the next 73 days, don’t worry about that. Thank you very much Minister.
Simon Birmingham: Thank you guys.