Interview on Radio National Breakfast with Patricia Karvelas
Topics: Higher education reforms to drive better outcomes for both students and taxpayers; Same-sex marriage
Patricia Karvelas: The debate over university funding will come to a head in Parliament this week, with the Turnbull Government trying to legislate almost $3 billion in budget cuts. The proposed changes would shift more of the burden from the taxpayer to the student, who would end up paying close to half the cost of their degrees if the legislation passes the Senate. Now, the university sector is fighting back, releasing new polling this morning which shows that more than 60 per cent of voters across the country oppose the cuts.
Education Minister Simon Birmingham is in our Parliament House studio. Minister, good morning.
Simon Birmingham: Good morning, PK.
Patricia Karvelas: So you’ve listed the uni cuts for debate in the house this morning and the Senate tomorrow. Does that mean you’ve got the numbers on the crossbench, especially those crucial three Nick Xenophon votes to get it passed?
Simon Birmingham: Well, Patricia, discussions are continuing and as usual I won’t play them out on air, but look, we’re having constructive discussions with the Senate crossbenchers. They’re always respectful, I find, in the discussions I have with them, and I’m hopeful that they will see, ultimately, the merits in rebalancing the way in which universities are funded a little bit.
We still see a strong growth rate of funding to universities over the next four years – some 23 per cent growth in resources that are supported by the taxpayer that universities will receive. We will still see the Government pay the majority, or taxpayers fund the majority of student fees on average across the life of their degree, and we will still have one of the most generous – if not the most generous – student loan schemes in the world at the end of these reforms. But we will have made them a bit more sustainable for the future, given they are under a weight of significant pressure of cost growth and increased debt in recent years.
Patricia Karvelas: Universities Australia commissioned some polling by JWS Research that shows just 16 per cent of voters support the funding cuts. In South Australia, which is Nick Xenophon’s home state – you need his support, of course – support is running at a miserable 10 per cent. How will that help you get the numbers you need on the crossbench?
Simon Birmingham: Well look, PK, given how loaded the question that was asked was, I’m surprised support’s even that high. Now, frankly I think Nick Xenophon is far, far smarter than Universities Australia clearly give him credit for. He understands that this isn’t about cuts, this is about recalibrating the way in which funding flows to universities, that universities – including the three in South Australia – will all continue to see increased revenue into the future under these reforms, that on average unis across the country will see 23 per cent growth.
I mean, find me a small business around Australia who wouldn’t like to know that over the next four years they’re likely to see 23 per cent growth in their revenue base. Unis have seen 70 per cent growth in funding since 2009, they’ve seen their per student funding grow by 15 per cent yet their cost base only grow by nine per cent. There is clearly scope for efficiency.
Patricia Karvelas: Minister, there’s a range of measures in this bill. There’s a 2.5 per cent efficiency dividend over the next two years, plus the 7.5 per cent cut in Commonwealth funding to each university. Student fees will rise by the same level, 7.5 per cent, and graduates will start paying back their loans when they reach an income threshold of $42,000 – that’s down from the current $55,000. Are you willing to negotiate any of these measures, or is it all or nothing?
Simon Birmingham: Well we’re always, as a Government, pragmatic with the crossbench, and so we will go through those consultations and discussions with the crossbench in good faith. But we will also…
Patricia Karvelas: Okay, and I have to get you there. Where? Where are you willing to negotiate on those? I listed them and I did that very strategically to help you out. Which one are you willing to move on?
Simon Birmingham: Well that is incredibly strategic of you, very generous, but of course my first answer to your first question was we don’t play our consultations and negotiations out publicly. We treat the crossbench with respect, and that’s exactly what I’ll keep doing. We believe that this is a very fair proposal that sees a very slight increase in student fees, but the majority of student fees on average still funded by taxpaying Australians. This sees students still access what is one of the most generous student loans programs in the world, that guarantees people don’t face any upfront fees to go to university, and it puts in place, yes, a new threshold for repayment, but also a new lower repayment rate of just one per cent at $42,000. That equates to $8 a week, but it does make a significant difference in terms of the debt not expected to be repaid. We currently have around $50 billion on our loan books of student debt, and on current projections around one quarter of that is estimated not to be repaid.
Patricia Karvelas: So are you willing to negotiate on that efficiency dividend so that the cuts to the universities aren’t as severe, to lower that percentage?
Simon Birmingham: Well, as I said before, I think universities, who have seen 15 per cent growth in per student funding but only nine per cent growth in per student costs, clearly have efficiencies that they can make. We’ve seen former vice chancellors like Steven Schwartz…
Patricia Karvelas: [Talks over] But if the only way you can get it through, Minister, is to negotiate on the funding cuts being less severe, are you willing to…
Simon Birmingham: [Talks over] Well there aren’t funding cuts, Patricia. There’s a slower rate of growth.
Patricia Karvelas: Well, the universities see it as funding cuts. Okay, let’s not get into the semantics because we could spend all day on that.
Simon Birmingham: I don’t think it’s semantics. I mean, universities are meant to be full of smart people; they should be able to distinguish between a reduction in funding and a slower rate of growth.
Patricia Karvelas: Okay, well they’re going to end up with less money. That’s how they see it and that’s the…
Simon Birmingham: [Talks over] Well they’re going to get 23 per cent growth over the next four years.
Patricia Karvelas: So tell me, are you willing to make that- accelerate that growth from your current position in order to get it through? Because you need to be pragmatic, as you said; you want to get this through.
Simon Birmingham: Well, nice try. As I said, we’re a pragmatic government, I’m a pragmatic minister. I’m pleased to have secured better school funding arrangements for the country through the Senate. I’m pleased to have secured better child care payments for Australian families that will take effect from July next year through the Senate. I’m pleased to have overseen the overhaul of the vocational student loans to have a much better vocational student market in the future.
I’m hopeful that we can get the same outcome in terms of higher education reform, but it doesn’t just deal with some of these budget pressures. It also creates a more student-centred, student-focused choice arrangement for sub-bachelor programs, associate degrees, diplomas that will give students more choice and more flexibility, that will empower students at the postgraduate level to, rather than be boxed in to only having certain offerings at certain universities, to instead ensure our best and brightest in the most needy disciplines get a scholarship that they can take to the university of their choice. There are significant reforms attached to this, as well as those funding arrangements we’ve been discussing.
Patricia Karvelas: According to Labor, the meanest and most punitive measure in the bill involves the proposed changes to enabling courses, they’re uni prep courses which basically help students improve their skills so they can meet entry requirements. You want to put enabling courses out to tender and charge students up to 3200 to enrol. Have you worked out how many students will be put off going to university as a result of this?
Simon Birmingham: Well we take the word of Professor Bruce Chapman, who designed the HECS-HELP Scheme, that where you have income contingent loan arrangements as generous as Australia’s you don’t see students put off at all. But we do believe that in terms of enabling programs it is absolutely worthwhile for us to go out to tender, to actually ensure the places that are there are ones that get the best result in terms of students being able to go on to university afterwards; to increase the completion rate and the transition rate into university, and to make sure that there is still no upfront barrier in relation to those students undertaking those important pathway programs.
Patricia Karvelas: So what’s your timeframe for trying to get this passed, Minister? It’s listed in the Senate tomorrow; are you going to get it through?
Simon Birmingham: Look, it’s listed this week. We’ll see whether we come to a vote this week…
Patricia Karvelas: [Talks over] Okay, but what are the chances? Give me your estimates there.
Simon Birmingham: Go to a bookie if you want some odds, not me.
Patricia Karvelas: But you’re the one in negotiations with Nick Xenophon. You’re the best person to ask.
Simon Birmingham: Look, for the interests of providing certainty to students, to universities, to others, we would like to see these matters dealt with this week. The Senate has a number of other things before us, and so whether everything gets through, whether the Xenophon Team are ready to deal with it this week, whether the rest of the crossbenchers are ready to deal with it this week, we’ll see.
Patricia Karvelas: Do you think they’re ready to deal with it? You’ve been talking to them.
Simon Birmingham: Well, I’m hopeful. I’m a very hopeful kind of guy.
Patricia Karvelas: How hopeful?
Simon Birmingham: I’m hopeful.
Patricia Karvelas: Do you know something you want to tell us?
Simon Birmingham: Look, I’m very happy to further explain to you that one of our other important reforms here – if you want something for me to tell you – is the 7.5 per cent performance payment system we want to put in for universities, so that there’s some accountability for unis in terms of the way in which they use their money to get the best outcomes for graduates – good job outcomes, good completion outcomes, high qualities of teaching. We want to make sure that there’s actually clear reward and incentive there in the university sector, and this is an important element of the reform proposal because unis have enormous autonomy now. They can enrol as many students as they want in whatever discipline they want, and the taxpayer funding just flows through to them.
This is also about putting in place something that guarantees they’re focused on graduate outcomes, and of course the most important graduate outcome is that they’re being trained in disciplines well to get a job.
Patricia Karvelas: Okay. Minister, the same-sex marriage postal survey will be underway today. You support marriage equality. According to Ipsos, 70 per cent of voters intend to vote yes. Is this in the bag?
Simon Birmingham: Nothing’s in the bag. No Senate vote is in the bag until it happens; no postal survey or electoral vote is in the bag until every vote is in. So I would urge every Australian to participate, but I particularly urge people to vote yes. I believe that that is the right thing to do to show respect to the relationships of fellow Australians. I don’t view my marriage to being superior to the committed relationship of anybody else.
Patricia Karvelas: But, Minister, how about the comments by Matt Canavan that advocates should grow a spine, because some people are raising issues around mental health. Do they have to grow a spine or do you have sympathy for people who say they feel vulnerable during this period?
Simon Birmingham: Look, I think people who feel vulnerable should absolutely reach out to the different support services that are available, but I do think that there is this tendency in Australian debate at present where we focus on the absolute extremes. Now, I thought Tiernan Brady did a great job on The Project the other night in a clip that I saw where he said there’ll always be idiots at either extreme of any argument, but of course the bulk of the argument actually plays out with good, honest, sensible people in the middle, and that is 95-plus per cent of Australians – probably even more than that – who just genuinely want to engage in this debate in a respectful way, have their voice heard. I hope their voices are heard, and I do hope that it’s a very strong yes vote so that this is a positive endorsement of change for Australia.
Patricia Karvelas: Thank you so much for your time, Minister.
Simon Birmingham: Thank you, Patricia.
Patricia Karvelas: Simon Birmingham is the Minister for Education and Training.