Interview on Sky News AM Agenda with Kieran Gilbert
Topics: Productivity Commission review findings; Labor energy policies
08:32 AM

Kieran Gilbert: Minister, thanks very much for you time. Now, on the Productivity Commission review, it says that universities are too focused on publishing research given the career prospects of lecturers depends more on publishing their resume than their teaching record. This is what Mr Morrison will argue today, that this is an upside down world. Should we be focusing more on the outcome of the degrees that students will then be able to be employed in terms of the funding arrangements for universities, as opposed to simply research?

Simon Birmingham: Well, research is critical. But universities, when they choose to enrol a student, should absolutely take responsibility for that student, for the success of their education, which for most students is measured by whether or not they then go and get a good job at the end of that that relates to the educational experience that they’ve just had and the qualification they’ve earned.

Now, this Productivity Commission report really is a call to arms to the Labor Party, to the Senate crossbench – particularly the Nick Xenophon Team – to reconsider their position around higher education reforms, because the Government is already one step ahead of the Productivity Commission. We’ve already put a focus on how we can get better bang for our buck in education, drive efficiencies and drive the public dollar, the taxpayer dollars further. We’ve already put a focus on how we actually put in place a performance metric for universities that will hold some of their funding contingent upon a range of things including, ultimately, graduate outcomes. We’re taking action here and the only roadblocks are those who seem to want to call for another reform or review.

Kieran Gilbert: So what- explain- Well, we’ll get to the Xenophon proposal for another review and the Universities Australia support for that Xenophon position, but on the Productivity Commission analysis, why is there underemployment of graduates? And it’s apparently doubled since 2009. What do you put that down to?

Simon Birmingham: Well, since 2009 we’ve of course seen a vast growth in student numbers. That’s also seen a 70 per cent plus growth in revenue into universities around teaching and learning courses, growing at twice the rate- or more than twice the rate of the economy overall. So that’s where the cost pressure to the taxpayers and the Budget has come, that phenomenal growth in numbers. Now, universities…

Kieran Gilbert: But it’s met demand from the student side as well?

Simon Birmingham: It’s met demand from the student side, but universities have full autonomy to be able to choose how many people they enrol, in what disciplines they enrol them in, and if they’re to maintain that autonomy into the future, well, they need to also be accountable for the outcomes of their students. They can be accountable either through some type of performance payment system, which the Government has proposed, or they could come up and propose alternative performance or accountability measures. Or ultimately they will see that their right to be able to enrol as many students as they want in whatever disciplines, comes under increasing question and pressure because people will question the value of the outcome.

Kieran Gilbert: As tertiary institutions, as universities, the whole tradition of them is to assist the students to transfer knowledge. Surely you would support the vast bulk of our academics, wouldn’t you, in terms of their interests in their students’ wellbeing?

Simon Birmingham: Of course. Australia has high-performing universities that are globally well-regarded and do an outstanding job for many, many students.

Kieran Gilbert: They can’t simply become glorified TAFEs, can they, either? That’s the point.

Simon Birmingham: No, far from it. But if you look at the growth of student numbers that have gone into universities, there’s no doubt that those students are looking for a qualification that leads to a job. That’s what the vast majority want, and the evidence is clear that universities, if they’re going to have that autonomy, that freedom to be able to choose all their enrolment decisions, ought to be held to account for it as well.

Kieran Gilbert: You’re saying your proposed reforms of universities is already heading in that direction through performance-linked funding?

Simon Birmingham: That’s right. We put performance contingent funding as part of our proposals; we put in place an efficiency dividend as well, which seeks to drive the dollar further, but it would still see universities get some estimated 23 per cent growth in funding over the next four years, but just a slightly slower rate of growth than would otherwise be the case. They were sensible, measured reforms …

Kieran Gilbert: And is your performance metrics- are they based on the student outcome though, or is it on research or a combination of both?

Simon Birmingham: Well, what we’ve said first is that in the first year they would be based on universities adopting reforms to admissions practices and transparency around what the ATAR cut-off and processes for admissions are. But we would then work with the university panel to build other metrics that would ultimately get you to a point of graduate outcomes. So we want to do it collaboratively, step by step, with the universities.

Kieran Gilbert: The chief executive of Universities Australia, Belinda Robinson, thanked the Xenophon Team for opposing your proposed changes. She says inflicting major cuts on Australia’s higher education system is the wrong call, it’s an opportunity for the Government to hit the reset button and stop treating the university sector as a target for budget savings; instead, it should be an investment in the nation’s future.

Simon Birmingham: Well, they’re not major cuts, it’s a slightly slower rate of growth, as I said before. Anybody who thinks that you can’t find some efficiencies in the nation’s universities clearly isn’t looking very hard.

Kieran Gilbert: But- so one person’s efficiency dividend is another person’s cut. That’s the bottom line.

Simon Birmingham: Well, it’s a slightly slower rate of growth, Kieran. In the end, funding into the universities will keep growing. It’s a way for them to keep the autonomy and the freedom they’ve got, but to be held more to account to get greater efficiency for taxpayer investment. These are sensible reforms. This Productivity Commission review comes on top of reviews we’ve already had into the demand-driven system, into a range of different funding streams into universities. Ultimately there’s been plenty of reviews, now is actually a time for policy reform and action, which is what the Turnbull Government has proposed, and all we’re facing is of course inaction and a call for more talk from Xenophon and Labor.

Now, the Nick Xenophon Team really have to decide whether they’re a party of policy or a party of stunts, whether they’re a party willing to stand up and take occasional difficult decisions and embrace reform, or whether in fact they’re just going to slink away and take the easy road of saying, oh, let’s have another review instead.

Kieran Gilbert: Do you think you are still a chance of getting this through the upper house as it stands today?

Simon Birmingham: I hope so. I hope the Productivity Commission review release is something that sparks people to reconsider, to understand that the Government’s policies were one step ahead of this and that we can act in implementing some of the PC thoughts early, quickly, to get that efficiency for taxpayers, to get more accountability…

Kieran Gilbert: But without Xenophon it’s no chance, isn’t it?

Simon Birmingham: Well, the Labor Party could always of course come to the party. They did propose an efficiency…

Kieran Gilbert: It’s not going to happen though is it?

Simon Birmingham: Well, they proposed an efficiency dividend in 2013 and have then voted against their own efficiency dividend, as well as the Government’s ever since, such is the hypocrisy and double-standards of Bill Shorten.

Kieran Gilbert: Jacinda Ardern, the new Prime Minister of New Zealand, is threatening retaliatory action if the Government goes ahead with a reduction in the subsidy for New Zealand students studying here; are you still going to push ahead with that? Because she’s saying she will then impose commensurate restrictions and increases on fees for Australian students studying across the ditch.

Simon Birmingham: Well, now that there’s a new government in New Zealand, I’m sure we’ll have further discussions with the New Zealand High Commission and try to increase the understanding that what we’re seeking to do is to remove upfront fees for New Zealand students, provide access to our generous student loan scheme, that it’s actually quite a measured reform in that sense that I believe, and all our modelling shows, will improve access for New Zealand students to Australia. But we’ll have those discussions respectfully with the New Zealand Government.

Kieran Gilbert: So are you open to compromise?

Simon Birmingham: Well, we’ll have the discussions with the New Zealand Government. Our proposal, we think, is a fair one that, as I say, improves access and removes upfront fees.

Kieran Gilbert: Now, finally, this Labor energy plan – a report, front page of The Australian today. Labor very strongly repudiating the modelling upon which this report is based and suggesting that it’s based on an emissions intensity scheme of the price of $69, and they’re saying that’s ridiculous, it’s not a viable proposal. What is your response to that, given Labor is saying it’s overdone?

Simon Birmingham: Well, if Labor don’t agree with it then Labor should tell us what they believe the costs are. They’re proposing some 45 per cent reduction in emissions, they’re proposing a 50 per cent renewable energy target; these will come with costs and costs that are far, far in excess of anything that the Turnbull Government is proposing – in fact, going in the opposite direction. And we have the Climate Change Authority – an independent, Labor Party-established entity – that says Labor’s policy will cost households $200 a year more. We’ve got the Australian Energy Market Commission saying the Turnbull Government’s policies would save households around $100 a year. So you’ve got a $300 a year gap for household electricity bills.

Kieran Gilbert: But Labor rejects the premise of this modelling, saying it’s inflated, that it’s not accurate.

Simon Birmingham: Well, we see no reason as to why it’s inflated. It’s for Labor to argue the case around their policy, and they offered in their election campaign eight paragraphs. You know, they’ve been out there criticising the Energy Security Board’s eight-page letter of policy detail to the Turnbull Government; Labor’s policy around the emissions intensity scheme was just eight paragraphs, if you go and have a look at their website – no modelling, no costings, no detail. But of course, we know they’re proposing vastly higher emissions reductions targets, a renewable energy target that has been proven time and again to add costs into households.

Kieran Gilbert: An ambition, an ambition, not a target. It’s actually not a renewable energy target per se with subsidies and so on. This is their ambition …

Simon Birmingham: And this is where their policy falls apart then, because there’s no clarity as to exactly what they are seeking to get to. Is their emissions reduction target actually the same as the Turnbull Government’s or is it higher? If it’s higher, then there will clearly be higher costs in meeting it.

Kieran Gilbert: Okay. Minister, I appreciate your time as always. Thanks.

Simon Birmingham: Thanks Kieran.