Interview on Sky News PM Agenda with David Speers
Topics: Higher education reforms to promote excellence in learning; same-sex marriage postal survey
David Speers: Now to higher education, the Government is on its third attempt to reform the sector and save some money, nearly $3 billion through various changes and we’ve been talking a bit about it this week. They include making students pay back their fees earlier, bringing down the threshold income which you have to start paying back your debt, also, giving universities a funding haircut as well along the way.
With me now is the Minister responsible, Simon Birmingham. Thanks for your time this afternoon.
Simon Birmingham: Good to be with you, David.
David Speers: Where is this at? Are you going to actually pass this reform this week?
Simon Birmingham: Look, I remain hopeful. The Senate has had a busy load this week. We’ve seen the legislation put through in relation to the conduct of the marriage law survey. There’s obviously the media reform legislation that’s taken up a lot of Senate time, but we’ll see where the next day, or longer if need be, goes.
David Speers: Well, you’ve got an all-night sitting as far as I’ve heard on the media reforms. So presumably you can get that through before tomorrow at some point. That gives you what, a day to get the higher education vote through?
Simon Birmingham: And look, we’ll see. If it doesn’t happen then we’re all back here in early to mid-October and we’ll be able to move on from there.
David Speers: Do you have the crossbench support for it, do you?
Simon Birmingham: The crossbench discussions are cordial and constructive as always and I’m hopeful that we’ll manage to find agreement.
David Speers: Will you put it up even if you’re not sure about that crossbench support?
Simon Birmingham: Look, I’m hopeful that we can get somewhere with the crossbench. Those discussions are constructive. They recognise that there are merits to the reform proposals the Government’s put forward. They don’t necessarily agree with absolutely everything and so we’re talking through those issues as you’d expect us to.
David Speers: Okay. You may not put it up for a vote if you don’t have the numbers?
Simon Birmingham: Well, I’m not going to sort of front-run where we might get to. Right now I want to see it pass the House of Representatives, then come into the Senate and hopefully proceed to a debate in the Senate.
David Speers: Let’s get to the reform itself. Now, there are a number of issues involved here. But this one about when students should have to start paying back their debt: it’s currently at a threshold of 54,000, you want to bring it down to 42,000. Now, we had Tanya Plibersek on the program yesterday, she says this is an income level that graduates – they’re trying to buy a home, get started in life, have kids and so on. Can they really afford it? Is it going to hit them hard when they can least afford? Why is 42 grand a fair measure in your view?
Simon Birmingham: Well, it’s currently around 51,000 now …
David Speers: [Interrupts] Right, but it’s due to go up too?
Simon Birmingham: No. No, no. But that’s beside the point.
David Speers: Okay.
Simon Birmingham: $42 000 is about 20 per cent above the minimum wage. It is well above comparable nations in terms of the way their income-contingent loan schemes work. Across the ditch in New Zealand, it’s around the $19,000-$20,000 mark. So, you see that ours is incredibly generous by global standards. But the real challenge there …
David Speers: [Talks over] What are the university fees though in New Zealand?
Simon Birmingham: Well, the university fees aren’t too …
David Speers: [Talks over] Comparable or quite a bit cheaper?
Simon Birmingham: No, not quite bit cheaper. They’re comparable in general ways. But the point is that our loan book has ballooned out from about $20 billion just six, seven years ago to $50 billion today. Around one-quarter of that is estimated not to be being repaid. Now, we need to make that sustainable for the future. Why? Because we need to make sure that future generations of students can also go to university with no upfront fees. I mean, the wonderful thing about the HECS-HELP scheme is that it guarantees students, regardless of your family income, your family background, your demographic background – anything – can walk in the door of a university without an upfront fee barrier and that’s what we want to preserve for the future.
David Speers: Now, the other part of it, of course, is the efficiency dividend and funding reduction to the universities. They are pretty strong in arguing this is not something they can afford. This is our what, third biggest export sector? We want to become a smarter nation and more productive and all of that. Why is a cut to universities a good idea?
Simon Birmingham: Well, it’s not a cut; it’s a slower rate of growth. Now, universities, of course, would much rather have a faster rate of funding growth and show me anybody who’s in receipt of government funding who wouldn’t like to have a faster rate of funding growth. But we’ve got to be responsible as a government with the Budget. Universities have seen their funding grow by around 71 per cent since 2009. That’s almost twice the rate of economic growth; it’s well above revenue growth to government. They’ve seen a really strong level of funding growth. And it will keep growing under our reforms by a projected 23 per cent.
David Speers: Just on the growth that you talk about, Tanya Plibersek says a lot of that is student debt that’s grown over those years. Is that right or wrong?
Simon Birmingham: All wrong. Student debt is part of what universities receive. So the government pays part of a student’s fees, on average the majority of a student’s fees, and will keep on average paying the majority of a student’s fees. We then also, through the HECS-HELP scheme, pay the rest of a student’s fees for those students direct to the university. And, as we were discussing before, the student only then pays them back once they’re earning a wage well above the minimum wage, so, pretty much all of it comes from taxpayer subsidies. The student loan scheme itself is heavily subsidised in terms of government picking up the tab of those who never repay their debts; in terms of only charging an interest rate that is at CPI, so it’s not a real rate of interest. It’s the best loan anybody will ever receive, and universities are the beneficiaries of what is a guaranteed strong rate of funding growth that comes from every student who walks in the door.
David Speers: In your reforms, is there a change in the way New Zealand students are treated?
Simon Birmingham: Yes. What we’re doing is we’re taking away an upfront fee barrier for New Zealand students. At present, under current arrangements, New Zealand students receive the government funding for a Commonwealth-supported place but then have to pay the remainder; they can’t access the loan scheme. What we’re proposing to do is reverse that so that there will no longer be an Australian taxpayer subsidy for New Zealand students, but they will be able to access the HECS-HELP loan scheme and the reason we’re doing that is it takes away the upfront fee but of course we’ve also over the last couple years put in …
David Speers: But they’ll have to pay more for their course?
Simon Birmingham: They’ll have to pay more for their course but without any upfront fee barrier and we’re confident that we’ll of course be able to get those debts back now because under the Turnbull Government we passed legislation for overseas recovery of debts and obviously we’ve very close cooperation with New Zealand in that regard.
David Speers: It hasn’t gone down terribly well though in New Zealand, the idea that Kiwi students are going to have to pay quite a lot more for their courses in Australia.
Simon Birmingham: Well that’s up to universities as to what they choose to charge. Yes, we’re saying that there will no longer be …
David Speers: [Talks over] But with no subsidy they’ll pay more.
Simon Birmingham: … an Australian Government subsidy but they will be receiving access with no upfront fee which is why we project, and the official Treasury projections are, that there will be more New Zealand students who choose to study here as a result.
David Speers: Now this is a hypothetical but it is the biggest budget savings measure, right, from this year’s budget? These higher education reforms. If you don’t get them through, this is your third attempt – not you personally, but under Christopher Pyne and you – what then? What do you do?
Simon Birmingham: Well there’s actually been higher education savings in the budget since 2014 and in this year’s budget we chose to reduce the scale of savings. So, I went through a 12-month process …
David Speers: Yep, but you haven’t been able to get it through.
Simon Birmingham: … talking to the universities about how what was a $3.6 billion savings target might be met. In this year’s budget we decided to present a package following that consultation that only aims for a $2.8 billion savings target and still sees that 23 per cent growth in funding to universities over the next four years. So we think it’s very fair. We think it’s reasonable. Yes, it’s hypothetical what you’re asking David, I’m not going to entertain what happens if it doesn’t pass because I’m still hopeful that we will find common ground with the crossbench.
David Speers [Interrupts] Can you break it up and get what you can through the Senate whether it’s the threshold of which you pay back your HECS or whether it’s the efficiency dividend?
Simon Birmingham: We’ve been- we’ve demonstrated we’re a very pragmatic government when it comes to dealing with the Senate …
David Speers: Can you break it up?
Simon Birmingham: Now there are things you can contemplate doing. Of course we want to make sure that we get as much of the government’s program legislated as possible and in a budget sense deliver the savings that are necessary to keep us on track to that budget surplus.
David Speers: Can I shift to same-sex marriage? You’re a strong advocate of the yes case. We were just talking to Karina Okotel, a strong advocate for the no case and also coincidentally vice-president of your party, the Liberal Party. Her big concern is about what happens with the push for commercial surrogacy laws changing, that married men will want to – she says – access commercial surrogacy; there’ll be a big push on if same-sex marriage happens to change those rules. Is that something that we should be worried about?
Simon Birmingham: Well David, I think this an area where actually most Australians would recognise that state governments have changed laws way ahead of the marriage law, and so there are thousands of same-sex families around the country who already have children, children who have become part of those families through a range of different circumstances and what we ought to do is give those children the certainty that comes with a binding commitment from their parents of marriage, and that will strengthen and stabilise those relationships and strengthen those families which is what I think is important.
David Speers: But the question is and this is the point they’ve made – those on the no side are making, that if same-sex marriage happens there is going to be enormous push on for changing commercial surrogacy.
Simon Birmingham: No. No, look. Well the point I’d make David is all of those sorts of changes in relation to adoption laws, IVF laws and so on, they’ve all happened in many instances. I mean state governments have progressed, that’s part of the reason why we have many, many thousands of same-sex families around the country and it’s one of the reasons why we should pass the marriage law changes, we should all vote yes and support that, because it will provide an additional level of safety, security, to those families that comes with that binding commitment of marriage between two people.
David Speers: And a final one on this: the anti-vilification measures, the safeguards measures passed through the Senate and the House today, why do we need them? Is there a problem with what’s going to happen in this campaign?
Simon Birmingham: There are always some extremes to these debates and unfortunately that’s just the reality. There are some idiots at either extreme and so in terms of protecting individuals, whether it be their religious freedoms and convictions or whether it be them in relation to their sexuality, from vilification, from attack. It’s sensible to put that through. Ninety-nine per cent of Australians will sensibly discuss and debate these issues in a respectful manner. And certainly that’s what I would urge all Australians to do including those on the extremes.
David Speers: Alright, Simon Birmingham, Education Minister, thank you very much for joining us.
Simon Birmingham: Thanks so much, Dave.