Interview on Sky News Richo with Graham Richardson
Delivering real needs-based funding for schools and fixing Labor’s model; Higher education reforms to drive better outcomes for students and taxpayers; University standards

Graham Richardson: Well, in our Adelaide studio is Senator Birmingham, Senator Simon Birmingham who, as Education Minister, has had one hell of a big ten days, because the education plans were announced just before the Budget and so he’s been out on the hustings. And I must say, I think this bloke has done very well. I’m glad you stayed with us over the break, because I think Simon Birmingham’s always worth listening to, particularly at the moment when he is the centre of attention.

Simon, welcome to the program.

Simon Birmingham: G’day, Richo. Good to be with you.

Graham Richardson: Good, thank you. I just want to go through some of these changes. Obviously, the one big problem you’ve got- the one big problem you’ve got is the Catholic Church, and Catholic education is saying that you’ve gutted them, that they’re in all sorts of strife and it’s all you. What- I think the question is, does this new plan of yours mean that a kid at a state school and a kid at a Catholic school gets exactly the same amount of money?

Simon Birmingham: Well, Richo, it means that the way we go about calculating what they receive is identical, except for the fact that, at a Federal level, there are two big differences, I guess. One is when it comes to all schools in the non-government sector; they have the amount they get discounted by what’s termed their capacity to contribute, so essentially a poorer low-fee non-government school gets more than a wealthier, high-fee non-government school necessarily gets, but of course that doesn’t apply in the government sector, but also the state governments remain the majority funder of government schools. We’re increasing our contribution to government schools quite significantly, by around five per cent per student, so it’s strong growth there, but it’s also strong growth in the Catholic sector over the next four years of 3.7 per cent per student around the country.

The key point here, though, is if it’s a non-government school, what we’re proposing is an approach to school funding that ensures, if the gate on the front fence changes- sorry, if the sign on the front gate changes from being a Catholic school to an Anglican school to an Evangelical school, to a Montessori, if it’s got the same kids, the same families, it will have a notional allocation of the same tax payer funds behind it.

Graham Richardson: Well, I hear all that, I mean, and I guess the argument with the Catholic education system will go on for some time, because they don’t seem to be mollified by it. But much of that, I suspect, comes down to what Labor had promised in the out years of the Gonski plan, which really was a lot of money, wasn’t it?

Simon Birmingham: Oh look, it was a truckload of money and we’re now in the ridiculous situation where the Labor Party is saying that they’ll probably oppose the Turnbull Government’s reforms, which adhere far more strictly and far more clearly to the principles and recommendations of David Gonksi’s report, that’s after all why he was standing alongside Malcolm Turnbull and I, endorsing what we were doing. What they’re proposing instead is just a spend-a-thon. They’re not able to say, now, where this extra $22 billion they’re proposing to spend on top of our $18.6 billion that we’re putting into Australian schools; they can’t say which schools it would go to, which states it would go to, which sectors it would go to, although it sounds like they’re wanting to have another whole series of special deals with different states, treating one sector of the non-government sector in a different way to another group of non-government schools. That’s not a way to apply the Gonski school principles; the Gonski school principles are about consistent, needs-based funding across Australian schools, and that’s what we’re seeking to implement.

Graham Richardson: Yeah, I understand that. I think that the trouble is seeking to implement- you know, if people will take their own views, and obviously Bill Shorten’s not going to agree with that, but it seems to me that, because only the Catholic schools are objecting, you’re in with a chance of reform here, which not many Education ministers have been successful with. Have you had- obviously there was no pre-consultation, have you had much consultation since with the Catholic education system?

Simon Birmingham: Well, we had quite a number of discussions beforehand; I do want to put to bed that idea that there wasn’t consultation. I’ve heard criticisms that people didn’t think it was adequate, or that they hadn’t been told beforehand sufficiently exactly what it is we were going to do, but we absolutely discussed and canvassed the nature of changes to ensure there was equity across all non-government schools. But obviously if you had an arrangement previously that provided you with a benefit relative to some others, you’re not going to be happy when you lose that benefit. There have been consultations subsequent and a number of school sectors, in fact all of them – government, independent, Catholic – had variously raised concerns about the way, when we shift from a fixed indexation period under our proposal to a floating indexation model, that they were concerned about uncertainty from that floating indexation. So we’ve responded to that and put a floor under that indexation in the fourth to tenth years of our proposal; that gives some certainty to all school sectors and I’m very pleased to see that the Catholic sector, in particular, has publicly welcomed the certainty that that gives them.

Graham Richardson: Yeah, I mean- and let’s hope it’s sorted as- and sorted quickly, because I think the sector, it was always going to be in need of reform, because, even as someone who always votes Labor, I had to look at those numbers in the out years of Gonski and think to myself, my God, we’ll never get to that and there’s no education levy to increase to try and pay for it, so I think you’ve obviously done pretty well.

On universities, do you think you’ve done as well? Because, I mean, there we are getting some pushback and I note, I went to a Pricewaterhouse function on Wednesday, the day after the Budget, and I was talking to- there’s about 700 people there, and I noticed one of the questions from the audience, was: my son says- one of the audience members said: my son says, why were you picking on university students? Why do we have to pay more? What would be your answer to that?

Simon Birmingham: So on that level I’d say, in relation to students, that we’re asking, yes, for a modest additional contribution, but we still propose that the tax payer pays the majority of a student’s fees; around 54 per cent on average of a university student’s fees will be paid for by the tax payer. Students will see a very nominal fee increase of 1.8 per cent per year over the next few years to a cumulative of seven and a half per cent increase, but the tax payer picks up the majority. The tax payer will then still continue to pay the other 46 per cent on a student’s behalf under what remains one of the world’s most generous student loan schemes. 

So yes, we’re asking students to pay a little bit more. We’re also asking universities to make a bit of a contribution back to Budget repair, because as they’ve grown exponentially over recent years, they have seen phenomenal increase in their revenue streams, which has outstripped their cost base and so that’s great, they’ve achieved economies of scale from their growth, but at a time of Budget pressure we think it’s reasonable, as largely tax payer funded institutions, that they provide some dividend back towards Budget repair, which on average is about 2.8 per cent across them.

Graham Richardson: Yeah, look, I think I can accept all of that, but at the basis of it, you know, what universities are doing now is they fill up courses, so regardless of the mark you were supposed to achieve to get into a course, they as many seats as that is, but then they have more seats and so people without that mark that you’re supposed to get, they are getting in anyway. Does it worry you that that will lower standards, because it seems to me it must lower standards.

Simon Birmingham: So there’s two points there, and for all the talk about the Budget measures, I guess, there are actually reform elements to our higher ed package. We’ve driven an agenda to try to improve transparency around admissions, so it’s clear under what circumstances unis are accepting people in and what the cut off score truly is, rather than it being masked in some instances. We’re going beyond that in this proposal and we actually want to put seven and a half per cent of a university’s funding stream into a performance pool where they’re actually going to be held to account for their admissions practices, the support they give their students, their completion success, and ultimately their graduate success in employment outcomes, as to how much of that pool that the university ultimately receives. 

So that if we, as we’ve decided to do, back a continuation of the demand-driven model that enables unis to enrol as many students as they choose in whatever disciplines they choose, there’ll now at least be this performance pool, this performance funding, against which they’re held accountable for doing the right thing by their students and making sure that they’re actually only enrolling where it’s likely to lead to completions and employment.

Graham Richardson: Okay, I- look, again, I’m hoping you’re right on that one, but it seems to me universities always seem to manage to worm their way around these things. But when it comes to this whole argument …

Simon Birmingham: [Talks over] They’re smart people at universities.

Graham Richardson: … about who funds whom, it seems to me the argument that Labor’s running about- it’s about working class students doesn’t work anymore, because if you want to get into a university you- there’s no question now that you can, but are you alarmed at that trend? It seems to me we’re churning out god knows how many law graduates who can’t get a job, they just churn out of there, they’re coming out of the end of the sausage machine at a hundred miles an hour, but we don’t seem to be able to give them a job, and yet we’ve got apprentices that we’d love to get- to increase the number, and we can’t seem to get kids to do it. How do you reverse a trend and say, look, you don’t have to have a university degree to get on in this world; if you get a ticket to be a plumber, and electrician or whatever, then you can do pretty well anyway.

Simon Birmingham: Yeah, so how do you influence your demand, essentially, how do you influence what kids coming out of school, their parents, their teachers, et cetera think is the best career path for them to pursue and … So another reform we’ve got to- got underway at present is a work between my department and the Tax Office to see if we can actually publish and make clear true graduate outcomes, not just survey data of where graduates go, but are they getting jobs, what are the income levels from those jobs, attach that to the university, attach that to the course from that university, and make it really transparent about what’s happening with law grads. 

Most law grads are still getting jobs, just a lot of them aren’t getting jobs as lawyers. Now, if they’re going in fully expecting to work in the public service or work in some other way, that’s fine, but if we can bring transparency to that to inform kids and schools and parents in their selection, plus we’ve invested one and a half billion bucks in this Budget from the Foreign Workers levy that’ll apply to foreign worker visas in the future, in to try to generate around 300,000 more apprenticeships and training opportunities in the future, and additional support for mentoring programs for apprentices to help ensure they get through the first couple of years and have a good chance of completion. 

Graham Richardson: [Talks over] Well, let’s hope it works.

Simon Birmingham: So it’s not easy to fix, but …

Graham Richardson: [Talks over] I’m going to have to leave it there; I’m getting all sorts of pressures in my ear.

Simon Birmingham: [Laughs]

Graham Richardson: I’ve actually- it pains me to admit this, but I’ve praised you in recent times. You’ve had a pretty good week, you’re a- you are a good persuader and there’s no doubt about it. So Labor’s got a fight on their hands on education because I don’t think anyone can deny that, as a salesman, you’re very, very good. We’ll have to leave it at that, mate, but thank you very much.

Simon Birmingham: I’d say it’s good policies, Richo. Thanks, mate. 

Graham Richardson: Well, Simon Birmingham. I think always good to have a talk to Simon Birmingham, he is a very knowledgeable bloke and I think he’s on the right tram here, I hate to say it, but he’s doing okay.