Subjects: Election of UN Secretary General, child care reforms, Labor’s schools policy, education funding, GST and tax reform

Peter van Onselen: Alright, let’s bring in Simon Birmingham, he’s the Education Minister, he’s the Senator, he joins us live from the nation’s capital, now that they’re finally hard at work on Tuesday. Thanks for your company.

Simon Birmingham: G’day Peter, Kristina, good to be with you and rest assured been hard at work for a little while already mate.

Peter van Onselen: I’m sure, I’m sure. Now let me ask you the question that I’ve got to start with before we move into portfolio issues – what is going on in this spat between Julie Bishop and Tony Abbott in relation to who to suggest for the UN Secretary General’s position? Do you go with the lefty Helen Clark? She’s- you could hardly find a bigger lefty in New Zealand politics, just quietly- or do you go with Kevin Rudd, a good close personal friend of my colleague here, Kristina Keneally…

Kristina Keneally: A psychopath- Kevin Rudd.

Peter van Onselen: … described as a psychopath allegedly.

Kristina Keneally: Allegedly. Not my words, other’s words.

Peter van Onselen: No of course, yeah you don’t want to be sued but what is going on? There seems like these two just are at war and they’re not even in the same country at the moment.

Simon Birmingham: I don’t think there’s any such dispute in that sense. In the end, look the selection process for the UN Secretary General of course involves many nations from around the world. It is perhaps a process that maybe could do with the transparency and light and colour and movement that you were just talking about in relation to what’s happening in Iowa, but in terms of the Australian Government’s position, well obviously that’s a matter that Julie and the Cabinet will rightly consider as the process goes through its different stages.

Peter van Onselen: On that one last question then we will get on to you portfolio because there’s been a lot happening in that space, let’s be honest. But Chris Kenny, online in The Australian, just moments ago has put an article on where he says that if Julie Bishop and the Government, of which you’re a cabinet minister, does decide to support a Kevin Rudd tilt for the UN Secretary General’s position, it would be akin to- wait for it- Malcolm Turnbull’s Prince Philip moment. You want to be careful not to do that.

Simon Birmingham: Well Chris is entitled to his opinion, as I said at the intro, I’ve been hard at work and whilst I like and respect Chris who I’ve known for many, many years, I have not got around to reading his online comments in The Australian.

Peter van Onselen: But that’s an alarming thing, Senator, I mean you don’t want a Prince Philip moment, I can assure you. I’m sure you remember what it was like…

Kristina Keneally: I’m fairly sure the Senator knows he doesn’t want that.

Peter van Onselen: … you don’t want that, if I were you I’d go straight from this studio to the Prime Minister’s office, print out a copy of that article and warn him he is risking a Prince Philip moment.

Simon Birmingham: I am quite sure that there will not be such a moment. I am quite confident of that. In the end, of course, Australia is but one nation in the United Nations, so others will have their say and it may well be that whomever we may think is best for the UN Secretary General’s role has little bearing on who actually gets the job.

Peter van Onselen: That is true, it usually gets decided by countries like Tuvalu and so on, but let’s- over to you, Kristina.

Kristina Keneally: Let’s move on here because I’ve really got to agree with you Minister Birmingham, I can’t see a lot of evidence that Kevin Rudd or Helen Clark’s going to get close to the chair, but yeah I wouldn’t take Peter van Onselen’s career limiting advice. What I do want to ask you about though is you wrote to the crossbench senators just last week encouraging them to ignore the misreporting of the child care reforms and to get on board and back your government’s reforms when it comes to child care. What is going on here and particularly are you concerned if a double dissolution is a live option that you may not even get the chance to put your education reforms, particularly in child care through the Parliament?

Simon Birmingham: Well Kristina let me firstly just deal with the double dissolution component which is to say that the Government’s desire is absolutely to run full term but there are issues that we think are very important so clearly, depending upon how the Parliament responds to those issues, especially in dealing with union corruption, we’re keeping all options alive and that’s what every sensible government should do but it’s no more and no less than that, our preference and our desire is to give calm and stable government right through the normal duration which Malcolm Turnbull has said publicly on numerous occasions.

In terms of child care, it is really important though that we do provide some certainty around a new child care system coming in from 2017. And because what we’re trying to put in place is a new system that streamlines the number of different rebates and benefits that are available in the child care sector, we’re investing around $3 billion in extra money over the budget forward estimates, and we’re really targeting it to those families who rely on child care the most. 

So our new child care formula for the new child care subsidy we’re proposing ensures that you get the greatest number of hours of support if you work the longest number of hours, and you get the greatest percentage of subsidy support; financial assistance from the Government if you are a low income earner. So it really is a fair package that says the more you work, the more hours of child care support you get; the less you earn, the greater financial support for the child care costs you have while you’re working, or studying, or volunteering, or looking for work. So it’s quite a light touch activity test we’re putting in place, but it is an important recalibration of the child care system to ensure it best supports those who are most reliant on child care.

Kristina Keneally: You mentioned there funding certainty. Can I just pick up on that, because one of the other areas of your portfolio is the university higher education reforms? Certainly, universities need some certainty about what the funding arrangements will be; I’ve got to say, maybe families with young people approaching university would like some certainty about what the costs will be. When is the Government going to make a decision on its higher education reforms?

Simon Birmingham: So, late last year after I became the Minister, I announced that we would not be proceeding with any higher education reforms as they would affect the 2016 university year, to give that certainty to institutions, parents, students and others. And so that’s in place for this year. I’ve been busily talking and consulting with a range of different parties, and I’ll be having conversations that continue with those stakeholders and with the Cabinet over the coming weeks and months, and I’m sure that we will have a clear position about what will apply from 2017 onwards well before we get to an election campaign. 

Peter Van Onselen: Let me ask you about the schools policy that the Labor Party announced last week. I’m not interested in what they’ve announced beyond years five and six of Gonski, but I am interested in your reaction to their interest, their decision, their commitment to reintroduce that funding in years five and six. What’s the Government’s alternative?

Simon Birmingham: Well, the Government will, as we’ve said for quite some time now, engage – as Governments have done for a very long period of time – in a discussion with states, territories and the non-government sector about a new school funding arrangement. Historically, they’ve been four years in nature, and that’s what’s being signed onto, consistent with the budget cycle, but of course we’ll be open to talking about anything that could give longer term certainty. We’re committed in those discussions to make sure that funding …

Peter Van Onselen: [Interrupts] Can I just ask you a quick question on that Senator?

Simon Birmingham: … is directed on the basis of need.

Peter Van Onselen: Just a quick question on that. This is more of a budget question I suppose, but originally when Labor announced that it was outside the forward estimates, now it is within the forward estimates with a few years having passed. Is there any allocation of funds on that schools education front factored into the budget? Or when we see those estimates in the budget is that an assumption of wherever the deficit, or wherever it will be, will be at without anything in relation to schools funding?

Simon Birmingham: So, there is absolutely an allocation of budget and funding for schools that is within the budget, that’s there for all to see. So, we provided and met our commitment to deliver on the Gonski funding for each single year of the budget, so we’ve provided those record levels of funding to Australian schools and we’re budgeting for continued growth in the years beyond that. So, we do have a growth factor already built into the budget. So that is there, and that will form a basis on which we’ll start discussions. 

In those discussions we’ll want to ensure that we do get a school funding agreement that deals with need, that ensures it is fair, but of course also is having a look at how we actually lift the quality of outcomes in our schooling system, because for all this discussion about funding, the evidence shows us that since 1988 state and federal governments have more than doubled the amount of money going into Australian schools. So that’s a doubling of funding going in, and yet in that time, in both real terms and relative to other countries, our performance in numeracy, in literacy, in science, has all gone backwards. 

So, we actually are spending lots more than we were 20 years ago, but we’re actually getting poorer outcomes as a result. So money is not necessarily the answer here. Actually, looking at how it is we boost teacher quality, which is why as a Government we’ve put so much of a focus on ensuring that we reform what’s happening in our universities; that we have minimum exit tests before somebody can qualify as a teacher or a teaching graduate from a university; why we put the effort in getting the national curriculum right, and getting a greater focus on phonics and instruction methods in elements of the national curriculum; why we’re really trying to lift parental engagement. 

On the weekend, I was talking in response to some data about that, about the real importance of parents playing their role, especially in the preschool years, because that is so essential, where we’re seeing data suggesting that some 20 per cent of students are starting school with insufficient vocabulary to be able to participate in the classroom and advance their learning from there, and if they start behind the data says they will nearly always stay behind. So somehow actually getting parents to embrace their responsibilities in those early years, as well as what we’re doing in investing more in early childhood education is essential to get the best outcome.

Kristina Keneally: Let me ask you this, because I’m not going to argue with you that there are plenty of other things that aren’t attached to just funding that would improve our education system. But Gonski is based on disadvantage, on providing funding to schools and particularly to students who are most disadvantaged. Is there- one thing I’ve never quite understood, is there actually a shared definition of disadvantage between the Commonwealth and the states?

Simon Birmingham: That’s a really good question Kristina, and the simple answer to that is no. That whilst the- whilst David Gonski did a very valuable piece of work that I think can help inform many discussions, what the Gillard and Rudd governments did was then strike quite different deals with different states and with the non-government sector. And what actually then happens is that while the Government, the Federal Government, calculates a funding allocation to a state or territory under one formula, the state or territory then gets the lump sum, puts it together with the rest of their revenue – and remember they of course are the primary funder of schools in Australia. It’s often forgotten in this debate that more than 80 per cent of funding to government schools comes from states and territories, not from the Federal Government. They lump it all together and distribute it according to their own formulas and their own approaches, which do not necessarily define disadvantage in the same was as the Federal Government. So you actually have a system that is far from nationally consistent, far from ensuring the type of equity and fairness that in many ways David’s work actually spoke about, and I’m very committed to continue to work with David to ensure that his thinking and his understanding informs where we go in the future. But we’ve got to be responsible about the budget outlays as well, and the simple fact is $37 billion of extra spending over the next 10 years was committed to by the Labor Party last week, and South Australian Labor Premier Jay Weatherill says there’s no coherent plan on which to deliver that funding in a responsible way. And I think that is very much the case.

Peter Van Onselen: As the Minister, how would you feel about extending the GST to school fees?

Simon Birmingham: I think there are certain issues there which are well discussed in terms of extending the GST to areas of education where you have to be conscious that in doing so you could end up having a perverse effect of actually lowering private investment in education, putting a bigger load on the taxpayer. So you’ve got to weigh all those factors up in your consideration. Now we’ve been very clear, we’re not taking things off the table in relation to the GST debate or anything to do with tax reform because we want to be far more mature about this than the Labor Party, who are really trying to rule lots of things out before you’ve done the comprehensive analysis. 

Kristina Keneally: So does that mean …

Simon Birmingham: [Interrupts] But I think it is important to make sure the sector is clear that we understand some of the impacts you could have were you to extend the GST in that space.

Kristina Keneally: So does that mean that directing some of the GST revenue, should the GST increase, to education, to the states, that’s still on the table?

Simon Birmingham: Well, everything in relation to tax reform is on the table, and were there to be an increase in the GST or Jay Weatherill’s idea of saying there’s an increase in the GST but the states get a share of income tax revenue, you would of course expect that then the Commonwealth has to look at …

Kristina Keneally: [Interrupts] What about Mike Baird’s idea?

Simon Birmingham: … what responsibilities the states pick up as a result of that. So, do they take on more responsibilities in hospitals and the Commonwealth backs out of national partnership agreements there, or in education? Of course that’s all part of the …

Peter Van Onselen: [Interrupts] You’d be left without a portfolio.

Simon Birmingham: … COAG reform agenda.

Peter Van Onselen: You can’t advocate that Senator, you’d be left without a Portfolio.

Simon Birmingham: [Interrupts] Well there’s still plenty to be done in higher education …

Peter Van Onselen: Well that’s true, but …

Simon Birmingham: Plenty that we can do in higher education, in vocational education, in early learning. Schools are obviously essential and an area that I’m very passionate about, but getting simple, clearer, understandable funding arrangements in the future is very important. And if tax reform is part of that, well, I’m open to those discussions.

Peter Van Onselen: I want to ask you this though if I can. You talk about the potentially unintended consequences of putting the GST onto school fees – and I know exactly what you’re talking about, the impact it might have on people choosing to use the private school system rather than the public school system, which of course costs governments more – but couldn’t you say the same thing about extending it to health, for example, and the impact it could have on private health insurance? Or couldn’t you say the same thing about the consumer impact of putting the GST up by as much as 50 per cent, and the impact that will have on consumer habits and spending? You could say the same thing about financial services – that people won’t choose to get good financial advice, and that will have a perverse impact as well. The same logic applies right across the sphere.

Simon Birmingham: Well Peter … well, no it doesn’t apply right across the sphere in that sense Peter, because you have to understand that in health and education you have private investment that’s occurring, and where people do not put that private investment in they end up of course costing more on the public system. That’s not the same in many of the other consumer-driven areas of the economy that you’re talking about. But yes, indeed, you can make the same argument in the health sector. And so across health and education there are real factors there to consider about whether indeed levying taxes on one part of a service sector there when there’s a public system that would not of course face those same costs [indistinct] …

Peter Van Onselen: [Interrupts] Sounds like you and Sussan Ley are ganging up on the Treasurer.

Simon Birmingham: … but could have some type of perverse effect. No not at all. This is just being very open and honest, that we do appreciate all of the different factors and all of those factors are part of the consideration of tax reform as you would expect.

Kristina Keneally: Minister, you’ve got to get Question Time, first of 2016, so thank you for joining us on To The Point.

Peter Van Onselen: Thank you.

Simon Birmingham: A pleasure guys, thank you.

Kristina Keneally: Thanks.

Senator Birmingham’s media contact: James Murphy 0478 333 974
  Nick Creevey 0447 644 957
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