Tom Tilley: So many questions came out of that story just there, and thankfully we have the Education Minister Simon Birmingham here to answer them. Simon Birmingham, thank you so much for joining us.
Simon Birmingham: G’day Tom, great to be with you.
Tom Tilley: First things first: this week you’ve reiterated that Christopher Pyne’s deregulation plans were only ever put on hold for a year and that they remain the Government’s position. They were unpopular with many young voters and the Senate crossbench. How will you sell the idea now of unis setting their own fees?
Simon Birmingham: Well Tom, what I’ve said this week and been clear about really all along is that we deferred the budget impact and therefore the policies for 12 months to give some time for consultation. That’s something I’ve been engaging in quite genuinely. I’m very clear that I want to make sure we structure policies that allow us to be able to afford to continue to offer the most equitable and generous access to higher education, so ensuring that nobody pays a dollar upfront, ensuring that people can go to university without fear of the cost of university being an impediment to them. But also that we do need to make sure that our universities have the right incentives in place to innovate, to differentiate between one another, to specialise in things, to excel on the world stage, and that probably means they need some flexibility around what they charge from one institution to another, which the current laws don’t give them. So I’m looking at indeed all aspects of the existing policy there, and what can work best to give us an equitable outcome for students, but also the type of innovation our universities need.
Tom Tilley: Young people will be very concerned that universities can put prices to a level where they don’t feel like they’ll be able to pay it back at any point in the future. Will you provide any guarantee that prices won’t go above a certain point?
Simon Birmingham: Well, it’s- what I’m looking at indeed are the types of safeguards that could be put in place, and to what extent you might actually go ahead with that existing model of full deregulation versus alternatives that might be more limited in their scope or application and the type of safeguards that can sit alongside it.
Tom Tilley: [Talks over] Okay, yeah.
Simon Birmingham: People should be confident that we’ve heard a number of the concerns and are trying to construct something that gives us a model that gives universities the incentive to excel on the world stage and to innovate and be different from one another, but still tries to protect students in the path of doing so.
Tom Tilley: Yeah, well I feel like if you don’t provide some kind of safeguard, a lot of people are going to be very concerned about the cost of the university degrees going up to, as Labor say, $100,000 degrees, and they may well be exaggerating in some cases, but people need certainty in this space, and it could become a really tough election issue for the Coalition if degrees are going to be more expensive. Also with Labor promising more funding for high schools through the extra years of funding for the Gonski model, are you worried voters might find Labor’s education package more attractive than yours?
Simon Birmingham: Well look, I’ll be quite open. Labor will spend more in this election campaign that we will, and they’ll promise to spend more on education than we will. But we don’t believe the nation can actually afford that spending. We are currently running, as a Federal Government, a $36 billion deficit this year alone. So we want to commit to growing funding in schools, and we are committed to growing funding in schools. Every single year, school funding will grow into the future, but our commitment is at a more affordable rate of growth than Labor’s commitment, and the same in higher education where we’ve seen since 2009, the cost of higher education grow at twice the rate of the economy. Grow at some 59 per cent, the cost of higher education. Now it’s great to be investing more, but we can’t sustain that type of growth, or it will only drive the nation further into debt, and at some stage, higher taxes, bigger debts will only mean that there are fewer jobs and opportunities out there for young people, and that of course would be a completely self-defeating purpose. So it is a case of getting the balance right. Expenditure that is effective and affordable is what we’re focused on.
Tom Tilley: Yeah, well speaking about the debt, we just heard about the Parliamentary Budget Office forecast of potentially $185 billion worth of student loan debt within 10 years, and part of that modelling showed that if deregulation goes ahead, that’ll add to the student debt problem. So why would you do that?
Simon Birmingham: And I think we have to really look closely at the debt system, the HELP system, the rules that apply around it. You obviously just heard in that package from the Grattan Institute, talking about some of the challenges in the increasing level of debt that is not expected to be repaid under that program. That’s partly, then, a reason as to why we are looking at admissions practices in universities and their transparency, to ensure that they are admitting students who are likely to complete their degree, because it’s awful for both the student and the taxpayer where we have people going into universities, racking up debts that are not going to be repaid, or that students repay without the benefit of a degree.
Tom Tilley: Okay. Let’s talk about how you get into uni. Most entrances are based on ATAR scores, but you’re looking at making changes to the way that system works. The Government’s Higher Education Standards Panel has just released a discussion paper on this. What’s the problem with the way ATARs work, and what do you think needs to change?
Simon Birmingham: The ATAR itself is okay when used in a pure form, and there are good reasons not to use an ATAR for, of course, mature aged students, and sometimes for something in between – the use of bonus point systems or the like. But it’s really important that there’s transparency there so that students know exactly what they’re up for to get into university, what they need to achieve to get into university, what they then need to do to be able to succeed at university. And it’s also important that we have transparency so that universities are held to account for the types of standards they’re apply around the students they’re admitting, because we do want and expect universities to be operating at a high standard, and we want to ensure we minimise those drop outs and failure rates that I spoke of before.
Tom Tilley: Okay, Patrick has called in from Canberra. Patrick, you had a point to make to the Education Minister.
Caller Patrick: I did, thanks very much Tom. A couple of weeks ago you had [indistinct] on the program whose name escapes me, but he was speaking about how the current administration of the Government, and even over the past couple of decades, have moved towards a system of administering government and laws, but have been quite restrictive on the younger generations, young people moving into their full-time occupations and their lives – that’s people trying to contribute to the economy and buy houses. Changes in laws like this, whereby we have to start paying back HECS at an earlier stage …
Tom Tilley: [Interrupts] Okay, talking about bringing the threshold from 54 down to $52,000, which …
Caller Patrick: [Interrupts] Yes, so lowering- exactly, yeah. Lowering the threshold like that is going to contribute to having less money in the pockets of young people. And what I mean by that is when you start paying back HECS at an earlier stage, you’re going to have less money in your pocket to be able to put it towards getting that house and getting yourself out of the rental market [indistinct] …
Tom Tilley: [Talks over] Yeah, it certainly sounds like that idea will be a hard sell to a lot of young people, Simon Birmingham. How will you sell that if you are going to keep advocating for that position of lowering the threshold to $42,000?
Simon Birmingham: Well that’s a position that the Grattan Institute has put. Now, I welcomed all suggestions, and so I’m not completely dismissing the suggestion. And I think people …
Tom Tilley: [Interrupts] It sounded like you were- maybe advocating is a strong word. You sounded quite receptive to it, at least.
Simon Birmingham: [Laughs], well I’m receptive to ideas, because we do have budget pressures and we do need to put all the ideas on the table to think about what will be the fairest and most effective way to do so. And in terms of student debt, it’s an interesting one as to which way you look at it, as to whether- and you know, and being able to pursue other ambitions like buying a house, as to whether it’s better if those debts are paid back as quickly as they can, rather than often hitting at a time when people are at the time of wanting to buy a house, have a family or the like.
Tom Tilley: Yeah, it depends on the interest rates really, and whether you change from government bond rates or it stays at inflation. We are going to have to wrap it up there, Simon Birmingham.
Simon Birmingham: Let me just quickly, if I …
Tom Tilley: [Interrupts] I really do have to move on, but I want to get you back on the show as soon as you make the big announcement about education policy, whether that happens before the budget, or, as you’ve said, it will definitely happen before the election. We’ll speak to you then. Thank you so much for coming on today.
Simon Birmingham: Thanks Tom. Cheers.
Tom Tilley: Good on you.