Government deaf to logic on university funding - Speech, House of Representatives


The Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020 before us tonight is largely uncontroversial and Labor will be supporting it. So my remarks tonight will be largely directed towards the second reading amendment, which goes to the ‘Job-Ready Graduates’ bill. That bill passed the parliament with the government using the guillotine twice. I was on the speaking list when it first came before the House and was unceremoniously cut off. Again, when it came back for debate in the House, I was on the list but was unable to have an opportunity to speak.

Having spent six years working at the Australian National University—finishing up as a professor there—there were contributions I wanted to make on the ‘Job-Ready Graduates’ bill. But the government wasn't willing to hear them.

The fact is at a time when Australia is facing its first recession in a generation the smart play would be to encourage more young Australians to go to university. In the early 1990s when the recession hit many young people extended their time at school. The year 12 completion rate soared, as people recognised if you don't have a chance to be earning then you should be learning. We should be sending a message to those year 12s sitting their exams today—and I reach out to them, brave students one and all who've suffered through the annus horribilis that has been 2020. We should be saying to those young men and women: if you've got the smarts to go to university there will be a place there waiting for you. We should do that because attending university boosts the productivity of graduates.

My own research suggests that every year of university boosts earnings by something in the order of 10 per cent, suggesting that the returns to a university degree over three years, a bachelor's degree, are at least 30 per cent. We should be doing it because attending university boosts the productivity of co-workers. You're not just more productive, the people working alongside you are more productive. There are other spillover benefits: university graduates are less likely to commit crime, less likely to be on welfare, more likely to live longer. The benefits of university even extend to civic engagement, with university attendees being more likely to play an active role in their communities and in the democratic process. Yet that's not what we're seeing from the government. Despite the fact that every single member of the Morrison government's cabinet went to university, they're making it harder for young Australians to do the same. They're giving the opposite advice to disadvantaged young Australians than they'd give to their own kids. To disadvantaged young Australians they're saying: 'You'll be right. Don't bother going to uni.' Then they scurry on home and tell their own kids: 'Study hard. Go to university if you can.' It's that hypocrisy that is at the very heart of what the government is doing.

There is no evidence that people studying humanities have worse outcomes. People with humanities degrees have the same employment rates as science or maths graduates. To the extent that the government is relying on modelling, it's short-term modelling based on the Graduate Destination Survey, which is a snapshot of labour market outcomes at the time of graduation.

Research by Harvard's David Deming suggests that if you look over a career you see a very different picture. Students who are trained for narrow skills do well in the immediate years, in their 20s, but tend to have worse outcomes in their 50s and 60s when the labour market has shifted and their skills have become redundant. Those who adopt broader skills early on are able to adapt as the labour market changes. It's a point that Joshua Gans and I made in 'Innovation + Equality: How to Create a Future That Is More Star Trek Than Terminator'.

It is vital that we ensure that young Australians can study the course that most suits them. As education expert Andrew Norton has said:

Students should have the choice to study whatever they wish, and not be penalised down the track when they have to repay the debt.

We know though, that as a result of the government's job-ready graduates changes, 40 per cent of students will have their fees increased to $14,500 a year; that students will pay, on average, seven per cent more for their degree; that people studying humanities, commerce and communications will pay more for their degree than doctors and dentists. And we know that the bill will cut $1 billion from universities.

At a time when the government has changed the rules three times to exclude public universities from JobKeeper, universities have shed some 11,000 staff, with Universities Australia forecasting 21,000 job losses in coming years. That's just university staff, but there'll be flow-on impacts on administrative staff, library staff, catering staff, ground staff, cleaners and security.

At the very time in which we're relying on our brilliant academics for solutions to deal with the economic crisis, we're making it harder for people to study economics. At a time when we're relying on brilliant university researchers to come up with a cure for COVID, we're cutting funding to universities. This is simply madness.

When Labor were in office, we boosted investment in universities from $8 billion in 2007 to $14 billion in 2013. We expanded places, putting in place demand-driven funding following the Bradley review, which ensured that we were no longer operating a system of command and control from the Molonglo but were allowing universities to respond to student demand. We saw an extra 220,000 Australians get the opportunity of a university education. And, in particular, we saw increased enrolment among the most disadvantaged. Financially disadvantaged student enrolments went up 66 per cent. Indigenous undergraduate enrolments increased 105 per cent. Enrolments of undergraduates with a disability grew 123 per cent. Enrolments of students from regional and remote areas increased 50 per cent. By the time Labor left office, a quarter of the students at Australian universities were there as a result of us opening up university places.

Today, the government claims that 39,000 places will be added over three years. This is woefully inadequate to meet the demand from the children of the early 2000s baby boom—'one for dad, one for mum, one for the country'—who are now reaching university age. The university sector, as I've said, faces a funding cut of around a billion dollars a year. Average funding per student to universities will drop by 5.8 per cent. That funding will drop by 16 per cent for engineering, by 15 per cent for clinical psychology, by eight per cent for nursing and by six per cent for education. That's on top of the $16 billion projected revenue drop due to the loss of international students. The impact of these changes will be tough on women. Average female student contributions will increase 10 per cent. Average Indigenous student contributions will increase 15 per cent. The highest fee-paying courses will have twice the share of First Nations students.

It isn't just Labor that's been critical of these changes. Bronwyn Evans, the CEO of Engineers Australia, says:

An increase in university fees risks increasing structural inequality for women and people from low socioeconomic status (SES) backgrounds who choose to study humanities, law and other courses that will now leave them in even more debt.

Dan Woodman, the president of the Council for the Humanities, Arts and Social Sciences, says:

Some of the fastest growing job areas for university graduates are new, many of which require exactly the skills and experiences that the study of HASS subjects can provide. Content Specialists, Customer Officers, Data Scientists, and Sustainability Analysts are in high demand. These jobs did not exist five years ago, and a strong humanities or social science degree provides a foundation for working in these and the new, related fields that will inevitably emerge in the coming years.

The Languages & Cultures Network for Australian Universities says: 'The proposal will actually involve higher costs for language students than first appears. We consider the proposal is inherently flawed, does not have the capacity to meet its stated aims and does not openly state its major objective, which is to reduce university funding.' Mark Warburton, a higher education expert, says:

… my analysis shows the growth in student places … will not meet any additional demand from the COVID-19-induced economic slowdown or future growth in the university-age cohort.

Peter Hurley from the Mitchell Institute at Victoria University points out that humanities graduates are employed at a rate of 91.1 per cent—that is above science and maths. Julie Bishop, the chancellor of the ANU and former Liberal Minister for Education, Science and Training, says:

My concern is that under these new arrangements, there is a greater incentive for universities to take in a higher number of law, commerce and humanities students than there is to take in students in engineering and maths. That appears to be contrary to the government's policy intentions.

Robert French, the chancellor of the University of Western Australia, says:

Humanities is the vehicle through which we understand our society, our history, our culture.

The changes that are being put in place will have a long-term adverse impact on Australians. Many Australians who are facing the prospect of university cutbacks will no longer have the opportunity to study. That will cost them and it will mean that Australians end up paying unemployment benefits rather than assisting somebody to take on a Commonwealth supported place. This can't be good for them. This can't be good for Australia's society.

I want to conclude by talking about the impact on universities in the ACT. The University of Canberra will be hit by a funding cut of $15 million between 2018 and 2021. The Australian National University will lose $14 million. The Australian Catholic University, which has a campus in Canberra, will be hit by a funding cut of $35 million. Australia's universities in total will lose $1.2 billion.

It's not as though Canberra's universities haven't tried to tighten their belts. Vice-Chancellor Brian Schmidt is among those who've taken pay cuts. ANU's top leaders have taken pay cuts which have saved some $397,000. ANU staff have deferred their pay rise, saving $13.5 million and up to 90 positions. ANU staff have made donations to the ANU Staff Urgent Relief Fund, which has provided support totalling $116,000 to 68 staff. But ANU is nonetheless having to lay people off, because its foreign student numbers have fallen markedly. They're already below 2017 levels and they're expected to fall to 70 per cent of 2019 levels in 2021. Characteristically a diplomat, Brian Schmidt has said of the government's support package that it is 'not one I would have designed', although he goes on to say 'it's not pathologically bad either'. If the best you can get from a diplomatic university leader is that your package is not pathologically bad, then I think you need to go back to the drawing board.

The fact is that at the very time we should be expanding universities this government is cutting them. This is a government that has effectively removed the demand-driven funding system. No longer do we have a system in which people who have the smarts for university can take up a place at a university that's ready to train them. Instead, we've gone back to the command-and-control system that pre-dated the reforms of the Rudd and Gillard governments. Those reforms were vital in opening up the university sector. They didn't just create more places; they ensured that universities and students were able to focus on the courses in high demand. This reflects the fact that those seeking a place at university are looking ahead to the labour market. We know, for example, that when the dotcom crash in the early 2000s came there was an immediate drop in the demand for computer science courses. My own research shows that in the teaching profession, if you look at demand for studying teacher education, as soon as salaries are changed in a state or territory you see an immediate demand response from students. Students are thinking about their future, they're acting rationally and they're moving into the courses that they know will be best for them. That's why a demand-driven system works so effectively to ensure that students study the courses that are best for them and best for our economy.

But the coalition, the so-called party of markets, has gone back to command and control. The coalition, whose cabinet is stuffed with university graduates, many of them with multiple degrees, have decided to pull up the ladder of opportunity, to take away the chance for young Australians to get the degrees that they themselves have benefited from. We know that university study is beneficial for the individual and is beneficial for Australia as a whole. Yet the changes that the government is making are eroding Australia's long-term future. What we need is investments that ensure that more Australians can study at university, that we can continue the inexorable rise of the education of Australians.

We know that we can't predict the jobs of the future. Occupational forecasting is one of those activities that make astrology look respectable. So we don't want to be narrowly forcing young people into particular occupations. But what we do know is that the labour market of the future will demand high levels of skills, and that's why we need to be opening up universities and that's why the government's changes in the university sector are so short sighted, damaging and bad for Australia's future.

Debate interrupted.


Authorised by Paul Erickson, ALP, Canberra.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.