Higher Education and Research Reform Amendment Bill 2014 -Debate
Posted September 04, 2014
CATHY McGOWAN (Indi) (10:47): I acknowledge the member for Ryan and thank her for her contribution. To the young people who are listening to this debate, what we are talking about today has direct relevance to your futures and I encourage you to have some discussion about it. There are three things that I am going to talk about in my speech today. I want to talk about the impact of these reforms on the people of Indi. I want to talk about why some aspects are problematic and I want to make some suggestions for future consideration.
I acknowledge the comments of the member for Ryan and, in many areas, we have total agreement. But the fundamental difference that I would like to bring to this debate is that I believe we have already got market failure in rural and regional Australia. This is not the case in the cities. So my contention is that the government has to do something about market failure and one size does not fit everybody.
BUDGET IMPACT TOUR
In May this year, following the budget, in Indi we undertook what we called the Indi Budget Impact Tour. We had widespread consultation with my electorate—730 people in one week—and copies of our report are available from my office. Generally speaking, people supported the budget and, importantly, the role of the government in making the changes they thought fit. However, within the whole budget, there are a number of issues which caused particular concern. None was stronger than the reaction we got to the so-called reform in the education sector.
There were a number of specific issues that people raised with me—the impact of changes to interest rates on HELP loans; the deregulation of the university fee system; cuts in funding; the scholarship system; increase in costs for postgraduate degrees; reliance on the market to drive changes; and the separation of teaching from research. I would like to read into the Hansard a summary of the major comments people made:
The possibility of increased university fees is overwhelmingly and emotively opposed. The proposed changes to university fee arrangements will benefit the well off and further exclude the disadvantaged and country students. The expense of university study and living away from home is already too great for country students; it should be reduced, not increased. We are creating an academic underclass when we don't support rural kids to do higher education. HECS/HELP debt is already a stress; increasing it will result in less people doing higher education. Private school bias is squeezing public schools and the Gonski proposal is to redress disadvantage should be implemented. TAFEs and universities need to receive funding. Education is our future, paying of the national debt is not as urgent.
Many more comments were included.
From my perspective, a number of things in this legislation are problematic. I would like to outline to the House why I think there has been such a strong negative reaction. I have to say that the people of Indi, by their nature, are doers. Typically, they are resilient, independent and creative people who cope with change. Like most people in this House, they value education. They see it as a fundamentally important part of our social, economic and cultural infrastructure.
They see education as the answer. They see it as the solution to continuing to be a profitable, prosperous, sustainable and creative community which is alive with opportunities for everybody. They know that the rural economy is changing. They see globalisation of our economy and through their agriculture and related businesses many are active players in this internationalisation. They know that education, especially formal education, is an absolutely essential ingredient of our ability to compete in world markets. I know these sentiments are shared by members of this House.
So what makes for such a strong, negative reaction to this legislation from the people of Indi? I believe they understand that the assumption underpinning the legislation—that the market will deliver—is flawed. Two recently released reports highlight the significance of regional universities in local communities: Regional Universities Network: engaging with regions, building a stronger nation and Aspirations and destinations of young people: a study of four towns and their communities and schools in Central Hume, Victoria, University of Ballarat, December 2012. In these reports some very revealing statistics are presented. For the Hume region, which includes half of my electorate of Indi and half of the electorate of Murray in north eastern and central Victoria, the percentage of graduating secondary students who enrol in a bachelors degree is for females in Hume 31 per cent, for males 26 per cent, the lowest percentage of non-metropolitan region. Interestingly, in Melbourne it is 59.6 per cent. So we have a comparison between Hume of 31 per cent and Melbourne of almost 60 per cent. The percentage of the Hume population aged between 25 and 35 with a bachelors degree or higher is 17.35 per cent; the state average is 30 per cent. The estimated percentage of Hume students who have been offered university places but have deferred is 30 per cent and all my career teachers tell me that that is growing.
Clearly, the current system is not working. Clearly change is needed. The question I put to this House is, where you have no competition, where you have limited service provision and what is currently being provided is not working, will a market based economy work? My argument is not. I believe we have market failure in Indi and the answer is more government intervention, not less. Market failure is considered by economists to be the rightful role of government to correct. Obviously, classic economic theory believes there is a large role for government to play in the economy.
WHAT IS NEEDED FOR SUCCESS?
I would like to read some of the preconditions for markets that are necessary if they are going to achieve efficiency. Clearly I believe these do not exist in my electorate. There needs to be perfect competition, there needs to be perfect information. We need to have perfect mobility of resources. We need to have no economies of scale and we need to have not critically large transaction costs. It is stated that when many of these conditions fail to be met, it is termed a market failure and it is considered by economists the rightful role of government to correct for these market failures. Obviously, classic theory leaves a large role for government to play. This is the crux of my argument today. There is a role for government to play in the provision of education, particularly in rural and regional Australia, because there is a difference between public goods and other goods, because there is a difference between the country and the city, because education is an investment as well as an expense and because politically we all know that one size does not fit all and if we, as politicians, refuse to accept this, we will pay the cost for our decisions.
So what is it about country living that makes for these special circumstances? My proposition is that distance is the key characteristic that needs to be accounted for and the consequential impact that it has on population density, demographic profiles, workforce composition and skill. These, coupled with the extra costs incurred in overcoming the tyranny of distance—the cost of money, the cost of time, the cost of resources and particularly the cost of effort—have huge impacts for us. People in my electorate are already playing huge costs for education, costs that are not accounted for through HELP, through government—the costs of travel, accommodation, living away from home, community disruption—and the extra costs imposed by this legislation will have a major multiplying effect on the individuals concerned. It will have a multiplier effect on the families. It will have a multiplying effect on the communities and, I believe, on my whole electorate. The impacts will be that even fewer people will take up the options of post secondary education. I do not think as a country we can afford that.
The fact that even fewer people are undertaking education will flow right through my community, adding to the disadvantage we already experience. For example, this education I am talking about is not about doctors and lawyers, it is not about excellence; it is about the basic provision of skilled professionals in my community. It is about nurses, it is about teachers, it is about social workers, it is about child-care workers, it is about people who do not do these jobs for maximum income. They want enough and they want a job to which they can reasonably travel from home to contribute to their community. These are not grabbing people, these are not people who want to rip off the system; they want to be able to serve their communities, to earn enough income and to live in their communities. Without this local provision we will lose that infrastructure.
The second thing is that because we do not have enough relevant education available locally, we have a huge export of our young people to the cities and very few of them choose to return—that brain drain. There is an opportunity cost for my community of having to pay for loans and the money goes out of our community. Instead of being invested in businesses and in mortgages locally, it goes off into some fund which then gets redistributed in the nether land. I have already spoken in this House about my particular concern for the impact on agricultural education, so I will not go into it today. What I would like to talk about in the next section of my speech is what can be done.
We have a failure of market. We have a role for government to intervene and we are not part of the city answer. I can totally understand when members of parliament say it is going to work for them; it does not mean to say it is going to work for us.
HOW DO WE SOLVE THE PROBLEMS?
Like the people in my electorate, I am a doer, and I know the importance of outlining solutions to the problem. When I talked to the community that I represent about what can be done, they said: 'It is not just what we do; it is how we do it. Giving us a big hunk of money won't solve this problem. You need to talk with us. You need to engage with us. Government needs to trust us to be part of the solution. You need to build on what is already working. We need to think and plan for the long term, beginning with the end in mind. Most importantly, we need to measure, count, analyse and recalibrate. It is how we do things that will deliver success. Throwing money at the problem is rarely the answer, and it won't be the answer for us. It is how the money is used that will make a difference.'
Suggestions from my community include: rather than limit scholarships to the profit base of universities, which clearly works to the disadvantage of rural and regional universities, have a process to consolidate scholarship funds and make them available to everybody equally. Have a process for tendering; award best practice. Rural and regional Australia needs to be engaged in the process of developing solutions. I am so disappointed that this legislation was not informed by a white or green paper or a consultation process.
In my community we know that the future is not some place we are going to; it is one we are creating. We know the paths to it are not found but made and we know that the making of those pathways changes both the maker and the destination. We know that, by working together with government, community and stakeholders, we can come up with better solutions. Government, come and talk to us. Invest the time in consulting with your communities and working together to come up with solutions that will work. We know what will work. We have some excellent practice in our communities.
In Indi specifically, we have an excellent campus of La Trobe University at Wodonga, doing fantastic work and delivering, against all odds, to raise those statistics that I mentioned before. In Wangaratta we have some fantastic work happening between GOTAFE and CSU, delivering agricultural education. We have excellent work happening. We have models that deliver. We know what works. We know how to engage. Give us more, not less.
Begin with an end in mind, government, and plan for the long term. When I look at this legislation, I do not see a plan. I do not see how this model will address the real concerns of businesses for a skilled and experienced locally based workforce. I do not see the concerns of families who want educational opportunities locally available and at all stages of the life cycle. I do not see a plan for rural and regional Australia where there is excellence. Excellence is going to be located in the cities. Where will that take us? I do not see a plan to enable all communities to reach their potential without exporting their young people and I do not see a plan that enables a nation—a nation that is both urban and regional—to truly reach its potential.
In closing, I call on the government and all my colleagues opposite who represent electorates outside the cities: in voting for this legislation, take responsibility for your decisions and start counting. Continue to count, and report back to this place on where the success is and how we actually have delivered for rural and regional Australia.