Cutting funding to public universities doesn't make any sense

Read the full speech below.

Ms BUTLER (Griffith) (17:38):  Labor supports the Education Services for Overseas Students (TPS Levies) Amendment Bill 2017. It was Labor that introduced the Tuition Protection Service in response to some of the poor behaviour by providers in the international education market in 2009. Labor acted swiftly in government to introduce more-effective national regulation of Australia's tertiary education sector. The Tuition Protection Service has been well managed and has responded appropriately where required. We're pleased that the levies have remained low despite a significant increase in international students coming to Australia to study, which could have put pressure on the scheme.

International education is one of the great success stories in Australia. International education is good for the economy, good for our society, and is good for soft diplomacy across the world. In fact, last year, international education contributed more than $21 billion to the Australian economy. The Education Services for Overseas Students Act 2000 was groundbreaking when it was introduced, as it was one of the first pieces of legislation designed to address the needs of foreign students anywhere in the world.

Labor are proud that we have a strong and supportive regulatory system for the nearly 600,000 international students in this country. We believe the measures in this bill are sensible and should be supported. We caution the government on ensuring that it does more to protect the rights and financial situation of Australian students. We know that far too many students took on bad VET FEE-HELP debt and the government took far too long to respond. Labor reminds this government to get on with the job of addressing some of the terrible bad debt of those students.

A high-quality, well-regulated tertiary education system is an important tool in our nation's future economic success. It is important to note there has been substantial growth in international student enrolment in Australia in recent years. In June 2017, our total international student enrolments reached 583,243—as I say, almost 600,000 students. This is the highest number of international student enrolments that we've seen in this country so far. It is a 13 per cent increase on the same time in 2016. This is a continuation of the recovery seen following the downturn in international education, and it's a very positive thing. Consistent with previous years, a majority of students are in higher education, but we also have substantial numbers in vocational education and training and English language intensive courses for overseas students, and smaller numbers in non-award studies such as foundation courses and also in schools.

It is important to remember that when we talk about the importance of the international student market and reaching out to people from other countries we're not only talking about higher education but also talking about the importance of vocational education and training to our international education exports. That is important because when we talk about what's happened to quality in this country in the vocational education and training sector that has an impact not only on domestic students but also on our international exports. Of course, it has a potential to impact education exports as well. It is an imperative not only for our domestic students, for those undertaking vocational training who are born and raised here in Australia or who become citizens here in Australia; also if we want to have competitive industry, if we want to be able to sell our vocational education and training system to the world, we must overcome some of the challenges in relation to quality in the vocational education and training sector.

I'm pleased to say I recently spoke at the conference for ACPET, the peak body in relation to vocational education private providers, which had its conference in Brisbane a couple of weeks ago. When I spoke to the private providers I made a couple of points. The first one was Labor's commitment to publicly funded TAFE, which may seem like an odd thing to say to private providers, but they acknowledge and accept themselves the importance of publicly funded TAFE. So they were quite interested to hear about the commitments that Labor had made in the budget reply in relation to supporting public TAFE. I also encouraged them to continue the work that they were doing to improve the reputation and quality of private vocational education in this country. It's absolutely crucial that that happens, and I am also pleased to say that the providers there were very receptive to that message. In fact, the chair and the CEO themselves acknowledged to me that they saw it as a very high priority for ACPET and for its members to restore confidence in private vocational education in this country. So I want to commend them for the work that they are doing in relation to restoring confidence in the Australian vocational education brand, for the work they're doing to engage with all of their members to seek to restore confidence, and for the work that they are doing to seek to ensure both quality and reputation are restored. As I say, that is important for our international exports when it comes to education.

Focusing on international education exports is important in the context of this bill but that's not to in any way undermine the significance of vocational education for domestic students. Mr Deputy Speaker Buchholz, you'd be aware that the Standing Committee on Employment, Education and Training at the moment is inquiring into the school to work transition, and one of the key focuses for that inquiry will be the role of vocational education both in school and after school.

I had a call out of the blue this afternoon from an industry association that was raising concerns about how to make sure that school leavers are ready for vocational education in the same way that we're seeking to ensure that school leavers are ready for higher education. Most people would agree and acknowledge that neither higher education nor vocational education has any higher status than the other. Both are important for the development of skills competencies, knowledge and character traits that people will need in order to do the jobs of the future, but, probably more importantly, to be able to be full participants in Australian society. I acknowledge that I spoke at the conference for ACPET recently and say thank you to them for the work that they're doing to restore that confidence.

I also want to say a little about international students in higher education. As you'd be aware, the government has a bill before the parliament that seeks to radically change the way that higher education works in this country by significantly cutting funding, increasing student fees, lowering payment thresholds for HECS, cutting funding loadings for enabling courses, and taking a range of other steps that will make it very difficult for universities to maintain the same level of funding and therefore maintain the same levels of quality and service that they provide to our community and to the international education export market.

I've spoken out against the legislation proposed by the government on a number of occasions, but let me do so again to explain why I'm concerned that measures like the one that we're talking about in this bill, to protect international education and protect higher education, should be seen in the context of the broader approach to higher education policy in this nation. If we fundamentally undermine the ability of universities to provide quality higher education, then protective measures like this one—though they'll remain important, of course—will be less effective. If you don't have a quality higher education system in the first place, because universities are under pressure as a consequence of funding cuts, it makes it very difficult to compete against universities, particularly universities in our region.

Universities in Japan and China have seen increasing public investment. They're increasingly improving in their rankings. At the same time, what are we doing as a nation? We're considering cutting funding to public universities. It doesn't really make any sense. It is a cut. We're not just talking about a shift in the way that universities are funded. We're considering a bill that seeks to cut funding to higher education. The bill will impose a fee increase for students of 7.5 per cent and will also impose a commensurate reduction in the amount of public funding to universities, which will rebalance the contribution between students and the public purse, in the event the government gets its way. On top of that rebalancing, it's the government's intention to impose a 2.5 per cent so-called efficiency dividend over two years.

Universities are indicating that they see this as a significant cut. In fact, the government's own budget papers refer to this as a $3.8 billion cut in fiscal terms over five years. That is a significant reduction in funding for Australia's universities and will mean universities in my state of Queensland will lose around $50 million in funding per university. The sandstone universities, the more established universities and the metropolitan based universities which are able to attract higher numbers and higher proportions of international students, may look at further increasing their international student numbers to try to deal with some of the fallout of these significant funding cuts that will be imposed in the event the government bill passes. Spare a thought for the universities that can't attract international students in those numbers. Spare a thought for the campuses in regional or rural areas that find it incredibly difficult to attract international students.

I visited a campus in a regional Victorian town recently. I won't say which university; it's a major university. Even that major university has been having some difficulty attracting international students for that particular campus because it was in a regional Victorian town, not in a capital city. I've certainly spoken to a number of universities who are concerned about how they're going to manage these cuts to revenue and who just don't have the option of increasing the proportion of international students across their whole enrolment. There are certainly questions, I think, to be asked in terms of the desirability of continuing to undermine public support for universities and what they might have to do in order to try to make up for that reduction of public support.

The head of the Regional Universities Network appeared in a public hearing yesterday, Monday—it's been a long couple of days—at the Committee on Employment, Education and Training, and they made this exact point: that members of the Regional Universities Network, which as you can appreciate from the name are regional universities, don't think that they're going to have the option of being able to increase international student numbers rapidly in order to defray some of the funding cuts that the government seeks to introduce in respect of Australian universities. So I think we should all be very careful before we take the opposite approach to funding universities compared with universities in our region, particularly universities in China and universities in Japan. In fact, it's interesting to have a look at an article that Ken Henry wrote last year or the year before, reflecting on the fact that there'd been wholesale ignoring of the Australia in the Asian Century white paper, which called for more engagement with our region and more investment in education. Ken Henry raised concerns in the article about Australia's failure to really look to what we can do to invest in education and to use that as a way of engaging. Mr Deputy Speaker, that's absolutely right; isn't it?

International education is not just about the money, the dollars, that we get from the export market, although those dollars are very important. The value last year alone was $21 billion—that was the value of the export market for international education. But it's not just those dollars that matter; is it? I talked about soft diplomacy. Whenever you get the chance to talk to people who have gone to Australian universities but who are not from Australia, they talk about the people-to-people links that are built through coming to our universities. And, of course, it also feeds into another important export for us, which is international tourism. Because if a student comes here from India or from China, they're just as likely to look around the place and encourage family and friends to come over as well, or they're just as likely to come back later in life to have a look and see what's happening in Australia. That's really important for us culturally, and it's really important for us, as I said, in terms of soft diplomacy—building those people-to-people links, building those connections between Australians and people from other countries who benefit from international education.

For all of those reasons I am very concerned about the funding cuts. I'm concerned about the funding cuts for a range of reasons. I'm concerned about the impact that the funding cuts are going to have on the quality of higher education. I'm also concerned about the impact that they will have on the incentives around universities seeking to increase the proportion of international students and whether all universities will be able to do so equally. As I said and as representatives of the universities of themselves said, they won't.

Although this bill is very sensible and commendable and we support it, it needs to be acknowledged that this is a bill that's being brought before this parliament at the same time as the Turnbull government is seeking to substantially cut public support for universities, which will result in a net funding cut for universities. In other words, even after you hike up the student fees—which, frankly, we don't support either—universities are still facing a cut as a consequence of what this government is trying to do to higher education funding. Although the opposition supports this bill, we do raise serious concerns about what the Turnbull government is doing in relation to higher education generally

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