ABC 774

E&OE TRANSCRIPT 774 ABC Melbourne – Jon Faine 20 AUGUST 2014 SUBJECT/S: higher education reforms JON FAINE: But, well, no one quite knows where this issue is going to go at the moment because, as we’ve been learning over the last few weeks Clive Palmer is a little unpredictable, but along with other budget measures university fee changes are blocked in the Senate. Now Christopher Pyne has been frantically criss-crossing the country – he’s the Education Minister – criss-crossing the country meeting with vice-chancellors to try and find out if there is some way through -not just the university business control net but also the Senate impasse. And Christopher Pyne, Education Minister, joins us from Perth where he has been conducting high level meetings. Mr Pyne, good morning to you. CHRISTOPHER PYNE: Good morning, Jon. Thank you for having me. JON FAINE: I don’t where you’re up to in trying to prosecute the case for reforming Australia’s tertiary education fees. It seems it’s completely blocked with Clive Palmer and other senators saying: absolutely not, no way, not in the slightest bit interested. CHRISTOPHER PYNE: Well, Jon, it’s not blocked, with great respect, it hasn’t even been introduced into the Parliament yet. So it can’t be blocked when it’s not actually there. JON FAINE: In principle they’re saying no way, jose. CHRISTOPHER PYNE: Well, they are and they aren’t. So next week when the Parliament returns I will introduce the higher education reforms. They will pass the House of Representatives, where obviously we have the numbers, and it might well be that Clive Palmer makes some suggestions for amendments that are acceptable to the Government and the House of Representatives. We will just have to wait and see what he does there. Then it will go into the Senate, and that’s when the real negotiations will begin. And my view is that there does need to be reform of universities, not only for the universities’ sake, but for students’ sake in terms of competition from overseas, in terms of offering a quality education to young people, and spreading opportunity to more young people. And I think that there will be some kind of reform passed over time in the Senate this year. I am not going to say it will be a quick process - I think it will be a slow process - but I’m a patient man, and I am prepared to take my time to bring it about because I think it’s very important. JON FAINE: The Government has got problems on so many different fronts, but from just conversations I’ve had with people - not just on the radio, but in day-to-day life, Christopher Pyne - I think this is the one that upsets and infuriates more people even than the $7 doctor co-payment charge. Just as an example we had a caller on Monday’s show, Amanda from Hughesdale, who called in. She had that weekend taken her son to an open day that the universities have all the time, and in Carlton the Pharmacy College, run by Monash University, had an open day - and her son for years had set his sights on doing pharmacy - and this is what she told us on Monday. [Excerpt of interview] AMANDA: It was a bit overwhelming at the end. We went up to make inquiries about the fees and found out that as of 2015, which is when my son is due to start his tertiary studies, the fees are going up from $9,000 per year to 30,000 and … JON FAINE: A year? AMANDA: A year. JON FAINE: What’s he want to study? AMANDA: He wants to do pharmaceutical science. JON FAINE: How many years? AMANDA: He wants to do a double degree so four years. JON FAINE: Four years at 30,000, $120,000, yes. AMANDA: And – and the rate of interest is changing from CPI … JON FAINE: Yes. AMANDA: … up to the government bond rate which is between five and a half and six per cent. And my son - just the look on his face, you know, he’s so – such a keen science studier, and to just – he just said: Mum, how on earth am I ever going to repay that money? [End of excerpt] JON FAINE: Christopher Pyne, how on earth are they ever going to repay it? CHRISTOPHER PYNE: Well, there are a couple of really important facts to convey to Amanda and to your listeners. Number 1, the government bond rate is not five and half to six. It’s 3.42. So, in fact, that’s not right. The CPI is almost 3, so there’s about a half a per cent difference between CPI and the 10-year government bond rate; and the taxpayers are paying back at the 10 year government bond rate the loan that they’ll make Amanda’s son. Secondly, no universities have set their fees for 2016 or, in fact, at any time; so there is no 30,000 pharmacy fee in Australia. So that information that Amanda has been given, or had perhaps not – been misinterpreted what she has been told. It’s just not factual. There are no fees being set. Did you say [indistinct] the Carlton Campus? I’m wondering if that’s Monash University. The listeners might like to … JON FAINE: It is. It’s next to Melbourne University, but, in fact, the Pharmacy College is a Monash … CHRISTOPHER PYNE: Yeah, but the Monash University … JON FAINE: … a Monash course. CHRISTOPHER PYNE: … not – not one university has set their fees, and Monash [indistinct] - JON FAINE: No, but that’s what they’re telling people to prepare for, and I would have thought - CHRISTOPHER PYNE: Well, that’s not right. JON FAINE: Well, it is right, Minister. CHRISTOPHER PYNE: It’s not right that that will be the fee by the way. JON FAINE: Well, okay, it might be 27. It might be 32, but it’s around that order. CHRISTOPHER PYNE: No. Well, Amanda might have been told that, but that actually is not - JON FAINE: It’s around that order of magnitude that they’re telling the students … CHRISTOPHER PYNE: No, it’s not actually, Jon. JON FAINE: … to prepare for. CHRISTOPHER PYNE: No. Well, that’s not right. And it’s important that people deal in the facts, and the facts are that no university has set their fees, and nobody could be told that they should be looking at a $30,000 a year fee. But just putting that to one side, even if all of that were true, even if that was true, every single dollar of that could be borrowed from the taxpayer by Amanda’s son, so there’s absolutely no reason at all that he would not go to university and do that degree. And may I also say there is no evidence whatsoever, not one research paper has been presented to me or to anyone else, that shows that fees that can be borrowed and repaid back after you earn over 50,000 deters people from going to university. None. And there are 750,000 university students in Australia, and that number has continued to rise over the last 20 years in spite of the fact that people have been charged a fee and asked to pay it back through the tax system. JON FAINE: Minister, this is social engineering. This is not about university fees is it? This is a social engineering experiment. And if you say no one has produced any evidence to you that this is going to deter people, well, I’d say that doesn’t pass the common sense test. Of course, it will deter people, in particular from low income families, from embarking on a life-changing course of study. CHRISTOPHER PYNE: And that’s why we’re going to have the largest Commonwealth Scholarships Fund in Australia’s history, so every – for one in every $5 the university charges in extra fees they will have to establish a Commonwealth Scholarship Fund which will go to the people from low SES background who are smart and want to go to universities. JON FAINE: What about those that aren’t that smart that they will get a scholarship, but they’re smart enough to get an education? CHRISTOPHER PYNE: Well, they are going to university, and that’s one of the - JON FAINE: Well, they won’t be in the future. CHRISTOPHER PYNE: They will, because the facts are we will have the largest Commonwealth Scholarships Fund in Australia’s history. The facts are - JON FAINE: Yes, you’ve already said that. I am talking about - CHRISTOPHER PYNE: The facts are - JON FAINE: - those that aren’t geniuses. CHRISTOPHER PYNE: The facts are - JON FAINE: They’re just clever kids from poor families. CHRISTOPHER PYNE: The facts are – the facts are we’re expanding the demand-driven system to the exact the [indistinct] type of courses that low-SES students from first generation university goers use, the pathways programs. They’re called sub-Bachelor courses. That’s costing money to the taxpayer because we think it’s important that those kinds of courses be available to low-SES and first-generation university goers. So, in fact, this is a reform which has many moving parts all of which will actually expand opportunity to 80,000 more students to go to university. JON FAINE: No they won’t. Minister, this is social engineering. Effectively it means there will be huge coteries of people excluded from tertiary education and there will also be people emerging from tertiary education with debts of such magnitude. First of all their career choices will narrow to those sorts of jobs that will rapidly repay their debt, and secondly, it will mean there will be people whose life choices are dictated by leaving university with huge debt. They will affect their capacity to have children, their capacity to enter the housing market, their capacity to travel. Everything will be predicated, American-style, on coming out of university carrying a huge debt. CHRISTOPHER PYNE: Well, none of that is right, Jon. Number one there is no Higher Education Loan Program in the United States, so our system bears no relation at all to the United States. JON FAINE: No. You have commercial loans instead. CHRISTOPHER PYNE: Well, you can’t keep asserting things that aren’t true. I mean, nobody is trying to do any social engineering. JON FAINE: Well, what I said is that people come out of tertiary education with huge debt. CHRISTOPHER PYNE: And pay it back when they earn over $50,000 a year in one of the most generous schemes in the world. And, in fact, it’s the envy of the world. And our students have not been deterred from going to university. In fact, the number of university students has exponentially increased in spite of the Higher Education Loan Program being there. JON FAINE: Under the status quo – not with your changes. CHRISTOPHER PYNE: Well, our changes haven’t even come in yet Jon, so - JON FAINE: That’s what I’m saying. CHRISTOPHER PYNE: You’ve already formed an opinion about them, Jon, which is - JON FAINE: No. I’m asking you questions about them. CHRISTOPHER PYNE: No. Not really. You are expressing your opinion but I’m happy to respond to your commentary and to your questions. Now, the reason why we are trying to make sure that we’ve got the Commonwealth Scholarships Fund, expanding the demand of insistence of the Sub-Bachelor courses, investing more in education – and this is going to cost us more money over the next four years, not less - is not because you want less people to go to university; it’s because we want more people from low-SES backgrounds to go to university. And that will be the outcome from these reforms - in fact, 80,000 more students will go to university and get the opportunity that you and I have had to go to uni. JON FAINE: You were going to deal with all the other questions that I just put to you but I’m not sure that you have. There will be people coming through - it will define their career options. For instance, someone will not come out of university with a 90 or a 100,000 dollar debt and go and do volunteer work for a couple of years in indigenous or remote or foreign communities overseas. CHRISTOPHER PYNE: Why not? JON FAINE: They simply won’t any more. CHRISTOPHER PYNE: Why wouldn’t they? JON FAINE: Because their debt will be accumulating interest at the Government Bond Rate and then they will be deferring the capacity to repay a Government loan of such huge significance, unlike the current ones where you can – you can carry 15 – maybe even 20,000 dollars debt, it’s not crippling, but carrying 80 or 100,000 dollar debt is crippling. CHRISTOPHER PYNE: Well, the modelling indicates that universities might increase their fees by between 10 and 20 per cent. The idea that there will be this massive exponential increases of fees, of course, is absolute rubbish and there’s no evidence that will be the case because we’re going to increase the competition by expanding the Commonwealth Grant Scheme to non-university higher education providers so there is more competition in the market. which will push the prices down. In fact, there is quite a lot of evidence that some of the courses will drop in price rather than increase, and there is very respectable modelling from the ANU which suggests that a typical degree that might cost somebody 40,000 over three or four years might cost 50,000. Now, they are not --- JON FAINE: So you can go to the university of Dubbo or Wagga Wagga and get a cheap degree? That’s not what we’re talking about, Minister, and you know that. CHRISTOPHER PYNE: Well, ANU is not a – is not the university of - JON FAINE: No, your research is from ANU and their research is into more competition, so you will have not even third tier, you’ll have fourth tier Mickey Mouse universities offering cut-price degrees, and that’s not what we’re talking about. CHRISTOPHER PYNE: Well, that’s your assertion. But there’s no --- JON FAINE: It is. I am asserting that. I will assert that and I think I’m right. CHRISTOPHER PYNE: Well, you’re welcome to your opinion. My view is that in fact these reforms will dramatically change university for the better, they will provide more opportunities for students, they will give our universities the chance to gain the revenue they need to become not just the best education system in the world, but one of some of the best universities in the world. And if we don’t do these reforms our competitors from Asia will overtake us and we will lose our international education market which, by the way, is our third largest export after iron ore and coal. So we are actually playing for serious chips here. We must make sure we protect our higher education sector and improve it so we can compete and keep that market. We also need to make sure that our students in Australia have the chance to go to university and be their very best selves, and I am very confident that these reforms will bring that about. JON FAINE: And just finally, I’ve got a full board of callers who would love to talk to you. I don’t know how much time you’ve got, Minister, but - and Amanda has called in from the Pharmacy College, she would like to speak to you as well. But just my final point is that of course kids from wealthy families will not be affected in the same way, and so the social engineering argument continues. Wealthy families will still be able to buy the top level education for their kids, and everyone else can go into the marketplace as best as they fit. CHRISTOPHER PYNE: Nobody is denied a university place in Australia because of their background, and in fact we have the Higher Education Loan Program, one of the most generous in the world, which ensures that every young person – that every person who wants to go to university will get the chance to do so. And they don’t start paying it back until they earn over $50,000 a year, and then they start paying it back at two per cent; two per cent of their income. So the armageddon that you have just described this morning Jon, that is not the reality of the higher education system in Australia. It hasn’t been in the past, and it won’t be in the future. JON FAINE: Well, we’ll put it to the test. Have you got a bit more time for a few callers? CHRISTOPHER PYNE: I haven’t really. If you had indicated there might be more time I would have been happy to make it but I am supposed to go to a dyslexia and disabilities round table here in Perth, and I do need to get on to do that. But perhaps I can come back another time and take some calls. JON FAINE: If I can get my people to talk to your people – I rarely see the phone light up like the proverbial Christmas tree but it has as we have been discussing, and there is clearly a great deal of interest in the details of what you are proposing. So if you get the chance I would love to continue the discussion then. CHRISTOPHER PYNE: Well, I am more than happy to keep prosecuting the argument because I believe in it very strongly, and I’m happy to dispel a lot of the myth that some of your callers might be listening to in the media. So I’m very happy for my staff to make a time for us to catch up again. JON FAINE: Thank you indeed. The Education Minister in Tony Abbott’s Federal Liberal Government, Christopher Pyne. [ends]