National Press Club address Q&A

E&OE TRANSCRIPT Press Conference — National Press Club 6 August 2014 SUBJECTS:  higher education; teacher quality; ambitions; national security KATHARINE MURPHY: While the Minister has a sip of water and resets, I’ll open the batting today, if I may. Minister, I want to take you back to Opposition – sorry for the trauma - but I send you back there. Essentially, do you think that the main problem the Government has at the present time in selling this package relates to arguments that were not articulated in Opposition? In Opposition there was a deliberate effort by the Coalition to minimise the differences and the perceptions of the differences in education between the Coalition and Labor. That's left voters in a position of getting this package after the fact without appropriate context, and every piece of information I've seen indicates that they don't like it. So do you accept responsibility for not articulating the case properly prior to the election? And do you accept that there is, at a minimum, the perception of broken promises? CHRISTOPHER PYNE: Well, thank you Katharine. Firstly, I don’t accept the assertion that not many people like this package. I think in my speech I highlighted a lot of people who like our package and a lot of them are vice-chancellors and that's because vice-chancellors know the dangerous situation that higher education is in in Australia if we don't take action to sustain it into the future. I was the education spokesman in Opposition for five years, but I wasn't the higher education spokesman. I was the overall shadow cabinet minister and in the 2013 election we did not release a higher education policy. We relied on the speech that the Prime Minister – now Prime Minister gave to the Universities Australia Conference, which did outline our general philosophical thrust. When we were elected and I became the Higher Education Minister, I took steps to inform myself about whether the expansion of the demand-driven system to undergraduate degrees had successfully achieved its ambitions, which was to skill the workforce and to lead to more young Australians getting a university degree and there was concern, there was commentary at the time that it might have led to a reduction in quality. And Andrew Norton and David Kemp did a report which addressed those three issues. They said it had not led to a reduction in quality, that it did meet the needs of the workforce and that it should be expanded and that more - obviously more Australians have got to go to uni and that it should be expanded to sub-bachelor courses, and they made a number of other recommendations. That sat out there to be debated and discussed for some time and I informed myself, as a good Minister should, about the situation facing higher education, and I spoke to a lot of people and I gave quite a few speeches hinting about the Government's plans in the Budget, about the direction in which we were heading. And if anybody reads my Universities Australia speech which was very long - anyone who was there will remember it was very long - it comprehensively, comprehensively outlined almost exactly what we did in the Budget. Now, the fact that some members of the fourth estate missed that is not my responsibility, but certainly the university sector didn't miss it, because they talk to us even more and Don Markwell, my higher education adviser, just one of the two Rhodes scholars in my office, he had a lot of communications with the sector. So I don't accept that we've surprised people with our higher education reforms. And even if you're right about that, even if it's true that we surprised people with our higher education reforms as you've asserted, it would be quite irresponsible, knowing the state of higher education in Australia and the challenges they face to simply say we're not going to do anything about that for three years. And that's why we acted in the Budget and that's why we'll try and get this reform package through the Senate. KATHARINE MURPHY: We’ll move to media questions, and our first today is from Michelle Grattan. QUESTION: Michelle Grattan from The Conversation. Mr Pyne, clearly you're going to have to make some compromises to get the package through the Senate. Talking about hints, you seem to be hinting very strongly that one area for compromise is the interest rate on student loans. I wonder if you could go a bit further to confirm that that hint is right, and also are there other areas that you're willing to be flexible about - for example, the cut in funding per student and some aspects of your deregulation thrust? CHRISTOPHER PYNE: Well, Michelle, the whole reforms do work like a well oiled machine and each part of the package is important to other parts of it. So for example, the expansion of opportunity is being achieved by expanding the demand-driven system to the sub-bachelor courses, which I know will be of benefit particularly to outer metropolitan universities and rural and regional universities. And so taking bits of the package apart, if that's what the Senate intends to do, needs to be very carefully considered and I intend to spend a great deal of my time over the next four months explaining all of these things, all of these moving parts to the cross benchers, and obviously I spend a lot of time engaging with them over the last few months because I think you can't talk to the cross benchers too much about something that you really believe in. In terms of hints, it's my intention to pass this package in September through the House of Representatives in total, as it is, as it's been presented. I'm quite realistic that when it goes to the Senate, the Government doesn't have the numbers on the floor of the Senate. If it did I would want the whole package to pass in total through the Senate as I have presented it, but as part of our democracy we have the house of review and it's controlled by four - by eight cross benchers, four members of the Palmer United Party and four other Independent senators, and Labor and the Greens are not supporting the Government's package yet and so therefore we are required to work with the cross benchers. And I'm happy to do so. I respect them all. I'm looking forward to spending more time with them. Inevitably in those negotiations, things change about the Government's program but I’m always a glass half full kind of person. Now, if we have to give up parts of the package to get the reform through, to get the thrust of the reform through then, you know, I live in the real world and that will happen. What I said in my speech was I tried to identify that the Government is listening to one of the chief concerns that seem to worry people which is the ten year government bond rate being applied to student debt, but I am committed to that because I think that the taxpayers should get the return that they put into the student in the first place, so if the taxpayers are paying the 10 year government bond rate then I think the students should pay the 10 year government bond rate when they pay it back. And I make the point that I think last week the 10 year Government bond rate was 3.42 per cent and the CPI is a little bit less than three per cent, so in fact there isn't an enormous difference between the two. But I think I've answered the question. We will obviously negotiate, we want to work with the Senate and I believe and hope that by the end of this year the majority of this package will be passed through the Senate. KATHARINE MURPHY: Matthew Knott. QUESTION: Thank you, Minister Pyne. Matthew Knott from the Sydney Morning Herald and the Age. An issue that a lot of people in the university sector have raised is the sweeping nature of the reforms and the pace of change. Fred Hilmer, who’s a big supporter of fee deregulation from UNSW said last week, he said there's too many moving parts to this package and the Government is trying to do too much at once; they should have taken it in a more staggered approach. Even the Commission of Audit recommended a 12 month process to look at fee deregulation, why is there a need for such rapid change in this area? CHRISTOPHER PYNE: Well, we're providing more than a 12 month period for the consideration of fee deregulation, Matthew, because we announced this in the Budget on 13 May and it doesn't begin until 1 January 2016. So in fact we gave the university sector, the polity, the Parliament, 18 months to consider these changes - more than 18 months to consider these changes and I have no intention of rushing them through the Parliament. We will take however long it takes to get the package through and Fred Hilmer is a very good man, he very strongly supports reform and deregulation. But if we continue to put off change, if we continue to add 12 months or two years, we are just putting off the inevitable. And I believe that we have the wit both in the Parliament and in the university sector and certainly in the Department of Education to implement these reforms and to implement them successfully by 1 January 2016, and I am concerned that if we put them off further then it will only give people an excuse not to face the reality that the sector needs to face now. KATHARINE MURPHY: Peter Jean. QUESTION: Peter Jean from The Advertiser, Minister. Minister, you’ve accused your critics, particularly the Labor Party, of exaggerating the potential fee increases that could occur under deregulation. But what real assurances can you give to people who might be thinking of studying at university in the future in areas which ultimately aren't going to lead to big salaries if they're thinking of going to allied health or something like that that they're not going to be saddled with enormous fee debts which are going to take them decades to pay off? CHRISTOPHER PYNE: Well Peter, the Labor Party doesn't understand the market. And they're being malicious in my view in trying to scare students into believing that there'll be exorbitant fee increases. I addressed it a bit in my speech, but one of the moving parts of this package is the expansion of the Commonwealth Grants Scheme to non-university higher education providers. And I'm told there'll be at least 140 accredited by TEQSA who will be able to compete effectively with universities. Of course they won't get 100 per cent of the Commonwealth grant scheme money because they don't typically do research, and therefore there'll be a discounted rate but they will be able to compete with the universities - with the Commonwealth Grant Scheme for the first time. There's an inevitability about that driving prices down. Vice-chancellors will also have to run their universities on the basis of offering what they do best even better and more of it and they will typically not try and compete in areas where they don't think that they're offering as good as say the university down the road. Both of those aspects mean that vice-chancellors will not be able to charge exorbitant fees because they won't have any students, and if there are 39 public institutions and there is another 140 people in the market. So say 180 people competing for the consumer dollar, if university X charges an exorbitant fee, they'll be undercut by the market and any vice-chancellor out there who thinks they're going to be able to charge exorbitant fees would get a very rude shock when their lecture theatres and tutorials are empty because students have gone to other institutions. That's how the market works. And that's why I'm very confident that fees will not be able to rise exorbitantly. I also make the point that vice-chancellors already know how much they can charge for their courses because they already have the international student market. In Australia, we have two systems operating in the same market, which is the one that the Government provides, which doesn't have a value attached to the course, and the one that the universities provide where they can attach a value to their course. So they already know the courses that will attract a students with higher fees because they're charging international students those fees, and it's my intention to not allow universities to charge fees more than they charge international students. In which case, there will be a cap if you like on what they can charge because they will not be able to go beyond what they're currently charging international students. KATHARINE MURPHY: Melissa Clarke. QUESTION: Melissa Clarke from the ABC. Minister, would you be willing to outline what communication you've had with the crossbench senators since this policy was released in the Budget and what consultation you'll have with them between now and when you introduce the legislation when Parliament resumes? CHRISTOPHER PYNE: Well, I have obviously written to the crossbenchers. I have stayed in constant communication with Clive Palmer by phone and by text and in meetings. Clive and I get along very well and I'm finding him a very good interlocutor in respect to these reforms. I have met with a number of the crossbench senators, some of them more than once, in fact two or three times, to talk to them about this package. The three PUP senators I've been asked by Clive to wait until legislation is introduced and then brief them together as a group, and I intend to do that, and I am being very proactive in my dealing with the crossbenchers. KATHARINE MURPHY: Stef Balogh. QUESTION: Minister, Stefanie Balogh from The Australian. Can I ask you a question on a different matter? Is it healthy for senior ministers to have leadership ambitions and how are those ambition balanced with questions of unity and loyalty? CHRISTOPHER PYNE: Well, that's a perennial question isn't it, Stefanie? [Laughter] It’s a perennial kind of Press Club question, too, isn’t it? Well, I think all politicians should have ambition. I think they should have ambition to serve their community. I think they should have ambition to bring about change. I think they should have ambition to grasp an idea and make it a reality. I think they should have ambition to serve others, and I think politicians who go into politics for other reasons have chosen the wrong career because I think politics is a vocation. I won't take the opportunity that you provided to create disunity. I will simply say that we have an excellent leader in Tony Abbott and I don't believe any Cabinet minister or any member of the parliamentary party is looking beyond the prime ministership of Tony Abbott. I want Tony Abbott to be prime minister for ten years or more and by that stage I will have been in Parliament for over 30 years. I know I look very young, but it's true, I will have been in Parliament for over 30 years. I'm ageless a bit like Michelle Grattan. Michelle and I together, we – came here a little bit before me, Michelle, but still I think we both have maintained our youthful good looks. But I'm not looking beyond Tony Abbott's prime ministership and I don't think any other Cabinet minister should be either. KATHARINE MURPHY: The ageless Marija Jovanovic. CHRISTOPHER PYNE: QUESTION: Marija Jovanovic from the Seven Network. Minister, you've spoken about a review of research infrastructure in your speech today. Can you go into more detail about what's likely to be considered in that? CHRISTOPHER PYNE: Well as part of the closing down of the EIF, the Education Investment Fund, which was established by the Howard government as the Higher Education Endowment Fund, the HEEF, Labor raided that quite dramatically when they won in 2007 and reduced it from about $6.6 billion to about $3.3 billion. As part of that closing down I've asked a couple of members of the EIF Board to advise me on ways that the Government can support and fund research infrastructure into the future. I'll probably more formally announce something about that in the coming months, but obviously I’m attune and awake to the need to continue to support research infrastructure in ways we can do so and wisely with the taxpayers' money. KATHARINE MURPHY: Joanna Mather. QUESTION: Joanna Mather from the Australian Financial Review. I just wondered, so are you saying that you won't allow any changes to the bond… to pegging HECS interest at the long-term bond rate, it needs to go through like that? CHRISTOPHER PYNE: Joanna, what I’m saying is that I will offer the package that the Government announced in the Budget in the House of Representatives because we have the numbers there. I anticipate that that will pass as it is. In the Senate, I don't have the numbers. Now, I - if I did have them I would want the package to pass as it is, because I believe that a student should pay the same interest rate on the loan that the taxpayers pay, which is the government – 10-year government bond rate. I will obviously have to negotiate with the Senate and I'm certainly not going to walk away from a entire package which I believe will transform the higher education sector and provide more opportunities for students over one or two aspects of the package that the Senate wishes to amend, and that's the nature of politics. KATHARINE MURPHY: Jessica Marszalek. QUESTION: Jessica Marszalek from the Herald Sun. Minister, in your speech, you mentioned that there would be 80,000 people who would have access to higher education under deregulation. I'm just wondering is there a chance deregulation might further compound an oversupply of some graduates in areas that are popular like teaching? And on that subject, you announced earlier this year a review around teacher quality. Can I ask where you are on that review and what improvements have you been considering in that area regarding university? CHRISTOPHER PYNE:        Well, the Teacher Education Ministerial Advisory Group chaired by Professor Greg Craven has been having regular meetings, meeting with me as well, and I’ll be having a dyslexia round table with them in Perth in the coming weeks because I’m obviously – well, I’m not obviously, I’m very committed to addressing issues to do with dyslexia and they will report back to me - and I believe that they’re running on time - by the end of the year about what they believe we can do around teacher quality. As the Federal Education Minister, what I can do in terms of the salaries of teachers, the industrial relations that surround teachers, the conditions under which they operate, I can’t do much about those things, those things are the responsibility of state and territory governments and I believe they should address those issues to make the teaching profession more attractive to young people in particular. Rather than tilting at windmills that I can’t control, my view is that where we do have some influence is in universities, and that means teacher colleges within universities, and so the particular remit of the Teacher Education Ministerial Advisory Group is to advise me on how we can improve the teacher training at university. So at least by the time I’m not in this job anymore, the new teachers coming out of teaching colleges, will I think, hopefully have a more practical rather than thematic understanding of teaching and, perhaps, a more orthodox approach to teaching in classrooms. I gave a speech about this at the Sydney Institute when we were in Opposition and pointed out that it wasn’t just me that thought the teacher training at university needed improving, it was also the young teachers coming out of the teaching colleges, it was the year 12 students going into them, and the principals, who inevitably hired them and had to work with them. So I am looking forward to their report and looking forward to implementing the implementable parts of it in the next – in the coming years through universities. The first part of your – oh 80,000 more students. Well, I think that getting a university degree almost in any discipline is good for an individual in improving their employability. Obviously, I outlined their health, their longevity in life. Now, choosing the right course is going to be made a lot easier by these reforms because universities will offer the courses where they know that they will get consumers and consumers will not do courses where when they look on QUILT, the Quality Indicators of Learning and Teaching, which I also announced today – well, I didn’t announce, but I outlined again today, they’ll look at the QUILT and recognise that the courses they were thinking of may not have had a high employability rate. Now, the consumer would then be – it would be unusual for the consumer to then choose that course and universities will, typically, when they haven’t got students doing those courses, won’t offer them. So, the market will ensure that the students that are being produced in universities are being produced for jobs that exist. Of course there are some courses where people do them out of interest, out of a private and public benefit, they don’t do them because of their employability post that degree and I think that is something to be encouraged if a student, mature-aged student, or any other kind of student chooses to go back to study and do a particular interest that might have – they would have pursued earlier in life but didn’t and are prepared to pay for it through the HELP scheme, I have absolutely no problem with that. KATHARINE MURPHY:       Andrew Tillett. QUESTION:   Andrew Tillett from The West Australian, Minister. You mentioned in your speech about how graduates can earn 75 per cent more than people who don’t go to university, over their lifetime they could earn up to a million dollars more. You also make the point, though, that you don’t think there’s a free education but those people who do go and pay – earn their million dollars more will be paying higher taxes and probably cover some of the costs of getting that education down the track, rather than necessarily have to pay it through high fees. What do you, sort of, say to that argument that these people will be paying more tax over the long term anyway from their education? CHRISTOPHER PYNE: Well, I think it’s a bit of a specious argument, actually, since you asked me what I think about that. I think it’s a specious argument because it’s really an argument for not charging anyone anything because we all pay taxes and it’s the same argument you could say that when I turn up to get my motor registration I shouldn’t have to pay for it because I pay taxes anyway. So, governments have to collect revenue. Universities need to have revenue to be able to pay their academic staff, to do their research, to build their infrastructure and students get the largest benefit from going to university - the largest private benefit. I think there is a public benefit to universities obviously and very pleased and proud that there are three public universities in my great state and several private institutions, as universities. But universities can’t exist on thin air, Andrew, and therefore they need revenue and students are currently paying 40 per cent of the costs of their study and our reforms will mean that they will pay about 50 per cent and I think most people in the community would think that was fair. In fact, I think a lot of people in the community think students are currently paying 100 per cent for their university degrees and when they find out they’re only paying 40 per cent, are surprisedthat there’s such a fuss about it from the Union of Students and the NTEU, et cetera. Because you have to remember that less than 40 per cent of Australians have a university degree. So, more than 60 per cent of Australians are paying for 60 per cent of the costs of students to go to university, to earn 75 per cent more than them over a lifetime. Now, if you can follow those percentages, you’re a better man than I am. [Laughter] But if you write them down you might be able to follow them. [Laughter] KATHARINE MURPHY:       A chap who has no trouble with percentages, Daniel Hurst. QUESTION:   Thank you. Daniel Hurst from Guardian Australia. Minister, thanks for your speech. You did mention Tony Abbott’s comments to Universities Australia in February last year and had pointed to that in response to that earlier question. In that same speech he flagged that a period of relative policy stability is probably what our universities most need now. In August 2012 you released a press release that said Coalition will not cap places or raise HECS and in Real Solutions, the Coalitions booklet, it said we will ensure the continuation of the current arrangements of university funding and, in fact, after the election in an interview with Sky News, in November, you said that you would not be raising fees, quote, I’m not even considering it because we promised that we wouldn’t and Tony Abbott made it very clear before the election that we would keep our promises. Can you just explain, please, how you reconcile those statements with the package you’ve now presented? CHRISTOPHER PYNE:        Well Daniel, I’m not raising fees. I’m freeing the university sector to place a value on the courses they offer students. The Government is not increasing HECS, we are not capping places; in fact, we are expanding the demand-driven system to the sub-bachelor courses because that to me is an equity measure. It means more young people from low SES background who are typically first generation university students will get the chance to go to university. So, I see this as a package that actually spreads opportunity and is equitable to those people in particular. The universities will make their own decisions about how they increase or decrease their fees, and so we’ve kept - we’ve entirely kept the promises that we made both before the election and since the election before the Budget. KATHARINE MURPHY: Could I just have a follow up? [Laughs] CHRISTOPHER PYNE: Katharine, sure. It’s your privilege. KATHARINE MURPHY: Do you accept the principle, though, that in order to make the case for a public policy change, it needs to be made in a straight forward way? Not hints, not inferences, but made. Surely you would accept that as a point of principle. CHRISTOPHER PYNE: And you also don’t announce Budget measures before the Budget, in my view, as a traditionalist. I don’t think you announce Budget measures before the Budget. We announced them in the Budget and I’ve been selling it ever since. KATHARINE MURPHY: Catalina Florez. QUESTION: Thank you very much. Catalina Florez from Network TEN, Minister. I’m following on from the broken promises theme but taking you to another issue. Were you supportive of the Prime Minister in his call to back down on 18C? Was that the right thing to do, given that he’s linked it to the national security laws and, I guess, was it the right thing to do in the face that it is a broken promise? CHRISTOPHER PYNE:        Well, George Brandis produced an exposure draft to amend section 18C of the Racial Discrimination Act. The nature of an exposure draft is that it’s put out for consultation and discussion. Since that time, he’s had 5000 - or more, in fact, I think it’s over 5000 - written submissions, countless meetings and much discussion with people, particularly in multicultural communities around Australia. And what’s become quite apparent is that they are not supportive of changing section 18C of the Racial Discrimination Act. And, at this particular time, when we are facing serious terror concerns with what’s happening in Syria and in Iraq and elsewhere, with this very unpleasant, home-grown Australian terrorism which is producing not only radicalised terrorists but well trained and potentially armed terrorists, what the Prime Minister wants is for everyone in Australia to be entirely supportive of the Government’s response on national security, and if there are hurdles that are in the way of that, those hurdles need to be cleared away. One of those, I think, was the changes to section 18C and the Prime Minister made a call that we would not proceed with that proposal, especially after their consultations as part of the exposure draft and I, 100 per cent, support the Prime Minister’s action. KATHARINE MURPHY:       Katina Curtis. QUESTION:   Katina Curtis from AAP. Minister you’ve said today variously that this package of reforms is a well-oiled machine; it’s a finely balanced package and you can’t alter one bit without throwing the whole lot out of kilter. But you’ve also said that you won’t let one or two sticking points in the Senate stop the thrust of the reforms from passing. So, which elements of the reforms do you see as the thrust of the package? CHRISTOPHER PYNE:        Well Katina, what I’ve said is that I want the whole package to pass as it is. I believe the whole package is the right reforms for higher education in Australia. That is not in the least bit inconsistent, and I think I said it several times that if we had the numbers in the Senate, that’s exactly what would happen. But we don’t. So, the choice is you either get everything you want or you walk away. Now, I think that would be immature and churlish to say that because we don’t get 100 per cent of everything we want, therefore we’re not going to have any of it. I think that would be what they used to call cutting off your nose to spite your face. So, I am prepared for the fact that when the bills get to the Senate, there will be a negotiation. But I am not going to flag to the crossbenchers, or anybody else in the Senate, which parts of the package are critical, at this stage, and which parts are open to negotiation. KATHARINE MURPHY: Let’s wrap on that note. [Applause] CHRISTOPHER PYNE: Thank you. KATHARINE MURPHY: We never allow our guests to go away empty handed at the National Press Club so just a small gift for the Education Minister, a membership, so he will certainly come back and see us again, and a small gift. Thanks again. [Applause] [ends]