Sky News PM Agenda
15 May 2014
Transcipt E&OE TRANSCRIPT
Sky News interveriew with David Speers
14 May 2014
SUBJECT: Budget 2014
DAVID SPEERS: You're watching PM Agenda, good to have you with us this afternoon. Education was a big area in last night's budget. You've seen the reaction from the State Premiers today, very angry over cuts to education and hospital funding. That's for schools in particular. When it comes to higher education though, last night we saw a blueprint for major changes, the biggest changes in decades to how higher education works in Australia.
To talk about all of this, the Education Minister, Christopher Pyne is with us now. Thanks for your time.
CHRISTOPHER PYNE: Pleasure, David.
DAVID SPEERS: Let's start with schools before we get to unis. Now you've seen the reaction of the states today. Admittedly Tony Abbott did say he would only fund Gonski for those first four years but explain exactly what happens then from 2018?
CHRISTOPHER PYNE: Well, I think Colin Barnett got it right today and he's a premier as well and he said that the states run public schools and the funding is locked in for four years exactly as we promised. Ironically, we're spending more on schools than Labor would have if they'd been re-elected. In 2017 it's $18.1 billion. Labor would have spent $18 billion. So for all of this hot air that we're hearing from Labor...
DAVID SPEERS: Colin Barnett though, Colin Barnett though didn't do the deal on Gonski with Labor in the way that people like New South Wales and Victoria did. They have written, signed agreements with the Commonwealth for six years.
CHRISTOPHER PYNE: But we also made it very clear that if we were elected we would have - we would revert to the normal four year funding agreement...
DAVID SPEERS: So let me....
CHRISTOPHER PYNE: ...that finishes at the end of 2017. So just to answer your question, in 2017 we will renegotiate a new funding agreement with the states and territories. The numbers in the budget are indicative only but what we have said is that there'll be the same amount of money plus CPI increases, which is a whole of government decision. So indeed money will continue to increase...
DAVID SPEERS: But no more than inflation.
CHRISTOPHER PYNE: ...every year for schools.
DAVID SPEERS: No more than inflation.
CHRISTOPHER PYNE: I don't think any treasurer of any state or territory could possibly have budgeted in, from 2018 onwards on the basis of Labor's blue sky promises that they made before the election...
DAVID SPEERS: Sure.
CHRISTOPHER PYNE: ...which they didn't put money in the budget to fund.
DAVID SPEERS: It's not very much of a lengthy negotiation then when it comes to 2017, is it, if, you've basically now said you get what you've got then plus inflation and that's it? No more.
CHRISTOPHER PYNE: Well the distribution between the states is to be negotiated but there's only a finite amount of taxpayers' money. Now we know that Labor just kept borrowing money. But we won the election in September and we said to the Australian public that we would get the budget under control and that we'd live within our means.
DAVID SPEERS: Well...
CHRISTOPHER PYNE: So the Australian public knew that we wouldn't keep just borrowing money to fund blue sky promises.
DAVID SPEERS: Let me ask you this then. Why did you prior to the election at the eleventh hour say okay, we're going to sign up for four years to this Gonski idea, if it was such a bad idea, if you were going to dump it after four years and revert to this?
CHRISTOPHER PYNE: Well I don't think it's such a bad idea. That's why we're funding it for four years. I think a needs based school funding model that recognises loadings for things like disability and increases funding for those kinds of disadvantaged and pays that equally across the non-government and government sector so that no sector is discriminated against is a good model and that's why we're funding it. And amazingly, David, I delivered it nationally.
DAVID SPEERS: But not in...
CHRISTOPHER PYNE: So I bought Western Australia, the Northern Territory and Queensland in when Labor had them out.
DAVID SPEERS: But not...
CHRISTOPHER PYNE: I put $1.2 billion more in that Bill Shorten took out.
DAVID SPEERS: But you're not delivering in year five and six that big increase that Gonski called for, that Julia Gillard agreed [on the states with 3:30].
CHRISTOPHER PYNE: Well Labor would never have, Labor would never have been able to deliver that because they don't have that money either. So Labor's just - was just trying to con the Australian public and the Australian public wasn't conned because they voted for us.
DAVID SPEERS: Let's go to higher education where the big changes are. You're deregulating fees but allowing universities to charge what they want. How do you expect this will change the higher educational landscape?
CHRISTOPHER PYNE: Well we are making the biggest reforms to higher education in thirty years, as you pointed out in the introduction, and we are bringing in a huge adrenalin shot of competition into that system. So universities for the first time ever will have to compete with non-university higher education providers because the Commonwealth grant scheme will be extended to those non-university higher education providers.
DAVID SPEERS: So private...
CHRISTOPHER PYNE: That'll drive the price down because competition always drives the price down.
But we're also going to have a huge spreading of opportunity amongst low SES, low socio-economic status students, students who have low ATAR results who typically use pathway programs into university degrees. So we're going to extend the demand driven system to diplomas and associate degrees. All of this is going to cost us money but it will mean that there'll be more choice and there'll be eighty thousand more students getting university diplomas and degrees.
DAVID SPEERS: Just on that, expanding the courses that the Commonwealth will subsidise, it is only diploma courses that are a stepping stone to a degree?
CHRISTOPHER PYNE: Well, there's a number of different ones. There's diplomas, there's associate degrees, there are some degrees, they're typically done at regional universities, outer suburban universities.
This will be a huge funding shot in the arm to those universities but all the reforms will mean that together, these reforms together, more information, the demand driven system, the Commonwealth grant scheme and the biggest Commonwealth scholarships scheme in Australia's history. But our best universities will be able to focus on what they do really well and compete and will be able to compete against the Asian universities that are coming at us in the rear view mirror.
DAVID SPEERS: Well this is the thing, so if they're competing not just with each other here but as you say regionally...
CHRISTOPHER PYNE: They're competing internationally.
DAVID SPEERS: This is a regional market...
CHRISTOPHER PYNE: Exactly right.
DAVID SPEERS: ...that they're competing in. It is going to mean some fees go up and some go down, doesn't it?
CHRISTOPHER PYNE: That's right.
DAVID SPEERS: So what's it going to mean specifically for a law degree at Sydney University, a prestigious sandstone university that has high demand for it at the moment. I think it costs around $40,000 to the student to do a law degree there. What's going to happen to that?
CHRISTOPHER PYNE: Well, the prices might go up or they might go down depending on competition but the good news is they'll be able to borrow every single dollar from the Australian taxpayer.
DAVID SPEERS: But what do you expect the price to do, for something like that, a law degree at Sydney Uni?
CHRISTOPHER PYNE: I'm not making any kind of estimates because I think...
DAVID SPEERS: Has this been modelled at all by your Department?
CHRISTOPHER PYNE: Well of course but I think people would be surprised at how much competition has an effect on reducing prices.
DAVID SPEERS: So why can't you release those sort of rough modelling in the estimates?
CHRISTOPHER PYNE: Well we typically expect that the student contribution to their education will be about fifty/fifty shared with the taxpayer. At the moment it's forty/sixty...
DAVID SPEERS: Yes, so the student has to pay - pay more...
CHRISTOPHER PYNE: ...the taxpayer pays sixty. The student will have to pay more in those circumstances.
DAVID SPEERS: But the actual course fee itself set by the university...
CHRISTOPHER PYNE: Well every fee will, could potentially be different. That's the whole purpose of a market.
DAVID SPEERS: You have, you have some idea what's going to happen.
CHRISTOPHER PYNE: Well I think some prices will go up, some will go down.
DAVID SPEERS: There is modelling on this?
CHRISTOPHER PYNE: Overall - overall we believe that the scholarships scheme, which is twenty per cent of what universities charge, will be worth about $200 million.
DAVID SPEERS: No, but I'm asking about a law degree at a prestigious university.
CHRISTOPHER PYNE: I know what you're asking about.
DAVID SPEERS: What's going to happen to that, the price of it?
CHRISTOPHER PYNE: There is no point in speculating on one degree at one university.
DAVID SPEERS: No, but you do have some idea, don't you?
CHRISTOPHER PYNE: I have an idea that we'll collect - the universities will collect about a $1 billion extra and about $200 million of that would be put into the Commonwealth scholarships. But this is also coupled, by the way, with a massive expansion of support for apprenticeships, the trade support loan programs, which [unclear 7:29].
DAVID SPEERS: Sure, but I just want to stick with this issue about the cost of a course. For a student at the moment $40,000 for a law degree.
CHRISTOPHER PYNE: Yeah.
DAVID SPEERS: Is that possibly going to go up towards or past $100,000?
CHRISTOPHER PYNE: It could go up, it could go down and that will depend on the competition in the market.
DAVID SPEERS: So that $100,000 figure isn't out of the question?
CHRISTOPHER PYNE: Look, I'm not going to give you the headline that you're searching for. Some people are speculating about...
DAVID SPEERS: We're all stabbing in the dark but you have a better idea.
CHRISTOPHER PYNE: But let's see how the market reacts from 2016 onwards remembering that current students are grandfathered in the current courses that they are doing so it won't affect them whatsoever.
This is such a well calibrated reform that it will lead to more students going to university from low SES backgrounds, with low ATAR scores. It will also mean because of the scholarships...
DAVID SPEERS: Which is great.
CHRISTOPHER PYNE: ...that the smartest kids in the world - the smartest kids in Australia will get to go to the best universities in Australia. And it frees our universities to become the best they can be and compete.
You know, five years ago, David, there were no Chinese universities in the top two hundred in the world. There are now five. And there are six Australian universities in the top two hundred and all of them are falling down the rankings. If we don't let our universities compete it'll go the same way as the manufacturing sector over time. And we also have to spread opportunity through the trade support loan program for apprenticeships, through the demand driven system going to these diploma courses and through private providers being able to compete with universities.
DAVID SPEERS: That greater access for students is the really good part of this. The reality too though is, which I'm sure you acknowledge, is that all of these students will be saddled with greater debt.
CHRISTOPHER PYNE: Okay. Yep, I can answer that. There is no evidence at all that students do not choose a course because of the cost. Do you know why? Because in Australia we have the world envied scheme called the higher education loan program. So yes, students don't like paying, who does like paying? But at the end of the day they don't not go to uni because they know they can borrow every dollar back from the taxpayer.
DAVID SPEERS: That's true, but there's debt and there's debt. Because at the moment you might start after you've graduated and start your career with a $40,000 debt. But if it's $100,000 debt that is a very big different scenario.
CHRISTOPHER PYNE: The students will have to weigh up the personal benefit against the debt that they might have to pay. Now the current HECS debt...
DAVID SPEERS: You as government have to weigh up the social good of having more people studying...
CHRISTOPHER PYNE: Yeah.
DAVID SPEERS: ...these degrees.
CHRISTOPHER PYNE: There will be a lot more people studying.
DAVID SPEERS: It's not just good for them; it's good for our economy to have highly educated...
CHRISTOPHER PYNE: It is but sixty - more than sixty per cent of Australians don't have a university degree and they are paying at the moment sixty per cent of the cost of students' tuition fees. That is a very generous gift that those people are giving to people who have a seven - who earn seventy five per cent more than them over the course of a lifetime. I think students get a great deal in Australia and they know that they can pay all that back when they start earning over $50,000 a year.
DAVID SPEERS: Just back on schools. One area where you are increasing funding is for school chaplains who are linked to a church, an extra $60 million a year. Why have you been able to find money for that while you've had to cut money for the CSIRO and other bodies?
CHRISTOPHER PYNE: Well, I'm responsible for the education portfolio so I can't comment on what's happened in other portfolios. I've been pretty focused on education over the last few weeks as you can well imagine given the big reforms in my area.
Well, school chaplaincy is a Howard Government program that we established. We want it to operate in two-thousand-nine-hundred schools. The feedback from the community is that it it's a tremendously successful and popular program at a time of youth suicide being an important issue, the social media creating a whole lot of new issues around bullying, et cetera. Now is not the time to be cutting back a program where young people get the opportunity to talk to somebody in their school who isn't a parent, who isn't somebody that might repeat what they say.
DAVID SPEERS: Let me ask you one final general political question about this budget. We've seen Clive Palmer this afternoon talking tough about ready to go to an election on some of these unpopular cuts. Is the Government ready to fight an election on any of this?
CHRISTOPHER PYNE: Well the most important thing that we can do is get it right for the Australian people and for it to be fair for everybody, to address the deficit and disaster, the debt and deficit disaster, left for us by Labor.
DAVID SPEERS: And if the Senate doesn't back it?
CHRISTOPHER PYNE: The public doesn't want an election. The public wants the Government to be allowed to get its mandate through...
DAVID SPEERS: And if you don't? If you don't?
CHRISTOPHER PYNE: Well, we shouldn't be dealing in hypotheticals and I don't think the public will respond well to Clive Palmer or anyone else saying that they'd like to have another election. We won the election last year in September because the public wanted stability and consistency and that's exactly what we're giving the public. They will not welcome minor parties threatening bellicose action over things that we've been elected to do.
DAVID SPEERS: Christopher Pyne, thank you.
CHRISTOPHER PYNE: Pleasure.
DAVID SPEERS: We'll take a break then we're going to hear from the Deputy Labor Leader, Tanya Plibersek. Stay with us.