House of Representatives

Second Reading Speech

Dr KEMP (Minister for Education, Training and Youth Affairs and Minister Assisting the Prime Minister for the Public Service)

I move:

That the bill be now read a second time.

Universities are important institutions in Australia's social, cultural and economic life. Their health, therefore, is a matter of concern to all Australians. I am pleased to report that, as a consequence of the less restrictive regulation and well-targeted incentives provided under this government, universities are enjoying record enrolments, record revenues and record levels of graduate satisfaction.

There are now more opportunities for higher education study than ever before. In 2000 there were 464,000 equivalent full-time students in Australian universities-some 28,000 more than in 1996. This equates to a large new university. Similarly, the number of undergraduate places fully subsidised by the Commonwealth has grown by nearly 16,000 equivalent full-time student places. Universities have projected that enrolments will reach a record level of 582,000 equivalent full-time places in 2003-a 27 per cent increase on enrolments in 1995. In 2001 there was a 2.3 per cent increase in the number of university places offered to commencing students and a 14.4 per cent decline in the number of unsuccessful applicants.

University revenues have grown to a record level, estimated at $9.5 billion in 2001-some $1.2 billion more in real terms than in 1995. This achievement demonstrates that universities are building stronger relationships with business and the community.

The most recent Graduate Careers Council of Australia's course experience questionnaire shows that graduate satisfaction is at its highest level ever with 91 per cent of bachelor degree graduates surveyed expressing overall satisfaction with their courses. Clearly, universities are becoming more focussed on student needs, such as access, course offerings and quality.

These excellent outcomes are the result of policies that have freed universities from the over-regulation of the past. For example, the government has assisted universities with the capacity to enrol additional students at marginal cost by providing supplementary funding for any HECS liable undergraduate student places offered above the number of fully subsidised Commonwealth places. The previous government refused to do this.

We have also given universities the option of enrolling fee paying undergraduates. This policy is opening up more choices and opportunities for Australians to access higher education. In the past some capable students missed out on a HECS liable place in the course of their first choice because of high demand. If such students are willing to undertake the course on a fee paying basis, they free up a Commonwealth funded place for another student. There are, of course, safeguards in place to ensure that Commonwealth funded places in all courses are protected.

The government, however, is not resting on its laurels. We recognise that innovation at all levels is becoming an increasingly important driver of economic growth and is the key to economic prosperity. Our universities produce much of the knowledge and skilled work force that sustain the innovation system. To remain at the forefront of the knowledge economy, we must boost our investment in innovation through universities and other sectors.

In January the Prime Minister made the most significant set of policy and funding announcements in support of innovation that has ever been made in this country. The government's innovation action plan, Backing Australia's Ability, committed an additional $2.9 billion over five years for science, research and innovation. It included an additional $1.47 billion to be provided through the university sector. This bill will lock into place the second year of that funding-the funding for 2003.

Backing Australia's Ability provided an additional $736 million to double the Australian Research Council's national competitive grant schemes. It provided $583 million to build up the research infrastructure in our universities. And it provided an extra $151 million over five years for additional university places in the priority areas of information and communications technology, mathematics and science.

There is also a new loans scheme available for postgraduate course work study. The Postgraduate Education Loans Scheme will improve access to postgraduate course work study by providing interest-free, income-contingent loans similar to HECS. The loans will mean that students will no longer be prevented from participating in postgraduate studies because they are unable to pay the tuition fee up-front. This initiative is a major equity measure that will greatly increase opportunities for people to upgrade their skills or develop expertise in new areas.

As well as delivering on Backing Australia's Ability, this bill delivers on two new budget initiatives. The government is making $38.4 million available over four years to fund 670 new commencing places each year in regional universities and campuses. This will mean around 5,200 additional student places delivered by 2005 as students progress through their studies. The additional places will be allocated to respond to demand in areas of rapid population growth and to address the needs of regions with low access to higher education and low rates of participation.

The second budget measure is part of the government's Welfare Reform Package. The measure provides $38 million to expand opportunities in vocational education and training, and higher education for people with disabilities. Approximately $8 million of this is additional funding for universities to help support students whose disabilities give rise to very costly educational support requirements. It will ensure that universities that enrol high numbers of these students are not disadvantaged.

The bill updates the funding amounts in the Higher Education Funding Act 1988, HEFA, to provide supplementation for price movements; to reflect revised estimates for HECS contributions and the Commonwealth's superannuation liability; and to rephase a small amount of innovation program funds. In addition, the bill legislates the base level of funding for universities in 2003.

The bill makes several technical changes to the Higher Education Contribution Scheme, Postgraduate Education Loans Scheme and related schemes in relation to the treatment of bankruptcy and guideline making powers on work experience in industry and provides for small repayment credits to offset outstanding tax debts.

The bankruptcy amendments clarify the treatment of accumulated HECS debts in the event of a HECS debtor becoming bankrupt. They allow for pre- and post-bankruptcy HECS debts to be separated and for each component of the debt to be treated fairly and appropriately. These amendments will assist people contemplating bankruptcy by giving them certainty about their situation and will protect the public's asset. These amendments will commence today.

The bill amends the Australian National University Act 1991 to enable a more effective committee structure to be established to advise the University Council. Lastly, the bill makes minor technical changes to HEFA to remove a reference to the now repealed Overseas Students Charge Act 1979.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Swan) adjourned.