The ALP believes it can capitalise on fears the government’s cuts to higher education will put university out of the reach of many families. By Sophie Morris.

Labor’s higher education hopes

Opposition Leader Bill Shorten speaking at ANU.
Opposition Leader Bill Shorten speaking at ANU.

At the University of Western Sydney, one in four domestic students come from poor families. More than six in 10 are the first member of their family to go to university.

It was these students and their families, rather than those on sandstone campuses, that Labor leader Bill Shorten was championing when he declared the next election would be about higher education.

“We will make the next election a competition for the best university policy,” he vowed during parliamentary debate on the government’s higher education legislation last week. “We declare that the game is on for who has the best policy in higher education.”

Even Labor strategists who want to fan public fury over an unpopular budget concede that it is gradually receding as a hot-button issue. Four months after the budget was unveiled, people are talking about it less and less.

Yet they say the university changes continue to resonate. And rather than being an ivory towers issue that relates solely to students, Labor polling shows university fees have become a concern for families.

Labor pollster from UMR Research John Utting says that in focus groups and polling post-budget, higher education is “showing up big-time amongst middle-class, aspirational, swinging voters”.

 “These changes – and the shorthand is the Americanisation of higher education and $100,000 degrees – are seen as closing the door on opportunity,” he says. “People say: I’d like my kids to go to university, but I’m not going to be able to afford this.”

While the budget proposal for a $7 co-payment for doctors’ visits alarms the Labor base, Utting says the university changes matter to the swinging voters whom both major parties pursue.

This is the calculation behind Shorten’s pledge early in this electoral cycle to prioritise higher education, which is traditionally viewed as an issue that people profess to care about but that does not sway votes come election day.

It is at odds with the view that has long informed Coalition strategy, that talking excessively about higher education is evidence of a government that is pandering to privileged students and is out of touch with the community.

This view is apparent when Education Minister Christopher Pyne, making the case for fee increases, argues that “60 per cent of adult Australians who will never hold a degree are subsidising the other 40 per cent”.

The government’s legislation is a complicated mix of changes, including uncapping fees, cutting per-student funding by 20 per cent, establishing a new scholarship fund for disadvantaged students, increasing the interest on student loans and extending Commonwealth subsidies to diplomas and associate diplomas at TAFEs and private colleges.

Elements of this package would open up opportunities for those from low-income groups to study, for instance at private colleges or on a scholarship, but this has been lost in the clamour over $100,000 degrees and debt traps. And their main study options might be on the lower rung of a tiered system.

The perception of inequity is reinforced by the proposal to impose a real interest rate on student loans, lifting it from the inflation rate to the 10-year bond rate, up to a maximum of 6 per cent. Several studies have shown this penalises those on lower incomes, who take longer to repay loans, including those who take time out of the workforce to have children, which is mostly women.

A report published this week by the Melbourne Institute of Applied Economic and Social Research found the changes would double the time most graduates take to repay their debt. “Those at median incomes take much longer to repay their debts than under existing arrangements, with males likely to take 15 years to repay their debt, females 26 years,” says the report, by economist Chris Ryan. Those still on incomes of $55,000 a year a decade after graduating would repay an extra $80,000 in total.

The government faces a challenge to rally senate support for the overhaul. After meeting the student union at the University of Queensland this week, the Palmer United Party’s senate leader, Glenn Lazarus, promised “the PUP will be doing everything possible to ensure the reforms do not pass the senate”.

The PUP’s record in the four senate sitting weeks since July 1, of noisily opposing government legislation then supporting it after some amendment, gives the government hope its legislation is not dead. But higher education differs from the carbon and mining taxes, in that the PUP campaigned on a platform of no-fees-for-degrees and the Coalition came to office promising no changes to university funding.

In another blow to the government’s hopes, Ricky Muir used his senate question time debut to voice his concerns. The motoring enthusiast and former sawyer said he never went to university but worried that his five children might not be able to afford it.

“What should I tell my children when they ask me why the government wants to deregulate the sector that could put universities out of reach for millions of ordinary Australians?” he asked.

Having passed the lower house, the legislation will be examined by a senate committee, reporting on October 28. But the senate impasse has the sector nervous. Although the debate has revolved around equity and affordability, some university chiefs are concerned about the sustainability of their institutions if they are not able to raise more funds, particularly if there are funding cuts. 

As the legislation passed the house of representatives, Universities Australia (UA) – representing 39 institutions – wrote to the eight senate crossbenchers, warning the sector was at a “tipping point” and that chronic underfunding was putting higher education and research quality at risk.

The lobby group is proposing a compromise, urging crossbenchers to push for a reduction in the per-student funding cut and for no change to the interest rate on student loans, as well as wanting transitional assistance for some campuses. Under these conditions, UA wants the senate to support fee deregulation.

Pyne has signalled he is open to negotiation and wants reforms passed by the year’s end. But this compromise proposal from UA masks deep divisions over the changes, which will exacerbate existing differences between institutions.

These divisions were on display at a “Great Debate” in June between Australian National University vice-chancellor Ian Young and his University of Canberra counterpart Stephen Parker, organised by the ANU’s student newspaper, Woroni.

Less than 10 kilometres separates the two institutions, but their missions are vastly different and their VC’s approaches to higher education policy are poles apart.

Parker, whose university’s top courses are commerce, nursing and education, described the government’s package as the “worst piece of policy I’ve seen in Australia in my 26 years here”.

“These changes taken together are unfair, unethical, reckless, poor economic policy, contrary to the international evidence and being woefully explained, raising suspicions about how much thought has actually gone into them,” he said to applause from students.

Parker said universities would need to increase fees by an average 30 per cent just to compensate for funding cuts and could go higher still, with fees charged to international students the only cap.

Parker’s speech focused on students, rather than the challenges for his institution, but the government’s proposals could threaten campuses such as the UC, with stiff competition from private colleges.

Young, whose university draws students from around Australia and overseas and prides itself on its high-quality research, rose to make his case. He argued the pursuit of excellence was hampered by the lack of funds, and that the shift to bigger student contributions was “sadly inevitable”. 

He said the dramatic expansion of enrolments in higher education, with an extra 130,000 students in the past five years, had led to a doubling in costs, and that there was simply no political will to fund this properly. 

“Even the Labor government who came to power with the slogan of an education revolution could not sustain this increased burden,” Young said.

“If we do nothing, the result will be clear: a continued decline into mediocrity. Based on decades of indifference from voters and hence the governments they elect, I have little faith that a change will arrive any time soon.”

The opposition believes the voters who matter are no longer indifferent. Shorten has staked it out early as an election issue and some in the opposition already speculate that the PUP might be prepared to risk a double dissolution on it. But if the government somehow overcomes senate opposition, the changes would be difficult to unwind. In that case, Shorten’s promise of the “best university policy” may prove academic.

This article was first published in the print edition of The Saturday Paper on September 13, 2014 as "Class distinction".

A free press is one you pay for. Now is the time to subscribe.

Sophie Morris is The Saturday Paper’s chief political correspondent.

Sharing credit ×

Share this article, without restrictions.

You’ve shared all of your credits for this month. They will refresh on August 1. If you would like to share more, you can buy a gift subscription for a friend.