Topics: Cabinet reshuffle; Higher education changes announced in MYEFO
Julie Doyle: Impending news of the reshuffle that’s coming, are you staying as Education Minister?
Simon Birmingham: Well look, I would anticipate that, but in the end Cabinet and Ministerial arrangements are the gift of the Prime Minister working in a Coalition Government in consultation with the Deputy Prime Minister and National Party leader Barnaby Joyce. So we will see in time what he has in store.
Julie Doyle: So you haven’t had any phone call yet, though?
Simon Birmingham: I’m not going to go into my conversations with the PM. It is for him to announce any changes to the arrangements and, of course, for he and Barnaby to make sure that it puts the best team in place for the country’s future.
Julie Doyle: Just on that, the ABC understands that Darren Chester has been dumped from Cabinet. What do you make of that?
Simon Birmingham: I’m not going to pre-empt any announcements. Darren is a great MP, he’s been a great Cabinet Minister. I’ve got no doubt that Darren has much more to give in whatever different role he might be undertaking, or indeed his continuing role. So, we’ll just have to wait and see.
Julie Doyle: What about David Littleproud? It’s expected that he’s going into Cabinet. What do you think of that?
Simon Birmingham: Again, that would be pre-empting what decisions may or may not be made, so let’s just see what the Cabinet arrangements, if they are to be changed, have in store.
Julie Doyle: With these kind of reshuffles, they’re always risky though, aren’t they, that they could spark some dissent if people get their noses out of joint?
Simon Birmingham: It is up to the Prime Minister to make sure he has the best team on the field. This is around the mid-term of course of this term of Parliament, so it’s a customary time for leaders to take stock and make sure that, as you enter the final half of the parliamentary term, that they do have the right people in the right roles to ensure the country’s got the leadership it needs in different portfolios, and I have no doubt that if there are changes it’s exactly those types of principles that Malcolm will be considering.
Julie Doyle: Well, let’s move on to higher education and the changes that were announced yesterday. Now, the freeze of funding for universities at this year’s level for the next two years looking ahead, universities have responded to that, saying it will mean they’ll offer fewer places looking down the track and it will be harder for students to get a spot at university. Isn’t investment in higher education crucial for the Government to meet your economic objectives?
Simon Birmingham: Well, investment in higher education is crucial for the country, but it also needs to be efficient and effective. Now, universities are being asked to take a freeze in one stream of their payments for two years. So there are a number of other streams of payments to universities, such as regional loadings, equity payments, research payments, and indeed student contributions that are supported through the HECS-HELP scheme, all of which we would anticipate will grow in various ways and will provide an increased funding stream into universities. There are also many efficiencies that universities can find. They’ve seen …
Julie Doyle: Universities say that there aren’t. The universities I spoke to yesterday say the fat’s not there in the budget anymore, that they’ve taken hits over the years, and that if funding for places is capped it will mean they won’t have the money to keep offering more places.
Simon Birmingham: Well, even Tanya Plibersek and the Labor Party admit that there are efficiencies, which is no doubt why, when they were last in government, they proposed an efficiency dividend on universities, which was never ultimately legislated. We’ve actually seen, since 2013 when Labor was in office, every single Budget projecting and planning for some savings from universities because they’ve seen such phenomenal growth in their revenue – some 71 per cent growth since 2009, twice the rate of economic growth; 15 per cent growth per student, compared with cost growth of only 9 per cent per student – and that obviously shows there’s a dividend there.
Julie Doyle: But do they know their own budgets, though. They’re telling me that they can’t afford to take another hit and that they won’t be able to keep offering the same places.
Simon Birmingham: Well, this isn’t another hit Julie. I mean, this is getting to a point of finality in what has been a very long process, dating back to the Labor years in government, of government’s trying to say: look, your budgets have grown out of control; you were given the right to write your own cheque, and they’ve been doing that ever since 2009, effectively, writing their own cheque. It’s seen huge growth in university revenues and finances. There are clearly efficiencies that can be found. Various academics themselves have highlighted that if some of the universities were even at the 85th percentile in terms of efficiency, of the most efficient, there’d be around $500 million in savings per annum across the sector.
So, frankly, it’s time to go and have a look at the $1.7 billion spend on marketing, advertising and sponsorship by universities over the last few years, to take a look at admin costs and overheads and efficiencies to make sure that that is where any savings are found, and put back into then helping students get the best possible results.
Julie Doyle: Well, let’s have a look after the freeze. After the next two years, then it will be based on- funding will be based on performance and population growth. How will that work?
Simon Birmingham: So, what we’ve done is project after the two years for funding growth in terms of this stream – noting that, as I said before, other funding streams keep growing for universities – but after the two year freeze, this stream of funding to unis will grow in aggregate by the working-age population across the country, to make sure that it keeps up in terms of access to university for Australians. And then in terms of distribution of that, we’ll spend the next two years – probably realistically the next 12 months – to get it locked down, talking to the sector about how we can ensure effective measures to reduce the non-completion rates, which have increased over the last few years, to improve student outcomes, particularly graduate employment outcomes, which have decreased in terms of short-term employment over the last few years.
Julie Doyle: So will they be the two main things that you’re looking at then, employment after they finish their degrees?
Simon Birmingham: Well, the ultimate measure, indeed, of success in terms of training thousands and thousands of Australians is whether or not those Australians are getting the benefit of that training in terms of job outcomes, improved job outcomes, than they would’ve otherwise had.
Julie Doyle: Is this just a political strategy to try to get the crossbench back to the table, because you couldn’t get your plan that you announced in the Budget through the Senate, and now you’ve come up with this one? Is this an effort to say, well, you didn’t like what we put forward and now you’re going to have to cop something worse unless you come back and negotiate?
Simon Birmingham: Not at all. This is accepting reality, and the reality is that whether it was Labor and what they proposed, or indeed over the last few years, there’s been a planning for some savings in higher education, for a stemming of the rate of growth in costs, but not implementation of it. This is about implementing it, giving certainty, ending the uncertainty, and what it means is that universities and taxpayers can have confidence now that there will be growing funding into the future, but it will be more affordable and sustainable to taxpayers, and it will be coupled with measures to ensure unis are focussing on boosting the performance and outcomes for students.
Julie Doyle: Let’s look now at the changes for student loans. In the Budget, you wanted students to start repaying their loans when they were earning $42,000. Now the proposal is to have the repayments begin when they start earning $45,000. Is that a sign that you think you can convince the crossbench to support that figure?
Simon Birmingham: Well, we certainly had a number of conversations with crossbench senators about this, and amongst a number of the crossbench senators there is a recognition that with $50 billion worth of debt on the student loans book – around 25 per cent of it estimated not to be paid back unless some changes are made – there’s a recognition that there ought to be changes. Why is that? Well, it’s really for two reasons. One is to make sure that taxpayers get a fair deal in terms of not having billions of dollars of unpaid debts that end up, of course, flowing onto future generations, and the other is to make sure that the student loan scheme, which is at the heart of guaranteeing that Australian students can go to uni without any fear of upfront fees, remains sustainable and viable in the future.
Julie Doyle: So you think you can get that $45,000 limit through the Parliament?
Simon Birmingham: Look, I am hopeful in that regard. As I said, a number of conversations about the different measures were had with the crossbenchers. There was a concern expressed as well in some of those about the scale of debts that some Australians were accumulating, and so we’ve clearly taken that into consideration by putting in place some limits to those debts, limits which in no way impede the ability of any individual to complete their degree without any upfront fees whatsoever, to be able to defer it all onto the taxpayer-funded loan scheme – a generous loan scheme it is – that of course is only indexed at inflation. And even at $45,000 in terms of repayment levels of just one per cent per annum, that would see individuals paying back less than $9 a week.
Julie Doyle: So you haven’t plucked that figure though from the air, so I can assume next year when Parliament’s sitting we could see some movement there from the crossbench?
Simon Birmingham: Well, we’ll certainly look to legislate that, and we hope that the crossbenchers will recognise that it’s a fair balance in terms of guaranteeing a loan scheme that ensures no student faces upfront fees, whilst ensuring that’s sustainable for taxpayers in terms of avoiding mounting debts.
Julie Doyle: Alright, Minister, we’ll leave it there. Thank you very much.