TOM CONNELL: One sector looking very closely at the vaccine rollout is the university sector, keen to get international students returning and knowing that could be quite some time off. Joining me live now is Alan Tudge, the Minister for Education. Thanks for your time. So, we know a billion dollars injected into universities in 2020 to help them through it. Universities Australia say the lost revenue is about 1.8 billion and 17,000 jobs. It’s still a big hit, isn’t it?
ALAN TUDGE: Well, a couple points on that. Obviously, any job loss is tragic and even if they were casuals or contracts coming to an end. The second point though is I’m surprised by the numbers which University Australia has put out, because it’s a much higher number than the aggregate of what each of the universities themselves published last year, which was more in the vicinity of 5,000 – still a very significant number.
But thirdly, just on the revenue side of things, yes, Universities Australia says that they were down $1.8 billion last year. But you’ve got to remember that in previous years, all the universities collectively had significant surpluses; 2019 for example, they had an operating surplus collectively of $2.3 billion, far greater than what they say their loss is in 2020. So, let’s put this into perspective. We keep a close eye on this, we are concerned if there’s job losses, but
we also have to understand that they’ve had operating surpluses for many years before that.
TOM CONNELL: Not an operating surplus obviously last year, though, and that was even with a billion. So, there’s clearly going to be a big loss of revenue this year. They’re putting it at 2 billion, it’s going to be significant. Can you commit there will be another injection of funds to avoid what would be some massive job losses?
ALAN TUDGE: Well, we don’t have the visibility of their accounts yet, and they’ve not put any proposal to me to say that they need additional funds. And when I at least look at the top-level numbers, for example of international students, which is 25 per cent of their revenue, enrolments as of December 2020 were only down 5 per cent compared to 2019. So, that’s only 5 per cent …
ALAN TUDGE: … And that’s only 25 per cent of their revenue. So, effectively only a 1.25 per cent hit to your revenue. Now, that’s not catastrophic given that you’ve been having operating surpluses in previous years.
TOM CONNELL: But a lot of them will be hoping they would have got here, and it doesn’t look like they will. If there is a loss in the order of revenue, in the order of 2 billion, would that be at a level where the Government would say, yes, you need assistance?
ALAN TUDGE: Well, we’ll look closely at what the actual figures are. But again, some of the universities have had significant operating surpluses over the last few years. I mean, collectively to date over the last 10 years, there's been an aggregate of $16.7 billion of operating surpluses until last year. And yes, then there was likely a deficit last year, collectively, as certainly a revenue downgrade.
TOM CONNELL: Let me put it this way then, I mean, if a situation is similar to last year, that is this year, would there be another billion or so in there? I mean last year's help was - obviously helped them a lot and helped save off jobs. So, if the same happens this year, the same money gets shelled out, or is this in keeping with the Government saying we can't go into debt, you know, the stimulus tap might get turned off? Is it-
ALAN TUDGE: Well, we just don't have visibility of those figures. And as I said, the universities themselves haven't put proposals to me. And I would say …
TOM CONNELL: But if the same situation rolls out, would the same help be available?
ALAN TUDGE: … But I would say, Tom, also in relation to the funding which we just announced, it comes into play in 2021. So it wasn't money for 2020. So, that billion dollars of research money, that will be played out this year. Plus, we've got an additional half a billion dollars’ worth of Commonwealth supported places. So, effectively, $1.5 billion of funding from the Commonwealth, new funding on top of other funding, which will be going to the university sector over this year and next.
TOM CONNELL: Alright. Well, job losses already. We’ll wait and see, I suppose. And there are a lot of things up in the air, so fair enough. You're waiting on that.
TOM CONNELL: But, what about the international cohort? I mean, what the universities are saying as well is 1,200 came here for the Australian Open, many from actually very high virus spots. China’s getting a handful of cases a day at the moment from 1.4 billion people. Pretty safe country to get people from. We could have a cohort from China, couldn’t we?
ALAN TUDGE: Well, we take our advice from the Chief Medical Officers and, as you know, the quarantine arrangements are governed by state governments, not by the Federal Government. So, in relation to the Australian Open…
TOM CONNELL: But an extra 1,200 was found in the Australian Open.
ALAN TUDGE: And that was the decision by the state government. So, the Andrews Government in my home state of Victoria decided that they would put those mechanisms into place, that was their decision. Our priority from a national government is on bringing Australians home.
TOM CONNELL: So, I understand that, yeah.
ALAN TUDGE: They have absolute priority, and they get the first bids in terms of the flights and in terms of the quarantine beds in each of the states and territories.
TOM CONNELL: Yeah. So there’s that pool and you’re saying we won’t eat into that – the health issues?
ALAN TUDGE: Correct, correct.
TOM CONNELL: The Australian Open became this separate pool. Now, if a state government came to you with a proposal, which New South Wales did but maybe it wasn't a separate one - with a separate cohort and maybe direct flights from China - nothing that would impinge on Australians - would you be open to that?
ALAN TUDGE: So we're open to looking at those situations, Tom. If a state government puts forward a proposal for quarantine arrangements above and beyond their existing ones, such that it's not disadvantaging Australians coming home; and, they get the tick off from their chief medical officer then of course, we'll be looking at that to approve. Now, none of the states and territories have such proposals to me at the moment, other than South Australia which is working on a very small one and is close to fruition.
TOM CONNELL: It might even help relations with China, who knows? Just the latest figures on childcare. So fees up, and I understand this fees and not just out of pocket?
ALAN TUDGE: Yeah, that’s right.
TOM CONNELL: It’s 5.6 per cent, 2019-2020. Then again, as we spoke about last time, I mean, the subsidy’s not keeping pace with those fee increases, is it?
ALAN TUDGE: Well, fees are up about 3.8 per cent. But, what matters to parents though is their out of pocket expenses, because you have the fees minus the subsidies and that gives you your out of pocket expenses.
TOM CONNELL: Well, they’re going up as well, aren’t they?
ALAN TUDGE: Now, they have gone up slightly, but let's bear in that almost a quarter of people are still paying two dollars per hour or less for their childcare, and almost three quarters are paying five dollars per hour or less for their child care because of the significant subsidies which are put in place. And those out-of-pocket expenses nationally are still down from the 2018 figures.
TOM CONNELL: Down from there but closely approaching it. Look, I know we just spoke about a lot of figures last time, so I won't try to re-prosecute that. But are you looking into whether centres have looked at this subsidy increase and are pushing up prices as a result of that? Trying to cash in on that?
ALAN TUDGE: Well, a lot of the centres are independent enterprises. They may be for profit. They have to operate within the guidelines which we set them. But, there's typically a competition as well which puts downward pressure on prices, too. But I would certainly be concerned if there was any price gouging overall.
TOM CONNELL: Are you looking into it?
ALAN TUDGE: We're always keeping a very close eye on this. If there is any price gouging, then it becomes a competition issue.
TOM CONNELL: What do you think the reason is? Is it that people are getting paid more? Centre costs?
ALAN TUDGE: Well, I don't think you've made the case here that there is that problem because, as I point out, the out-of-pocket expenses are actually still nationally down 1.8 per cent…
TOM CONNELL: [indistinct] huge injection of cash, and then-
ALAN TUDGE: …compared to 2000, compared to 2018.
TOM CONNELL: Right, but initially they were down in the order of 11 – so that’s closed 9 per cent. So that's, that the case that out-of-pocket is going up more?
ALAN TUDGE: They are still down, compared to 2018.
TOM CONNELL: But, the gap is closing, isn’t it?
ALAN TUDGE: And for many people it is still an opportunity for them to be able to send their kids to child care, particularly so that the mother can work or the father can work as well. When you look at those figures actually, Tom, we've got almost back to record levels of workforce participation amongst women. And we've got 300,000 more kids in childcare now compared to when we first started. So, that is saying that something is working there, that women are finding the opportunity to find a spot in childcare and get back into the workforce where they're choosing to do so.
TOM CONNELL: Got to leave it there. Education Minister, Alan Tudge, thanks for your time.
ALAN TUDGE: Thanks, Tom.