THE HON CHRISTOPHER PYNE MP

Minister for Education

Leader of the House
SPEECH
**CHECK AGAINST DELIVERY**
'Spreading opportunity and staying competitive why
we need the higher education reform package'
National Press Club Canberra
! Au"ust #$%&
Introduction
In the Federal Budget in May, the Government announced a package of changes to
Australias higher education system! "hese changes #ill spread opportunity for students
and ensure Australia #ill not $e left $ehind $y cut%throat international competition and
disruptive technologies in higher education!
"hrough the Governments reforms, Australia can more than hold our o#n and create
some of the $est universities in the #orld and the $est higher education system in the
#orld! "he reforms #ill create a system that increases our nations international
standing! "he reforms #ill create a system that #ill provide Australians #ith the skills
and kno#ledge for the &o$s of the future!
'e live in a time of inevita$le and constant change! "he international economy is
evolving! "he employment market is changing! "he citi(ens and #orkers of tomorro#
#ill need different skills to those they need today!
Bruno Lanvin, E)ecutive *irector of one of the #orlds leading and largest graduate
$usiness schools, and a former senior e)ecutive at the 'orld Bank and the +nited
,ations has said-
.in an environment of ongoing disruptive technologies and economic structural
change, we are preparing graduates for jobs that have not even been defined
today
Glo$al competition for higher education is intensifying, there are #orld%class universities
emerging on our door step in Asia!
And ne# technology is driving the e)pansion of online education!
'e must e/uip Australias higher education institutions to meet the demands of the 01
st

century and #e have an historic opportunity to do this no#!
"he choice is stark-
either #e spread access to higher education to more Australians and keep our
country competitive #ith others in our region, or
#e support a higher education system that is unsustaina$le, that #ill decline into
mediocrity, and eventually $e left $ehind!
2no#ing the challenges #e confront, it #ould $e irresponsi$le, indeed co#ardly, as the
Minister for Education, not to act! 'hile it might $e politically e)pedient to leave it for
someone else, I didnt spend 01 years in politics scaling the mountain, only to admire
the vie#!
3o, I em$race this challenge, and I call on the 3enate cross%$enchers to &oin #ith me in
meeting it head on! I kno# #e can #ork together to create some of the $est universities
in the #orld and the $est higher education system in the #orld!
If #e adopt the Governments higher education package, Australian higher education
institutions #ill have the freedom to respond to our changing environment!
4ur universities and colleges #ill $e more creative and they #ill improve the teaching
and learning they offer in order to attract students!
Australian students #ill $e a$le to choose from a #ider range of courses! "hey #ill have
$etter information to help them choose #here and #hat they #ill study!
By 0516 there #ill $e an additional 65,555 higher education students per year supported
$y the 7ommon#ealth! "hese ne# students #ill include more Australians from
disadvantaged $ackgrounds, more students from rural and regional Australia,
Australians #ho re/uire more support to succeed at university and #orkers #hose skills
and &o$s are $ecoming outdated and need to $e updated!
'e need this package to spread opportunity to all these Australians! 'e need it no#!
Current situation
Both sides of politics agree Australias current higher education and research system is
unsustaina$le! Apart from the landmark reform of the demand%driven system, the
previous La$or Government tried to deal #ith this $y &ust making cuts! "hey made no
attempt to $olster revenue to universities in spite of kno#ing that more revenue #as
needed! In fact, under their #atch the international education market is estimated to
have fallen from 819 $illion in 0559%15 to 81: $illion #hen they left office!
By contrast this government #ants to strengthen our higher education system and make
it more sustaina$le in the long term!
"he uncapping of 7ommon#ealth supported places initiated under La$or allo#ed more
students to study at university! "his is very desira$le, and #e are maintaining this!
Ho#ever the demand%driven system led to rapidly increasing costs for the ta)payer!
I agree #ith former ;rime Minister ;aul 2eating #ho said-
there is no such thing.as "free" education, somebody has to pay. In systems
with no charges those somebodies are all taxpayers. This is a pretty important
point: a "free" higher education system is one paid for by the taxes of all, the
majority of whom havent had the privilege of a university education. !s"
yourself if you thin" that is a fair thing!
"his government $elieves the higher education system must $e fair and e/uita$le for all
Australians! "hose #ho $enefit most < the students themselves < must make a fair
contri$ution, given the ongoing $enefits they receive from higher education over their
lifetime! But I firmly $elieve that they should not pay until they are earning a decent
living!
Australian university graduates on average earn up to =: per cent more than those #ho
do not go on to higher education after secondary school! 4ver their lifetime graduates
may earn around a million dollars more than if they had foregone university!
+niversity graduates are consistently and significantly less likely to $e unemployed than
those people #ithout degrees!
And university graduates also live longer and en&oy $etter health!
+nder our package, #e e)pect higher education graduates #ill $e re/uired to contri$ute
around :5 per cent on average to the cost of their higher education! 7urrently students
contri$ute only around >5 per cent on average #hile the ta)payer pays ?5 per cent!
Ask yourself if this is fair #hen they are $enefiting more than those #ho are paying the
$ulk of the cost!
+nder our package pu$lic funding for education #ill continue to gro#! "otal education
and research funding in my portfolio #ill continue to gro# $y around 8:!= $illion over the
ne)t four years!
"his includes higher education and research funding that #ill gro# $y over 89:5 million
over the same period!
'e $elieve students undertaking a #ider range of courses deserve support from the
Australian Government! 7urrently only students studying $achelor level courses at
universities are guaranteed to have their place directly supported $y the Australian
Government!
"his means there is currently limited support for students #ho chose to study for higher
education /ualifications at "AFEs, private universities, and private higher education
institutions and for students studying higher education diplomas, advanced diplomas
and associate degrees!
"hese are the /ualifications that lead to &o$s such as childcare #orkers, aged care
#orkers and computer technicians! 'ith our changing economy and ageing population,
#hy dont #e support the students #ho #ill do these vital &o$s@
"hey are also /ualifications that serve as path#ays into university, preparing students
for university study! Many of these students come from lo# socio%economic status
$ackgrounds, and many are first generation university students!
3uch path#ays have $een proven to $e very effective in e/uipping students for
university! 4ften they perform $etter at university than students #ith $etter Aear 10
results #ho have not come through path#ay programmes!
4ur e)pectation is that guaranteed support for such path#ay /ualifications #ill help to
improve the success rate and reduce the drop%out rate for undergraduates!
In a #orld of gro#ing international competition, +niversities Australia has #arned us
a$out the risk of Australia $eing left $ehind!
7urrently our universities have limited prospects of competing #ith the $est in Europe
and ,orth America and the fast developing universities of Asia!
Five years ago there #ere no 7hinese universities in the top 055 universities in the
3hanghai Biao "ong inde) of universities! "oday there are five! In the same period only
one Australian university has entered the top 055, &oining si) Australian universities
already there! 'e face the prospect of our universities falling $ehind, or #e can do
something a$out it!
'e $elieve Australia must keep attracting the #orlds $est and $rightest to study here!
International students #ho come to Australia $ring different vie#s and cultures that
enhance our kno#ledge and skills! Importantly, international education is a valua$le
e)port! As I mentioned earlier, #e earn around 81: $illion $y providing education to
international students each year! It is our third largest e)port after iron ore and coal, and
our largest non%resource e)port!
+nless #e give universities and higher education colleges more freedom, #e are asking
them to operate in the modern #orld economy #ith one hand tied $ehind their $ack!
In early Bune, higher education commentator 3tephen Matchett said:
after #universities$ complaining about underfunding and government interference
for decades there is now a chance of change. !ustralian universities are
governed by rules from the %&'(s, designedto ma"e all )& institutions as
similar as possible. *hat wor"ed then does not wor" in the age of the internet,
with competition from across the country and the world.
4ur package also shores up critical research programmes left unfunded $y the previous
La$or Government! 'ithout our higher education package there is no solution to these
funding cliffs and Australias researchers #ill languish!
Views on the package
4ur reforms are a coherent package that #ill $ring Australias higher education system
into the 01st century!
As the economist ;rofessor Budith 3loan said a fe# #eeks ago, there are +uite a few
moving parts to the higher education pac"age..the sum of these moving parts will
produce a degree of coherence that has been largely absent from higher education
policy for some time.
As is clear from comments $y Belinda Co$inson of +niversities Australia, university
leaders generally agree #ith the Government that #e need to deregulate or free%up
higher education in Australia!
In early Buly, Australian "echnology ,et#ork DA",E E)ecutive *irector Ficki "hompson
e)plained that the A", supports deregulation! 3he said-
!!it,s about more than just financial savings, it,s also about driving diversity and
giving students unparalleled choice.
Ms "hompson advised independent 3enators that-
to reject the #deregulation$ legislation out of hand would be to sign the death
warrant on a globally respected higher education system.
Cegional +niversities ,et#ork 7hair, ;rofessor ;eter Lee, said-
universities may no longer be complacent about teaching performance, but we,re
probably not as smart and creative in challenging modern, technologically-savvy
students as we should be. To that extent, the deregulation reforms should play a
critical role in ma"ing universities loo" closely at what we teach and how we
teach it, and that can only be a good thing.
;rofessor Bohn *e#ar, Fice 7hancellor of La "ro$e +niversity, said prior to the Budget-
the reality is that something has to give if universities are to serve the national
interest effectively! deregulation of fee setting is an obvious next step
In this ;ress 7lu$ a #eek ago, the Fice%7hancellor of the Australian ,ational +niversity,
;rofessor Ian Aoung, said that it #ould $e a Gtragedy if the deregulation #ere not
passed, leading our universities inevita$ly into Gdecay!
And Michael Gallagher, 7hief E)ecutive of the Group of Eight +niversities, said-
the .(%/ 0igher 1ducation 2udget reforms are necessary. They are logical,
coherent, sustainable, e+uitable and inevitable.
Mr Gallagher #ent on to say-
my guess is that the detractors of micro-economic reform in !ustralias higher
education industry will find themselves on the wrong side of history in resisting
efficiency improvement and innovation.
#they will be$ curiously, supporting socially regressive subsidies from general
taxpayers to more advantaged segments of the community.
All of these different commentators are in general agreement that #e cannot stand $y
and do nothing!
"here is an emerging consensus!
"his is the right time for reform < the #orld is changing fast, and #e need to respond
no#!
'e need to free our universities to meet the challenges of the 01
st
century < a$ove all,
to meet the needs of our students and future graduates in a rapidly changing #orld!
Australias higher education system $eing left unchanged #ill mean that our students
receive a mediocre education that allo#s them to think they can compete #ith the
#orlds $est, only to find #hen they turn up to the competition they consistently come 6
th
out of eight and never mount the #inners platform!
Spreading opportunities for students
7ontrary to the $reathless e)citement of the ,ational "ertiary Education +nion and the
3ocialist Alternative, students are the $ig #inners from the Governments higher
education package!
As I said earlier, 65,555 more students each year #ill $e a$le to study the course of
their choice and at the institution of their choice #ith 7ommon#ealth support!
Cegional students and regional higher education institutions have the potential to
$enefit significantly!
Cecently I travelled from Mackay to "o#nsville to Lismore, *u$$o, 'agga and Mildura!
Every#here I #ent, people in regional Australia told me that they #ant access to the
same opportunities that their city counterparts en&oy!
"he reforms #ill encourage innovative partnerships, especially in outer%metropolitan and
regional areas #here universities and "AFEs can #ork together to offer the skills and
kno#ledge that local employers #ant in their employees!
"he Governments package #ill free regional universities to respond more fle)i$ly to the
needs of their potential students % to make studying at a regional university highly
attractive! "hese universities can offer a different lifestyle, lo#er living costs, high
/uality courses, strong student satisfaction, good employment outcomes, and potentially
$etter value for money!
;rofessor Bim Bar$er, former Fice 7hancellor of the +niversity of ,e# England,
said, !!we are li"ely to see prices move in both directions following deregulation and the
prestigious university brands will find themselves going head-to-head with a raft of
cheaper but e+ually high-+uality competitors.
3ommonwealth 4cholarships
+nder the Governments reforms, students from disadvantaged $ackgrounds including
from regional Australia #ill have access to the ne# 7ommon#ealth 3cholarship
scheme! "heir higher education institution #ill help them #ith their costs of living #hile
they study! "he scholarships #ill also $e a$le to cover fee e)emptions and mentoring,
tutorial support and even relocation and living e)penses!
Higher education institutions #ill $e re/uired to allocate one dollar in every five dollars
of additional revenue they raise from student contri$utions to this ne# scheme! 'ith
this investment, institutions #ill tailor individual packages to meet the needs of their
students, their consumers!
"hese ne# arrangements #ill mean our smartest students can receive a #orld%class
education no matter #hat their $ackground might $e or #here they are from!
0igher 1ducation 5oan 6rogramme 701568
3tudents in Australia do not face upfront costs and do not repay their contri$ution to the
cost of their higher education until they are earning a decent income! "hat #orld%class
system of support #ill stay! And #e #ill make it even more generous!
3tudents #ill $enefit from removing the loan fees that apply #hen students $orro# to
study under the FE" FEE%HEL; and FEE%HEL; schemes! "his #ill mean a level
playing field for students, no matter #here they choose to study!
Equipping universities for change
"he Governments package #ill give higher education institutions the freedom to #ork to
their strengths! 'e #ill give universities the opportunity to respond to the changing
economic and social environment in #hich they operate!
Higher education institutions #ill $e a$le to make informed choices a$out #hat courses
they offer, #hat fees they charge, #hich students they aim to attract, #hat teaching
methods they use, #hat scholarships they provide and #hat other support services they
give!
7onor 2ing, E)ecutive *irector of the Innovative Cesearch +niversities said shortly after
the higher education Budget package #as announced- The challenge for universities
is to engage with the potential of the new, not wor" out ways to operate as if nothing
were changing.
+niversity of 'ollongong Fice 7hancellor ;rofessor ;aul 'ellings said, Hthe ne#
arrangements #ill giveI each university a chance to control the level of funding per
student and to have greater ability to tune its own strategic direction independently of
the government. !fter all those years when the sector was controlled by volume and
price we should be celebrating the chance to do #something$ different.
Each institution #ill have the freedom to position themselves to provide the very $est
education to the students they #ish to teach!
4ne university may #ant to provide intensive tutorials to a small num$er of students
#ith the #orlds $est thinkers and teachers in their field! Another university may #ish to
provide innovative online courses catering for students #ho #ish to study in fle)i$le
#ays! 4thers may cater to parents or #orkers #ho #ant to change &o$s $ecause they
are #orking in industries that are contracting!
3tudents #ill $e a$le to choose the kind of degree they #ant!
As ;aul 'ellings #ent on to say, universities should anticipate changing behaviours
from undergraduate students who will want to see greater engagement! 9niversities
will need to re-examine the +uality of information we give prospective students and be
even more responsive to student needs and their graduate destinations.
Many higher education institutions are thinking #ith dynamism and strategic vision
a$out e)citing things they can achieve as a result of the reforms!
3ince the Budget announcement many university leaders have thought more than ever
$efore a$out ho# they are going to make #hat they offer students more appealing to
them!
3uch leaders are planning for the future and thinking a$out the package they #ill offer,
including courses, student support, scholarships, and the value they #ill offer to
students!
Fice%chancellor of 7entral Jueensland +niversity 3cott Bo#man said, there are two
types of universities: those that see change, wring their hands and say :h woe is me.
!nd then there are others that lic" their lips. *e are lic"ing our lips, he said, because
we are a lip-smac"ingly good university.
'hen competition increases, the #inners are students!
Driving quality through competition and etter information
A competitive market re/uires an informed consumer! 'e are responding to this truism!
,e# information provided through the Juality Indicators for Learning and "eaching #ill
put the performance of each higher education institution, private as #ell as pu$lic, in the
pu$lic eye!
3tudents and their families #ill $e a$le to access information a$out the /uality of
courses and institutions they are considering! "here #ill $e $etter information a$out
ho# successful previous graduates have $een at finding &o$s and #hat other students
and employers think of the course!
"his information #ill also help Australian institutions to compare their performance #ith
other countries, helping them to learn ho# to continually improve!
A ne# #e$site presenting this and other information #ill $e online later this year #ith full
implementation $y August 051:!
Course fees
I $elieve universities #ill $e very responsi$le in setting their fees under the ne# higher
education arrangements!
"here has $een a lot of misinformation and outrageous predictions a$out e)or$itant
fees! "here has also $een some considered analysis! An impressive e)ample of
considered analysis is the modelling $y the Innovative Cesearch +niversities that
identifies four options for institutions to keep their price changes to a minimum!
+nder one of the Innovative Cesearch +niversities scenarios all degrees in a university
in 051? #ould $e charged at the same rate < #ith all students, regardless of #hat they
are studying, paying &ust under 815,>55 each!
A further scenario allo#s for different prices for different degrees! "he ma&ority #ould
pay close to 86,555, and a small num$er in more e)pensive degrees like la#, dentistry,
medicine and veterinary science % #here the lifetime earnings of graduates are very
high % #ould pay 81K,K55!
7onor 2ing has said-
universities could easily spread the increases across all disciplines and limit the
cost increases to students.
;rofessor Ian Aoung, Fice 7hancellor at the Australian ,ational +niversity, said, $ased
on his calculations a three year degree may increase from 8>5,555 to 8:5,555!
"hese are not the stratospheric num$ers the opposition are maliciously trumpeting to
scare Australians a#ay from higher education!
Higher education #ill typically $e the $est investment a person #ill ever make in their
o#n future! It is crucial that no one is deterred from this life%changing opportunity
through e)aggerated and misleading scare campaigns!
"he 4pposition is irresponsi$le, ill%informed and dyspeptic! As Belinda Co$inson of
+niversities Australia has said, GIt seems a bit rich to be bloc"ing these reforms when
there is no alternative,. Bust $ecause La$or cannot accept reality doesnt mean #e
shouldnt effect reform! And #e #ill!
!esearch
A key element of the Governments higher education package is its commitment to
maintaining Australias research standing!
"he Government faced t#o funding cliffs in research < t#o crucial areas in #hich the
previous Government left no provision for future e)penditure! 'e have provided
hundreds of millions of dollars for research infrastructure and mid%career research
fello#ships that the previous Government left unfunded and that can only $e funded
through our package!
First, the Government has committed 81K9 million for the Future Fello#ships scheme,
a#arding 155 four%year fello#ships each year from 051: through the Australian
Cesearch 7ouncil DAC7E!
A couple of #eeks ago I announced 1:5 fello#ships a#arded to outstanding
researchers! "hese researchers are #orking on a $road range of research that #ill
deliver $enefits to our nation and our region! "his includes improving Australian
agriculture, food security and preventing future #ater scarcity!
3econdly, the Government has also committed to provide 81:5 million in 051:%1? to
continue the ,ational 7olla$orative Cesearch Infrastructure 3trategy! "his #ill ensure
that #e secure the $enefits of the 80!: $illion investment in state%of%the%art research
infrastructure since the 3trategy #as created $y the Ho#ard Government in 055>!
4ngoing development of our research agenda #ill $e informed $y the vie#s of the
university and research sectors, input from industry $odies and important revie#s such
as the ,ational 7ommission of Audit!
"he 7ommission found that G/uality research infrastructure is a critical component of
Australias research and development system! It also recommended that the
Government commit to Gongoing funding for critical research infrastructure in Australia,
informed $y a reassessment of e)isting research infrastructure provision and
re/uirements!
In line #ith this constructive approach, a positive revie# of research infrastructure #ill
commence in the coming months!
Implementation
"hese reforms #ill transform opportunities for Australians, particularly young Australians
to get the /uality higher education in Australia that they deserve!
In developing a plan to implement the reforms, #e are listening to the vie#s $eing
e)pressed across Australia! "he move to a ne# higher education system is $eing
carefully planned!
I am #orking closely #ith and listening to higher education and research stakeholders
on the details of the reforms and the process for implementation!
"he Legislation and Financing 'orking Group chaired $y Bohn *e#ar has advised me
on various important components of the higher education package such as the funding
for non%university higher education institutions and su$%$achelor courses!
And the Juality, *eregulation and Information 'orking Group, chaired $y +niversity of
'estern 3ydney 7hancellor ;eter 3hergold, has advised on ho# to implement the
changes #hile minimising unnecessary red tape!
I am considering their constructive and thoughtful advice in developing legislation for the
higher education package! I e)pect to introduce this legislation into ;arliament this
month!
,aturally, I understand that the single $iggest issue raised $y university leaders is the
interest rate on student de$ts under the Higher Education Loan ;rogramme! At present,
there is a hidden su$sidy from the ta)payer to students #hen the Government $orro#s
at the $ond rate to lend to students #hose de$ts are only inde)ed at the 7onsumer
;rice Inde)! 'e have proposed that students should pay in effect the interest rate that
the Government has had to pay to lend to them! 'e $elieve that this is $oth fair and
important for a fiscally sustaina$le Higher Education Loan ;rogramme!
I have $een consulting #ith universities and others, including through the *e#ar group,
on their concerns a$out this measure and a$out alternative proposals! ,aturally, I #ill
give careful thought to all that has $een said in this constructive dialogue!
Conclusion
It is no# up to the ;arliament to make this historic opportunity a reality!
"he Governments higher education reform package is essential for the future prosperity
of our nation!
If #e implement this package #e #ill have more highly /ualified people across a #ider
range of fieldsL and these graduates #ill come from more diverse $ackgrounds!
"hrough this package #e #ill have a strong competitive research systemL and #e have
the potential to have some of the $est universities in the #orld in #hat can $ecome the
$est higher education system in the #orld!
"he alternative is not accepta$le! If #e do not take this opportunity to transform higher
education #e #ill retain an unsustaina$le, outdated system! 'e risk that system
declining into mediocrity and Australia $eing left $ehind!
'e #ill truly $e on the #rong side of history if #e dont make change for the $etter and if
#e donMt make that change no#!