The AFR is reporting today that the Abbott Government will dump its controversial university reforms if it is unable to gain passage through the Senate by the end of March.
The Senate blocked the university reforms before Christmas, defeating the measure 33 against to 31 for, with Labor, The Greens, South Australian senator Nick Xenophon and Palmer United Party (PUP) senators Zhenya Wang and Glenn Lazarus among those that voted against the Bill.
Already, the Government has agreed to a range of compromise measures, including pegging the interest rate on student loan repayments to inflation (rather than the 10-year bond rate, as announced in the May 2014 Budget), allowing primary carers of children a five-year freeze on loan repayments, and as revealed yesterday in The Australian, potentially abolishing the announced 20% cut to university funding.
The compromises mean that the Coalition’s university reforms would be about one thing: deregulation so that universities can set their own course fees.
According to Education Minister, Christopher Pyne:
“We want to get this reform through in February or March this year but we will not so adulterate the reforms that they’re now meaningless and, if that’s the situation in Australia today, if the crossbenchers are not up to microeconomic reform because they don’t want to be unpopular with any organisation in Australia or any particular individual, well, the government will accept the decision of the Senate.”
While the compromises may be enough to persuade Xenophon and the PUP senators to support university fee deregulation, they also risk losing the support of senators Bob Day and David Leyonhjelm, who voted for the Bill in December, and are seeking a package that creates savings for taxpayers. Therefore, it remains to be seen whether the Coalition can broker a deal before its end-March deadline.
As noted yesterday, I remain sceptical of the Coalition’s university reforms for a number of reasons.
First, Australian students already pay a higher proportion of their tuition than those in most OECD countries, and fee deregulation would likely result in significant increases in student debt levels, acting as a millstone on their futures.
Second, the impact on women and certain socially beneficial professions would also be particularly bad, as NATSEM’s Ben Phillips has demonstrated when modelling the likely HECS debts of female scientists, nurses and teachers based on typical career trajectories.
Third, the higher fees associated with deregulation could actually worsen the Budget, since under HECS, the Government forwards all the money upfront to the University, and given defaults would likely rise.
Finally, there is no guarantee that the increased fees would be used by universities to improve the quality of teaching/courses. Rather, it is just as likely that they would be used to pad universities’ administration departments, to beef-up research, to pay for lecturers’ junkets, or any number of other follies.
Hopefully, the cross-bench senators will stand firm and retain their opposition to the Coalition’s university reforms.
