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Students Respond to the Mid-Year Economic and Fiscal Outlook
Anything But ‘Innovative and Agile’
Member of ANU Labor Students Club
Does anyone remember the ‘Innovation Agenda’? Turnbull’s signature policy launched right after he became PM, with promises of an ‘innovative and agile Australia’? Well, with the latest cuts to higher education revealed in the 2017-18 Mid-Year Economic and Fiscal Outlook (MYEFO), Turnbull has shown us that he is continually willing to abandon the values we once thought he stood for.
Taking the scalpel to students is by no means an innovative policy, and yet the government persists with a $2.1 billion cut in the name of budget repair. With Senate approval, this MYEFO would enact two new policies. Firstly, the HECS repayment threshold would be lowered from $55,000 to $45,000. To put that into context, it’s almost as much you would earn a year working full time at McDonald’s. Secondly, it would put in place a lifetime student loan cap of $104,000 (or $150,000 for medical, veterinary and dental courses), which will make it harder for later year students to switch degrees. In addition, and without the need for senate approval, it enacts a two-year funding freeze for universities. This will likely result in universities having to cut the number of students they admit. These cuts present a real threat to Australia’s future.
Cuts to education are simply a false economy. Every budget saving made from education now will result in the loss of future income tax revenue, not to mention the wealth that comes from an educated and inventive population. According to the chair of Universities Australia, Margret Gardner, we could end up with a skills shortage in areas that are most expensive to teach. These include nursing, science and engineering – but demand for these skills is forecast to only increase into the future. The government is also putting the international reputation of the Australian university sector – a sector that generates over $20 billion a year and brings with it international students who contribute further to the Australian economy. Furthermore, these cuts will disproportionately hurt lower SES students. Locking gifted individuals out from fulfilling their potential due to circumstance is not only unfair, but it’s also a poor investment decision by the government. Education is one of the best investments a country can make in its population. To cut it is absurd.
While the government targets students, its policies also include a $50 billion corporate tax cut that flies in the face of budget repair and has been denounced by economists as a race to the bottom. This is in a context in which the Australian Tax Office recently reported that 36 per cent of large companies operating in Australia are paying no tax whatsoever. Prioritising these tax cuts over education funding shows that the Turnbull government is not only unwilling, but unable, to be innovative and agile.
Who Will Fight for Students?
By Lachlan McGregor
Labor Party Member and current Secretary of ANU Labor Left
As Malcolm Turnbull’s government risks imploding as a result of the Parliamentary citizenship debacle, the prospect of an early election looms. The outcome of this election will dictate the future of tertiary education and the hopes of many secondary school students looking to obtain a degree. It is vital that students are aware of how this government plans to fund universities and reform education.
This year, the coalition’s ruthless economic management manifested in a war on university students. With the recent MYEFO announcement of a planned $2.1 billion cut in funding, Australia could not be further from the Whitlam-era of free education.
The government’s plan to freeze funding to universities for two years, before capping it at the growth rate of the working age population, ends demand-based funding, and with it any skerrick of equality left in tertiary education. Demand-based funding is by no means perfect, but it has provided access to higher education for students who would otherwise be priced out of receiving a degree.
Under this new funding scheme, many students from low-income families will either struggle financially at university or be left without the option of ever pursuing higher education. Whilst Simon Birmingham has endorsed the changes as ‘sustainable,’ these cuts will effectively eliminate the possibility of getting a degree for many young people.
To make matters worse, the HECS repayment threshold will be lowered from $52,000 to $45,000. Consequently, graduates will begin repaying their HECS debt earlier whilst earning an income only slightly above minimum wage. This will hit low-income graduates hard and help to entrench a system where only the elite have the means to afford and gain a degree. These attacks further disadvantage working-class families and systemically deny them post-school qualifications.
On top of all this, Gonski 2.0’s watered-down ‘needs-based’ funding has diverted much- needed funds away from public schools and towards some of the nation’s wealthiest private schools. Although Gonski 2.0 does not directly target universities, its impact has the potential to deny poorer students access to higher education.
With Di Natale’s neo-liberal Greens offering their support to pass the Gonski bill in the senate, Labor has emerged as the only party committed to equitably funding public education and supporting access to universities for low-income families.
At the next election, students who are tired of a government that does not put them, their education or equality first, can take a stand. The Coalition has shown that their priority is to benefit big business and those who already have so much, rather than creating a society that is fair, just and compassionate.
If students want to see real change and equality returned to tertiary education, they can no longer place their faith in this out-of-touch government, which has so voraciously capitalised universities and destroyed the concept of a right to education.
Less Is More
Member of the ANU Liberal Club
Overall, the MYEFO reveals the Coalition government has done an excellent job in keeping the debt ceiling low. Net debt is projected to plateau at 19.2 per cent of GDP in 2018-2019, a $11.9-billion-dollar reduction from what was estimated in the May Budget. This MYEFO has positive implications, as the government has taken essential steps toward tackling the ever-pervasive ‘debt bomb’. Its changes to education, including changes to the HECS system and increased incentives for better university performance, through an updated funding system, will benefit the quality and accountability of Australia’s higher education sector. Critics of these changes, who would rely on increased taxes to maintain the education system, would see the introduction of short-sighted policies with negative long-term consequences.
There are changes to HECS-HELP, but these are only small changes in the scheme of things and will importantly save the Government an estimated $2.8 billion over four years. From 1 July 2018, the revised repayment threshold scheme will be implemented so that when a student earns a minimum threshold of $45,000, they will be required to repay the debt at a rate of only one per cent. This is down from the previous minimum threshold of $55,000. This reduction will keep universities accountable for graduate job prospects as well as easing the burden on the taxpayer. Taxpayer funding to universities has increased at twice the rate of the economy since 2009 and so they will have to now pull their weight to repair the budget. These important changes should not be a source of concern for students.
The changes are bad news for students planning on remaining at university forever, however. A lifetime limit on student loans has been implemented with the maximum to be $104,000 for most students and $150,000 for students studying medicine, dentistry and veterinary science courses. This is a prudent policy given student debt is continuing to grow and one-quarter of student loans are not expecting to be repaid.
ANU will directly benefit from these policies, meanwhile, as $69.2m has been allocated through 2018-2019 to enhance the current National Computational Infrastructure and supercomputer program headquartered at the ANU. The NCI provides critical access to researchers across many disciplines and is key to the ANU producing world-class research.
ANU will also be held more accountable and transparent, in having to publish both undergraduate and postgraduate students’ course marks. This transparency will be required of universities in order to receive CGS funding. A high standard of world-class education will be encouraged across the university sector as the Government will cap the amount of funding it pays to universities for Bachelors courses through its Commonwealth Grants Scheme (CGS). In 2018-2019, the cap will be set equal to the funding provided from 2017 and, in 2020, the amount of funding allocated will be linked to university performance requirements. Not only will these force universities to improve performance, but they will also boost graduate employment outcomes and support retention of students.
The Coalition Government has taken steps to address educational disadvantage. It recognises that regional students from disadvantaged backgrounds struggle to access university, and has committed $15m to provide eight regional study hubs around the country for those who wish to study in their local region. Further, the Quality Schools package will deliver an additional $25.3b in recurrent needs-based funding, particularly for disadvantaged schools, over the next ten years.
These higher education cuts are not severe enough to have any real long term impact on any aspect of university. As Liberal Education Minister Simon Birmingham has said, ‘if the government funded the university sector at the rates it did in 1989, with no HELP loans to students, they would receive $4,300 less than they currently do per student place.’
Overall, the MYEFO delivers a fiscally responsible outlook for education, easing the burden on the taxpayer to fund education as well as giving universities the incentive to increase their competitiveness. Each taxpayer is paying $474 towards interest on our national debt. So for the student organisations that lobby for free education such as the National Union of Students (NUS), I ask, where do you plan to get the money from? If we really care about our future generations, we instead need to acknowledge the reality we are living in.
Students and Universities Are Under Attack
Executive of ANU Greens on Campus
This year’s Mid-Year Economic and Fiscal Outlook does not signal a change of tack for the Coalition Government. Young people, and specifically students, are targeted front and centre.
The Government’s proposed Funding Freeze for Commonwealth Supported places will, in practice, freeze the size of the domestic university student population. It would be naïve to think that universities will respond to the funding moratorium by cutting major costs in administration, such as the ludicrous salaries that most Vice-Chancellors are on, or by making sweeping efficiency improvements in order to allow more domestic students into university. Instead, it will simply become tougher for Australians to be admitted into higher education.
Additionally, if domestic student placements become a frozen market until 2020, university administrators will sharply pivot to the suddenly far more profitable, and growing, international student market. Given the Government’s Immigration policy, and the often deeply xenophobic rhetoric stemming from elements of the Coalition, it seems rather ironic that the government would so actively pursue policies that will make Australian Universities less focused on domestic students.
Lowering the HECS repayment threshold is also a shameless attack on young people. It puts even more strain on the already financially-pressured youth of today while offering no compensation to make the financial positions of low-income HECS debt holders better off.
These cuts will give fewer Australians access to higher education, and university leavers will be paying off HECS from more precarious financial situations. With a Government that will happily spend $122m on an unnecessary and damaging postal survey, continue to support Negative Gearing, and whose Treasurer, Scott Morrison, aspires to cut the corporate tax rate despite hundreds of companies paying $0 in taxes, the targets of these cuts seem less than accidental. Hundreds of gratuitous expenses have been prioritised over students.
This is clearly not ‘living within our means’ – it is an attack on universities, plain and simple. It is also an attempt for the Coalition Government to target Higher Education without walking the maelstrom that is the Senate, which has proved almost impossible to goad into selling out universities. The HECS changes, luckily, do require Senate approval – but the rest of the package does not.
Whilst they are not unprecedented, the gall of career politicians on inflated taxpayer-funded salaries, many of whom received a free university education, to attack students in the name of ‘belt-tightening’ should be condemned by all who believe in Australia’s future.
An educated populace is what will make Australia stronger, smarter, and wealthier going into an uncertain future. The education changes outlined by the MYEFO threaten that future, and are short-sighted political theatre and ideological signalling by a government whose policy seems committed to worsening both the financial and academic prospects of young people.
The Greens oppose the Government’s Higher Education Reforms in the highest degree and will do everything in our power to stop them – from in the Pop-Up to on Parliament Hill.