5AA

E&OE TRANSCRIPT 5AA Interview with Matthew Pantelis 20 May 2014 SUBJECTS: CHANGES TO EDUCATION IN THE FEDERAL BUDGET, INTEREST RATES ON HECS DEBT. MATTHEW PANTELIS: My guest in the studio is the Federal Education Minister, Christopher Pyne. Good morning. CHRISTOPHER PYNE: Good morning, Matthew. MATTHEW PANTELIS: Thank you for coming along. CHRISTOPHER PYNE: It's a pleasure. MATTHEW PANTELIS: And you're here to take questions as well, so we will invite people to ring in on 8223 0000. Let's start off with your portfolio. It has been a big week. It's exactly a week since the Budget was handed down a week ago tonight, last week, but education - now, you've made some changes. You've cut money for higher education by $4.7 billion over four years, introduced real interest rates for HECS debts, the tuition subsidy has been slashed. Will people still be able to go to university and study? CHRISTOPHER PYNE: Well, Matthew, we actually haven't cut spending to higher education. Over the next four years spending on higher education will increase by $900 million, and what we've done in higher education is massively expanded the opportunity for young people to go to university, by extending the Commonwealth Grant Scheme to private providers of higher education, which will cost the government money, and we are expanding the demand-driven system for diplomas and associate degrees, which are typically done by first generation university goers, by low socioeconomic status students, who use those to get the skills to then go on to university to do an undergraduate degree. That will also cost us money, and we will have the largest Commonwealth scholarship scheme in Australia's history, because whatever fees that universities charge over and above what they're charging now, they will have to put one in five of those dollars away in a Commonwealth scholarship fund for low SES and disadvantaged students. So, in fact, what we're doing represents a massive expansion of opportunity we estimate to 80,000 students, and every single dollar of fees that universities charge can be borrowed from the Australian taxpayer and paid back when students earn over 50 grand a year, and starting at two per cent of their income. So it's a very good deal, that students will never get a loan like that from any bank. MATTHEW PANTELIS: The Vice-Chancellors have got a mixed review. Here in Adelaide, Warren Bebbington, the Vice-Chancellor, is thrilled with what you've done, and the University of Canberra's Vice-Chancellor, Stephen Parker, thinks it's a step back. He says a little bit early to judge, but the quote is, no one actually knows the impact, as no one knows how young people approach the question of debt. So he fears people from a poor background will not study because they're very conscious of debt levels and what it will mean for them. So is deregulating fees the way to go? CHRISTOPHER PYNE: Well, it is. There are 39 Vice-Chancellors in Australia, and one has said that they don't support the Government's proposals, and many of the others have come out and written op-eds and stories in the newspapers supporting them - even Gareth Evans, the former Labor Foreign Minister, is supporting the deregulation of fees - because they know what I know, and what I think most Australians know. There's no money coming from the Australian taxpayer, no large licks of new money coming from the taxpayer for universities. We have to get our universities to be able to compete with their Asian competitors for excellence. The only way of doing that is to get them more revenue, and that revenue will need to come from students. At the moment, Matthew, students contribute 40 per cent of the cost of their education at university, and everyone else contributes 60 per cent, and yet less than 40 per cent of Australians have a university degree. So most of your listeners, who would be in that 60 per cent of people without a university degree, are paying their taxes so that young people can go to university and then earn 75 per cent more than them over a lifetime. I think that is a very generous thing that the taxpayers of Australia are providing to students. MATTHEW PANTELIS: Does that statistic appal you then when you see students behaving the way they have behaved towards you, towards Sophie Mirabella yesterday, and I think most notably towards Julie Bishop on Friday? CHRISTOPHER PYNE: Well, I don't think it's an extraordinary ivory tower, if you like, that some students live in, where they get the best deal imaginable. The taxpayers pay their tuition fees, 60 per cent of them. They can borrow any fees that they have to pay. They pay them at a lower interest rate than anybody would ever get from a bank, and they don't start paying back till over $50,000 and yet they are complaining about that. Now, I said to somebody recently that I think they should buy a bunch of flowers or a box of chocolates and take them around to a friend that they know who lives near them who doesn't have a university degree, knock on the door, give them the flowers and the chocolates and say: thank you for paying for my education. MATTHEW PANTELIS: Are you going to do that, because you've been to university? CHRISTOPHER PYNE: Well, indeed. It's a very good point. I should do that. MATTHEW PANTELIS: You should, indeed, take your own... CHRISTOPHER PYNE: I'll make sure I bring a Channel 9 camera with me at the time. MATTHEW PANTELIS: Take your own advice. Now, we have a former head of education here in SA, Ken Boston, and I think New South Wales as well, who has told a Senate committee that the reason Gonski is failing at the moment is not so much because - and I think the quote is from the Senate Committee, not because an Abbott Government has been elected, but because the previous government failed in delivering it. We saw, of course, Julia Gillard running around in the last few months of her prime ministership, trying to sign up all the states. Was it a rushed process? The Gonski Report was out for the best part of a year and a half before that, I think. CHRISTOPHER PYNE: That's true, Matthew. Look, the Gonski Report came down about 18 months before the Labor Party finally responded to it. Goodness knows what they were doing with it all that time. They then tried to hold a gun to the heads of the states and territories in a few months period of time, and some states held out against it. Ironically, I have delivered the National New School Funding Model, because I found $1.2 billion more to put into it, and got Northern Territory, Western Australia and Queensland to sign up. MATTHEW PANTELIS: And then you tried to cut that at the start though, didn't you? CHRISTOPHER PYNE: Ironically, Matthew, in year four, in 2017, we are putting $18.1 billion into school funding, which is $100 million more than Labor would have if they had been re-elected. So there are no cuts to education in this budget. We are keeping all of our election commitments in education, whether it's higher education or whether it's school education. MATTHEW PANTELIS: We will get to some of that in a minute. Tyson has called in. You've got the headphones on. Morning, Tyson. CALLER TYSON: How you going, mate? MATTHEW PANTELIS: Good. CALLER TYSON: Christopher Pyne, I've got to ask you a question. CHRISTOPHER PYNE: Sure. CALLER TYSON: Now, mate, I am disgusted in your Government, really disgusted. My partner is a school teacher. She has been struggling to find work, find secure work. She suffers anxiety, and I know for a fact she's not the only teacher that's in this position. Number two. If you want to put tax on a HECS debt, well, she's paying so much in HECS fees, and she's going to get charged interest on top of - someone that's supposedly help children, for the government to help build this country, and, number two, she's earning less than me at times than me working for the council, without doing a four year degree. And also, with the funding in schools and that, now, a lot of the time she has to buy paper and pencils for her kids, and books for her kids... MATTHEW PANTELIS: Well, there's something going on at the school there if that's happening, but, Mr Pyne? CHRISTOPHER PYNE: Well, there's a couple of issues there. The first one with respect to your partner, it's the State Government that employs all the teachers in South Australia. It's the State Government that runs the public school system, and it's the State Government that has to provide pencils and paper and stationery for school students in the public schools. So your partner, quite rightly, if she's unhappy with the fact that she can't get permanency and can't get work, Jennifer Rankine is the State Minister for Education, and I would invite her to come on Matthew's program and explain some of those issues. In terms of the HECS debt, which is certainly Federal Government responsibility, the HECS debt doesn't have to start being paid back until people earn over $50,000 a year. At that rate you pay back two per cent of your income to start with in the first, lowest thresholds, and you pay it back at about four per cent interest under the government's proposal, which is one of the best interest rates anyone will ever get. Over a lifetime he will earn 75 per cent more than people who don't go to university. So this is a vast personal benefit that more than 60 per cent of the Australian public don't have, Tyson. So it is a very generous arrangement - one of the most generous in the world - and we want to expand that so that more students get the opportunity to have a university education, and that's what's contained in the Budget. MATTHEW PANTELIS: Thanks for the call, Tyson. We will move on to other calls shortly. I want to ask you as well, Chris Pyne, regarding Joe Hockey last night on the national broadcaster say that, with plans to increase the pension age to 70, superannuation needs to be reviewed. If you go down that path this term, will that be a broken promise? CHRISTOPHER PYNE: Well, we have no plans to change the treatment of superannuation at all in the next three years, during this term of the Parliament. So that will not be touched in the next three years. MATTHEW PANTELIS: But it will be reviewed. CHRISTOPHER PYNE: We have no plans to change the time in which you can access your superannuation in Australia at all. MATTHEW PANTELIS: All right. The next three years could be interesting, because the latest poll, Morgan, 57.5 for the ALP, and for your side of politics 42.5. Big upswing to the Palmer United Party, up one per cent, a record high for them, to 6.5. Early days, but anyone nervous yet on the back bench behind you? CHRISTOPHER PYNE: I don't think so, Matthew. Look, we had to hand down a very tough Budget, and we were elected to hand down a tough budget. The Australian public didn't throw Labor out in a landslide because they thought they were doing a good job. They know that we inherited a debt and deficit disaster, $123 billion worth of deficit, $667 billion worth of debt from Labor, and they know that last Tuesday we had to make some tough decisions, and we've made them. This was never going to make us popular in the short-term, but in the medium and long-term, when the economy starts growing again, when unemployment starts coming down again, when people feel that Australia has got our debt and deficit under control, I think we will get a lot of credit from the Australian public for having the resolve, unlike Bill Shorten who just wants to be the champion of complaint. MATTHEW PANTELIS: All right. Matt, good morning to you. Hello, Matt? CALLER MATT: Good morning to you. MATTHEW PANTELIS: Yes, Matt. CALLER MATT: Is it true that there is such a thing as career students who go to university, collecting degrees, racking up a HECS bill with very little chance of repaying it? MATTHEW PANTELIS: Minister? CHRISTOPHER PYNE: Matt, there are - about 18 per cent of a HECS is never repaid, so about 1 in $5 of a HECS debt is never repaid, and the HECS debt at the moment is $52 billion. That's how much the Australian taxpayer has lent students over the last almost two decades. It's an immense number. Most of the people who don't pay it back are people who move overseas, and most of those people who move overseas go to the UK. So I've recently arranged an Australia/UK education dialogue with their Minister, David Willetts, and the number one item on the agenda for both countries is a tax treaty from our tax offices, whether it's British or Australian, to get those students to pay back their HECS debts. In terms of perennial students, which you've asked about, I think it's a bit of an urban myth that there are perennial students. I think most young people want to get into university, get a degree, get out and start earning an income, and there would probably be a handful of perennial students, but I would say that's a very small number of people, and the vast majority of students want to go on and do the right thing. MATTHEW PANTELIS: Thanks for the call, Matt. My guest in the studio is Federal Education Minister Christopher Pyne. [ends]