SENATE Official Committee Hansard€¦ · Portfolio: Employment, Education, Training and Youth...

COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

SENATE

Official Committee Hansard

EMPLOYMENT, EDUCATION ANDTRAINING LEGISLATION

COMMITTEE

(Consideration of Estimates)

WEDNESDAY, 4 JUNE 1997

BY AUTHORITY OF THE SENATECANBERRA 1997

CONTENTS

WEDNESDAY, 4 JUNE

Department of Employment, Education, Training and Youth Affairs—Program 1—Schools—

Subprogram 1.1—General assistance. . . . . . . . . . . . . . . . . . . . . . 284Subprogram 1.2—Targeted assistance. . . . . . . . . . . . . . . . . . . . . 284Subprogram 5.2—Youth Policy and Support. . . . . . . . . . . . . . . . 358

Program 2—Higher Education—Subprogram 2.1—Higher EducationSystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370

Wednesday, 4 June 1997 SENATE—Legislation EE&T 281

SENATE

Wednesday, 4 June 1997

EMPLOYMENT, EDUCATION AND TRAINING LEGISLATION COMMITTEE

Portfolio: Employment, Education, Training and Youth Affairs

Members: Senator Tierney(Chair), Senator Carr(Deputy Chair), Senators Crowley, Ferris,Stott Despoja and Troeth

Substitute member:Senator Synon to substitute for Senator Troeth for the 1997-98 Budgetestimates hearing on 4 June 1997.

Participating members: Senators Abetz, Allison, Bolkus, Brown, Bob Collins, Colston,Cooney, Evans, Forshaw, Harradine, Hogg, Mackay, Margetts, Murphy, O’Brien and Synon

The committee met at 9.20 a.m.

DEPARTMENT OF EMPLOYMENT, EDUCATION, TRAINING AND YOUTHAFFAIRS

In AttendanceSenator Vanstone, Minister for Employment, Education, Training and Youth AffairsDepartment of Employment, Education and Training

Mr Alan Ruby, Deputy SecretaryMr Peter Grant, Deputy SecretaryMr Ian Campbell, Acting Deputy Secretary

Program 1—Schools

Subprogram 1.1—General Assistance

Subprogram 1.2—Targeted Assistance

Schools and Curriculum Division (Subprograms 1.1 and 1.2)

Mr Bill Daniels, First Assistant Secretary

Mr Chris Evans, Assistant Secretary, Budget and Coordination Branch

Ms Denise Jefferson, Director, Budget and Legislation Section

Dr Evan Arthur, Assistant Secretary, Literacy and Special Programs Branch

Mr Peter Buckskin, Assistant Secretary, Indigenous Education Branch

Dr Anne Byrne, Director, Quality Outcomes Section

Mr Bruce Furze, Director, Aboriginal Education Direct Assistance Programs (AEDA),Indigenous Education Branch

Mr Michael Goonrey, Director, General Recurrent Grants Section

Ms Mary Johnston, Assistant Secretary, Quality Schooling Branch

EMPLOYMENT, EDUCATION AND TRAINING

EE&T 282 SENATE—Legislation Wednesday, 4 June 1997

Program 2—Higher EducationSubprogram 2.1—Higher Education SystemSubprogram 2.2—Targeted Research and Scientific DevelopmentSubprogram 2.3—Recognition of Overseas SkillsHigher Education System (Subprograms 1.2 and 2.2)

Mr Michael Gallagher, First Assistant Secretary, Higher Education DivisionMr Bill Burmester, Assistant Secretary, Funding BranchDr Tom Karmel, Assistant Secretary, Operations BranchMs Marion McDowell, Director, Public Funding SectionMs Clare White, Assistant Secretary, Research BranchMs Stella Morahan, Director, Private Funding Section

Program 3—Vocational Education and TrainingSubprogram 3.2—Australian National Training AuthoritySubprogram 3.1—Training ReformANTA (Subprogram 3.2)

Mr Terry Moran, Chief Executive OfficerMr Phillip Clarke, Senior Advisor, New ApprenticeshipsMs Jan Johnman, Director, Resources and Management

Vocational Education and Training Division (Subprogram 3.1)Mr Tony Greer, First Assistant Secretary, Vocational Educ and Training DivisionMs Lorraine White, Assistant Secretary, Industry Liaison BranchgMr Peter Dowling, Acting Assistant Secretary, New Apprenticeship BranchMs Virginia Greville, Assistant Secretary, Entry Level Training Programs BranchMr Rod Manns, Acting Assistant Secretary, VET Reform Branch

Program 4—EmploymentSubprogram 4.1—Jobseeker Registration, Assessment and ReferralSubprogram—Employment ParticipationSubprogram 4.3—Employer and Industry ServicingSubprogram 4.4—Aboriginal Employment and Training AssistanceSubprogram 4.5—Case Management Services (EAA)Subprogram 4.6 Case Management Processes (ESRA)Subprogram 4.7 Employment Services MarketEmployment and Purchasing (various subprograms)

Ms Leslie Riggs, Acting First Assistant Secretary, Employment and Purchasing DivisionMr Bob Harvey, Assistant Secretary, Employment Market Development BranchMr Russell Patterson, Assistant Secretary, Indigenous Member of Parliament Initiatives

BranchMr Finn Pratt, Assistant Secretary, Service Delivery Strategies Branch



Mr Graham Carters, Acting Assistant Secretary, Resources and Analysis BranchMs Sheila Butler, Assistant Secretary, Work for the Dole Task Force

Operations and Performance Division (subprogram 4.1 and 4.5)Mr Bob Correll, Acting First Assistant Secretary, Operations and Performance Division

Employer and Industry Servicing (Subprogram 4.3)Mr Peter Reeves, Assistant Secretary, Regional and Employer Servicing Branch

Employment Services Regulatory Authority—ESRA (Subprogram 4.6)Dr Owen Donald, Chief Executive OfficerDr Roslyn Kelleher, Executive Director, Finance and Corporate Services Branch

PEPE Task Force (Subprogram 4.7)Mr Rod Halstead, First Assistant Secretary, Public Enterprise TaskforceMr Dudley Martin, Assistant Secretary, Public Enterprise Taskforce

Program 5—Student and Youth SupportSubprogram 5.1—Education Assistance and Income SupportSubprogram 5.2—Youth Policy and SupportYouth Students and Social Policy (Subprograms 5.1, 5.2 and 5.3)

Mr Colin Walters, First Assistant Secretary, Youth, Students and Social Policy DivisionMs Frances Davies, Assistant Secretary, Youth BureauDr Peter Whitney, Assistant Secretary, Student Assistance Policy BranchMr David Batchelor, Assistant Secretary, Student Assistance Operations Branch

Program 6—Portfolio Administration and AdvisingSubprograms 6.1—Portfolio ManagementSubprogram 6.2—InternationalAnalysis and Evaluation (Subprogram 6.1)

Dr Wendy Jarvie, First Assistant Secretary, Analysis and Evaluation DivisionMs Jo Caldwell, Acting Assistant Secretary, Skills Analysis and Research BranchMr Bob McHugh, Director, Client and Labour Market Analysis SectionMr Phil Potterton, Assistant Secretary, Evaluation and Monitoring BranchMr Derek Pigram, Director—Employment Monitoring Section, Evaluation and Monitoring

BranchDr Paul Volker, Assistant Secretary, Economic and Labour Market Analysis Branch

Communications Branch (Subprogram 6.1)Mr Graham Gall, Acting Assistant Secretary

NBEET (Subprogram 6.1)Ms Anne Baly, Acting Director

Corporate Services Division (Subprogram 6.1)Mr Bill Mutton, Acting First Assistant Secretary, Corporate Services DivisionMr Stirling Meredith, Director, Property Planning and Management



Mr Tony Swift, Acting Assistant Secretary, Purchasing Branch

Mr Pat Watson, Acting Assistant Secretary, Finance Branch

Systems Division (Subprogram 6.1)

Mr John Burston, First Assistant Secretary, Systems Division

Legal and Review Division (Subprogram 6.1)

Mr Brian McMillan, General Counsel

International Division (Subprogram 6.2)

Mrs Jenni Gordon, Acting First Assistant Secretary, International Division

Mr John Rowling, Assistant Secretary, AIEF

Ms Barbara Bennett, Assistant Secretary, International Policy Branch

Secretariat

Finance Branch

Mr Robert Hesterman

Ms Paula Ridgway

Mr Nigel Packwood

Ms Shaunagh Wenck

Department of Finance Officers

Mr Garry Brooke

Mr Mark Jurkiewicz

Mr Bevan McDonald

Ms Suzanne Parkinson

Ms Wendy McNutt

CHAIR —Welcome. The committee will commence today’s proceedings with theexamination of program 1, schools; program 2, higher education; and program 5, youth, studentand social policy. Minister, do you wish to make an opening statement?

Senator Vanstone—No.

Program 1—SchoolsSubprogram 1.1—General assistance

Subprogram 1.2—Targeted assistance

Senator CARR—Mr Daniels, do you receive copies of the press releases of the Ministerfor Schools, Vocational Education and Training?

Mr Daniels—Given that I have been away for five months, questions on schools might bedirectly primarily to Mr Chris Evans who has acted as head of the division during that time.

Mr Evans—As a matter of course, we do not receive every media release that is put outthrough ministers’ offices. We receive quite a sizeable number.

Senator CARR—Of those press releases that you receive, do you have an opportunity tocomment upon the accuracy of that information?



Mr Evans—If we see the media release in draft form, we might provide comment.Obviously there is a particular media release you want to ask me about; do you have one inmind?

Senator CARR—Yes. I am just wanting to know about the process. Does the departmentprepare the minister’s press releases or does the minister prepare his own press releases?

Mr Evans—That can vary depending on the particular issue.Senator CARR—Let us just say budget press releases. Do you prepare them, Mr Evans?Mr Evans—I can prepare some material or the department might prepare some material that

is used in a press release.Senator CARR—Did you prepare the press release dated May 13, known as K2297?Mr Evans—I did not prepare it but I had input into that particular press release.Senator CARR—What input did you have to that press release?Mr Evans—I provided some of the budgetary amounts and checked other figures that were

in that press release.Senator CARR—The actual presentational aspects of the release therefore were presumably

done in the minister’s office?Mr Evans—I cannot go through on a word by word basis and explain which was attributed

to me and which might be attributed to the minister.Senator CARR—There is a reference here that Australia’s 10,000 schools will receive an

extra $152 million from the federal government. Is that your work?Mr Evans—The $152 million is the difference between the amount of money that was

provided to schools in 1996-97 compared to 1997-98.Senator CARR—So you prepared that particular part of the press release, did you?Mr Evans—I provided that figure.Senator CARR—But the claim that there is a funding boost for schools, was that your work

as well?Mr Evans—I do not know whether the word ‘boost’ was mine.Senator CARR—So the claim that there is a funding boost for schools was a ministerial

office proposal, was it?Mr Evans—I would have to check back and look at drafts but a number of the figures and

a number of the comments in that are attributed to me or could be attributed to me. I am notquite sure where this is leading, Senator.

Senator CARR—I am sure you will find out, Mr Evans. I know I am not always very clear;I accept that.

Senator Vanstone—It is not the clarity, it is the speed.Senator CARR—We have got all day, Minister. I would not get too excited about this. This

is a marathon and not a sprint. So the minister claims that there has been a boost for schoolsas outlined in this budget for schools. Could you show me where the new, additional fundingis within the budget?

Mr Evans—The issue here is that there is an increase for schools year on year. Thedifference between 1996-97 and 1997-98 is that there is a substantial increase of some$152 million. That means that there are decisions that are being taken by government that they



are going to provide more money in this coming budget than was provided in the last budget.That, of itself, is an increase.

Senator CARR—Make this clear for me. Show me the new additional funding for schoolsin this budget which would support the minister’s claim that there is a funding boost forschools.

Mr Evans—If you look at that particular media release—I think it is the second lastparagraph at the bottom of that page—an extra $7 million has been earmarked for a newliteracy and numeracy plan. That particular initiative is a specific initiative of Dr Kemp’s toprovide funding to state governments and to non-government systems for literacy andnumeracy. That is an allocation that states and non-government systems might not haveexpected.

Senator CARR—That is $7 million. I follow you so far.Mr Evans—In addition, over the page there is an initiative for $7.5 million over the next

four years for education centres. As you might recall—Senator CARR—I certainly do.Mr Evans—it was a decision of the previous government to cease funding for education

centres. This particular initiative to provide $7.5 million over the next four years is, again,an initiative of this government and has been applauded by the association for educationcentres.

Senator CARR—So that is it; is it? We are looking at $14.5 million. This is the basis forthe funding boost for schools. What is the total budget for schools?

Mr Evans—Off the top of my head, I think it is $3.75 billion, as that media release says.Senator CARR—This is a massive increase!Mr Evans—If you care to look at pages 34 and 38 of the portfolio budget statements, they

provide, in a disaggregated form, essentially the basis of the breakup of the $152 million.Senator CARR—Yes, I understand. I am glad you have drawn my attention to that because

that is basically where I want to go as well. Has there been any increase in the amount ofmoney going to individual students on, say, the payments from the Commonwealth to the stateson a per capita basis for a student at a government school?

Mr Evans—Yes, Senator.Senator CARR—No, an individual student. What is the ratio change?Mr Evans—The ratio change is the impact of the indexation arrangements. So year on year

there are indexation changes which provide an increase for students at government and non-government schools.

Senator CARR—Yes. What was the figure last year for a primary school student?Mr Evans—I believe the increase in indexation in 1996 was 2.5 per cent. So the rate of

increase for a student at a government school and at a non-government school increased by2.5 per cent, for primary and secondary. For students in categories 5 to 12, non-governmentschools, the rate would have been a bit higher than that—probably a 1.8 per cent on averageincrease. That was because of decisions that would have been taken for schools in thosecategories.

Senator CARR—That is the normal indexation arrangement, though, isn’t it?Mr Evans—The 1.8 per cent is not.



Senator CARR—Is the 2.5 the normal indexation arrangement?Mr Evans—That is correct.Senator CARR—That is what I thought. Can you give me a dollar amount per student?

What is the Commonwealth paying to the states for a student in a government school thesedays?

Mr Evans—For a student in a government school, the government is paying, out of specificpurpose payments, $352 at a primary school and $520 at a secondary school.

Senator CARR—How much was it paying in the previous year?Mr Evans—That would be the same amount in 1996 because the 1997 figure will be subject

to indexation later on this year. So that will be adjusted towards the end of this year.Senator CARR—I see. So I repeat: the normal indexation processes would work?Mr Evans—When you use the word ‘normal’, the fact that indexation arrangements continue

is, I think, a very good outcome for school students.Senator CARR—I am not disputing it is a good outcome for students. I am just trying to

establish how long this has been going on. We have had indexation for student costs for sometime, I would have thought.

Senator Vanstone—Just to make the point, when outcomes that might have been expectedor hoped for are achieved, they should not be disparaged. Because it is easy for people to lookat forward estimates and say, ‘Oh well, they were going to get that anyway.’ Whereas, I wouldargue that the previous government’s fiscal ineptitude really meant that the previousgovernment’s forward estimates were unsigned cheques on an empty bank account. Therefore,for schools, in particular, to have the outcome that they have is, in fact, a very significantachievement for this portfolio in the fiscal climate—a very significant achievement.

Senator CARR—That is terrific, Minister. How many years has this been going on?Mr Evans—The arrangements are subject to change by governments and they have been

subject to change a number of times over the past decade. I cannot go back so far, but I knowthat—

Senator CARR—The process of indexing government payments to the states for educationin government schools, as an example, has been going on for some time? The resource indexhas been adjusted for some time? The calculations are made for increased costs to schools?The normal supplementation processes have been in place for some time?

Mr Evans—I would reiterate the point that the word ‘normal’, I think, overstates thesignificance of the fact that the arrangements are continuing.

Senator CARR—That is right. The arrangements are continuing. I am just interested toknow about this funding boost, that is all. I come back to this point—

Mr Evans—I thought I had explained that the difference—and I think you appreciate thatthe difference, the boost—is the $152 million increase—

Senator CARR—I do and I undoubtedly will go through each item to do that.Mr Evans—I am happy to move to identifying each of the items.Senator CARR—Yes, but I am interested in knowing why it is that media releases are put

out like this now in a pattern in all the areas that this minister is responsible for, which at bestcould be a distortion of the truth, and a more cynical view might say it is blatant propaganda.We have a ministry of truth here, not a ministry of education. I want to know whether or not



you are part of it. I would not expect that you would be but I would be anxious to knowwhether you are preparing this material for the minister or whether it is down to Mr MichaelSmith, the minister’s press secretary.

Senator Vanstone—Senator, you have been given an answer on that. You have been toldon a number of occasions that, on some occasions, the department will prepare a draft releasewhich may then be modified by the minister’s office. On other occasions, the minister’s officewill prepare a release and will not necessarily go back and run it through the department.

I think it is unreasonable and, I would suggest, beyond the bounds of reasonableconsideration at an estimates committee to expect an officer to come along and have in hishead—or, for that matter, the department to keep perfect records of—exactly who made whichmodification to which press release. In my own office, for example—I am not saying it is thesame in Dr Kemp’s office but I imagine it may be—there would be a number of people whowould contribute to a change. The person whose has the master press release—that is, theinitial draft—does not sit down and say, ‘The department suggests this here; X officer suggeststhere; Y officer suggests there.’ For you to suggest that that ought to be the case, and that anofficer ought to have a memory of that, with respect, I think is slightly unrealistic.

Senator CARR—I thank you for your contribution, Minister. The point is, I would expect—CHAIR —Senator Carr, the minister has given her answer. Can we move on to some other

matters please?Senator CARR—I would expect Mr Evans, being a professional officer, would not be

engaged in the production of blatantly untrue press statements.CHAIR —Senator Carr, you have your answer. Could we move on to another matter please?Senator Vanstone—That would undoubtedly be the case, and I certainly hope you are not

making that allegation, Senator. It is quite inappropriate for you to suggest that officers wouldbe engaged in that. If you have a political point to take up with the minister, take it up withthe minister.

Senator CARR—You are the senior minister.Senator Vanstone—The officers are here to provide information on the estimates within

the department and, in a bipartisan way, to give you such information as they can. They arenot here to indulge in your political games of nitpicking on a minister. You have plenty ofopportunities to do that, and this is not the appropriate one.

CHAIR —Senator Carr, could we return to the estimates? You can do it in the chamber, ifyou wish.

Senator CARR—Minister, did you express concern to the Minister for Schools about hisinaccurate press statements?

Senator Vanstone—No, I have not.Mr Evans—Senator, regarding the word ‘inaccurate’, as I explained, the figures in that press

release are accurate.Senator CARR—It is just the description of them that is inaccurate.Mr Evans—That is a point of view, Senator.CHAIR —That has nothing to do with the officer, so could we move on, Senator Carr.Senator CARR—The indexation presumably applies to the additional moneys that arise from

the enrolment increases. Do you have a breakdown on where those enrolment increases are?



Mr Evans—Are you referring to a figure or a comment on page 38, Senator?

Senator CARR—On page 34, you have special appropriations, the estimated cost ofsupplementation and enrolment increases. What is the nature of those enrolment increases?

Mr Evans—Senator, the impact of those enrolment increases comprises a rounded increaseof $3.2 million in the government sector and $34 million in the non-government sector.

Senator CARR—How come there is a discrepancy of $3.2 for government schools and $34million for non-government schools? As I understand it, two-thirds of students in Australiago to government schools and one-third of students go to non-government schools. Could youexplain to me why you get such a large discrepancy?

Mr Evans—It is not a discrepancy, Senator. What you are referring to is the compositionof the total enrolment base in schools. This is a year-on-year change in enrolments, whichreflects where increases are distributed between government and non-government schoolenrolments.

Senator CARR—So is there a transfer of students from the public to the private sector?

Mr Evans—It is more complex than that, Senator. It could be that students start in the non-government sector. Some students might move from non-government to non-government, sothat would not reflect a change in pattern. Others might be a transfer of enrolments, as youpointed out, from government to non-government.

Senator CARR—What is the rate of growth of private school enrolments?

Mr Evans—It is probably about half a per cent a year, Senator.

Senator CARR—Is that consistent with your projections?

Mr Evans—Pretty well consistent.

Senator CARR—Do you have the forward estimates on those enrolment increases on thoseitems?

Mr Evans—If you are referring to projections of enrolments over the next few years, I havesome projections.

Senator CARR—The out years. Presumably, the budget is constructed on that basis.

Mr Evans—That is correct.

Senator CARR—Would you be able to indicate to us what the department thinks will bethe out years?

Mr Evans—We are expecting a figure of around 940,600 for non-government for 1997 anda figure of about 2,205,000 for government for 1997; for 1998, figures of around 963,800 fornon-government and 2,196,100 for government.

Senator CARR—In 1999?

Mr Evans—In 1999, a figure of around 989,000 for non-government and a figure of2,192,000 for government.

Senator CARR—So the public sector appears to be remaining relatively static. Is that yourexpectation over the forward out years?

Mr Evans—On the projections that we have here, it remains fairly static, although my ownview is that those figures on the government sector might be a touch on the conservative side.

Senator CARR—And on the non-government sector, what are the growth rates there?



Mr Evans—I have not got a figure that shows the growth rate year-on-year for non-government. I have not done that calculation.

Senator CARR—I just wonder whether I can get that from you, please, so that I can getthat clear in my own mind regarding the department’s expectations. Take that on notice forme. While you are there, could you indicate what you anticipate to be the changes in thespecial appropriations which would follow those figures? What is the distribution of moneysexpected to be—

Mr Evans—The question you are asking goes to the forward estimates figuring in the budgetdocument.

Senator CARR—Can you show me where the enrolment increases over the out years ismeasured in the budget papers?

Mr Evans—If you go to document 437 of budget paper No. 1—

Senator CARR—Thank you.

Mr Evans—If you go down to table 4.3, that gives you the budget estimates for governmentand non-government schools, with the targeted programs for 1996-97 through to the year 2001.So the forward estimates are shown there.

Senator CARR—Thank you very much. I will just go on with the grant level increases.How is that figure arrived at?

Mr Evans—The figure of $25.860 million that you are obviously looking at refers to theaverage 1.8 per cent increase for categories 5 to 12 schools in the non-government sector thatI mentioned to you a bit earlier.

Senator CARR—So that is all private school funding, is it?

Mr Evans—That is correct, Senator.

Senator CARR—The expenditure against previous programs?

Mr Evans—As you would be aware, school programs are calendar year programs that canbe commitments taken in the 1996 program that might not be fulfilled in that year. This isa slight change on an assumption. It is very similar to a cash flow issue.

Senator CARR—Is that underspending?

Mr Evans—No. There might have been a prediction that there was going to be, say, $10million expenditure outside of the program year, some of which occurred within the programyear, and that estimate has been varied by $3 million. So it might be that it was bettermanagement.

Senator CARR—So I cannot count that as a cut?

Mr Evans—It is not a cut, Senator. No.

Senator CARR—The effect of previous decisions—an $18 million reduction—what is thatabout?

Mr Evans—Senator, you would recall that in the non-government sector a number of yearsago, there was a decision of the previous government to provide a substantial amount offunding for non-government schools’ capital. That funding ceased at the end of 1996. So theeffect of that was that on a financial year comparison, it shows a reduction of some $20.7million year on year between the 1996-97 and the 1997-98 financial years.



In addition to that, there was a decision taken by this government for a $30 million increasein non-government capital over three years, the 1997, 1998 and 1999 program years. The effectof that was an increase of $4.718 million in 1997-98.

In addition, it was the government’s decision to abolish the new schools policy. The effectof that was a $16.577 million increase year on year between the 1997 and 1998 financial years.Also, there was the estimated impact of the enrolment benchmark adjustment, which is adownward adjustment, of an estimated $19.133 million. The aggregate of that is a downwardadjustment of $18.544 million.

Senator CARR—Again, would you say that was not a cut?Mr Evans—These are not cuts. They are downward adjustments and upward adjustments

as well, and a net affect.Senator CARR—On the abolition of the new schools policy, how do you get those figures

of the downward adjustments of $19 million?Mr Evans—No, I said that it was a downward adjustment of $18.544 million, but that was

the net effect of increases and decreases.Senator CARR—That is the transfer of moneys from the public to the private sector?Mr Evans—The biggest reduction was the reduction in the ceasing of the non-government

capital funding from 1996.Senator CARR—I thought you already covered that in the previous section?Mr Evans—No, I covered it in this one. It was the reduction of $20.706 million.Senator CARR—And the final component of these special appropriations refers to transfers

of agreed changes to the base funding. How do you get an increase there?Mr Evans—The increase is a combination of two effects; one is a slight amount of money

that is transferred for non-government special education, which is a figure of $1.039 million,offset by a slight reduction in funding to the Curriculum Corporation of $48,000 in respectof Australian Schools Cataloguing Information Service subscriptions.

Senator CARR—That is another downward adjustment, is it?Mr Evans—Yes, it is a downward adjustment. Some of these downward adjustments reflect

also the movement of items between special appropriations and annual appropriations. In manyinstances, the overall effect is that there is no change in the overall funding for a particularfunction. It reflects a repositioning of a particular item.

Senator CARR—I take you back to the top of the table where it talks about running costvariations of $123,000. Where does that come from? That is another downward adjustment,is it not?

Mr Watson—The $123,000 reduction covers a number of items. There are some pre-budgetvariations relating to the capital grants to non-government schools programs, which is anincrease of $34,000. There is a reduction of $213,000 for a new schools state regulation model,which I assume was subject to a sunset clause. There is an increase of $96,000, which isvariations affecting all subprograms for such things as the efficiency dividend, the wage costindex variations, re-attribution of property, net effect of carryover, et cetera.

Senator CARR—Are those downward adjustments transferred through to the states?Mr Watson—No.Senator CARR—It is all Commonwealth programs? It has no impact at all on the state—



Mr Watson—No, that is a direct impact on the department’s running costs.

Senator CARR—In terms of Appropriation Bill (No. 1), the phasing out of specific fundingfor Language Australia indexation and agreed changes to the funding base, there is a $483,000downward adjustment in one of those.

Mr Evans—That is a decision that was taken in the budget context to reduce core fundingfor Language Australia.

Senator CARR—It is another funding boost, is it?

Mr Evans—It may well be. If Language Australia is successful in accessing literacy andlanguage funding from the Commonwealth, their overall financial situation could be increased.

Senator CARR—I am sure they will be encouraged no end by that. If I could ask you aboutfurther matters on Appropriation Bill (No. 1), can you take me through the other items listedin the table on page 38—rollover increases, funding bases and quality outcomes?

Mr Evans—That is an increase of $5.373 million. In part, it reflects a change in the basefunding for the civics and citizenship program of $770,000. It also reflects a rollover of moneybetween financial years of $1.611 million. The transfer of projects of national significance fromspecial appropriations into the annual appropriations is $2.675 million. There were also twoelements that indicated an increase in the quality outcomes program. One was an extra $51,000for a quality schooling component; in addition, there was an extra $266,000 with the transferof some Asian studies funding into the quality outcomes program. The net effect of that wasan increase of $5.373 million.

Senator CARR—And the rollover in the school to work program?

Mr Evans—That is as it says, a rollover, and it is $4.0 million.

Senator CARR—I will just follow this through. The same pattern emerges in all of theseand I come back to the point that I made initially: how much of these moneys that have beenappropriated can be attributed to growth in the sector, inflation or indexation?

Mr Evans—In terms of the latter point that you raised, the indexation or inflation, at page34 you would see a figure of $96.563 million, which is supplementation. At page 38 youwould pick up a further figure of $11.39 million. So in aggregate—without a calculator—itcomes to roughly $117 million.

Senator CARR—So $117 million of the $152 million is inflation?

Mr Evans—That is correct. Enrolment increases, again using pages 34 and 38, account fora further $41 million.

Senator CARR—It gets pretty close to the $156 million, doesn’t it?

Mr Evans—That is right. In essence, the fact that the Commonwealth has continued to fundon a per capita basis and not cap the program shows a commitment to provide additionalfunding based on student numbers.

Senator CARR—As I say, that is a policy that has been maintained for some years now.We fund on a per capita basis and take into account inflation, which produces a result ininflation and enrolment growth of $156 million, which is precisely the amount of money theminister is claiming is the basis for growth—the boost for schools that he is appropriating forthis government. That is the whole point of my line of questioning. This is essentially a budgetthat acknowledges that there has been enrolment and inflation growth. That is what is drivingit. It is not a policy initiative here; it is the normal processes of government within education.



Mr Evans—I tend to disagree slightly. The process of framing a budget means that all areasof the budget are reviewed, and the fact that this comes down at this level of funding forschools is, as you indicated yourself earlier on, a good outcome for schools.

Senator CARR—It is a great outcome: they have not decided to change the base—CHAIR —Order, Senator Carr! The minister is speaking.Senator Vanstone—Senator, I will just ask you to consider the degree to which what you

are doing here, to indulge yourself, is asking an officer to make an assessment as to whetheran adjective used by the minister is appropriate or not. That is not the function of the officershere. They are here to give you such facts as they can, to assist you to understand what thedepartment is doing. They are not here to make subjective assessments of the word selectionof various ministers. You, no doubt, have plenty of opportunity to do that and no-one couldcomplain that you would. But it is unreasonable to ask officers of the department to do that.

Senator CARR—Thank you very much, Minister. I noticed here that there is a claim thatthere is an increase of 17 per cent per government student and 14 per cent per non-governmentstudent. Mr Evans, could you explain to me how that calculation is derived?

Mr Evans—You would recall the debate late last year during the passage of the StatesGrants (Primary and Secondary Education Assistance) Bill 1996. In some of that debate thepoint was made that Commonwealth sourced funding for schools comprises two elements:firstly, the specific purpose payments; and, secondly, the attributed financial assistance grantsthat state governments apply to government and non-government schools.

The departmental submission to the Senate inquiry into that legislation included a table thatshowed the attributed projected funding over the next four years for government and non-government schools. That showed that the increase on a per capita basis for a student at agovernment school was some 17 per cent, and for a student at a non-government school some14 per cent. To cut to your question, Senator, it is a combination of projected specific purposepayments and financial assistance grants funding for schools.

Senator CARR—It is guesswork, isn’t it?Mr Evans—No, it is not guesswork. They are projections.Senator CARR—How much of the specific purpose payments across each state go to private

schools?Mr Evans—Financial assistance grants?Senator CARR—FAGs—yes.Mr Evans—Some two per cent was our projection.Senator CARR—Predicted?Mr Evans—A projection based on historical Commonwealth Grants Commission figures.Senator CARR—What is the figure in New South Wales?Mr Evans—I do not have the figure on New South Wales in front of me.Senator CARR—Could you do that for me, please, for each of the states? The New South

Wales government is claiming that your figures are wrong.Mr Evans—I have not seen that.Senator CARR—We will come to that later on, but I will draw your attention to a statement

that I understand the minister from New South Wales made—statements that go to issuesraised in a paper entitledCrippling the future. We will go into that later on. Are you telling



me that you have not heard any disputation from the New South Wales government on yourbasis for calculations of the division between public and private on FAGs?

Mr Evans—I have not, in recent months, seen anything. I cannot recall exactly what you—

Senator CARR—Not in recent months, but are you aware that that is a disputed figure?

Mr Evans—There have been disputes between New South Wales and the Commonwealthin relation to certain calculations.

Senator CARR—Could we turn to the question of the program cuts to Language Australia.That is a policy initiative that does actually relate to a program cut, does it not?

Mr Evans—It is not a program cut to Language Australia.

Senator CARR—How do you describe a downward adjustment?

Mr Evans—I describe it as a wind-up of core funding for Language Australia.

Senator CARR—Do you blokes actually have tutorials on this? ‘A wind-up of corefunding’—that is good! What are the measures to support the claims made in the performanceforecast on page 35 of the portfolio budget statements, which states:Schools and systems receiving Commonwealth funding under this sub-programme are expected to placegreater emphasis on improving student outcomes and reporting those outcomes to parents and thecommunity.

What is the basis of that statement?

Mr Evans—The basis of that statement is a tightening up of the reporting arrangements forgovernment and non-government schools set out in the agreements that have been entered intowith government and non-government school systems and non-systemic schools in theiragreements for the years 1997 through to the year 2000.

Senator CARR—You say ‘tightening up’—what is the nature of the tightening up?

Mr Evans—It is making the reporting arrangements a lot more focused on student outcomes.It means that the frameworks for reporting that we agree with state governments each yearare a lot more specific in what they are requiring.

Senator CARR—Can you give precise examples?

Mr Evans—I might ask Dr Arthur to give some examples of the work that we are doingin the area of literacy and numeracy. I know it is jumping forward to subprogram 1.2, but itis probably a good example of an area where we are strengthening and making much morerobust our reporting requirements.

Dr Arthur —As Mr Evans indicated, in the area of literacy, in particular, we are makingsignificant progress in cooperation with the states and territories in terms of outcomesreporting. This particular initiative that we are engaged in is not at the moment reflectedspecifically in the guidelines. However, it is covered by the general requirements in theguidelines in terms of outcomes reporting. It is the work that is being done in terms ofestablishing national benchmarks for achievement in literacy and numeracy. Agreements fromall the state and territory ministers to provide data which is comparable on a state by statebasis of achievement against those benchmarks will provide very powerful information in termsof outcomes reporting of key educational skills, which we expect our school systems to providefor students.

Senator CARR—What has been the responses of the states to this increased demand bythe Commonwealth for reporting outcomes?



Dr Arthur —I can comment in terms of the actual benchmarking issue where there has beenan extremely positive response from the states and territories to the overall initiative. Theproposals that there should be national benchmarks and national reporting on a nationallycomparable state by state basis against those benchmarks has been endorsed by all state andterritory ministers at the last MCEETYA meeting. Further progress on that, including approvalsubject to further consultation and trialling of the draft benchmarks, will be before the nextMCEETYA meeting in Darwin next week.

Senator CARR—On the question of benchmarking, the states are supportive. Are theysupportive on all other aspects of your reporting outcomes?

Mr Evans—To explain the background to reporting, each year a framework for reportingis prepared jointly by the Commonwealth and the states and that framework is presented toministers. In my experience, in each year that framework and the actual reporting that isoccurring is a lot more robust. I expect that you will ask me shortly when the next versionof the annual report is available.

Senator CARR—We were going to come to this.Mr Evans—I thought we might so I thought I would just jump a bit ahead, Senator. I

understand that it is actually at the printers at the moment, for 1995. But having seen it—Senator CARR—We are moving along quickly, aren’t we?Mr Evans—If the Commonwealth was able to dictate exactly when it produces it, you might

have the 1995 report in your hands at this moment, Senator.Senator CARR—Yes.Mr Evans—But having seen the draft report, I believe that it is far stronger and more robust

in the areas of reporting.Senator CARR—You are saying things are moving along more quickly yet we still talking

about the printing of a 1995 report. Will we ever see a situation where we could actually getthe reports for a particular year at the end of that year?

Mr Evans—It is very difficult when you are actually reporting on final outcomes ofexpenditure which would, of itself, not be known until probably sometime late in January. Thereporting does require—

Senator CARR—Why does it take two years? Why does it take such a long time to getthis material together, particularly since the states seem to be so cooperative?

Mr Evans—This increasing cooperation with states will mean that the time lag betweenreporting can be reduced.

Senator CARR—Given that there is this increasing level of cooperation, will there bereporting against the national benchmarks on a public basis? Will we actually get to see thesereports from each of the states? Will we be able to make state by state comparisons as a resultof this increasing level of cooperation?

Mr Evans—The Commonwealth minister has written to all state ministers to seek theircooperation on a number of reports or information being released on a state by statecomparable basis. That is an issue that might be raised at the MCEETYA meeting next week.

From the Commonwealth’s perspective, we would encourage all reporting to be released.As you would also be aware, Senator, there are forms of reporting that are released alreadyon a state by state basis. The third international maths and science survey information wasreleased including state comparisons.



Senator CARR—You are saying that the Commonwealth will encourage the publicationof these.

Mr Evans—Strongly encourage, Senator.

Senator CARR—When will we know the responses of the states to this encouragement?

Mr Evans—I would be hopeful that we would have one before we next have the additionalestimates hearing.

Senator CARR—Would you be able to take on notice the question: please indicate theresponse of the states to this strong encouragement of the Commonwealth to the public?

Mr Evans—Certainly, Senator.

Senator CARR—The public reporting of national benchmarks on a state by state basis—

Mr Evans—On the benchmarks—

Dr Arthur —I do not know that that word ‘public’ appeared in the MCEETYA decision.I am not aware of any discussions that have occurred in the task force that is looking at thisissue, which has been on any other basis than an assumption that the results would be publiclyreported and indeed would be in the ANR. I will just say that while the MCEETYA decision,as I recall, does not contain the word ‘public’, it does speak in terms of the outcomes beingreported on a state by state basis. The current assumption that all officials are working on isthat those reports will be public.

Senator CARR—I will still place on notice the question I put to you, because it is one thingfor the Commonwealth to encourage; it is another thing for the states to accept thatencouragement.

Mr Evans—I think the distinction we are making is that we believe that in relation toliteracy and numeracy the reporting would be on a state by state basis. We would be pushingthat, in other forms of reporting, that also occurs.

Dr Arthur —I will make another point there. By way of an example, I do not think that thatis a problem. In the MCEETYA decision, which agreed to the establishment of a nationalbenchmark, it was also agreed that if any further literacy or numeracy surveys were carriedout, they would be designed so that the reporting on those surveys could be done on a stateby state comparison basis with the explicit understanding that that would be public. So thatissue does not appear to be controversial with the states and territories at the moment.

Senator CARR—I thought that in last year’s budget the objectives statement included acommitment to enhancing educational outcomes for all students and to achieving common andagreed national goals for schooling; is that correct? Was there a commitment last year to that?

Mr Evans—I do not have before me the 1996-97 budget statements.

Senator CARR—I can probably dig it out for you. On page 23 of last year’s PBS, it says:To enhance education outcomes for all students by providing funds to schools to assist with the recurrentand capital costs of schooling and by promoting programmes and projects that are directed towardsachieving the Common and Agreed National Goals for Schooling.

In this year’s statement, I seem to recall there was a change. It says:To support choice and diversity and to promote Commonwealth priorities.

Can you please explain to me the difference there? What was meant by the differentformulations?



Mr Evans—Each year, as part of framing the budget, we review our objectives of ourprograms. As you can see by the objective that is shown for 1997-98, the first elements ofthat are continuing; that is, to improve educational outcomes of all students. But the objectivealso goes on to talk about supporting choice and diversity in schooling and promotingpriorities. I can see the word changes that you are referring to, Senator.

Senator CARR—Yes. What are the meaning changes? You have obviously been in theprocess of review here. Why have you changed those words?

Mr Evans—There are some changes, but I believe that the pre-eminent issue there is thatit improves the educational outcomes of all students.

Senator CARR—Yes; but there is the question of ‘choice and diversity’. Why the emphasison choice and diversity?

Mr Evans—They also reflect the government’s priorities in this area.

Senator CARR—So there is a change in government priority?

Mr Evans—No, this just reflects government priority.

Senator CARR—How does that differ from the previous priorities that were established?

Mr Evans—I suppose it is a subtlety, Senator.

Senator CARR—Subtlety? Some would say that there are millions and millions of dollarsin subtlety that flow from those choices and that diversity. It is bit more than a subtlety.

Mr Evans—Senator, if you compare the Budget Paper No. 1 for 1996-97 to 1997-98 youwill see that in the estimates for each of the forward years for government/non-government—which I think is what you are referring to—there is not a significant change in the relativefigures between those program years.

Senator CARR—Does the Commonwealth still set national goals or does it merely developpriorities?

Mr Evans—Senator, the national goals in schooling were agreed between Commonwealthand states in 1989 and Minister Kemp has very recently written to state ministers to seek theiragreement to review national goals.

Senator CARR—Can we have a copy of that letter?

Mr Evans—I would have to check with the minister’s office.

Senator CARR—Could you take that on notice?

Mr Evans—I will take that on notice, Senator.

Senator CARR—What do you see as the implications of this change in direction that arereflected in these different statements of objectives?

Mr Evans—Senator, I would reiterate the point that I made earlier—that is, that the mostimportance I see there is the emphasis on education outcomes for students.

Senator CARR—I see. So when we read in this year’s statement the various changes inwording that have occurred and we note that there has been an omission of the concept ofpromoting both excellence and equity in Australian schools, what could we read from that?What was your intention in preparing that?

Mr Evans—Sorry, Senator, your reference—



Senator CARR—As I understand it, we no longer see that one of the objectives of thedepartment is to promote excellence and equity in Australian schools. We now see choice anddiversity as the objective of the department. What is the implication of that change?

Mr Evans—Again, Senator, the emphasis there is also about improving educationaloutcomes. It goes on there to refer to the fact that the capital grants program also has aparticular emphasis on improving outcomes for educationally disadvantaged students.

Senator CARR—I want to pick you up on that point, but I am just not certain why youhave omitted this concept of excellence and equity. Is that a change in priorities?

Mr Evans—I do not believe it is a change in priorities. I believe that it is covered by theissue of improving educational outcomes. We are talking there, Senator, of educationaloutcomes for all students. So we are talking about value added for students who are giftedand talented; we are talking about value added for all students in education systems.

Senator CARR—That presumably reflects current government priorities?

Mr Evans—These words are agreed by the government, Senator.

Senator CARR—The minister is engaged elsewhere. Perhaps we will come back to thatwhen she is not so distracted. You mention in your statements that the capital grantscomponent ensures the target of improved outcomes for educationally disadvantaged students.How will that be done?

Mr Goonrey—Senator, one of the objectives is, as stated there, to put particular emphasison improving outcomes for educationally disadvantaged students. The intention of that in termsof the program is that the guidelines that are laid down for the block grant authorities thatadminister the capital grants program in the states for non-government schools will focus onparticular disadvantage—the educational disadvantage. One of the indicators that has been usedin the past is looking at the socioeconomic disadvantage. The overall focus is on educationaldisadvantage, and the block grant authorities are encouraged to consider programs that willaddress that sort of disadvantage in funding in recommending capital grants projects forapproval.

Senator CARR—How are these measures calculated?

Mr Evans—It is in relation to capital programs, I understand, that there would be proposalsthat would be put to block grant authorities for applications for capital funding. Then thereis a process whereby block grant authorities would assess those and prioritise them in termsof the overall needs within a particular state or within a particular system.

Senator CARR—I want to come back to the question I asked; how will these criteria bemeasured?

Mr Evans—Each block grant authority determines the balance they put between educationaldisadvantage—

Senator CARR—The block grant authorities determine it?

Mr Evans—They determine it and they make recommendations on how that funding shouldbe allocated.

Senator CARR—What role does the Commonwealth play in determining the distributionsof money?

Mr Goonrey—The Commonwealth does lay down guidelines. I cannot recall, off the topof my head, the very specific items that the block grant authorities are required to consider



in assessing a particular proposal. But the Commonwealth’s role, at the end of the day, is toapprove those proposals that are recommended by the block grant authority.

Senator CARR—Do you rubber stamp them? Do you evaluate them? Do you in any waycheck the recommendations of the block grant authorities against the criteria you haveestablished in this budget?

Mr Evans—They are assessed against the criteria but it is not rubber stamping. But theyare professional bodies that are skilled in making those assessments.

Senator CARR—Can you show me in the guidelines the supporting documentation thatthe capital grants component has a particular emphasis on improving outcomes foreducationally disadvantaged students? If necessary, you can take that on notice. But show mein the guidelines where the block grant authorities will be able to follow that ‘particularemphasis’—the words you use. While you are there, explain to me how these measures areenforced by the Commonwealth.

Mr Evans—Rather than delay the conduct of this committee, I will take that on notice.Senator CARR—Could you also give me an indication of the breakdown of capital grants

expenditure by schools, state and sector, linked to specific measures of disadvantage? Wouldyou mind taking that on notice?

Mr Evans—I would be happy to, Senator.Senator CARR—In last year’s budget estimates I asked a question—it was number 25—on

the breakdown of general capital funding in the schools sector. Could you please update thosefigures for me? I expect you will take that on notice as well. I seek further advice from theavailable data in regard to capital programs in government schools, specifically in Victoria.I would like to know what was the percentage that was funded by the Commonwealth in 1996;what was the total financial contribution from the Commonwealth and state funds in 1996;what are the projected Commonwealth and state contributions in 1996-97? We go through thisevery year, so I am sure you are only too familiar with it.

Mr Evans—I can give you the capital funding for the state of Victoria for 1996 and 1997now, rather than take it on notice. Do you want it just for Victoria?

Senator CARR—Obviously, I would want them for all states if I can get them.Mr Evans—I will read them out for you, Senator. For 1996: New South Wales, $72.044

million; Victoria, $49.6 million; Queensland, $38.438 million; Western Australia, $21.267million; South Australia, $17.315 million; Tasmania, $6.107 million; ACT, $3.8 million;Northern Territory, $2.567 million—giving a total of $211.138 million. That is for government.I will read out the figures in order for non-government for the same states: $36.55 million,$31.416 million, $15.873 million, $9.877 million, $12.660 million, $2.957 million, $2.595million, $2.907 million—giving a total of $114.835 million.

For government for 1997, in that same order: $72.225 million, $49.231 million, $38.783million, $21.334 million, $17.067 million, $6.052 million, $3.837 million, $2.609 million—giving a total of $211.138 million. For non-government: $27.718 million, $23.695 million,$13.507 million, $6.467 million, $5.979 million, $2.052 million, $1.968 million, $619,000,giving a total of $82.05 million. There is a qualifier that the figures that I have just read outto you for 1997 will be subject to indexation arrangements during the course of this year.

Senator CARR—Thank you. Are you able to give me the percentage of capital worksfunding in the public schools in Victoria that is sourced from Commonwealth sources?



Mr Evans—I do not have that figure in front of me, but we can give that to you.Senator CARR—Would you be able to take that on notice, please.Mr Evans—I would be happy to.Senator CARR—I would be interested to know the financial contribution from the

Commonwealth funds for operation of schools in Victoria over the last year. Would you havethat figure? You can divide it up into recurrent and capital?

Mr Evans—Are you asking me the amount of money that is taken off Commonwealthfunding for the administration of Commonwealth assistance or assistance generally in Victoria?

Senator CARR—Assistance generally. The contribution of the Commonwealth governmentto the funding of public schools in Victoria—just as an example. Presumably, the same patternwill apply in other states but, rather than go through each of the states, what was thecontribution from the Commonwealth parliament to the running of schools in Victoria overthe last year?

Mr Evans—When you say the running of schools, Senator, the vast amount of money thatis provided from the Commonwealth would be applied to teacher salaries and the operationswithin a school.

Senator CARR—That is right.Mr Evans—I would not be able to break that down and say that this amount of general

recurrent funding is—Senator CARR—I am sorry, Mr Evans, but I noticed in your press release you said that

there was a projected increase. You can tell us what is going to happen over the next fouryears, but you cannot tell me what happened in Victoria in the last year.

Mr Evans—That is not the same question. That is not my press release but—Senator CARR—I think we have established that, but you see the point I am making.Mr Evans—The thing that you are referring to there, Senator, is the projected per capita

Commonwealth sourced funding applied to students nationally.Senator CARR—Yes. But you cannot tell me what the Commonwealth contribution to the

running of schools in Victoria was in the last year?Mr Evans—I cannot tell you how much money went on teachers’ salaries and went on other

operations of schooling in Victoria.Senator CARR—I have seen in previous answers to questions that you have provided to

me that there is a claim that some 47 per cent of funding—Mr Evans—That is the total operation of Commonwealth funding to the state. I understood

that your question earlier was to explain how much was applied to a central administrationof schooling in Victoria. Maybe I have misinterpreted your question, Senator.

Senator CARR—I would like to know how much the Commonwealth contributed to therunning of schools in Victoria in the last year.

Mr Evans—I can give you a global figure, but I have not got it in front of me. I will giveit to you.

Senator CARR—Thank you. As I understand it, previously you have said to me that some47 per cent of Commonwealth funding could go towards the running of schools.

Mr Evans—I will take that on notice and provide it to you.



Senator CARR—Thank you. I would like to see how it applied last year.

Mr Evans—Sure. I was misunderstanding the question you asked me.

Senator CARR—Clearly, I can understand where the misunderstanding arises, but I alsodraw to your attention the claims in this press release that there is going to be an increase of17 per cent per government school over the next four years in terms of Commonwealth sourcedfunding, specific purpose payments and financial assistance grants.

Mr Evans—Yes.

Senator CARR—So if the minister can claim that, you must be able to tell what happenedin Victoria last year.

Mr Evans—It was simply my misunderstanding of your line of questioning.

Senator CARR—Could you also indicate to me, for the current estimates in the out years,the funding in the government and non-government school sector in terms of the governmentrecurrent grants, government and non-government capital grants, government and non-government targeted assistance grants and joint targeted programs. I suspect you would takethat on notice as well, or draw to my attention the relevant tables.

Mr Evans—I can draw your attention to table 437 in Budget Paper No. 1, which gives youthe breakup of government, non-government and targeted for the last financial year, thisfinancial year and for each of the forward estimate years.

Senator CARR—That is the targeted programs?

Mr Evans—For government programs, non-government programs, and targeted programs.

Senator CARR—And for joint targeted programs?

Mr Evans—That is covered in the targeted programs.

Senator CARR—That is covered in the table, is it?

Mr Evans—Yes.

Senator CARR—Thank you. I will have a look at that and perhaps come back to you atthe supplementaries.

Senator ALLISON—I would like to ask what the state of the agreement is with the stategovernments in relation to the enrolment benchmark adjustment formulae.

Mr Evans—At the previous additional estimates hearing, I indicated that at the MCEETYAmeeting in Melbourne in March, there was a requirement that Minister Kemp report back tostate and territory ministers at the next MCEETYA meeting in Darwin next week on the basisof implementation of the enrolment benchmark adjustment. Minister Kemp has provided hiscolleagues with a paper and will be talking to ministers at that meeting next week. At thisstage, I am not in a position to give you that paper but I expect that I might be able tofollowing that meeting in June.

Senator ALLISON—Is it expected that agreement will be reached at this meeting?

Mr Evans—I would be hopeful. I think the minister would be hopeful that there would beagreement but, in any issue where money moves in various directions, it is often difficult toget complete agreement.

Senator ALLISON—So an announcement of some sort will be made after that meeting?I am just trying to understand when we will have access to this information.



Mr Evans—To give you a bit of background, the minister will be discussing with hiscolleagues the arrangements that might operate in relation to the enrolment benchmarkadjustment. But the actual decision will, in some ways, depend on the final enrolments thatare calculated for 1997, because it is only at that time that we would know what the impactis in relation to the 1997 program year.

As you would be familiar, the trigger—the enrolment benchmark adjustment—requires thereto be a proportionate shift to the non-government sector in a state or territory compared to1996. That information will not be available until very late this year. So I am not expectingthat there will be a definitive statement until that time.

Senator ALLISON—On what date will we expect those figures?

Mr Evans—The census on government and non-government enrolments is conducted inAugust. I am not sure of the exact date but it is generally around about the middle of August.Traditionally, that information has not been available until possibly October/November, so Iexpect it would be very close towards the end of this calendar year, Senator.

Senator ALLISON—So in November when the census figures are available, theCommonwealth will then resume negotiations with the states about the EBA formula?

Mr Evans—I would expect that there would be correspondence between the Commonwealthminister and all state ministers, yes.

Senator ALLISON—How long do you expect that process to take before agreement isreached?

Mr Evans—It depends on the interpretation of the word ‘agreement’, but I expect that theremight be an announcement towards the end of this year or in the first month of next year.

Senator ALLISON—So the Commonwealth will make a decision one way or the other,whether there is agreement or not. Is that correct?

Mr Evans—I would be hopeful that everyone understands the basis, so no surprises occur.

Senator ALLISON—At what period in time will the actual adjustment be made? Assumingthere is agreement or a decision made by November or December, at what point will this beginto affect the budget for the following year?

Mr Evans—It would be for the 1997-98 budget year, so I would expect that it would occurvery early in 1998. It is a bit more complicated than that because it is somewhat of a cocktailarrangement. There might be an impact which slightly reduces the funding to a particular stateas a consequence of the enrolment benchmark adjustment but, at the same time, an increaseto a state in respect of cost supplementation. There will also be a further adjustment in respectof enrolment changes compared to 1996. It might be that the impact in 1998 is still an increasein funding to a state.

Senator ALLISON—I was somewhat puzzled to look at the budget and find that there wasnot a specific line item for the EBA adjustment. Is that because it is impossible to work thatout at this stage?

Mr Evans—No. That is because it was a 1996 budget decision, so it was shown in lastyear’s portfolio budget statements in respect of 1996-97 and the forward estimate years.

Senator ALLISON—Doesn’t this budget cover 1998?

Mr Evans—No. That is what I am saying, Senator. It is reflected in the forward estimatesas they were established last year. This portfolio budget statement shows the impact of



decisions that were taken in this budget. I think it is shown in one of the adjustments, but itis one of a number of measures.

On page 34 of the portfolio budget statement there is a figure and a heading ‘Effect ofprevious decisions’. You might recall that I went through with Senator Carr and explained thatthat was a net effect of some increases and some decreases. One of the decreases was the year-on-year impact of the enrolment benchmark adjustment, which was a downward adjustmentof $19.193 million. Within that figure of a downward adjustment of $18.544 million is anamount in respect of the year-on-year change as a consequence of the enrolment benchmarkadjustment.

Senator ALLISON—So the consequence of the enrolment benchmark adjustment for 1997-98 is—

Mr Evans—It is $19.133 million. I should say that that was the estimate that wasdetermined in the 1996 budget. There has been no change to the estimates of the impact ofthe enrolment benchmark adjustment since last year’s budget because the minister, as I justindicated, is still consulting with his ministerial colleagues.

Senator ALLISON—That was my next question: to what degree does that vary from theprevious budget?

Mr Evans—It does not.Senator ALLISON—You are saying it is a reflection. It would be useful to have a

breakdown of that figure. I could ask your department to provide that if it is not already inother budget documents.

Mr Evans—When you say a breakdown, Senator, what are you after?Senator ALLISON—Of the effect of previous decisions.Mr Evans—They are on the record. I have gone through and outlined exactly all the

components that make up that $18.544 million reduction, so theHansardshould show that.Senator ALLISON—In the discussions with the states, is there any indication of which

states will be changing their registration criteria for new schools?Mr Evans—There was an indication at MCEETYA in March that the states will be

reviewing their registration policies. Nothing has been conveyed ministerially that I have seento indicate how that might occur or the extent to which that might occur by state. However,I do note that there was some reference to it in media clippings yesterday in respect of SouthAustralia. The extent to which that is to occur is still not clear at an official level.

Senator ALLISON—At an unofficial level?Mr Evans—As I say, I have read the same clippings as presumably you have, so—Senator ALLISON—Is there any indication, then, in your discussions that the states will

have made decisions themselves prior to next year’s enrolments, next year’s judgments, aroundwhich schools will comply and which will not?

Mr Evans—In the absence of seeing anything from states I am not willing to predict orstargaze on that issue.

Senator ALLISON—Is the Commonwealth at all interested in this issue? Is it somethingthat you know by chance from clippings, or is it something that you have an interest in?

Mr Evans—It is something we have an interest in. I believe the government would not belooking to see states establish, at a state level, previous new schools policies.



Senator ALLISON—Perhaps the minister should answer this question about whatnegotiations the government is taking with the states, or what line the government is taking.If they would not be keen to see the states develop de facto new schools policies, what arethey requiring of the states?

Senator Vanstone—I will pass the question on to Dr Kemp. He will give you an answeras to what negotiations he has had and whatever information he chooses to give you, to helpyou get some insight into this.

Senator CARR—Did I hear Mr Evans say that the government would not want to see there-establishment of Labor’s new school policy at a state level?

Mr Evans—No. It must have been the microphone. I said that I would not expect that thegovernment would want to see a re-establishment, at a state level, of new schools policies.

Senator ALLISON—How many new private schools have been set up under thisarrangement in the last year?

Mr Evans—Are you asking how many applications there have been, or how many schoolshave been established?

Senator ALLISON—Both.Mr Goonrey—There is an answer to a question on notice, question 218 from Senate Carr,

which summarised as at 16 May just how many applications had been received at that time.The total was 194. Of those, 96 were for new schools, 52 for extensions to a new level ofeducation, 33 for progressive extensions within a level of education, seven for relocations andsix for amalgamations or separations.

Senator ALLISON—How does this compare with the budget projections?Mr Goonrey—There is no direct comparison at this stage, As Mr Evans was saying, we

are not looking at reviewing numbers until we actually have some census material for this year.Mr Evans—The budgetary impact of any new schools is based on the census that I referred

to earlier that occurs in about August each year. We pay on the basis of actual student numbersas determined in the census period. I also indicated to Senator Carr the projections that wehad for enrolments in the non-government schools as compared with government schools inthe forward estimate years, but I also indicated that I thought that the numbers might not bequite as high in the non-government school sector. There is a link between applications andapprovals for new non-government schools, but the actual budget impact is more complex asstudents move between categories and across sectors. Some non-government schools wouldclose down in that period, as well.

Senator ALLISON—In the applications for new private schools, is there no indication ofthe number of students who will be in those schools in this current year?

Mr Evans—They might give an indication of the number of students but it might be thatthey are not going to be all in that school in this year. We pay only on the numbers that arethere in the school at the census time.

Senator ALLISON—What information comes when there is an application for a newschool? Do they indicate how many students there will be in that school, or not?

Mr Goonrey—Yes, they do, and that is part of the answer to that earlier question that Ireferred to. However, they are the initial enrolments at the beginning of the year. We do makean advance payment based on those numbers, but the school’s actual entitlement for the yearis determined by the numbers that they have at school census day for the year.



Mr Evans—The key point to focus on in this area is the number of students who are ingovernment schools or non-government schools on the census date, not whether there areseveral new non-government schools starting up. Basically, it is the number that is in thatsector which is the basis that determines the split between the government and non-governmentschools—

Senator ALLISON—I understand that. I am just trying to get a grasp of how many newschools there are and the level of students in those schools. Do you have a total figure for whatwas applied for?

Mr Goonrey—No, we have not totalled it up at this stage as we would see them asessentially being beginning of the year enrolments.

Senator ALLISON—Is it possible to publish a list of those schools together with thenumber of students that they expect to have in those schools?

Mr Evans—I think an answer has already been provided in answer to that question.Mr Goonrey—Question no. 218 provides the names of the schools by states, the types of

application, the funding level—when that had been determined—and the number of primary,junior, secondary or senior secondary students as shown in the application at that time.

Senator ALLISON—Does it show the number of students for those schools as well?Mr Goonrey—The number is in relation to the applications that we receive, so for a new

school it would show all the numbers for that school. For an existing school extending intoanother level of education it just shows the numbers in that new level of education.

Mr Evans—I repeat that it does not show the numbers that are necessarily going to be thereon census day.

Senator ALLISON—I understand that. Was the government surprised at the size of the newschools that were being applied for or is that consistent with your expectations in terms ofenrolment numbers?

Mr Goonrey—Certainly there were no surprises in terms of a number of the schools becausethey were existing schools that had been prevented from getting funding in the past by reasonof the Commonwealth’s minimum enrolment requirements. With the abolition of thoserequirements it was expected that those schools would be able to obtain funding this year.

Senator ALLISON—How many of those new schools have moved into schools previouslyoccupied by state schools?

Mr Goonrey—I do not think we have that information. We simply get an address on theapplication and that may or may not be the location of a former government school.

Mr Evans—I think you are referring to a particular school in Victoria. I do not have thedetail in front of me at the moment, but that particular non-government school had beenplanning on opening up for several years before it actually did open up. As it turned out itwas to open up at a different site, but it ended up that a school had been closed down—

Senator CARR—Bulla Primary School.Mr Evans—Bulla Primary. Thank you, Senator. A non-government school opened up at

that particular site, but the planning for the commencement of that school had been occurringfor several years before that government school closed down.

Senator CARR—There is the site of Murrumbeena High School, which previously had 300students.



CHAIR —Senator Carr, Senator Allison has got the floor.Senator ALLISON—I would like to ask some questions about the removal of funding for

Language Australia. According to page 34 of the budget document, this is to improveadministrative efficiency and encourage the organisation to become more attuned to the needsof its clients and continue to provide support to this organisation while it secures alternativesources of funding. What are those alternative sources of funding?

Mr Evans—You are referring to a wind-up of—Senator ALLISON—Language Australia.Mr Evans—No, not wind-up of Language Australia; wind-up of core funding to Language

Australia. Language Australia will continue, I believe, to be successful in applying forCommonwealth and state assistance for particular project funding in the areas of language andliteracy. We are talking about less reliance by an organisation on core untied funding and morefocused targeted assistance that they generate by being more successful in generating projectfunding. Overall, I believe Language Australia should be quite successful in accessing fundingfrom a number of sources.

Senator ALLISON—So instead of having core funding, they must rely each year on theirapplications for grants. Is that how it is to work in the future?

Mr Evans—They would be in the marketplace each year, but some of the projects that theywould be successful for would have funding that would extend over maybe two or three years.In that sense, they are not having to wait until a particular financial year to know what theirsituation is. The organisation needs to focus on the programs and initiatives that theCommonwealth and state governments and the private sector are actually wanting to assistwith.

Senator ALLISON—In other words, this organisation competes with the private sector. Isthat what is intended?

Mr Evans—No, it can actually target assistance to the private sector. For instance, thereare projects that Language Australia has been successful in securing overseas. I know also thatthere has been some discussions with Language Australia and the Sydney Olympic committeeas well about how they might provide assistance in that area.

Just on one other point, we are referring here to a reduction in core funding for LanguageAustralia from the schools program. Language Australia does actually secure core funding fromother program areas. In particular, it gets some funding through higher education and alsothrough ANTA. So we are talking about a wind up over time from one source of core funding.

Senator ALLISON—I have a general question about the obligations of private schools tosome social objectives which we take for granted in the states. Perhaps the minister can answerthis question. Does the government intend that private schools should, for instance, be ableto demonstrate that they are open to students who are disadvantaged such as those withdisabilities or those who have learning or even behaviour difficulties?

Senator Vanstone—Senator, in a sense this is a rehashing of the new schools policy which,as you know, you have put through every sieve you possibly could when the legislation camebefore the chamber. That is your right, and indeed, your obligation. But the answer to thequestion, whichever way you phrase it, comes out the same. That answer is that the states areresponsible for registration of schools and, accordingly, the appropriate criteria.

Senator ALLISON—So the Commonwealth government is not interested in this question.Is that what you are saying?



Senator Vanstone—No, Senator. You can put whatever words you want in your own mouth,but—

Senator ALLISON—You just said the states were responsible—

Senator Vanstone—That is right.

Senator ALLISON—That means the Commonwealth is not interested in this issue.

Senator Vanstone—The Commonwealth is interested in the appropriate registration ofschools. It has decided that it is appropriate for the states to undertake that role. Senator, withrespect, it is a bit like picking a head of power that is primarily controlled by the states andsaying that the Commonwealth has no interest in anything that happens in that area simplybecause it is primarily a matter for the states.

Senator CARR—Could you indicate to us whether there is any Commonwealth money, orany schools that have applied for Commonwealth money, whose philosophies, practices andteaching methods would be considered questionable or harmful to students?

Mr Evans—Whether a school exists depends on decisions that are taken by the stategovernments that are responsible for the registration of schools.

Senator CARR—So as far as you are concerned, if a school can secure state registration,no matter what its philosophies, practices or teaching methods, no matter if it is perceived tobe harmful to students, you would provide them with money?

Mr Evans—Senator, there are a series of criteria that a school would have to satisfy to beregistered by a state government. Those criteria include physical presence and the competenceof teachers. The Commonwealth would not provide money unless those criteria had been metand approved by a state government.

CHAIR —Senator Carr, I thought you were asking a supplementary.

Senator CARR—It is a series of supplementaries.

CHAIR —Okay, if it is a series of questions, we will come back to you when it is your turn.

Senator ALLISON—What percentage of students in private schools are disabled?

Mr Evans—I do not have before me the number of students that have a disability ingovernment schools. The point I was going to make is that many students with a disabilityreceive very satisfactory educations in the non-government sector and there are many non-government schools around Australia that are committed to students with a disability.

Dr Arthur —There is data available in that there is one particular Commonwealth programwhich is paid on a per capita basis for students who meet the definition for students withdisabilities under the special education program. I do not have that data with me but itcertainly could be made available in terms of the per capita numbers. I suppose it would bepossible to compare those per capita numbers with the census numbers and provide you withan answer of students who are identified by the schools as meeting the criteria for paymentunder that program.

Mr Evans—We will provide you with that information.

Senator ALLISON—Could we have that state by state and could we have comparisons withthe state schools as well?

Mr Evans—Certainly.

Senator ALLISON—The rest of my questions are in subprogram 1.2.



Senator CARR—I have got quite a few questions on these issues. Minister, are you awareof any school who has applied for Commonwealth funding in 1997 which is based on extremefundamentalists, religious or otherwise, which would be considered to be harmful to studentsat that school—a fundamentalist philosophy which would be considered harmful to studentsat that school?

Senator Vanstone—No, I am not and I have not been through a list of the schools that haveapplied, so you would not expect me to be.

Senator CARR—Is the government concerned that public moneys should be expended,purportedly on education, in fundamentalist schools in this Commonwealth?

Senator Vanstone—I say the same to you as I said to Senator Allison and that is thegovernment has come to the view that it is appropriate for the states to be the authorising orregistering body for schools.

Senator CARR—Would you, as the Commonwealth minister for education, consider itappropriate that Commonwealth moneys be spent on a school that bans computers and videos?

Senator Vanstone—I have told you I think that—and I will repeat it again for you—theCommonwealth has decided that it is appropriate that the states are the registering body forschools.

Mr Daniels—To my knowledge, I do not think the Commonwealth has ever taken decisionsabout non-government school funding that have taken account of those criteria.

Senator CARR—The Commonwealth has never taken consideration of the curriculum?Mr Daniels—Concerning curriculum, we have relied on state education registering

authorities.Senator CARR—You never take into account the philosophies, practices and teaching

methods of schools?Mr Daniels—Not to my knowledge.Senator CARR—As far as you are concerned, these fundamentalist schools could have been

established for some time?Mr Daniels—Certainly, Senator.Senator CARR—You are not aware of cases involving the banning of computers in schools?Mr Daniels—I am not aware of those cases but they would not have been criteria which

the Commonwealth would have taken into account even in the days when the new schoolspolicy existed.

Senator CARR—Mr Evans, are you aware of schools that have banned computers thatattract Commonwealth funding?

Mr Evans—No, I am not aware, Senator, but if the school is not using computers, it doesnot mean it will not lead to good educational outcomes per se.

Senator CARR—You would see nothing wrong with it?Mr Evans—No, I did not say that, Senator.Senator CARR—You would just see that it is possible that you would still get a good

education by banning computers.

Mr Evans—No, I did not say that. I said that in the absence of computers you could stillget a good education.



Senator CARR—In this part of the century, do you think that would be appropriate?Senator Vanstone—Senator, can I just be of some assistance to you here?Senator CARR—I always welcome your assistance, Minister.Senator Vanstone—I think the committee and officers would welcome yours in this respect.

This is not some debating society where you can, at leisure, sit back at vast Commonwealthexpense and discuss your theories of education. This is the estimates committee for thedepartment, where you are entitled to ask questions as to matter of facts. If you want to havea debate about theories of education, go and get a couple of your mates and set up a debate.But at vast Commonwealth expense, this is not the place for you to be indulging yourself onthose issues.

Senator CARR—Minister, you are able to advise the committee that, if a school wereidentified as having applied for Commonwealth recurrent funding and been granted thatapproval and it later transpired that the philosophies, practices and teaching methods wereproven to be harmful to students, that school would have its Commonwealth funds ceased?

Senator Vanstone—I have already given you the answer to this question, but let me giveyou another one. You are crystal-gazing: what if this happened? What if that happened? I havetold you the answer.

Senator CARR—I just want to know what procedures operate in the expenditure ofCommonwealth money.

Senator Vanstone—The answer that I have given you before is that the states areresponsible for the registration of schools. You might be completely dissatisfied with that. Youmight not trust the states, but the Commonwealth does.

Senator CARR—You are telling this committee that there is no procedure that would beinvoked to prevent a school from receiving Commonwealth funding if it transpired that thephilosophy, practices and teaching methods of that school were harmful to students.

Senator Vanstone—Senator, you can ask the question whichever way you like. The bottomline is: the responsibility for registration of schools lies with the states, and I have told youthat the Commonwealth has confidence in the states. It follows from that that, where a schoolthat was unsatisfactory sought to register, we have confidence that the state would not registerthem.

CHAIR —It is a federation, Senator. Could we move on to some other line of questioning?Senator CARR—So if it was identified that a school was in fact receiving Commonwealth

moneys and that its philosophies, practices and teaching methods were proven to be harmfulto students—

CHAIR —Order! Senator Carr, that question is out of order, because to say that it is harmfulto students, it would not be registered by the state government. Could we move on to anotherline of questioning?

Senator CARR—I am asking the minister a direct question.Senator Vanstone—You have asked the question three times. I have given you the answer

that I am going to give you.Senator CARR—So there is no procedure within the present administrative arrangements

that Commonwealth payments to private schools that were to see those moneys, ceased?Senator Vanstone—Senator, I know you hanker for the system, because you are in federal

parliament, where you can double check everything the states do in education and those areas



of your personal interest and indulge yourself. But it is, as Senator Tierney says, a federation.There are appropriate matters dealt with by the Commonwealth, and others by the states. Ofcourse there are areas of overlap.

But in relation to this particular matter, the registration of schools is up to the states. Werea school to be registered, that people in the state were unhappy with collectively, I am surethey would take it up with the state government. That would be the appropriate politicalprocess. It would not be the appropriate political process for the Commonwealth to seek toset up second layers second-guessing everything that state governments do. That would be acomplete waste of taxpayers’ money and would send us back into Beazley’s black hole which,I note, your government left us with.

Senator CARR—I take it the answer is no.CHAIR —You have your answer, Senator Carr. Can we move on?Senator Vanstone—Senator Carr, I have told you that the states are responsible for the

registration. If you are unhappy with the registration of a particular school, take it up with theappropriate authority; that is, the state government.

Senator CARR—So the Commonwealth now has abrogated its responsibilities entirely inthis matter.

CHAIR —Senator Carr, you have your answer. Move on, please.Senator Vanstone—Senator, you can express all the views you care to. You have asked

a simple question. You have been given a simple answer. You can engage in polemics at vasttaxpayers’ expense, if you choose, indulge yourself further if you want.

Mr Evans—Senator, it has not been my recollection that the Commonwealth has ever hadthat responsibility to review state registration.

CHAIR —Even under your government.Senator CARR—There was a direct contact between the states and the Commonwealth on

the payments of Commonwealth moneys, under the previous government.Mr Evans—There was contact in relation to planning policies. I do not believe that that

extended to reviewing existing schools.Senator CARR—And enrolment policies, and a number of other factors could be taken—Mr Evans—No, Senator, I do not believe that extended to reviewing existing schools.Senator CARR—So they have Commonwealth moneys no matter what levels they drop

to, for instance, in enrolments?Mr Daniels—There were minimum and maximum enrolments.Senator CARR—There were no other criteria?Mr Daniels—And planning policies.Senator CARR—You provided me with the number of applicants for non-government

schools for recurrent government funding. What was the percentage increase on the previousyear? I have seen an estimate of a 25 per cent increase in private schools. Would that be afair calculation?

Mr Goonrey—In response to question 181, those numbers were provided in terms ofapplications.

Senator CARR—What is the percentage increase? What is the year-on-year comparison?



Mr Goonrey—I have not calculated that percentage.Senator CARR—Would 25 per cent be roughly correct?Mr Evans—It is probably an unfair comparison. Whilst it might be a numeric figure, year

on year, the number that started this year reflected a number of schools that had applicationsthat were held back because of the new schools policy. I think a fairer comparison would bethe comparison over a three-year period—comparing 1996, 1997 and 1998—so that the impactI just referred to would have been worked through the system.

Senator CARR—You may well wish to argue the case on the issue of catch-up, but evenon your own figures there has been an increase of between 16 and 19 new schools approvedthis year, an increase of 25 per cent. Is that not correct?

Mr Evans—Nineteen schools on some 2,500 non-government schools on my calculations—Senator CARR—Applications.Mr Evans—No, 19 applications on a total number of non-government schools of some

2,500.Senator CARR—What is the percentage increase of the number of applications?Mr Evans—I have a series of figures here. I will take that question on notice and come back

to you.Senator CARR—Would you be able to update the figures that you provided me on

applications? I understand that the figures you provided me with were as of 16 May. Has therebeen any increase since then?

Mr Goonrey—The current total number of applications—it has been only a marginalincrease—is 196.

Senator CARR—So only two applied. Whereabouts are those two?Mr Goonrey—From recollection, there is one in Victoria and one in New South Wales.Senator CARR—What was the one in Victoria?Mr Goonrey—Offhand I cannot recall the name.Senator CARR—Was that the one that is on the site of the former Murrumbeena High

School, the Christian college?Senator Vanstone—Senator, the officer has answered that question. He said he could not

recall and now you are continuing to ask questions. His answer is that he cannot recall.Senator CARR—Would you take that on notice, please? I would like to know the names

of those schools.Mr Goonrey—Yes.Senator CARR—Also, has there been an application for a new school on the site of the

Murrumbeena Secondary College? You also mentioned there was a new school in New SouthWales. Whereabouts was that?

Mr Goonrey—I do not recall the name there, either.Senator CARR—I would ask that that information be provided, please. Mr Evans, can you

indicate to us the cost to the Commonwealth of processing these funding applications to date?Mr Evans—Most of the cost of funding applications would rest with state governments in

terms of the registration process.Senator CARR—So there is no cost to the Commonwealth?



Mr Evans—I am saying that I do not believe there is an additional cost to the Common-wealth. The cost to the Commonwealth in large part is met through the funding for non-government schools. That is the payments of the per capita funding.

Senator CARR—You do not have a calculation?

Mr Evans—I believe that the actual cost of processing a general recurrent grant applicationwould be fairly minor in the overall scheme of the operation of the schools program, Senator.

Senator CARR—Whereabouts is that in the budget?

Mr Evans—It is covered under resources on page 37 of the portfolio budget statementsunder running costs. It is a very minor amount within the overall running costs of program1.1.

Senator CARR—Thank you for that. Have you had any applications for next year for 1998funding?

Mr Goonrey—We have had some inquiries, Senator. At this stage we have said that thereare no application forms available. We have sent forms to the current users for informationpurposes only.

Mr Evans—Senator, I do not believe that we actually keep a tally of phone calls as topeople who might be indicating that they are thinking about applying to be a school.

Senator CARR—Presumably you would calculate the funding arrangements at the end ofthe financial year?

Mr Evans—Senator, if we go back to an earlier answer I gave to you—and that was theprojections of enrolments in non-government schools—we are more focused on the totalnumber of students in government and non-government sectors because that has the mostbudgetary impact on the Commonwealth. Rather than getting down to an application for aparticular school, our focus is on overall school enrolments.

Senator CARR—You cannot tell me, for instance, at what point you cut off the applicationsfor funding for this year? Is it at the end of the 1997 financial year, or is it December thisyear? When is it?

Mr Goonrey—Senator, under the legislation, unless the various criteria are met by schoolscensus day of this year—

Senator CARR—When is that?

Mr Evans—It is in August, Senator. I have not got the actual date before me, buttraditionally it has been around about the middle of August.

Senator CARR—Thank you. By the middle of August, you can effectively say that is whatthe Commonwealth’s commitment is for private school funding for this year?

Mr Goonrey—Not necessarily, Senator, in that while the requirements need to be met bythat date, for example, a school may not have had state registration by that date. It couldsubsequently get state registration which could be backdated prior to that date. It is a cut-offin terms of the requirements needing to be met with effect from that date.

Senator CARR—When will the Commonwealth know what its final liability is for 1997?

Mr Evans—It would be fair to say, Senator, that by the census date we would be probablyabout 99.9 per cent sure.

Senator CARR—So by the middle of August—



Mr Evans—By the middle of August that census would have been undertaken. Thatinformation would probably then need to be collated by the Commonwealth, I would sayprobably by October or November. But I return to the point that to the extent of 99 per centassuredness, we would know what our likely outcome is for the program year because of thecensus.

Senator CARR—If we have 96 new schools as of 16 May, would it be reasonable to expectthat by August we will have additional schools that will be approved?

Mr Evans—As Mr Goonrey indicated, there have been two other applications, Senator. Iam not going to predict whether those two schools will actually work through to finalities.But I think it is fair to say that the 96 that you are referring to would be the vast bulk ofschools that would be commencing this year.

Senator CARR—Claims that there will be over 100 new private schools this year as a directresult of this government’s policies would therefore not be too far from the truth?

Mr Goonrey—Senator, could I say that a number of those applications are from schoolsthat were existing last year. At least half of that number would be from existing schools.

Senator CARR—As I read the figures though, you are saying that there is likely to be over100 new schools, and in fact, another 85 extensions to existing schools, a further sevenrelocations and a further six amalgamations.

Mr Evans—I do not know where you get your figure of 85 from, Senator.Senator CARR—You say here extensions to new level of education—that is 52—then you

get a progressive extension within the level of another 33. Is it reasonable for me to be ableto put those two together, given they are both involving extensions of existing schools?

Mr Goonrey—The progressive extensions are schools that were formerly approved forfunding prior to this year for that level of education.

Mr Evans—It could simply be that that school is now going to move on to teach years nineand 10.

Senator CARR—Yes, I understand the point. But is it not reasonable to point to theextensions to the new level of education, and the category known as a progressive extensionwithin the level, as an expansion or extensions to existing schools?

Mr Goonrey—I return to my point that those existing schools that had Commonwealthapproval would have been approved with the presentation to the Commonwealth of stateregistration under the former new schools policy.

Senator CARR—How many of those extensions are a result of changes in policy? Noneat all?

Mr Evans—Some of those new schools would be in respect of the abolition of the newschools policy, Senator.

Senator CARR—Yes, that is right. So what is the effect of the change in policy?Mr Evans—We are only looking at it from the new schools view. There would also be

schools closing here as well.Senator CARR—I am just relying on the information you provided me.Mr Evans—You asked a particular question and we answered the particular question.Senator CARR—That is right. I would like to know if my interpretation is now correct.

As of 16 May, there were 96 new schools.



Mr Evans—There were 96 applications for new schools.

Senator CARR—How many of those will be approved?

Mr Evans—At this stage, I cannot give you that answer, Senator.

Senator CARR—I thought that is part of the answer. I thought you were actually able totell me that. It is listed in the tables. What is the aggregate there?

Mr Evans—Of the 96 applications, I think the table shows you that 82 have been approved.

Senator CARR—Do I presume therefore that the remainder have been rejected?

Mr Evans—No, Senator. They are still in the process of application.

Senator CARR—Is it still possible for them to be approved?

Mr Evans—Some of them might be approved.

Senator CARR—What is your expectation? Are many of them going to be rejected? Howmany do you expect will be rejected?

Mr Evans—I cannot predict that, Senator.

Senator CARR—Can’t you tell me if any of them are likely to be rejected?

Mr Evans—I cannot predict the actual number.

Senator CARR—Are you saying some are going to be rejected because they do not meetwhatever criteria you now have?

Mr Evans—Some might not follow through to completion. A number of things wererequired for an application to be finally approved.

Senator CARR—So 82 new schools have already been approved on 16 May and there area further two applications, whose chances of success you presumably cannot tell me. At theend of the period in August, what is your expectation of the number of new schools that aregoing to be in existence?

Mr Evans—I am not willing to predict exactly, but I would imagine that the figure is goingto be greater than 82 and about 100.

Senator CARR—About 100. The point I started with was: is it reasonable to expect thatthere be 100 new schools?

Mr Evans—It could be anywhere between those two figures.

Senator CARR—But about 100 seems a reasonable guess. Then there are a further 85extensions to existing schools.

Mr Evans—As I indicated earlier, I am still puzzled by the figure of 85 that you arereferring to.

Senator CARR—I say to you that the extensions to the new level of education are listedon the second line in your table at 52 and the progressive extensions within the existing tableare indicated at 33. That is where I get my 85 from. Are you telling me that it is unrealisticor it is not correct to then say there are some 85 extensions to the levels of schools operatingat the moment?

Mr Goonrey—I was making the point earlier that a number of those 33 are receivingCommonwealth funding which is not a result of the change in policy. In other words, they—

Senator CARR—The 33, but how many of the 52 can be put down to a change in policy?



Mr Goonrey—Again, it would be difficult to assess. It would require speculation aboutwhether they would have been successful under the former new schools policy and whetherthey would have got state registration, met minimum numbers.

Senator CARR—Can you take this question on notice. I would like the names of all newschools that have benefited directly as a result of the change in policy.

Mr Evans—I do not believe we can give you that. Because of the nature of the questionyou are asking, we cannot separate out those that have definitely benefited—

Senator CARR—You have in the past. I asked a similar question last year. All I am doingis seeking that that be updated.

Mr Goonrey—Yes, if we were permitted to make the assumption about likely success underthe new schools policy.

Mr Evans—We will put some qualifiers to it, Senator.

Senator CARR—I am sure you will. I can always come back and seek clarification of thequalifiers that you put in.

CHAIR —I just ask a supplementary to that. Would it be true to say that there would bequite a number of schools which, under the previous policy, did not actually succeed in settingup or had some frustration that would now find it a little easier under the new schools policy?In other words, is there a backlog that might be satisfied in the first year or two of this policy?

Mr Evans—That is the point I was making to Senator Carr. I believe that for anycomparison in this area, it is better to look at numbers of schools that are approved—comparing 1996 to 1997 to 1998—so that that pipeline effect might have worked its waythrough.

Senator CARR—Of these new schools opening, can you please confirm whether there are10 schools with less than 10 students?

Mr Evans—Until we undertake a census this year, we will not know the actual numbersof students that are there on census day, so it is probably a bit pre-emptive to provide anestimate for you of that nature. We have given you an estimate here of what might be in anapplication, but the real issue will be those that are there on census day.

Senator CARR—So I am correct in assuming that there are 10 schools with less than 10pupils that you have approved?

Mr Goonrey—I have no reason to doubt that, assuming that you have—

Senator CARR—Yes, but that is the case—you can have 10 students in a school and nowreceive Commonwealth funding?

Mr Evans—The answer is yes, you can have that number of students in a school registeredby a state government.

Senator CARR—I understand the point you are making. Effectively, registration means verylittle. How could 10 students possibly be viable? Could you answer that?

Mr Evans—I have no reason to assume that a school with 10 students is not viable.

Senator CARR—On financial grounds? What is the test for that? Which states test financialviability?

Mr Goonrey—I cannot list the states off-hand, but I do believe that a number of states dolook at financial viability as part of the registration process.



Senator CARR—Could you please advise me which states do not look at the question offinancial viability?

Mr Goonrey—We will take that one on notice, Senator.CHAIR —Could I just ask a supplementary. Would it not be true that a number of these

schools that have 10 students are starting up and would be in the early stage—maybe oneyear—and would project for future growth? It would not be that they would intend to stay atthat level for very long, one would assume.

Mr Goonrey—Yes, I would agree with that.CHAIR —I think that is the explanation.Senator CARR—Could you please indicate in your answers that you have taken on notice

the schools that have benefited from the removal of category 6 amongst the new applicants.Am I also correct in presuming that there are 62 schools with 50 or less students?

Mr Goonrey—I have no reason to doubt that; I do not have those numbers.Senator CARR—And 83 schools with less than 100 places?Mr Goonrey—Under the former new schools policy, the vast majority of schools were not

subject to a minimum enrolment number. In other words, those schools that started prior tothe introduction of the new schools policy were not subject to minimum enrolment numbers.

Senator CARR—In government we tend to go forwards in most other areas of programperformance, rather than backwards. I am worried that the list of schools you have given meseems to show a massive increase in the number of extremely small religious schools. Is thatof concern to the Commonwealth?

Mr Goonrey—I do not think I can add to what has previously been said on that.Senator CARR—What is the basis for the Commonwealth applying educational outcomes

to the private sector? How do those outcomes apply to the private sector?Dr Arthur —Are you asking a question specifically in relation to benchmarks or in general

terms?Senator CARR—Benchmarks. You spoke at length on the question of benchmarks earlier.

Given that this has been so completely deregulated and it is up to the individual states to allowor not allow private religious sects to establish schools, how do you measure them againstthese benchmarks?

Dr Arthur —I think Mr Evans indicated earlier that, with educational outcomes overall andthe payments that are covered by particular agreements, particularly in terms of targetedprograms, educational and financial outcomes accountability are covered in detail in theguidelines for the individual programs. In general terms, accountability in both financial andeducational terms for the expenditure of Commonwealth funds is covered in those agreementsand in the detail of those agreements.

We have not yet got to the stage where the benchmarks and assessment against thosebenchmarks are incorporated in the guidelines. That process is still a work in progress.However, it is within that context of guidelines and educational accountability withinguidelines that I would expect that issue to be addressed.

Mr Evans—I draw your attention to section 16(5) of the States Grants (Primary andEducational Assistance) Act. That section provides that there must be agreements withauthorities. It has a requirement that schools participate in the preparation of a national reporton the outcomes of schooling and provide to the minister a report or reports of a kind or kinds



required by the minister. This actually binds government and non-government schools intooutcomes reporting.

Senator CARR—But that is essentially a meaningless clause in the bill. If it is notmeaningless, could you explain to me how a school of nine could possibly meet theexpectations the Commonwealth has set with regard to literacy, numeracy and civics? Couldyou tell me how the Commonwealth’s objectives in vocational experiences could be met ina high school of six?

Dr Arthur —The Commonwealth has expectations which are set out in the act and theguidelines. It is incumbent upon people who receive funds to perform according to thoseexpectations. The mechanism by which they do so is for them in order to produce the result.But, as has been indicated, the Commonwealth has moved a certain distance and I wouldexpect it is going to move further in terms of looking at outcomes as being the key measurefor effectiveness of educational funding. It will be necessary for the educational participantsto meet whatever requirements are placed within the Commonwealth guidelines at any onetime.

Mr Evans—A small school could be like any other non-government school selected toparticipate in a sample study, which is part of the requirements under the national reportingarrangements.

Senator CARR—And how often does that happen?Mr Evans—There are sample studies conducted each year. The only requirement I think

we have for a school is that it not be chosen in any two consecutive years. The selectionprocess for schools means that school A is not chosen several years running.

Senator CARR—That raises some questions in itself as to what that tells you. How oftenis it the case that these small, fundamentalist sects have been part of your sample?

Mr Evans—In determining the sample survey we do not look at the religious basis of aschool. We look at it in terms of the number of non-government schools in a state or territoryand whether or not they have participated before. I do not record information on that basis.

Senator CARR—Could you take on notice which private schools in the last three years havebeen included as part of your sample for the production of the outcomes of surveys?

Mr Evans—There is a confidentiality issue here.Senator CARR—What is the nature of the confidentiality?Mr Evans—I am not saying I cannot provide the information, but I know that there is an

issue in relation to which schools are selected. I will try my utmost to provide that for you.Senator CARR—I am not asking for a Commonwealth report.Mr Evans—I understand what you are asking for.Senator CARR—I am asking for the name of the school that has been included in your

sample.CHAIR —And the officer has said he will provide it as far as he is able to. Can we move

on?Senator CARR—What is your mechanism for actually checking state registration? How

do you establish that a school has state registration?Mr Goonrey—There are a number of avenues. The most normal avenue would be to get

a copy of the registration certificate issued by the state registration authority. We also get



folders containing registration for all the schools in the state, various other advices. There isno set form, but the most normal form would be a copy of the certificate of registration.

Senator CARR—What is the status of the application for Commonwealth funding forCondell Park Christian School?

Mr Goonrey—What do you mean by status?Senator CARR—Is it receiving Commonwealth funding?Mr Evans—That school appears in the answer we gave you as being one of the schools

that has applied to be funded. It is not clear from that answer whether or not that has beenapproved at this stage.

Mr Goonrey—I think it has been approved. The reason for my hesitancy is that after theapproval each school needs to enter into an agreement with the Commonwealth. After thatsigned agreement is returned, payments will commence. My guess would be that it has beenpaid, but I am not 100 per cent sure of that.

Senator CARR—Could you please take that question on notice? I would like to knowwhether the Commonwealth has paid moneys to Condell Park or whether its application hasbeen approved.

Mr Evans—We will take that on notice.Senator CARR—Could you also indicate to me whether that school is currently registered

by the New South Wales government?Mr Goonrey—I think I can answer that. The school has an exemption from registration

which, under the New South Wales Registration Act, is taken as registration.Senator CARR—So you do not have to be registered? You can have an exemption from

registration?Mr Goonrey—No, I think that is registration.Senator ALLISON—Can I ask on what basis one gets an exemption from registration?Mr Goonrey—Conscientious objection.Senator ALLISON—What form would that take?Mr Goonrey—I am not sure in this particular case but, in general terms, schools may have

an objection to registration. They still need to go through the various steps as if they werebeing registered, on my understanding. It is just that at the end of the process, it will not bea certificate in quite the same way, but the effect is still of it being registered.

Senator ALLISON—What kind of schools have a conscientious objection to beingregistered?

Mr Goonrey—I cannot answer that in general terms, Senator. I am not sure just how manydo.

Senator ALLISON—Do you know of one instance at least?Mr Goonrey—This particular one is the first.Senator ALLISON—What sort of school is that? Is it a religious school?

Mr Goonrey—I think it is.

Senator ALLISON—Which religion?Mr Goonrey—I think it is a Christian school.



Senator ALLISON—A Christian school has a conscientious objection to registration?Mr Goonrey—Yes, Senator.Senator ALLISON—How extraordinary.Senator CARR—Sorry, I did not quite catch that. Who gives the certificate of exemption?Mr Goonrey—The state registration authority.Senator CARR—When was that granted?Mr Goonrey—I do not have a date.Senator CARR—Could you take that on notice for me please?CHAIR —Senator Carr, it would be helpful if we could actually move into areas that the

Commonwealth has responsibility for in decision making.Senator CARR—Well, it is. Commonwealth money is being paid to some pretty loopy

schools out there.CHAIR —That is a valued judgment, Senator Carr. If the officers have no control of things

like registrations in states, it is really wasting the time of the committee to pursue thosematters. Could we move onto things that relate to the Commonwealth estimates please.

Senator ALLISON—Chair, I would like to pursue that a little further. If this school—andthese schools, if there are more—can claim an exemption from state registration onconscientious grounds, are there any other aspects of their educational outcomes in which theycan do likewise?

Mr Goonrey—Not that I am aware of, Senator. I think it is a philosophical objection ratherthan in terms of the actual reality of what is involved in the registration process.

Mr Evans—Senator, we have taken on notice the response to Senator Carr. I think thatshould probably cover it.

Senator CARR—Can you indicate to me whether it is a fact that the number of enrolmentsat Condell Park Christian School in 1996 was 57 and on its application for Commonwealthfunding in 1997, it claimed 47 students, which would suggest to me a decline of 17 per centin enrolments in the course of one year? Can you indicate to me whether or not that is thesituation?

Mr Evans—Senator, I do not have that detail before me, so I will include that in the answerto the previous question.

Senator CARR—Thank you very much. While you are there, could you also indicate tome whether or not you regard that circumstance as indicating that there should be any concernabout the financial viability of such a school and the wisdom of providing Commonwealthfunding for a school that loses 17 per cent of its students in one year?

Mr Evans—I will include that response, Senator.Senator CARR—Thank you very much. Can you indicate to the committee whether the

state school registration boards around Australia are prepared to make public applications forschool registration?

Mr Evans—We do not have at our fingertips knowledge as to whether or not that mightalready be occurring, so we will come back to you with that information.

Senator CARR—I appreciate that that is the case. If they are not prepared to make publicapplications, will the Commonwealth make representations to the states and then give the states



encouragement to ensure that there is a publication of those applications, particularly giventhat you are relying so heavily upon them for your funding criteria?

Mr Evans—We will give you a full answer, Senator.Senator CARR—Thank you very much. In terms of this question of the financial viability,

is there any concern by the Commonwealth officers of an expenditure of capital works moneyon sites that may not be financially viable?

Mr Goonrey—Under the current arrangements, block grant authorities do consider financialviability as part of the assessment process. So I think the answer to that would be generallythat it is not a matter of concern.

Mr Evans—I believe we are already on notice to respond to you on the basis under whichblock grant authorities make decisions. I think the question you have just asked will be coveredin the response we will be giving to that earlier question.

Senator CARR—All right. There are a few other questions I will put on notice and a fewother questions I will put directly to the minister. Given the report in the MelbourneAgeyesterday about the Victorian government’s plans to provide greater autonomy for the schoolsector—that is, to allow schools to borrow, build and sell land—can you indicate whether ornot this has any implications for the Commonwealth’s funding arrangements, particularly onthese accountability measures?

Mr Evans—The Commonwealth accountability measures are quite clearly specified and wewould require the state of Victoria, like any other state, to make sure that it is fullyaccountable for Commonwealth funds.

Senator CARR—So, when schools are given autonomy to borrow, build, sell land andemploy persons outside of the arrangements that you have entered into, do you think therewill be any requirement for you to review those accountability mechanisms?

Mr Evans—As I indicated, the state of Victoria would have to satisfy the Commonwealththat it is fully accountable for the funds that it received from the Commonwealth.

Senator CARR—Is it appropriate to seek advice on schools and TAFE now? Is this theappropriate section?

Mr Daniels—Vocational education in schools?Senator CARR—Yes, vocational education in schools.Mr Evans—It is probably an issue under subprogram 1.2, Senator.Senator CARR—Okay, I will take it up then. I have a question about the civics program.

Is that appropriate here?Mr Evans—That is under subprogram 1.2 as well, Senator.Senator CARR—Languages support is under subprogram 1.2 as well—Language Australia?Mr Evans—Yes, Senator.Senator CARR—What about information technology?Mr Evans—That probably best fits in subprogram 1.2.CHAIR —Are there any more general questions on subprogram 1.1?

Senator CARR—Yes, there are actually, now that you mention it. This ministerial councilmeeting on the EBA—

Mr Evans—It is on a range of issues, Senator—not just on the enrolment benchmark stuff.



Senator CARR—Yes. At the last ministerial council in Darwin—

Mr Evans—That is the next meeting.

Senator CARR—The next one is in Darwin?

Mr Evans—That is next week.

Senator CARR—I see, I am sorry. Is it the case that the states have responded to yourinvitations for the production of papers indicating the state responses, for instance in the caseof Victoria and New South Wales?

Mr Evans—There have been consultations with all states which, as I indicated at theprevious estimates hearing, would then form the basis of a paper from the Commonwealth tostates that would be considered at the next MCEETYA meeting. I think it was also indicatedto you that that paper would be made available to this committee once the MCEETYA meetinghad been held. At the moment, that Commonwealth paper is with state ministers.

Senator CARR—In February and in March there were bilateral consultations, which youhave referred to in the past.

Mr Evans—Correct.

Senator CARR—As I understand it, the governments of Victoria and New South Walesproduced position papers at that time. Are those available to the committee?

Mr Evans—I would have to ask the states of Victoria and New South Wales whether theywanted to make those papers available to this committee.

Senator CARR—Would you take that on notice? As I understand it, all states and territorieshave expressed concern over the introduction of the EBA. Is that correct?

Mr Evans—It is a fair comment.

Senator CARR—Most state that there was a negative perception in the community aboutthe EBA and the effect on the government school system. Is that correct?

Mr Evans—A lot of information has been put into the public arena, some of which is ofa varying quality, some of which is factually correct.

Senator CARR—There was specific concern expressed about the length of time the EBAwould be in place and the cumulative effect the EBA would have on government schools if1996 was seen to be the benchmark indefinitely of the basis for your calculation. Is thatcorrect?

Mr Evans—What you are getting to is the heart of the implementation arrangements of theEBA, which is the subject of the meeting in Darwin next week.

Senator CARR—Yes.

Mr Evans—So I would not like to speculate about issues such as the long-term effect ofan EBA until some of those discussions have been held in Darwin.

Senator CARR—But I have asked you not about the effect but about the shared concernof all states.

Mr Evans—As I said, there is mixed information out there in the community and thatconcern might be alleviated depending on the outcome of the meeting next week.

Senator CARR—But at this point, there is a shared concern about the implementation ofthe EBA and it has been expressed by all states.



Mr Evans—The concern is about particular ways in which some information has been putinto the media.

Senator CARR—All right. I put to you that it is a shared concern of all states. Could youindicate to me one state that does not share this concern?

Mr Evans—Any state that is likely to be losing money would have a concern.Senator CARR—All states are losing money, aren’t they?Mr Evans—No, it is not necessarily that a state would lose money.Senator CARR—I see. Which state is not losing money?Mr Evans—That depends on whether or not there is a proportionate shift of enrolments to

the non-government sector and the actual arrangements that are finally determined by ministerson the implementation of the benchmark adjustment.

Senator CARR—So on your projections, which states will not be losing money?Mr Evans—My projections are not the way in which the actual application might occur.

A number of factors will determine what happens with enrolments over the next few years.Senator CARR—But you have budgeted for them; you must have projections.Mr Evans—That is a global projection.Senator CARR—I know they are global, but you must work it out on the basis of a state-

by-state arrangement at some point. You have made the point that there is not shared concernbecause some states will not be losing money. Which state is that is not losing money?

Mr Evans—The forward estimates make assumptions that there would be a reduction infunding over the next four years because of the enrolment benchmark adjustment. Thatreduction is attributed to across all states, if that is what you are getting to. The actual finaloutcome for a state may not be a reduction.

Senator CARR—It is a very optimistic view, I put to you, Mr Evans. I am wondering whichstate agrees with you.

Mr Evans—At this point in time, probably no state.Senator CARR—That is right.Senator ALLISON—I am interested in the comment you made about incorrect information

being out there in the community. Can you expand on that comment?Mr Evans—Some information has been put out that assumes that a state could lose more

than its total recurrent grants program, for instance.Senator ALLISON—By whom?Mr Evans—I cannot remember exactly, although I do recall that some information you have

put out has been on this topic.Senator ALLISON—Could you repeat what you said before?Mr Evans—Some information has been put into the community that a state might lose more

than its total general recurrent grants.Senator ALLISON—Is that not true if the enrolment shift occurred to a point where there

was 50-50 enrolment in private and government schools?

Mr Evans—Senator, no projections I have seen would ever get you to a fifty-fifty situation.Senator ALLISON—That may be the case, but do you not—



Mr Evans—Senator, I think what you are saying with a fifty-fifty calculation is amathematical calculation, but I believe that in terms of projections, which is what I go on, Ihave not seen a figure that would lead you to a situation where there is a fifty-fiftyproportionate share between government and non-government.

Senator ALLISON—Nevertheless, the extension of the EBA would lead you to that point,would it not? That is the nature of the EBA: the more the shift, the greater the penalty, if youlike, on the states.

Mr Evans—I just reiterate that that is a mathematical calculation.Senator ALLISON—Indeed.Mr Evans—It is also dependent on what are the final means of implementation of the

enrolment benchmark adjustment. As I indicated to Senator Carr, that issue is still subject toconsideration by ministers.

Senator ALLISON—Are you suggesting that there is some doubt out there amongst thestates about the effect of the EBA?

Mr Evans—No, Senator. What I am saying is that states have made submissions to theCommonwealth minister or departments have made submissions to the Commonwealthdepartment that are currently in consideration before ministers.

Senator ALLISON—I am sure they are, but I am not sure that you can substantiate thatclaim that the EBA, taken to its logical end, would indeed remove those recurrent grants fromthe states. It would. That is the nature of the EBA.

Mr Evans—Senator, I just reiterate: I have not seen a projection that could lead you to asituation where fifty per cent of enrolments would be in non-government schools.

Senator ALLISON—I think we all understand that, but you are suggesting that that ideais incorrect, and I suggest to you that it is not.

Mr Evans—I am suggesting that that outcome is incorrect, Senator.Senator ALLISON—The outcome may be unlikely, not incorrect.Mr Daniels—Senator, could I perhaps add that I think the most common error that I see

reported in the media on this issue is an assumption that an increase in enrolment in a non-government school will automatically lead to a reduction in funding for a government school.That is not correct.

Senator ALLISON—Can I suggest to you that the other incorrect assumption is that themoney follows the student across from the state system to the private system, and that has beensaid by many people around this room. You and I know that that is not correct. It is actuallythe percentage increase in the private sector. So neither assumption is correct.

Senator CARR—Mr Evans, is it the case that several states view the EBA as theCommonwealth shifting costs onto the states and have expressed concern that the EBA wouldrecoup all the increasing costs to the state for government education in the years to come?

Mr Evans—That is a view that has been put by a number of states in their submissions,Senator, yes.

Senator CARR—Which state has not put that view?Mr Evans—I believe that only one state explicitly put that view, and that was New South

Wales.Senator CARR—So you are suggesting to us that the other states do not agree with that?



Mr Evans—I am not saying that they do not necessarily agree. I am just indicating to youthat from what I can recall it was put to the Commonwealth explicitly by only one state.

Senator CARR—Can I refresh your memory. Is it the case that South Australia expressesdeep concern over the introduction of the EBA, particularly in an environment of pooreconomic outlook and continuing high unemployment?

Mr Evans—Those words would put—Senator CARR—Do they sound familiar to you?Mr Evans—They could sound familiar, which is slightly different from the earlier question

you asked.Senator CARR—Yes, it is slightly different but is it not the case that these are the factors

that South Australia believes contribute heavily towards falling retention rates in governmentschools and the shift of students to non-government schools?

Mr Evans—Senator, it is exactly those factors that have been suggested to this departmentand that are subject to consideration at the moment.

Senator CARR—Is it also the case that South Australia believes that a 12 per cent shiftin enrolments to non-government schools would result in the Commonwealth not providingany general recurrent funding to South Australia for government schools?

Mr Evans—Again, Senator, as I indicated to Senator Allison, that is probably amathematical calculation.

Senator CARR—Yes, but you said before that you thought only New South Wales had puta view to you.

Mr Evans—Your question was about whether a state had made a specific point about theincreased Commonwealth cost for non-government schools being met by the EBA. That wasnot your latest question, Senator.

Senator CARR—I am just wondering whether or not it could be inferred from the SouthAustralian submission that they too were concerned, like New South Wales, about this costshifting argument.

Mr Evans—I do not believe it was explicitly put that way but, as I indicated to you, yes,all states have expressed concerns to the Commonwealth.

Senator CARR—Is it the case that South Australia currently estimates a three per cent shiftto the non-government schools during this quadrennium but that that does not include theimpact of the EBAs?

Mr Evans—I am not familiar with that figure; I do not have it in front of me. I know thatthis situation for South Australia was quite marked.

Senator CARR—Quite dramatic, yes. Is it the case that states generally regard the notionthat the EBA was built on the premise of government students moving to the non-governmentsector as representing a significant saving on your claims to states and territories but that theywill not be able to meet all of those claims in terms of the effect on the marginal costs versusthe average costs of schooling? Does that still remain their concern?

Mr Evans—A number of states have expressed concerns about using average costs versusmarginal costs. The Commonwealth has listened to those arguments and has made adjustmentsto its assumptions on the basis of those arguments. That is, in part, the content of the paperthat will be considered by ministers.



Senator CARR—What is the nature of the change in the Commonwealth’s offer now tothe states? How has it altered?

Mr Evans—There is no offer as such. There is a paper that will be considered by theCommonwealth minister and state ministers.

Senator CARR—So you are saying that the EBA is not being reviewed after theseconsultations?

Mr Evans—No, the obligation on the Commonwealth minister was to prepare a paper forministers on the basis of the implementation, and that paper will be considered.

Senator CARR—Is it the case that the states are proposing changes to the way in whichthe EBA is calculated?

Mr Evans—States have questioned particular aspects as to whether they should be includedin the calculations or not. Some of those concerns have been listened to.

Senator CARR—Is it the case that, specifically, New South Wales and Victoria, in thevarious papers that they have produced, have suggested that there should be different itemsdeducted or excluded from the NSSC expenditure figures?

Mr Evans—That is correct.Senator CARR—What is the Commonwealth’s response to those requests?Mr Evans—The Commonwealth’s response is included in the Commonwealth paper.Senator CARR—You are not able to advise the committee as to the Commonwealth’s

response?Mr Evans—I indicated that it would be fair that that response be considered by the ministers

before I indicate it to you in this forum. But I indicated to you that we would provide thatpaper to you following the MCEETYA meeting.

Senator CARR—Is it the case that Victoria and New South Wales have both argued thatthere are fixed costs associated with running a large government school system?

Mr Evans—That is correct.Senator CARR—Is it also the case that New South Wales argued that costs such as non

school based administration, school executive funding, staff development funding, schooladministrative funding, ancillary support, state office administrative support and general schoolrunning costs should be taken into account when looking at the implications of studenttransfers between the government and the non-government sectors?

Mr Evans—That is correct.Senator CARR—And is it the case that Victoria argued that all costs which are not

specifically related to individual students should be excluded along similar lines?Mr Evans—Correct.Senator CARR—Are you able to indicate what the Commonwealth response is to those

propositions?Mr Evans—Not at this moment.Senator CARR—What do you say about the issue of the calculation of the EBA not being

made on a transparent, simple and applicably consistent basis across all states?

Mr Evans—I believe that in attempting to come up with an agreed mechanism that thatmechanism, once it is released, will be transparent.



Senator CARR—It will be transparent?Mr Evans—Yes.Senator CARR—So there will be a removal of provisions for buildings and grounds within

the Commonwealth special purpose funds, is that right?Mr Evans—I believe that, once it is available, we can provide it to you and we can have

the suitable footnotes to explain what is in and what is out.Senator CARR—Thank you. What impact has the Commonwealth calculated of state

government expenditure on non-government schools? What impact does that make on yourcalculations?

Mr Evans—If state government expenditure on non-government schools goes up then itwould be a reduced impact on the enrolment benchmark adjustment.

Senator CARR—Can you just go through that with me again? What is the impact?Mr Evans—If state expenditure on non-government schools went up then there would be

a reduced impact on the enrolment benchmark adjustment.Senator CARR—What would that mean financially for the state in terms of Commonwealth

contributions? Would there be an adjustment in the EBA payments?Mr Evans—It is not an EBA payment.Senator CARR—EBA deductions. How would that affect the calculations of the moneys

due to a state from Commonwealth sources?Mr Evans—If a state increased its expenditure on the non-government sector it would not

affect the Commonwealth payment to the state. I am just thinking this through in my headas I am saying it.

Senator CARR—Yes, I understand that. I have the same problem from time to time. Couldyou give us an indication or would you like to take that on notice?

Mr Evans—I think I have given you the correct answer.Senator CARR—I see.Mr Daniels—Could I qualify that? I agree; I do not believe it would make any difference

unless the state government was shifting funding resources from its own school sector to thenon-government sector. So, unless it was operating within the same size bucket, and if it wasproviding additional funds to non-government schools, I do not believe the calculation wouldbe any different.

Senator CARR—Is it the case that several states have argued that non-government schoolcosts should include all the costs to the state government associated with the operation ofprivate schools?

Mr Evans—I think that was the point that you covered in the submission from Victoriaabout whether some of the expenses met in a particular state should be attributed across asector. That is a point that has been raised with the Commonwealth, yes.

Senator CARR—Is it specifically the case in New South Wales that the New South Walesgovernment has argued that the costs of transport, the operations of exams and all the otherpoints of access that the private sector has with the public sector should be included in thecosts of government contributions to the private sector?

Mr Evans—I do not believe the transport costs are actually covered in that basket of goodsthat you referred to as the NSSC, or national schools statistics collection.



Senator CARR—Yes but should they not be included? If you are looking at the state’scontribution towards a particular sector, surely the cost of getting the students to and from theschool is a relevant component of the costs of operating the system?

Mr Evans—I believe that if you actually included them it could be to the detriment of astate. I believe that, to include them on a per capita basis, the cost of transport for agovernment school student would be higher than for a non-government school student. Wehave looked at these things and we have actually tried to indicate to the states whether or notit would be in the states’ interest to have particular items in or out. On transport, I believe itis one that it would be better for a state to have out.

Senator CARR—It is just that the states have a responsibility to provide a universal service.The private sector is not part of a universal service. I would have thought the provision oftransport would be measured somewhat differently, giving access to the public educationsystem or subsidies to the private education system.

Mr Evans—I reiterate that I believe if we put transport in it would be to the detriment ofa state.

Senator CARR—All right. Is it the case that the Northern Territory argues that itsexpenditure on non-government schools actually exceeds the Commonwealth’s contribution?

Mr Evans—Yes, that is probably a fair statement. It is a while since I saw the territory’ssubmission, but it is a very high cost structure statement because of the issues of remotenessand location.

Senator CARR—Do you agree with the territory’s supposition that they are paying moreto the private sector than the Commonwealth contribution?

Mr Evans—I would have to verify it. It is a while since I looked at those figures. I amhappy to take that on notice. I have just been advised that we do not have those figures fromthe Northern Territory.

Senator CARR—You do not.

Mr Evans—Not the figure you are referring to.

Senator CARR—How would you verify their claims?

Mr Evans—We have already entered into dialogue with the territory, as you might expect,in preparing that paper. That sort of information would be provided to us again by the territory.

Senator CARR—So you are considering not applying in the Northern Territory the EBA?

Mr Evans—I believe the point you are trying to make is that the Commonwealthcontribution to the non-government is less than the territory contribution. I will take that oneon notice. My train of thought is lost for a second.

Senator CARR—Thank you. I presume you would also be assessing the in-kind assistanceto non-government sectors provided by the Northern Territory government, which would bemuch more difficult to quantify?

Mr Evans—A lot of in-kind assistance is provided to both the government and non-government in all states.

Senator CARR—Yes. As I understand it, the application of the EBA next year will verymuch depend upon the census in 1996. Is that the case?



Mr Evans—The benchmark is the 1996 census. The actual calculations will be dependentupon the 1997 census to see the proportion of shift from one year to the next in each stateand territory.

Senator CARR—So all states and territories have agreed to use full-time equivalentenrolments on that basis?

Mr Evans—That is a point that we have made to each state.Senator CARR—So have they agreed with you?Mr Evans—Yes.Senator CARR—Is it also the case that a number of states have expressed a preference for

using a three year average figure on enrolments rather than the annual census?Mr Evans—That point has been made by at least one state.Senator CARR—And one territory?Mr Evans—Could be. Senator, I take it I do not need to provide you with a copy of the

Commonwealth paper?Senator CARR—I do not know whether we are talking about the same paper. I am

interested to know exactly how you are calculating these figures. Since there are considerablesums of money involved in this it would be useful to know precisely what you are using asthe basis for your calculations. That is the point of these questions. When do you expectpositions in regard to these cost arrangements to be refined? Will you be able to get that sortedout at the August meeting?

Mr Evans—Around the census period would be my prediction.Senator CARR—Yes. So there are a number of issues that are going to take some while

to refine? When will you have all that data available?Mr Evans—When the census data is available.Senator CARR—When will that be processed?Mr Evans—As I answered in an earlier question, I am predicting it would be around about

the end of this calendar year or very early in the next calendar year.Senator CARR—Presumably we will then be able to assess those matters at that point. I

take it that the figures you gave me before in terms of future projections on enrolments arethe basis on which you have calculated the budget funding arrangements for non-governmentschools. How do you reach those projections? What was the basis on which you calculatedthose figures?

Mr Evans—If you are referring to the enrolment projections, they are based on projectionsof numbers of students in government and non-government schools. They are also based ondemographic assumptions about birthrates, progressions of students from primary to secondarysectors and migration patterns. So they rely on ABS information, and then the outcome ofthose various inputs is the projections.

Senator CARR—What is the figure for 2000 or 2001?Mr Evans—I did not give you a figure for 2000 or 2001. I did not have one before me at

the time.

Senator CARR—When will you have that?Mr Evans—I can probably give you one. I will take that question on notice.



Senator CARR—Given the discussion we had earlier regarding the numbers of applicationsfor new schools, do you see any need to revise your forward projections?

Mr Evans—As I indicated earlier, the key issue that we focus on is the total numbers inthe sector rather than the numbers of applications for new schools per se. I would not beexpecting to make any adjustments to those enrolment projections until I see the 1997enrolment figures.

Senator CARR—When will you know whether or not a revision is required?Mr Evans—I see it as around the end of this calendar year.Senator CARR—The end of this calendar year. So December we could expect them?Mr Evans—Possibly December, possibly January, and the timing, if there was a need for

a review, might be a month or two after that.Senator CARR—Presumably we will take that up in the supplementary next year.Mr Evans—No doubt.Senator CARR—Minister, now that you have returned, there are a couple of issues that

I wanted to raise with you. When you introduced this new policy framework, was it yourexpectation that there would be whole districts of major capital cities without a public school?

Senator Vanstone—Whole districts, did you say?Senator CARR—Yes, whole districts.Senator Vanstone—Senator, you misunderstand the thrust of the policy. It is not district

based.Mr Evans—There are still, by my projections, going to be around two million students in

government schools.Senator CARR—Yes, that is true.Mr Evans—So to say that there are going to be whole districts that do not have government

schools is probably taking the point a bit far.Senator CARR—You say that, but I put it to you that in the case of the area around the

suburb of Oakleigh in Melbourne, which I understand might be part of the minister’s ownelectorate—

Senator Vanstone—I would not have a clue, I am sorry.Senator CARR—There is no public secondary education provision, that is no secondary

school, after the closure by the Kennett government of various high schools in that district.How does that provide more choice for parents in the Oakleigh region?

Senator Vanstone—We have been through this in the debate in the chamber, we have beenthrough it at the last estimates hearings and I am happy to indulge you and go through it again,at vast taxpayer’s expense. The policy is designed to give parents more choice, that is, notto have a second layer—in combination with the new schools policy—of the Commonwealthsaying where schools could go and where they could not, but leaving that up to the states. Thestates are responsible for that.

Your question with respect to Oakleigh is therefore more appropriately directed to theVictorian minister in that respect and to acknowledge that, where parents choose to take theirchildren from a government school and put them in a non-government school, there is, in asense, a windfall to the state governments—it is a sort of cost-loading onto the Commonwealthif you like—and they should not be able to keep all of that money. There should be a division



up of that money. In fact, some might argue we should take it all because as you know, thecost to the Commonwealth of a child going into a non-government school—we can get thefigures for you—is quite substantial, compared with a government school.

Senator CARR—We have been through this at some length.

Senator Vanstone—If you want to portray this as being a policy that was designed to savethe Commonwealth money, you might ask yourself, ‘Why would that be?’ when it costs morefor the Commonwealth if a kid goes to a non-government school. The answer to that, ofcourse, is because the Commonwealth is interested in parents having a choice in terms of ourfunding. The choice is there within the schools that are registered by the state. So as I say,come back to Oakleigh. If you have a complaint about Oakleigh, raise it with the stateeducation minister.

Senator CARR—Minister, I understand that just about every state in the country is arguingthat this policy will actually lead to cost shifting to the states by the Commonwealth.

Senator Vanstone—Of course they are, Senator. I imagine a kid in grade 2 would tell youthat in any financial discussions between the states and the Commonwealth it is inevitable thatthe states claim they are being hardly done by. But you might like to tell me, do you disagreethat it is more expensive for the Commonwealth if a kid goes to a non-government school thana government school? Do you accept that as a fact?

Senator CARR—No. I actually expect that the costs can be measured on a whole rangeof factors and the cost to this country of your policy will be measured for generations. ButI come back to this point—

Senator Vanstone—Since you have raised the point, I might point out that you have avoidedanswering the question because you know the answer to that question is yes. If you want totalk about the cost to the nation of policies, look at the devastation wreaked by your peoplewith the recession we had to have, the ingrained unemployment we are now having to copewith and the training system that was not brought up to date. This country will be paying theprice for having people like you in government for decades.

Senator CARR—When you introduced this policy, did you expect—to take the case wehave mentioned in Oakleigh and the minister’s electorate—that a public school, as is the casein Murrumbeena High School, would be closed down, that the Christian Ecumenical Collegewould seek to establish on the same site and that, at the public meeting that was called todiscuss the establishment of the Christian Ecumenical College on that site, a leaflet wasdistributed saying that with the closure of a number of neighbourhood schools has come agrowth in concern about educational opportunities for students in the region? When youestablished the policy, Minister, did it ever concern you that, rather than providing parents withmore choice for schools, the abolition of the new schools policy has actually seen stategovernments limit the choice of parents in regard to students in any particular district?

Senator Vanstone—You asked me about some leaflet that was distributed. Really, this isfor the questioning of the department as to government policies, not some leaflet that you havespotted in some meeting that you have been to, which you have prepared, I imagine. I canjust see you preparing a leaflet and then coming along and asking everybody whether theyhad seen it. Senator, the situation in Oakleigh is a situation that could well be there irrespectiveof the new schools policy. I ask you to accept that.

Senator CARR—No, I do not accept that.



Senator Vanstone—Okay, well you don’t. You want to put a different view on it, butnonetheless that is the situation that could happen even if we had not abandoned your so-callednew schools policy which was a ‘let’s limit new schools policy’, but you did not want to tellthe truth about it. That is the situation. It is a matter for the state.

Senator CROWLEY—If I might interpolate, that does go to interpretation. The new schoolspolicy was to ensure, when new schools were encouraged to establish, that they would remainviable.

Senator Vanstone—We have had a whole morning of interpretation from the senator, soI welcome some from you as well. It just adds a bit of diversity.

Mr Evans—Senator, viability was not a factor that the Commonwealth specifically lookedat when the new schools policy was in effect.

Senator CARR—No, but it used to have minimum enrolments which would give you ameasure of financial viability.

CHAIR —We have trawled through this debate for several hours this morning. Can we moveon to something new and related to the estimates please?

Senator CARR—It is related directly to government policy.CHAIR —You are supposed to be questioning the officers, not talking about policy.Senator Vanstone—Senator, you seem to have the view that wherever there is a government

school there should be a non-government school and vice versa. I do not happen to share thatview. And you will always claim when there is, in a particular area, greater choice for non-government schools, that there is not a choice. But you do not stick to your rationale, becausein an area where there is only government schools or a predominance of government schools,you do not worry about the lack of choice. You are really only interested in protectinggovernment schools and that is the difference between your government and your approachand the approach taken by Dr Kemp and myself. We are interested in all schools, governmentand non-government. We want parents to have greater choice between the two.

Senator CROWLEY—Can you define choice, Minister, if for a certain population—CHAIR —Order! Senator Crowley, we are now moving into a debate that is probably more

appropriate in the chamber, not in the estimates hearing. Could we return to estimates please?Senator CARR—Mr Chairman, it is clearly stated within the objectives of this program

that that is the whole purpose of this government’s operations.CHAIR —We will stick to questions on the program, not on the philosophy.Senator CROWLEY—We are actually now in response to your comment a minute ago that

the government’s policy is about increased choice.Senator Vanstone—Yes, I think it is.Senator CROWLEY—And you have just said that, so I think it is reasonable for me to

ask—Senator Vanstone—Yes, and had you been here earlier Senator, you might not have asked

that question. I do not mean that rudely because I know you have probably come from otherestimates where they have just finished one load, but it does make it difficult going throughthings again and again.

Senator CROWLEY—Indeed minister, and I do not want to make things difficult, but Ido wonder—



Senator Vanstone—And especially when you come in bright and fresh and, in a most perkymanner, ask a pertinent question, and, sadly you get a bit of a sour reply because I have hadthe question repeated again and again by people who apparently do not understand or whosimply want to keep asking it until they get the answer they prefer. But let me summon suchenthusiasm to answer the question yet again, since you have such a friendly demeanour aboutyou.

We believe the abolition of the former government’s new schools policy will add to choicein that a second layer of limitation on the establishment of new schools has been removed,and there is, therefore, the one layer, the state layer. Obviously, if you remove a layer oflimitation, the likelihood is you are going to get more schools. The bottom line is, we havethe view that your so-called new schools policy was there not to ensure viability, as hasalready been indicated, but was in fact to ensure that people who wanted to go away and setup perhaps a small school would not be able to because you were worried that people wouldexercise choice if you let them and move away from government schools, that the wholepurpose of your new schools policy was to limit choice to shore up enrolments in governmentschools, and that is your commitment to the teaching unions. Good luck go to you. We havea different view.

Senator CROWLEY—Thank you for that interpretation, Minister. My question was reallyto say if, in area A, public school 1 closes and is replaced by a private school, one would haveto worry about the definition of choice here. People have one option once, now they have oneoption again but it is a different option. That is the concern that parents are raising with me.It may be argued that we have more choice, but what we are finding now is we have just gotone school to go to and it is just a different school now.

Senator Vanstone—Why do you not give us a list of the areas where you think the parentshave only got one choice? You might not like it, but the facts are that the states haveresponsibility for registering schools. If the states choose to close a state school, that is amatter you should take up with the states, not with the Commonwealth. This is theCommonwealth Department of Employment, Education, Training and Youth Affairs and youcan ask us about Commonwealth responsibilities, but this is a state responsibility.

Senator CARR—It is Commonwealth funding of private schools.

Senator Vanstone—If the states choose to close a school, take it up with the state.

Senator CARR—We have a case here of a public education facility, funded in the past 47per cent by Commonwealth sources—Murrumbeena high school, Murrumbeena secondarycollege—now being closed and a private school opening on the very same site. It is obscene.You must acknowledge that there is an obscenity about that.

Senator Vanstone—No, I do not acknowledge that at all. I think there is an obscenity aboutyou wasting taxpayers’ money indulging yourself.

Senator CARR—We are measuring the government’s objectives against the empiricalevidence that is available to us.

Senator Vanstone—Honestly! If anyone ever let you through a university they should thinkabout withdrawing their degree. Empirical evidence? You raise one puny little area of Victoria,that quite coincidentally happens to be in the minister’s electorate, and you have the gall tocome in here and say that is empirical evidence! Even your limited standing is diminished bythat stupid remark.



Senator CARR—Perhaps you would like to advise us. Have you seen the New South Walesgovernment’s assessment of your budget, talking of empirical evidence?

Senator Vanstone—No, but clearly you sit on the phone to John Aquilina. It is the onlyplace you can probably get any decent information.

Senator CARR—Is that right?

Senator Vanstone—It is pretty clear that you have easy access to New South Walesgovernment information, some of which I would have access to, some of which they may notgive me—I do not know.

Senator CARR—Have you seen the New South Wales government’s analysis of the federalgovernment’s budget impact on education and training in that state?

Senator Vanstone—No, but I understand that such an analysis has been made available toMCEETYA ministers. No doubt I will get the opportunity to look at it because the MCEETYAmeeting is next week on Thursday and Friday.

Senator CARR—This is a publicly available document entitledCrippling the Future.

Senator Vanstone—Yes. You mentioned it this morning on a number of occasions.

Senator CARR—Yes, I did mention it. I was wondering whether you have had time to—

Senator Vanstone—A beautifully polemically chosen title—Crippling the Future—

Senator CARR—If so, can you indicate to us—

Senator Vanstone—Have I bothered to rush out and get a copy because you have referredto it? With respect, no.

Senator CARR—I am pleased to hear, minister, that you have not heard of it. Perhaps yourofficers can advise me as to whether they are familiar with the claims made by the governmentof New South Wales on an Australia-wide basis that Commonwealth outlays on governmentschools may have increased nominally six per cent, but have declined 3.5 per cent in realterms.

Mr Evans—I have seen that paper. I have not gone through it in detail. Elements of thatpaper are, I believe, misleading. For instance, I am not sure whether you have a copy—

Senator CARR—Yes.

Mr Evans—A table at the back of that looks at indigenous education, for example, andportrays it as a cut of 33 per cent in funding. The reduction in the outyears in forwardestimates is simply because the forward estimates do not go beyond the triennium orquadrennium we actually have for indigenous education. It is very misleading and slanted forthat paper to portray that as a reduction in indigenous education. It is issues like that whichI have problems with in that paper.

Senator CARR—What about their claim that the Commonwealth contribution to schoolswill actually decline 3.5 per cent in real terms?

Mr Evans—As I say, I have not done that analysis. I am just making an observation onparts of the paper. A briefing has been prepared on that paper for ministers at this momentthat will be provided to ministers before MCEETYA. The paper was submitted late by NewSouth Wales. Indeed, when it was circulated to ministers, the tables that you have in your righthand were not included in the paper. They have only arrived in the last 48 hours and they arethe subject of some analysis at the moment.



Senator CARR—So have you had an opportunity to assess the claim that expenditure bythe Commonwealth will increase in real terms 4.7 per cent for school spending, almost all ofwhich goes to the non-government sector?

Mr Evans—I refer you to the table in budget paper No.1, which I referred you to earlier,which actually shows the funding for government and non-government and joint. That showsthe funding for this year and for the outyears. It shows growth as well.

Senator CARR—But excluding from that the growth in enrolments and inflation, what isthe real effect?

Mr Evans—Sorry. My mind does not extend to doing that calculation.

Senator CARR—Could you take that on notice? On the front of the budget papers you havea bit of a pie graph and a bit of a bar graph on some of your portfolio outlays. Is that in realterms?

Mr Evans—Which page are you referring to?

Senator CARR—Page 18.

Mr Evans—I will confine my comments in particular to schools and then make a generalobservation on the balance of that pie chart. The amount for schools, at the bottom of thattable, that pie chart, shows $3.8 billion. That would include the supplementation in respectof 1997-98. I do not know whether it is a fair observation in respect of the other programsshown in that pie chart, programs 2 to 6. In some ways that gets to the heart of the wholeadditional estimates process, that there is that other opportunity later on in the year. As youwould know, there is not much adjustment on the schools front, but often there might be someadjustment in the other programs.

Senator CARR—Thank you. Is that real figures?

Mr Evans—They are real dollars.

Senator CARR—So those measurements are all in real dollars?

Mr Evans—No, I am talking about that pie chart at the bottom.

Senator CARR—I understand that. But that is only for one year, so we presume we canmake that calculation. But on the summary of portfolio outlays, are those figures in realdollars?

Mr Evans—I expect they are probably not in real terms. They are probably in nominalterms. I will just check. I believe that the figures in that summary table are in nominalamounts. Figures in most budget papers are presented in nominal amounts in forward estimateyears. I think we had this discussion at an earlier Senate estimates hearing, at last year’sbudget, about whether moneys were provided in real terms or nominal terms.

Senator CARR—Can you provide to me a summary of portfolio outlays in the outyearsin real terms, calculated on 1996-97 prices?

Mr Evans—Aggregate expenditures by programs in real terms?

Senator CARR—Yes. You have provided for us a graph in nominal terms. Can you provideit in real terms for the outyears? I will ask you, if you cannot do it now, to take it on notice.

Mr Evans—We will take that on notice and come back to you with what best we can. CouldI just make one observation: simply to turn that summary of portfolio outlays into real termsmasks changes where you might actually be providing increased assistance for increased



numbers of students. So the question you are getting to, I think, is the real value of thisassistance.

Senator CARR—Yes.Mr Evans—I just make that observation.Senator CARR—Thanks for that. I am sure you can provide me with additional information

if you think that is necessary. You have been very good at doing that in recent years. But whatI am interested to know is whether or not the portfolio is in fact providing additional resourcesin the manner in which it seems to be presented in this graph. I would think, if you take acalculation for inflation, you may get a lesser figure—that in fact the real effect in the outyears is to see a decline in the resources that the department or the portfolio has available.Would that be an unreasonable assumption to make?

Mr Evans—Again, I make that qualifier that it is masking what might be happening inindividual program areas.

Senator CARR—If you can, give me a separate piece of advice on the outlays by program.You have been able to categorise the percentage for 1997-98. Are you able to do that for theout years as well? That will give me a separate indication.

Senator Vanstone—I indicate that, in relation to some of the material you are asking for,it is almost as if we would have to shift resources from other sections of the department toput the material in the format that you choose to have it in. It may or may not be appropriateto simply have—

Senator CARR—It might be readily available, too.Senator Vanstone—And if it is readily available, there is no problem. You ought to have

understood that by now. But, if it requires significant resourcing et cetera, I think we will comeback to you with a suggested cost of putting the information together for you—

Senator CARR—Yes, that is fine, Minister. I am—Senator Vanstone—Just hold on a minute, Senator. I let you have your go when you are

asking a question. Should you wish the work to proceed, and should the department beprepared to do the work, which, if it is expensive, I doubt the department will, then everyoneelse will know the cost of your own indulgence.

Senator CARR—Thank you.CHAIR —Order! It being after 12.30 p.m., the committee stands suspended until 1.30 p.m.

Sitting suspended from 12.32 p.m. to 1.46 p.m.Senator CARR—Minister, on 17 March, your junior minister said that the federal

government was not getting value for money for its school funding, as teachers had failed toequip every child with basic reading and writing skills. What was the basis of that attack?

Dr Arthur —As I recall, that particular release followed the announcement of the resultsof an analysis carried out by the Australian Council for Educational Research on a series ofstudies done of Australian youth over a significant period. I cannot recall the length of theseries of studies, but it was a longitudinal study producing some results. That was the basisfor the statement.

Senator CARR—Minister, do you agree that the federal government was not getting valuefor its money for its school funding?

Senator Vanstone—I have been given no reason to disagree with Dr Kemp.



Senator CARR—Minister, would you agree that Australia spends proportionately lessmoney on education than any OECD country?

Mr Evans—I believe that those figures have since changed. It shows that Australia istowards the middle of OECD countries.

Senator CARR—Spending what—above average?Mr Evans—From what I can recollect, it is spending roughly on average.Senator CARR—Minister, since you agree with Dr Kemp’s statements, what are you doing

to address the problem that he has allegedly identified?Dr Arthur —The entire process of seeking benchmarks and reporting against benchmarks

on a national basis with state and territory comparisons is directly addressed to that issue.Senator CARR—How will that improve the level of literacy?Dr Arthur —It will improve the level of literacy as part of an overall national plan of which

benchmarking and assessment are elements. Other elements which ministers agreed to at thelast MCEETYA include diagnostic assessment of all students as soon as they enter school anda commitment to early intervention to ensure that the benchmarks are achieved. Overall, thenational plan is intended to improve results in literacy and numeracy amongst all Australianstudents.

Senator CARR—Perhaps I might come to that. That is probably moving more intosubprogram 1.2. I guess you have strategies for dealing with that. Is that correct?

Dr Arthur —Yes.Senator CARR—Is it also the case that, in regard to the national professional develop-

ment—Dr Arthur —That is 1.2, Senator.Senator CARR—Is the question of teacher registration also 1.2?Mr Evans—There is no Commonwealth teacher registration.Senator CARR—Yes, I understand that. Is the government taking any steps to improve the

quality of teaching by ensuring that there is registration of teachers across the country?Mr Evans—I do not believe it necessarily follows that the process of registration would

bring about improvements in teacher outcomes.Senator CARR—But, presumably, if we could see a situation whereby the teachers were

required to meet minimal educational standards, minimum academic attainment and perhapsundertake a teaching qualification, you could reasonably expect that there would be animprovement. Currently there is a situation where people calling themselves teachers are notregistered and are working in the systems in this country. Is that not the case?

Mr Evans—I expect that is the case.Senator CARR—Is the government planning any steps to actually improve the level of

teaching by ensuring that there are registered teachers in all schools?Mr Evans—Again, I would make the point that I do not believe teacher registration leads

to improved teaching outcomes.

Senator Vanstone—I think that is pretty manifestly obvious.

Senator CARR—Are you taking any steps to improve teacher registration? Are there anyproposals being considered for a national teacher registration?



Senator Vanstone—That is a matter for the states.Senator CARR—So a national registration is a matter for the states?Mr Evans—It is a matter for individual states if they want to have a central register.Senator CARR—So you are saying there is no national registration being proposed?Mr Evans—The department is not pursuing national registration.Senator CARR—In terms of the national benchmarking that Mr Arthur mentioned before,

is there any role for state governments’ testing to be included in that? For instance, is theVictorian LAP program part of your benchmarking studies?

Dr Arthur —The decision of the ministers at the last MCEETYA was that assessment wouldtake place using rigorous state-based assessments. So the answer is yes.

Senator CARR—How would that work? What is the nature of the statistical calculation?Dr Arthur —The detail of how we would establish the equivalent assessments between the

state and territory test is currently being investigated by the benchmarking task force. It isemploying measurement expertise, including the Australian Council for Educational Researchas part of that process.

Senator CARR—But it is based on the Australian Council for Educational Research study,though, is it?

Dr Arthur —No. They are one of the bodies who have expertise in measurement issues whoare involved in assisting the benchmarking process. There are other bodies—for example, aconsortium previously based at Macquarie University, which is now called COSBOA.

Senator CARR—Is there any proposal to consider the establishment of a nationalprofessional group to advise the government on education matters in the context of this claimthat Dr Kemp has made that the Commonwealth is not getting value for money out of itseducation programs?

Mr Evans—Dr Kemp has written to a number of teaching organisations about establishinga national professional forum for teachers.

Senator CARR—What progress has been made on that?Mr Evans—That is where it is at at the moment.Senator CARR—Who has he written the letter to?Mr Evans—I do not have that detail in front of me.Senator CARR—Would you mind getting me that detail?Mr Evans—If Dr Kemp wants to release that information.Senator CARR—It is a secret, is it?Mr Evans—No, it is not a secret. Basically, he has written to a number of individuals.Senator CARR—Individuals, not state authorities—Mr Evans—A number of associations.Senator CARR—Teacher associations?Mr Evans—Yes, a number of teacher associations.Senator CARR—What is the secrecy about this?Mr Evans—There is no secrecy, Senator.Senator CARR—Why aren’t you able to advise—



Senator Vanstone—I think the point is, Senator, as you well know, that a minister’s officeis not open for every member of the public or, for that matter, every member of parliamentto walk through every single—

Senator CARR—Minister, is there any—Senator Vanstone—Senator, if you want to ask questions, we are all happy to try to answer

them. But, frankly, you will have to let people answer them. The simple point is that notevery piece of information is readily available or a minister is not always prepared to makeevery item available. The officer has given you a perfectly responsible answer—that is, he willask Dr Kemp.

Senator CARR—That is very good to hear, Minister.Senator Vanstone—He has not suggested it is a secret. You do not need to try to put any

negative connotations on an officer. This is most unsatisfactory. There are people on both sidesof parliament who have done that in estimates and none of them are liked.

CHAIR —Let us move on, Senator Carr.Senator CARR—Minister, since you are the minister at the table, what is the relationship

between this national professional group that is being proposed and the schools division ofyour department?

Mr Evans—This association can provide advice to Dr Kemp, just like the departmentprovides advice to Dr Kemp.

Senator CARR—So what is the relationship between this proposed group and yourdepartment, Minister?

Senator Vanstone—I am not quite sure of your point here. It does not have to have arelationship. Dr Kemp is seeking some advice from a range of people. He is entitled to do that.

Senator CARR—Is there any proposal that there should be Commonwealth funds appliedto the support of this group?

Senator Vanstone—Yes, some secretariat support.Senator CARR—So there is a matter for this committee to be interested in?Senator Vanstone—No-one has suggested that it isn’t.Senator CARR—You are saying that some matters are not within the province of this

committee because they have something to do with the minister’s office. You are nowadvising—

Senator Vanstone—I have not said that. I said that the officer gave you a perfectlyappropriate answer—that is, with respect to ministerial correspondence, he would ask theminister whether he cared to release the letters. That is what I said.

Senator CARR—You said a lot more than that. Is there not Commonwealth money involvedin the establishment of this reference group?

Mr Evans—It is limited to secretariat support.Senator CARR—I appreciate that you are saying it is limited, but I am asking the minister

a question. Is there Commonwealth money involved in the establishment of this group?Senator Vanstone—You have got the answer to that. You have already had it. I invite you

to check the record or check your memory. We are not going to continue having the samequestion asked 53 different times and bending over backwards to give you the same answer53 different ways. You have asked that question and you have had it answered.



CHAIR —Could we move on at a slightly faster pace, Senator Carr.Senator CARR—What is the level of secretarial support?Senator Vanstone—As I understand it, no money has been spent at this stage.Mr Evans—As I indicated, the minister has written to a number of teacher associations

asking them to possibly nominate someone to participate. It is at that very formative stage.There is no body that has been established at this point. There is no secretariat that you canpoint to and say, ‘There are these three people, or four people or one person.’ Not one dollarhas been spent on it at this time.

Senator CARR—The department presumably has provided advice to the minister on thismatter?

Mr Evans—We provide briefing from time to time, either orally or in a written form.Senator CARR—So it is not entirely true to say that there has been no money spent on it.

Presumably resources of the department have been applied to it.Mr Evans—I do not determine how much money is spent on every particular—Senator CARR—No, I am not asking you to determine that. I am just asking whether there

have been departmental resources applied to this project. You have advised me that there hasin fact been advice to the minister.

Mr Evans—That is right.Senator CARR—You also indicated that no money has been spent on the project. It is not

entirely consistent with those two observations.Mr Evans—No specific money has been spent on it.Senator CARR—Whereabouts does this project appear in the forward estimates? Is it

ministerial discretion?Senator Vanstone—The limited time you have been here should have given you the

capacity, frankly, to understand that not every item on which a department offers advice islisted separately in the estimates. It may be there; it may not. It does not come to my mind,but it would be no surprise if it was not.

Senator CARR—So it is not there?Senator Vanstone—Why don’t we have PBSs next year that list every possible thing that

a minister might like to seek some advice on, because that might be an expense! It comesunder the category of the general advice offered from the department. For heaven’s sake, tryto get a grip on reality.

Senator CARR—I have plenty of time to get a grip on reality. I understand you are gettingvery grumpy and very frustrated. That is the difficulty about the parliamentary process.

Senator Vanstone—No; it is a difficulty with senators, such as you, who indulge themselvesand take up a lot of time asking the same question 43 different ways.

Senator CARR—Yes, well, I am pleased to hear that. What is happening with theprofessional development program in the department?

Mr Evans—The national professional development program that you refer to ceased at theend of 1996. It was not in the forward estimates of the previous government, so that was it.

Senator CARR—What program do you have to replace it? What measures can you pointto that replace it? That was a $60 million program, wasn’t it?



Mr Evans—You referred earlier to one of Dr Kemp’s media releases. There was a referencein there to some professional development in the area of literacy. There is also someprofessional development money that is provided through the civics program. There is also$3.7 billion that is provided to the states and employers that is used for school level education.

Senator CARR—What is the total amount of the department’s spending on professionaldevelopment?

Mr Evans—I gave you two examples of areas where there is some. I have not got anestimate of the total amount of specific funding that we provide to professional development.

CHAIR —Isn’t it true the education centres that the last government wanted to shut downare actually staying open?

Mr Evans—That is correct. That was another initiative that was announced by Dr Kempin the budget.

Senator CARR—Can you give me an aggregate figure on professional development withinthis budget?

Mr Evans—I can say that it includes the $7 million that was announced for literacy, itincludes $7½ million for education centres and it includes an amount for civics and citizenship.But it would include a lot of other money that is provided through general recurrent grantsto states.

Senator CARR—With regard to the question of school fees being funded through publicschools, does the Commonwealth have any concern, Minister, about the issue of schoolscharging parents fees and voluntary levies?

Senator Vanstone—I recall us canvassing this. It was not at the last estimates but I thinkwe did at the estimates before. This is all about the voluntary contributions, the role the statesplay and whether parents decide to pay up.

Senator CARR—So, Minister, has your department undertaken an analysis of just what sortsof school fees are being charged to government schools?

Senator Vanstone—I am advised that the answer is no.Senator CARR—None at all?Mr Evans—I understand we have not done a detailed analysis of it.Senator CARR—Would you be aware of the recent Victorian Auditor-General’s report that

shows that 97 per cent of Victorian schools have now introduced so-called voluntary levies?Mr Evans—I have not seen that report.Senator CARR—So the department, presumably, has not had any response to it?Mr Evans—To that Auditor-General’s report?Senator CARR—Yes.Mr Evans—No.Senator CARR—Does the Commonwealth have any responsibility at all to parents in this

country in terms of schools issuing monthly invoices to parents for the payment of the so-called voluntary fees?

Senator Vanstone—Are you talking about levies sent out by state government schools—theschools that you are so keen to protect? Is that what you are talking about?

Senator CARR—That is just the point, Minister. You have no responsibility for that at all?



Senator Vanstone—I am just trying to clarify your question. Are you talking about invoicessent out by state government schools?

Senator CARR—These are state government schools, yes?Senator Vanstone—Yes, the schools that you are so keen to protect at the expense of

choice.Senator CARR—That is right.Senator Vanstone—And they are doing something you do not like or approve of, is that

right?Senator CARR—They would do many things I do not like. That is not the point of these

hearings. I am asking what you are doing, as a government, concerning public education inthis country.

Senator Vanstone—I am just getting back to that. If you do not like it and you do notapprove of it, why don’t you take it up with the state education ministers? You eventually haveto come to grips with the fact that we have a federation. When you have a problem withsomething, go to the people who are responsible which are, in this case, the state educationdepartments.

Senator CARR—Has this matter not been raised through the MCEETYA processes at all?Mr Evans—I cannot recall. To the best of my recollection I cannot recall that issue of

voluntary contributions being raised.Senator CARR—Mr Evans, could you provide the committee with a breakdown of the

targeted funding for literacy, languages, special learning needs, schools and work qualityoutcomes throughout the out years?

Mr Evans—Yes. You have, I believe, a copy of the departmental submission to Senatelegislation for last year. It is all set down in that document.

Senator CARR—There is no variation to those in that submission?Mr Evans—There are projections of cost supplementation in there, but I do not believe that

those projections have changed at this point.Senator CARR—I see. Would you be aware that the paper I referred to earlier on the

implications of the federal budget in New South Wales claims that literacy expenditure hasfallen by nine per cent in real terms to the four years until 2000-01?

Mr Evans—Senator, I indicated earlier that I had not had a chance to go through that paper,but I do have some misgivings about elements of it.

Senator CARR—I presume, therefore, that you will take this on notice: is it true thatliteracy expenditure has fallen by nine per cent in real terms in the four years to 2000-01?

Mr Evans—Again, like the other example I gave in the area of indigenous education, it ismisleading to the extent that the government has made a specific additional amount of fundingavailable for literacy over a three-year period. That is the years 1997, 1998 and 1999. It isquite open to the government to reconsider what funding it provides to the year 2000.

In each of the years that I have just referred to—1997, 1998 and 1999—there has been anincrease in literacy funding. My problem with that New South Wales paper is it is selectiveand then assumes that, because it falls away on the year 2000, that is a decision that has beentaken by this government. This government has open to it to make a decision to provideadditional funding in a future budget.



Senator CARR—So what do your forward estimates show?

Mr Evans—I will take it on notice, Senator. Essentially, what I am saying to you is thatthe commitment that was announced by the government was for a three years extension ofthe literacy program. Yet the New South Wales paper simply portrays that inaccurately.

Senator CARR—You will presumably show us why that is inaccurate in detail. What arethe details of the $7 million allocated for the national literacy and numeracy plan? How doyou intend to spend that $7 million?

Dr Arthur —You are referring to the $7 million which is referred to in terms of professionaldevelopment, particularly in terms of the budget press releases. Money is to be spent, in broadterms, to provide a catalyst towards the improvements of literacy teaching and literacystrategies in schools. The minister proposes to consult in detail with his colleagues about howthat can be best achieved, and I would expect he would write shortly to his ministerialcolleagues in the states and territories on the detail of that.

Senator CARR—I notice the press release says that the funds will be used to train teachersto identify by the end of grade 1, and support, students at risk of failing to develop adequateliteracy and numeracy standards. What is the nature of the training that you are undertaking?

Dr Arthur —Those statements that you read at the end of that sentence referred to theobjectives of a national literacy plan and, indeed, the national literacy goal and sub-goalswhich have been endorsed by all state and territory ministers. The money is intended toprovide training which will lead to those objectives. The minister does not intend to specify,from a Commonwealth level, what those mechanisms would be. He proposes to consult withhis colleagues to come to an agreed view on the best mechanisms for distributing funds andwould also expect that judgments on what are the best professional development mechanismswill be made by those with specific expertise in the area.

Senator CARR—How far do you think $7 million goes?

Dr Arthur —The $7 million is, like a number of other elements of Commonwealth funding,intended to be supplementary and to have, as I have said, a catalytic effect. As Mr Evansindicated, the Commonwealth provides funding for state government activities and, indeed,non-government activities, which include professional development, but most particularlythrough general recurrent funds. Those funds are not in anyway intended to be the totalquantum of funds which will be spent on professional development associated with thedevelopment of literacy in Australian schools.

Senator CARR—It says that the national plan aims to have every child literate and numerateby the end of grade 3. What sort of funding envelope do you think is required to actuallyachieve that objective?

Mr Evans—The funding envelope includes the $3.7 billion the Commonwealth providesto the states each year.

Senator CARR—The global amount?

Mr Evans—That is correct, Senator.

Senator CARR—So when you present the extra $7 million with those objectives, it is notnecessarily an accurate reflection of what this program involves? That is the way the pressrelease is written. It says that an extra $7 million has been earmarked for Australia’s newnational literacy and numeracy plan.

Mr Evans—That is correct.



Senator CARR—But the whole package actually involves $3 billion.Mr Evans—Well above that, Senator. As you know, the states put in money from their own

sources.Senator CARR—Are you aware that 50 academics from five major universities in Victoria

recently wrote to Dr Kemp, the minister, about the government’s literacy policy?Dr Arthur —I am certainly aware that a letter was written following a conference, and I

think it is the one you are referring to. On my analysis and recollection of the letter, it wasbased on a number of misconceptions about what the plan was about. As I recall it, theminister has responded, correcting those inaccuracies. I would need to check the exact detailsof that, but that is my recollection.

Senator CARR—Minister, how do you respond to the concerns that have been raised aboutbasic skill testing being a measure of literacy?

Dr Arthur —I do not at the moment have a detailed recollection of the contents of thatletter.

Senator CARR—I wonder what the minister has to say on that.Senator Vanstone—I am happy for the officer to give you an answer, Senator. I have no

intention of letting this degenerate into an indulgence on your part.Senator CARR—Dr Arthur, what does the minister say about that?Dr Arthur —As I have said, I do not recall the exact detail of the contents of that letter.

If I understand your question, however, about the issue of the adequacy of the basic skills testas a test of literacy, it is certainly the case that, in the course of the deliberations of thebenchmarking task force, the issue of whether or not it is possible to test against all of theindicators in the literacy benchmarks, which I would say have been developed in consultationwith experts in the profession, can be met by current tests. Whether there will need to be anyimprovements to current tests is something which all those involved in the process areexamining.

Senator CARR—I am told that the specific criticisms of the government’s programminggo to the question of caution regarding the proposal for national testing. Would you agree thatthere is considerable caution about national testing as a model?

Dr Arthur —That is a very good example of the misconceptions. There is no proposal for‘national testing’.

Senator CARR—I see. Presumably you would advise me, therefore, that there is no attemptto administer tests other than the diagnostic type. Is that what you are saying?

Dr Arthur —No. What I said draws on what I said earlier, that is, ministers have agreedthat state based assessments are to be the basis of mechanisms by which states will reportnationally against the benchmarks.

Senator CARR—Is it possible to get a copy of the minister’s comments regarding thesemisconceptions?

Dr Arthur —As with the previous answer, I certainly will inquire as to whether or not thatresponse can be made available.

Senator CARR—It would be good to follow that through. Mr Evans, can you advise meas to whether or not there is an attempt being made through this budget process to redistributeliteracy funds from government to non-government schools?



Mr Evans—There is nothing in this budget process that redistributes literacy funds fromgovernment to non-government.

Senator CARR—How will the distribution work?Dr Arthur —At the moment, the distribution mechanisms for the elements of funding of

the literacy program are the mechanisms which were introduced in the last budget under thebroadbanding proposals. So there is an allocative mechanism for funds which were previouslyunder the disadvantaged schools program and there is an allocative mechanism for funds whichwere previously known as the ESL general program. Those two allocative mechanismscontinue and are the basis for distribution of funds between states and between sectors.

Senator CARR—I noticed in the PBS on page 37 that there is a reference to theunderspending of the program. What was the reason for the underspending?

Dr Arthur —Sorry?Senator CARR—That is what my notes say. I might have to double check that. Are you

saying that is wrong?Dr Arthur —At the moment I am not quite sure what you are referring to.Senator CARR—It is the NALSAS program.Mr Evans—It is the NALSAS languages program. I am still trying to find a reference to

an underspend there.Senator CARR—It is $17,000, I thought. Is that right? There is no underspending in the

budget. Is that what you are telling me, or have I got that wrong?Mr Evans—There is a carry forward of NALSAS moneys from this financial year to next

financial year.Senator CARR—How much is that?Mr Evans—There is a transfer. Page 37 refers to annual appropriations. There has been a

decision to transfer NALSAS funding from annual appropriations into the specialappropriations. The original appropriation was against the annual appropriations. The moneyhas since been moved from annual appropriations into special appropriations. You would recallthat we had this discussion at an additional estimates hearing where we indicated to you thatthere was not any cut in NALSAS funding but in some ways there was a movement inNALSAS funding out of annual appropriations and into special appropriations. If you turn topage 38 you will see down the bottom a transfer of NALSAS into special appropriations, anincrease in base funding, a further $12.104 million. It is under special appropriations in thattable.

Senator CARR—I have that.Mr Evans—What you are pointing to is a movement of how the moneys are appropriated.Senator CARR—You are saying it has been carried forward?Mr Evans—There is an impact of carrying forward and transfer from one funding source

to another.Senator CARR—I accept that. Can you just go through this again with me? I have noticed

that there is no appropriation for NALSAS, National Asian Languages and Studies inAustralian Schools, for the 1997-98 year.

Mr Evans—That is because it has now moved into special appropriations.Senator CARR—So that is the effect of it. It will not show up in there at all?



Mr Evans—That is correct.Senator CARR—And that is the same for the teacher professional development program?Mr Evans—No. We covered that earlier. That is because that program ceased at the end

of calendar year 1996 and it is not in the forward estimates.Senator CARR—The IESIP program, I notice, appears to have an increase in funding: is

it the case that it arises from a cessation of existing programs?Mr Evans—What are you referring to?Senator CARR—This is on page 38 of your table 1.2, program 1.2—outlays. There is a

reference there to a funding for the IESIP. What is that again? See under ‘specialappropriations’.

Mr Evans—That is the indigenous education program.Senator CARR—What is the nature of that increase?Mr Buckskin —The increase is the government’s commitment to an $80 million increase

over the next three years. It is associated with providing increased funding as a result of thechanges to the program to preschools, schools and the VET sector, both government and non-government.

Senator CARR—Then I notice on the next line there is a reduction in funding, a downwardadjustment of $7 million. What is that about? Is the carry-over from 1995-1996 an actualreduction?

Mr Evans—That carryover is a one-year carryover of the moneys from 1995-96 to 1996-97.The carryover was for one year only and was not reflected into 1997-98, so it was a one-offeffect in 1996-97, Senator, of 1995-96 moneys.

Senator CARR—Presumably, those two budget lines are related.Mr Evans—It is the same program but there are two quite separate reasons, and we have

provided you with more detail than we might necessarily have had to provide.Senator CARR—I am very grateful, but can you explain to me what is the impact of

indexation, cost supplementation or enrolment increases on these particular programs?Mr Evans—On the IESIP programs?Senator CARR—Yes.Mr Furze —I think, Senator, apart from the $12 million increase for funding for IESIP and

the one-off carryover of $7 million, which appears to be a $5 million increase in that programaccording to this summary. There were other adjustments applicable to the program; namely,an efficiency dividend which reduced the funding under the program. The efficiency dividend,I would assume, is included in the first line under special appropriations, the ‘Estimate ofindexation/cost supplementation’, which would be an aggregate of several positive and negativemovements—that is, the $11.390 million. So the net effect, basically, on page 37, Senator,is an increase in the order of $1 million, from $110,124 million to $111,206 million.

Senator CARR—One million?Mr Furze —Yes.Senator CARR—Thank you. Can you explain to me what is involved with the school

languages program as outlined? In the additional estimates I asked a question relating to thesematters, and you indicated to me there was an evaluation of the school languages program.What is involved with that evaluation?



Dr Byrne—As you say, to follow up on what we said last time, the evaluation will coverthe three components of the languages program—community languages, priority languagesand NALSAS, national Asian languages and studies in Australian schools. The objectives ofthe evaluation are to examine the objectives of the languages programs with a view todetermining their continued appropriateness; report on the extent to which Commonwealthinput is fostering proficiency in the priority languages; advise on the extent to which structuresand framework around the delivery of programs are the most suitable to deliver positiveoutcomes against program objectives; and also advise on the role and effectiveness of the AsiaEducation Foundation and Language Australia in meeting the program objectives.

The Evaluation and Monitoring Branch of the Analysis and Evaluation Division has carriageof the evaluation of the languages program, and there is a steering committee that has beenestablished to contribute to the evaluation process. I have a list of members of that committee,if you would like to—

Senator CARR—Yes, I would.

Dr Byrne—The chair is the Assistant Secretary of Evaluation and Monitoring Branch, MrPhilip Potterton, and the committee members are Professor Colin Mackerras, who is the chairof the NALSAS task force, and Ms Karen White, who is the chief executive officer inlanguages other than English from the curriculum directorate of the Department of SchoolEducation in New South Wales, I think, but I would need to check that for you. Also, we haverepresentatives from the non-government school sector: Ms Rosemary Collins, from theCatholic Education Office, South Australia; and Mr Fergus Thompson.

Senator CARR—Thank you. Can you indicate to me what community consultationmechanisms are involved with the review?

Dr Byrne—Can I take the word ‘community’ in the broadest sense. There are two—I havenot finished the membership, incidentally, so perhaps I could provide—

Senator CARR—I am sorry; I was distracted.

Dr Byrne—Do you want me to take it on notice or finish the list first?

Senator CARR—Finish the list.

Mr Evans—We can provide the list and have it recorded in theHansard to save time,Senator.

Senator CARR—Whatever suits you. I am sorry I interrupted your answer; I wasmomentarily distracted.

Dr Byrne—Consultations are occurring through two processes. The first is the mechanismI have just outlined—an evaluation group overseen by the Evaluation and Monitoring Branch,which will—we think by late May—appoint a consultant to assist the department inundertaking the evaluation to ensure the independence and integrity of the evaluation. In thatcontext, I would think that in order to meet the terms of reference there would beconsultations. I, at this stage, cannot say what the nature of those community consultationswould be, but I would also add that officers from the department, at the same time as thisformal evaluation is occurring, are undertaking discussions with relevant personnel.

Mr Evans—Senator, that committee has not met yet, so I think it is fair to wait—it willbe at least having its first meeting and general consultation—to see how the actual evaluationproceeds. No doubt you will come back to it at a further hearing.



Senator CARR—Thank you very much, Mr Evans. Finally, could I get an indication fromyou what time lines you are working on?

Dr Byrne—Yes.

Mr Evans—Over the course of this calendar year the review will be conducted, Senator.

Senator CARR—It will be concluded?

Mr Evans—I am expecting it will be concluded by the end of this year.

Senator CARR—At the end of this year. Thank you very much. This is a matter for theminister, I am sure: Minister, at the last estimates I asked a question regarding the review ofspecial education, and I was advised that this was not a secret review, that it had beenannounced by media release on 20 August. That release was provided to me, and it said ‘thegovernment has announced already the working party’. When was that announcement made?

Senator Vanstone—Dr Arthur can help you with that.

Dr Arthur —I think that is a drafting issue in terms of the press releases I read. Thatannouncement is the announcement.

Senator CARR—That was the announcement?

Dr Arthur —Yes. You might make a claim of slightly infelicitous wording, but I do not—

Senator CARR—That wouldn’t be like me to do that, but it strikes me that—

Senator Vanstone—That word is too long for you, I agree.

Senator CARR—There could be an improvement in the wording, we would agree, DrArthur?

Dr Arthur —The wording is intended to indicate that it is now being announced.

Senator CARR—It is being announced?

Dr Arthur —Yes; at that date.

Senator CARR—I see. Thank you very much. I ask, Minister: what evaluation has thedepartment undertaken in regard to the effects of funding reductions in last year’s budget andforward estimates for English language education and ESL?

Senator Vanstone—Dr Arthur can answer that for you.

Dr Arthur —I am not aware of funding reductions—

Senator CARR—There were no funding reductions in last year’s budget?

Mr Evans—You may be referring to broadbanding of ESL, the fact that ESL has beenbroadbanded into a literacy program. There has been no reduction in funding from the sourcesfrom which that money came.

Senator CARR—Right; I see.

Mr Evans—Sorry, there was also one minor change, Senator, and that was reduction onESL for new arrivals because of a change in parameters of the numbers of people arrivingunder that program. I believe it is per capita assistance.

Dr Arthur —It is. An amount of dollars is provided for each eligible person to be providedwith on arrival 26 weeks, as I recall, English instruction or an equivalent. So, if the calculationof the numbers who are eligible went down, the moneys provided in the last budget wouldhave gone down with it.



Senator CARR—I just noticed that budget measure No. 9 in subprogram 1.2 last year hada reduction in migrant places under the humanitarian program and a consequential reductionin English language education outlays. Under the forward estimates last year, there was a $1.9million cut this year, $2.48 million next year and then $2.55 million. Are those figuresaccurate?

Dr Arthur —We are quoting them from last year’s, and they would have been the estimatesthat were arrived at last year. I am not certain of what the estimates are?

Senator CARR—You have not reviewed them at all? So as far as we are concerned theyremain current, do they? The department has not reviewed—

Dr Arthur —Those estimates would be derived from the Department of Immigration andMulticultural Affairs in terms of the persons who were eligible since the criteria for thatprogram very much depend on people’s entry under particular classes of visa.

Mr Evans—I believe that the actual amount of assistance per individual has not changedat all. Until there is a decision taken that varies the numbers coming in, that is the only wayin which that figure would vary.

Senator CARR—So I presume the same would apply to changes in the migration program,the timing of family reunion requirements and processes, the expansion of skilled migrationand the consequential reduction in English language outlays? That was budget measure No.8 of last year, but it had forward estimates consequences of $2.65 million this year, $3.27million and $3.36 million. Do they remain consistent or constant?

Dr Arthur —I would need to check the estimates for this year. As Mr Evans has indicated,those figures are derived entirely from flows of people within the relevant categories. If it isproved that the estimates for the flows in those categories remain the same, the figures willremain the same. If DIMA’s estimates of the flows within those categories have changed, Iwould expect the figures to change as a consequence.

Senator CARR—Where do they appear in this year’s forward estimates?Mr Evans—Because it is a previous year’s budget decision, Senator, it is absorbed in the

program so it does not appear as a separately identified item.Senator CARR—The Finance and Public Administration Legislation Committee has actually

asked us to comment on the preparation of portfolio budget statements. We have now noticedthat on three occasions at least that the EBA and the issue of the migration places—and, ofcourse, that is budget measure No. 8 and budget measure No. 9 of last year and budgetmeasure No. 5 of a previous year—do not seem to appear.

Mr Evans—But they do, Senator. If you go down to the bottom of page 38, you will seea heading ‘Effect of previous decisions’. The effect of previous decisions there was an increaseof $758,000. That reflects funding for the national literacy and numeracy strategy, which wasan increase of $6.4 million. The change to the migrant program that you referred to was areduction of $1.461. The reduction under the humanitarian program was a reduction of $1.145.There was also an efficiency dividend on some SPPs and COPOs last year which had animpact of a further reduction of $3 million. They are shown there, but they are shown in thatparticular item.

Senator CARR—It does not seem to me to be very clear, Mr Evans, if I might make anobservation to you. It does not exactly clarify—

Mr Evans—Senator, these portfolio budget statements follow the guidelines as set by theDepartment of Finance on how matters should be presented.



Senator CARR—I understand that. You put this view to me last year and I made commentslast year about the lack of clarity in the statements. I am afraid I cannot see there has beenany improvement. I think that would be a fair way of putting it.

Another issue I would like to canvas with you at this point, Minister, is the government’sproposal to turn schools into labour exchanges. I understand this is the appropriate place todo that?

Senator Vanstone—There is no proposal to do that, Senator. It has simply been made clearthat schools would be welcome to tender.

Senator CARR—Welcome to tender?Senator Vanstone—Yes.Senator CARR—This is the issue I raised at the previous hearings—Senator Vanstone—At length.Senator CARR—At length, yes. Minister, has there been any further development on the

issue since I last raised this question? Were you able to establish that the tender documentsthat you propose do in fact make it clear that schools will receive the $200 million that wasreported in the press?

Mr Evans—Senator, this is an item for the meeting in Darwin next week. At a pre-meetinglast Friday in Melbourne, all the states were provided with a paper. There was some interestaround the table about how schools in states might be able to participate in this program.

Senator CARR—Yes. I understand that there was some interest. That is probably not theterm that comes immediately to mind. As I read that resolution, and you have been kindenough to provide me with—

Mr Evans—The resolution which you are going to refer to, Senator, is the resolution thatwas taken by ministers in March this year. What I am talking about is a subsequent discussionwith states.

Senator CARR—Can you tell me then how does that resolution vary?Mr Evans—The resolution has not varied; that stands as an outcome from the March

meeting. The paper that has been prepared subsequently is one that ministers will considernext week in Darwin.

Senator CARR—How does that vary from the propositions that you have put to me, forinstance, ‘That the states noted the complex legal industrial relations and resource implicationswhich flow from the schools assuming a job placement role’?

Mr Evans—At the meeting in Melbourne, the states were asked to provide indications asto whether there are any industrial or complex administrative implications. They have beenasked to provide evidence of that. They have also been provided with the draft exposure tenderdocument to observe, and I expect that there will be some fair discussion about this next week.

Senator CARR—You do not think that the paper provided by the New South Walesgovernment clarifies those matters?

Mr Evans—It provides some information, Senator.Senator CARR—Why are they wrong? Did you dispute the claims that are made in that

paper?Mr Evans—I have not read that paper for a long time, Senator, I am not as familiar with

it as you are.



Senator CARR—The resolution in March called upon the Commonwealth to clarify thedistinction between employment services, including labour exchange, job assistance, entry leveltraining support service, jobs pathway program and the possible role for schools as far as jobplacement is concerned. What have you done about that, Minister? You are directly responsiblefor this, aren’t you, given that these matters are supposed to come under your—

Senator Vanstone—Sorry, Senator?Senator CARR—Is this part of your role as the minister for employment?Senator Vanstone—The EPI tender process?Senator CARR—Yes.Senator Vanstone—Yes.Senator CARR—Can you indicate to us, given the MCEETYA resolution of 14 March,

what action the Commonwealth has undertaken to distinguish between the various employmentservices, including labour exchange, employment assistance, entry level training supportservice, jobs pathway program and the possible role for schools as far as job placement isconcerned?

Senator Vanstone—Senator, I understand that the answer is contained in previous answersyou have been given. The MCEETYA paper that Mr Evans referred to canvasses those mattersand that paper will be dealt with next week.

Senator CARR—It will be dealt with next week; that is your response, is it?Senator Vanstone—That is right. We will see what the states have to say. There will be

a discussion, I presume. Things have changed since you people lost government. We actuallydiscuss things with the states.

Senator CARR—I will be delighted to hear, Minister, and I am sure they will be delightedto read your answer to that question.

Senator Vanstone—Good.Senator CARR—Which states are actually supporting this proposal?Mr Evans—They are all considering the paper that was prepared by the Commonwealth,

they are examining the draft exposure tender document and we would be looking for aresponse from the states next week.

Senator Vanstone—It is entirely up to the states. There is no compulsion here. If theirschools or independent schools want to tender, they are welcome to.

Senator CARR—What is your expectation? Has the department made any provision forthe number of schools that will be tendering?

Senator Vanstone—I do not have a particular expectation in respect of this. What I amdetermined to see is that the employment services market is as open and on as even a keelas it can possibly be.

Senator CARR—I think you have acknowledged in previous answers to the question thatthere is a legal impediment to this proceeding without the states’ approval, is there not?

Senator Vanstone—To which proceeding?Senator CARR—The so-called schools jobs placement program.

Senator Vanstone—I do not think I have acknowledged that. Someone else might have.If that is the case, it has not been drawn to my attention.



Mr Evans—We have asked the states to indicate to us what the situation is in each state.

Senator CARR—You are not aware that there is a legal impediment against this programproceeding without the approval of the states as far as government schools are concerned?

Mr Evans—It might be within the precepts of a state to dictate whether or not it wantedschools to participate.

Senator Vanstone—I would expect state governments to have a say on whether stategovernment schools participated. If they have passed legislation that in one way or anotherinhibits them, that is a matter for the states.

Senator CARR—I would suggest, Minister, that you actually look at some of the answersyou have provided me with on this matter. I think you will find that if it has not been drawnto your attention, there may have to be some work there. As I understand it, it is quite explicitthat the states are required.

Senator Vanstone—If they want their schools to participate, they will obviously make achange. If they don’t, they won’t. I do not see that this is anything to particularly get upsetabout.

Senator CROWLEY—What would happen, Minister, if all states agreed that the negativesoutweighed the pluses—in other words, there was no take up?

Senator Vanstone—The bottom line is that if all states decided that their schools per se,as schools, would not, they would not tender, would they? But that would not mean that, forexample, an innovative employment placement enterprise, which might be a private provideror a local community provider, like a Skillshare that becomes an EPE, may well establish veryclose links with schools in the area in order to see what sort of talent, if you like, is comingout of those schools.

I made the point in response to other questions that employment placement enterprises thatwant to be successful will have to have a very broad range of people available for work ontheir books. Some of those will be unemployed people on a benefit looking for work. TheCommonwealth will pay an outcome fee if they are put into a job. Others will be youngAustralians. The Commonwealth will pay an outcome fee if they are put into a job. Otherswill be people with a job looking to change. The Commonwealth will not pay an outcome feefor those people, nor will it pay for people who have sufficient wealth that it inhibits themgetting on a benefit. In other words, we will pay outcome fees for people who are unemployedand for young people, and that way we are going to put them at the top of the queue. Everyoneelse, frankly, comes second in the Commonwealth’s perspective.

Senator CROWLEY—My question was: would it be of concern if all state governmentssay that they do not want their schools to be involved?

Senator Vanstone—It would not particularly concern me. I am determined to see that ineach region there is a good diversity of employment placement enterprises. I would like tosee some schools participating if they want to, but the bottom line is that I want employmentplacement enterprises to be focused on getting those priority people into jobs. In order to dothat, as I have pointed out before, they are going to have to have much broader arrangementsthan those priority people on their books. They may well choose to link up with schools orschools may choose to link up with them.

This market is not there to give more money to private providers. We are not establishingit to give more money to community providers or to punish the CES in some way. It is to have



a level playing field between all of them and give the money to those people who putunemployed people on benefits and young people into jobs first.

Senator CROWLEY—Just to be clear about your comments, if no state schools take upthis tendering process or participate in this way, that is no skin off your nose. I think that ismore or less what you said.

Senator Vanstone—I am sorry, I was just talking to the officer at the time.

Senator CROWLEY—Do you want more time?

Senator Vanstone—I will put it as simply as I can and you can tell me if I have notanswered the question. I do not have a problem if schools do not want to participate.

Senator CROWLEY—I have this concern. Is this therefore an idea that was floated withoutany consultation with schools? Is it the case that the schools have given no evidence of anyinterest in being involved in this?

Senator Vanstone—No. I think the way to describe it is as follows: there are opportunitiesnow for a range of people to become employment placement enterprises. In an ideal world,I see that some schools may well be interested in taking on that task, and the Commonwealthwould not seek to prevent them. If they prevent state government schools from doing so, thatis a matter for the state governments.

Mr Evans—They are involved to a certain extent at present through the jobs pathwayprogram. In that sense, there is additional effort that is going on in schools at this point intime. The issue that we are talking about here, though, is whether or not states would beinvolved through one particular initiative.

Senator CARR—There is a big difference in the jobs pathway program, which I understandis a relatively small component. It is about $3.5 million, isn’t it?

Mr Evans—It would be about that amount.

Senator CARR—What you have here is the minister claiming that $200 million will beallocated to schools which are prepared to act as employment agencies.

Senator Vanstone—No, the minister has actually claimed that $200 million is available andschools can tender if they want to. We went through this last time.

Senator CARR—Yes, we did. But after we went through this last time a further articleappeared in theCampus Review—I am sure others have appeared but this is one that wasdrawn to my attention—where the claim was made yet again that $200 million was for schoolsto be employment agencies.

Mr Evans—I draw attention to the first line of the media release. It says, ‘All secondaryschools will be able to bid for $200 million’.

Senator CARR—I understand that, but the rest of the press release gives you the impressionthat the $200 million will be available for schools and the schools will get $200 million.

Mr Evans—I think I made this point during the last hearing.

Senator Vanstone—It was made last time. There is no point in rehashing it.

Mr Evans—It is not a program with an allocation of $200 million.

Senator CARR—Absolutely. We understand that. But I do not think the public understandsthat. As a matter of interest, articles still appear which suggest to me that there is media workstill continuing. Mr Evans, I am sure you would not be part of this, but it would appear to



me that there is a media campaign being run by the minister to suggest that $200 million forschools is available for the employment agencies.

Senator Vanstone—If you would like to put a question on notice to Dr Kemp about hismedia comments in this respect, I am sure he will answer it for you.

Senator CARR—I am waiting, and have been for some time. We still have not heardanything from Dr Kemp on these matters. You said to me last time, ‘We’ll wait for theresponse.’ We have yet to receive it, Minister.

CHAIR —Perhaps you should take it up with the minister.Senator CARR—The minister is here representing Dr Kemp. This is the process that we

are involved in, Mr Chairman. This is the point I raise. If ministers wish to make publiccomments about government programs, you would expect them to reflect what they are doing.

Senator Vanstone—Do you believe you have a question outstanding in relation to thismatter?

Senator CARR—Minister, you have just indicated to me that you were going to take thismatter up about the inaccurate press comment with Dr Kemp last time. I have yet to hear aresponse.

Senator Vanstone—No, I am sorry. I will get you some cotton buds. What I just said toyou was, ‘If you would like to put a question on notice.’ You sit there, indulging yourself yetagain, saying, ‘It appears to you’—because you have read something in the paper—‘that aminister must be doing something’. I said, ‘If that’s the case, why don’t you put a fewquestions on notice and I’ll get Dr Kemp to answer them for you.’

Senator CARR—I will follow that through. Given the article that appeared in theCampusReviewon 14 May, was this based on an interview conducted with departmental officials?

Senator Vanstone—I will take it on notice and find out.Senator CARR—Thank you. Can you also find out whether or not there was an interview

based on a discussion with Dr Kemp’s office? I say that this appeared after the last set ofestimates. This is a journal that is normally known for paying some attention to the estimatesprocesses. Could you indicate whether or not you have spoken to your junior minister aboutclarifying the media comment in regard to this particular program for which you are theresponsible minister? Have you taken any discretion?

Senator Vanstone—No, I haven’t, and I have no intention of doing so because the pressrelease of 21 April says that schools in Australia will be able to bid for $200 million. All thatsays is that there is $200 million there. By the way, schools might not have realised that theywere able to bid for this and they should know that they are able to bid for it. That is all itsays.

Senator CARR—That is exactly all it says, but that is clearly not the impression that isgained by reading that press release.

Senator Vanstone—Then you have gained the wrong impression, haven’t you?Senator CARR—I might not be the only one. I notice articles by Michelle Grattan, Geoff

Maslen and a number of other people who are not known to be people who get these sortsof things wrong.

Senator Vanstone—I agree that Michelle Grattan has an excellent record. I do not knowabout the other people you mentioned but I do not impugn their record by silence. I simplysay that the reading of that is plain to me.



Senator CARR—Of the five services to be put out to tender, which schools are most likelyto be able to tender?

Senator Vanstone—It might vary from school to school, I would think. Schools may notin fact wish to tender. I am not going to sit here and get into some guessing exercise of whata school might tender for if it wants to participate. I think that is just fruitless.

Senator CARR—You think it is fruitless, do you, Minister?Senator Vanstone—Yes, I do. It does not relate to the expenditures and the program

statements for this portfolio, because we cannot tell what is going to happen in that respect.I cannot tell you, for example, the proportions and I do not have an idea in my head aboutwhat will happen with respect to skill shares, which services they will apply for. You areasking the officers and me to dream on into the future like you do. I decline that opportunity,thanks very much.

Senator CARR—This government is allocating how much money for vocational educationin schools?

Ms Johnston—The government is providing in the order of $50 million in 1998 to expandvocational education. Components of that are funds from ANTA, $20 million for 1998; theschool to work program, approximately $7 million for 1997-98; the Australian StudentTraineeship Foundation, $9.9 million in 1997-98; the ASTF workplace coordination funding,$10 million in 1997-98; and the jobs pathway program, approximately $3 million—subsequently, that has been raised to $5.5 million. So it is in the order of $50 million in 1998.That is part of a $187 million school to work package over four years.

Senator CARR—Thank you very much. I note that in this morning’s press there is a reportthat suggests that the vocational training agenda initiated by the government involves a catch-22 for schools. It says:. . . educators believe that students have to be work experienced and work-ready by the time they leaveschool, but they must also have a realistic understanding of the working world they are entering.

Are you familiar with the article in this morning’sCanberra Times?Ms Johnston—No, I am not familiar with the article.Senator CARR—It argues that the strategy proposed by state and territory governments is

in fact to incorporate national modules into the general education courses which will allowarticulation into TAFE. However, it also argues:

Should . . . schools act to implement the Federal Government vocational education priority they willbe doubly penalised.

The Enrolment Benchmark . . . scheme begins in 1998; it effectively transfers $1,700 per student offederal funds from the public to the private system if enrolments move in that direction, while increasingpublic funding by only $400 for each student who moves from a private to a public school.

Is that in fact the case as far as the impact of vocational education in schools is concerned?Mr Evans—I think that is a fairly narrow interpretation. I think it would be better if we

gave you a response on notice to that document.Senator CARR—Thank you. If you could have a look at the article by Mr David Edmunds

in the Canberra Times, Wednesday, 4 June 1997, which is arguing that vocational trainingin schools in fact involves a catch-22, I would appreciate it if you could respond to that matter.The minister does not particularly wish to discuss the implications of schools being able totender for job brokering services, although I notice that her junior minister has made a greatplay of this around the country.



Senator Vanstone—I am happy to discuss with you those implications of the possibilitiesat another time, when we are both indulging ourselves. Right at the moment we are askingabout the department’s estimates.

Senator CARR—I am asking you, Minister: to what extend do you believe that a schoolcould operate profitably as a labour exchange provider, given that the tender documentsindicate that the so-called reforms would involve a payment of a $250 labour exchange feefor any person under the age of 21, who is registered as unemployed for the CSDA? How willschools be able to operate as profitable brokers in that context?

Senator Vanstone—It is really up to the schools. There is not one uniform sort of schoolall around Australia. Some are much more active in vocational training and interested inplacing their kids at entry level training areas, partly as a function of the kids that they havegot. Others, as you know, focus very much on university placements.

My general comment is that I would like to see secondary schools not advertising themselvessimply on the proportion that get to year 12 and the proportion that get into university but,particularly, I would like to see them advertising something like the proportion that, one yearout of school, have got a job. I think that would be useful to a lot of kids and a lot of parentsin making their choices.

Senator CARR—What is your expectation then, Minister, of the number of schools thatwill actually be able to perform that function in terms of their vocation?

Senator Vanstone—I wish there was a rewind button on these estimates, because I wouldgo back to when you last asked me the question of what my expectation was and you wouldfind the answer.

Senator CARR—Would it be correct to say, as school principals and a number of othershave actually stated, that in fact the number of schools that will be able to participate in thisprogram is extremely limited?

Senator Vanstone—We will have to wait and see, won’t we? As I have said—I will haveto repeat it for you, because you seem to have attention deficit or a short memory problem—itis up to the schools to decide whether they want to participate. All I care about is that in eachregion there is an appropriate diversity of providers so that unemployed people on benefits,who up until now, quite frankly, by not only your government but also previous coalitiongovernments, have been—if you don’t mind the expression being used—been completelysegregated in their access to employment services because they do not have a lot of money.They have been segregated into getting employment services from the CES while everyoneelse with a few more bucks in their pocket has had a choice about where they go.

We are going to engage in a program of integration for those people into the mainstreamservices so that they have the same choices that everybody else has. We are going to do thatby paying employment placement providers for putting those people in jobs and not payingthem for putting other people in jobs. That will mean, for the first time in heaven knows howlong, that unemployed people on a benefit will be able to choose whether they go to a publicprovider or whether they go to Drake personnel or the Salvation Army. They will know thatif those people get them a job, we will pay for that person to get the placement. That, forunemployed people on a benefit, is going to be a very dramatic change in services offered.Whether schools provide it, the Salvation Army provides it, Drake personnel provides it orthe PEPE provides it, I do not care.



Senator CARR—Minister, you might not care, but the problem is that schools are supposedto function primarily as learning environments.

Senator Vanstone—That is right.Senator CARR—They have a specific objective in terms of the education system.Senator Vanstone—Which is, in your view?Senator CARR—In my view, primarily, they are learning institutions, not job brokerages.Senator Vanstone—Yes. But you say that as learning institutions they have a specific

objective. I was wondering what you thought that was.Senator CARR—I would have thought it was to make sure that people learned to read and

write, Minister.Senator Vanstone—Yes, that is a very good start. It is a shame that it did not happen under

your government.Senator CARR—I would not have thought that operating as labour exchanges would

necessarily detract from that primary educational role. I would ask, if you are so confidentthat these measures will be successful in improving the primary function of schools, and asso much consideration has been given to this matter within the government—

Senator Vanstone—You make a whole lot of assumptions there. You might as well saveyour breath.

Senator CARR—I certainly do. Will the Commonwealth paper that will be made availableto this committee be released to the states next week on 13 and 14 June?

Senator Vanstone—Let us get through the MCEETYA meeting first. I am not going to gothrough the process of going to a ministerial meeting and distributing, willy-nilly, papersbeforehand.

Senator CARR—I presume you will want to do it after the meeting. Will it be madeavailable to the committee?

Senator Vanstone—Not all ministerial council meeting papers are. I will have a think aboutit and, in my usual fashion of being as helpful as I can be to someone like you—because youneed a lot of help—

Senator CARR—Extremely helpful, Minister.Senator Vanstone—If it can be, I will.Senator CARR—That is all right, Minister. I just ask that that be taken on notice, that I

request a copy of the Commonwealth paper on the schools as labour market programs.Senator Vanstone—That is fine. I am happy for it to be taken on notice.Senator CARR—I have just a couple of questions on this program, you will be pleased to

know. Mr Evans, what is the current status of the national equity strategy? Do we still haveone?

Dr Arthur —The strategy is a document which has been endorsed by state and territoryministers through MCEETYA and still exists.

Senator CARR—Is it still functioning?

Dr Arthur —Yes.Senator CARR—What is the contribution in this budget to the national equity strategy?



Dr Arthur —To answer that question I would need to go through a large number ofindividual measures and make a hypothesis of their contribution to equity outcomes, whichwould be an extremely theoretical exercise. In overall terms, the targeted assistance programs,by and large, are intended to contribute to the national equity strategy.

Mr Evans—Those programs provide assistance to people with special learning needs, theyprovide assistance to people for whom English is their second language, and they provideassistance to people with a disability. So equity assistance is provided through those broad-banded targeted programs.

Senator CARR—Thank you very much Mr Evans and Mr Daniels, and your officers, foryour assistance today. I will put the remainder of those questions on notice.

CHAIR —Thank you, Senator Carr. We will now go to program 2.Senator CROWLEY—Mr Chairman, I am sure I am out of the right program, but while

we have a break could I ask the minister a question? It is actually in response to a questionon notice that I asked you, Senator. The discussion of equity brought it to mind. What is thestate of play with the re-establishment of WEETAG? The question was on notice because Iwas unable to stay to put it last time. You say:I remain committed to re-establishing a ministerial advisory group to assist me with questions of concernto women in the area of my portfolio responsibilities. I am not yet ready to advise precisely when thenew group will be up and running.

The concern I have, Minister, is that it is over a year, I believe, since I first asked you aboutWEETAG.

Senator Vanstone—It may be this is a very big portfolio and there can be improvements,in the meantime it is simply steady as she goes. I do not think enough is happening and thatmatter is under much closer consideration than it was when I last spoke to you about it, whenyou last raised it. I think that was two estimates ago—not the last ones, but the ones before.

Senator CROWLEY—It possibly was. I think I put it on notice to you in a written way.It is a long time since I first asked about WEETAG.

Senator Vanstone—I actually think it was in the estimates in 1R3 or 4 when—Senator CROWLEY—I believe so. I do remember another coda that reminds me of it, but

I will not be mean enough to remind you.Senator Vanstone—That is very gracious of you, but I have a clear memory of that and

I did say to you then that I would get back to you about it. That is how it came to be onnotice.

Senator CROWLEY—I have had this question put on notice again because I have not heardfrom you. Minister, whatever it is, whether it is 12 months or six months, it is a long timefor no further advance on a women’s advisory group or whatever other mechanism you mightbe establishing. But you did say to me, as I recollect it, ‘No, I will be reforming WEETAGfor the purposes of women’s advice.’ That was my understanding. I could be corrected on that.

Senator Vanstone—I might not have used exactly those words. But I think we are generallyon the right track in the sense of saying I think there can be an improvement and I am—

Senator CROWLEY—An improvement in what? In the timeliness, or in the actual adviceyou get about women?

Senator Vanstone—No, in the structure and advice.Senator CROWLEY—So there could be an improvement—



Senator Vanstone—Yes, I think there could be.Senator CROWLEY—to the advice coming to you if WEETAG was established?Senator Vanstone—As I say, the matter is under close consideration. I do not want to go

into it now, but I guarantee that the day I am going to make some announcement I will giveyou a buzz and let you know well in advance.

Senator CROWLEY—Can you give us any further information—Senator Vanstone—I do not think it would be helpful at the moment to do so.Senator CROWLEY—What further information you can give me to elaborate on your

comment, ‘I think there could be improvement on the advice coming to me.’Senator Vanstone—I think those were your words. I think advice to me in a whole range

of areas can be improved and I include in that advice vis-a-vis matters relating to women. Ihave that matter under close consideration.

Senator CROWLEY—Does it have to do with the timeliness of the advice or the content?Senator Vanstone—I think that will become clear to you. I cannot say that it will be very

soon as in next week, but very soon. I have been working on that matter.Senator CROWLEY—Thank you, Minister.CHAIR —We will be move on to program 5.2 next, and then we will be going on to higher

education—programs 2.1 and 2.2.Sitting suspended from 3.06 p.m. to 3.33 p.m.

Subprogram 5.2—Youth Policy and Support

Senator O’BRIEN—I received very recently an answer to question 217, lodged on 8 Mayand relating to the Green Corps. It was a multi-part question and has a multi-part answer. Anumber of these parts of the question have been answered, but some have not. In relation tothe second round of Green Corps participants, I asked whether you could provide details asto how many were long-term unemployed and short-term unemployed prior to their acceptanceon the program? Your answer was that the second round of Green Corps commenced on 19May 1997 and that information on participants would not be available until June 1997. Is thatinformation available now?

Mr Walters —I understand that that information is going to be available next week.Senator O’BRIEN—Would you please supply the committee with that information?Mr Walters —Yes.Senator O’BRIEN—I also asked what percentage of those placements went to the long-term

unemployed and what percentage went to short-term unemployed. Same situation?Mr Walters —Yes.Senator O’BRIEN—Would you take that on notice please. Then there was a question:

In relation to the second round of Green Corps projectswhat percentage of applicants were long-term unemployed and what percentage were short-termunemployed?

Your answer was:This information was not collected from Green Corps applicants as it was not relevant to the selectionprocess. In the case of successful applicants details were collected retrospectively after placementdecisions had been made.



Surely the applications indicated whether they had been employed or unemployed and whenthey had last worked?

Ms Davies—The distinction is that your question related to applications. The informationthat we gather in terms of detailed employment history is from participants.

Senator O’BRIEN—So when they apply they do not set out their work history?Ms Davies—Not in that level of detail in terms of the long-term unemployed and that is

the cause.Senator O’BRIEN—Are you saying that it will be collected for the second round

participants?Ms Davies—That is what is coming next week.Mr Grant —For participants, as distinct from applicants.Senator O’BRIEN—It would be useful to know the rate of success that long-term

unemployed people had in applications to this program, but you are saying that thatinformation is not available in any meaningful form. In relation to the last of the questionsthat I asked on notice you gave this answer—and it is to do with workers’ compensation and other insurance cover:The contract between the Commonwealth and the Australian Trust for Conservation Volunteers requiresthat the Australian Trust for Conservation Volunteers hold the following insurance.

Then there are two dot points. The first is:Public liability insurance for a reasonable amount against claims by third parties or participants for bodilyinjuries and property damage resulting from the provision of the services.

Then it goes to the second dot point and I will come to that shortly. In relation to the first dotpoint, is it fair to say that public liability insurance is insurance which indemnifies the holderof the insurance for its liability under common law, for example, negligence, occupier’sliability and the like?

Mr Walters —I believe that would be right. We would have to confirm that.Senator O’BRIEN—I am interested to know what circumstances would need to be in

existence to enable a claim to access coverage under that public liability insurance premium.Perhaps it will be obvious why I ask that, because the second dot point states:Personal accident insurance coverage for participants who do not come within the coverage of workers’compensation insurance legislation.

Firstly, are you saying that some of the participants do and some do not come within thecoverage of workers’ compensation legislation?

Mr Walters —We do not know the technical answer to that. We will have to come backto you on that.

Senator O’BRIEN—I will have to ask some ‘what if’ questions that you might also comeback to me on. If it is the case that some of the participants are covered and some are not,could you provide details? It may be a state breakdown or a particular program breakdown.I would not think it would be an individual by individual breakdown. If it is the case that noneof the participants come within the coverage of workers’ compensation insurance legislation,then going back to the first dot point, I would like you to advise—in the context of the answerto the first matter—whether there are any deficiencies in protective insurance cover for theparticipants, having regard to the limitations of a public liability insurance cover. Because youhave not told me that it is an accident insurance cover; it is a public liability cover and



potentially a workers’ compensation cover. The point that I am getting to is that not everyoneis covered by workers’ compensation.

Mr Grant —I understand.

Senator O’BRIEN—And not everything is covered by public liability. There are gaps there.I want to know what those gaps are. A follow-up question is: what does the departmentpropose to do to protect the participants in those circumstances?

Mr Grant —If there should be gaps?

Senator O’BRIEN—If there are such gaps. That is a fair qualification.

Mr Grant —I would be surprised if there are such gaps, but certainly we will go into thosequestions and come back to you.

Senator O’BRIEN—There has been a debate. I know that this department pursued policiesin relation to, for example, the Working Nation program and new work opportunities sayingthat the employees were not employees. We had evidence in the committee inquiry into theSocial Security Legislation Amendment (Work for the Dole) Bill where certain of the sponsororganisations for new work opportunities or other Working Nation programs said that certainstate laws did apply. There is a bit of a grey area and that is evidence that was before thecommittee. I am sure the secretariat will direct you to that evidence if you need to have regardto it.

Mr Grant —Thanks very much.

Senator O’BRIEN—Having regard to the questions that I ask, particularly those for whichyou say the information will be available next week, can I ask you when the information canbe made available?

Ms Davies—The project started on 19 May and some of them of course were in remoteareas. We have to physically check, because some of the young people start and then perhapsdo not continue. That takes a couple of weeks and some of them do not have ready accessto fax and phone. So there is a bit of a lag before you actually have a comprehensive set ofinformation.

Senator O’BRIEN—It will not be able to be used in any meaningful way in thosecircumstances until the supplementary estimates process, which is in the second half of August.Can you assure me that we will have the material by then?

Ms Davies—Yes, definitely. I expect to have it next week.

Senator O’BRIEN—That will be great if we can have it shortly after that. In answer to aprevious question on notice in relation to Green Corps regarding superannuation and healthbenefits, the department said that they have sought the opinion of the Commissioner ofTaxation about the participants’ rights to superannuation. Has the department received anyresponse from the Commissioner of Taxation on the entitlement or otherwise of Green Corpsparticipants to occupational superannuation?

Ms Davies—It is my understanding that we have not at the moment received a response.

Senator O’BRIEN—Is there some question in the department’s mind as to whether thepeople are engaged in employment, that is, whether they have a job?

Ms Davies—No. I think that in the department’s mind in the strict legal sense it is notemployment.



Senator O’BRIEN—On 27 May at page 4094 ofHansardthe parliamentary secretary, MrAbbott, member for Warringah, said in the first full paragraph commencing in the first columnon that page:There is an enormous difference between Green Corps and work for the dole. Green Corps is anenvironmental program for young people. Green Corps is a job. It is a job lasting for six months at thenational training wage. It is a real job, working on real environmental problems.

That being a statement inHansardmade by the parliamentary secretary, have you any reasonto review your views that it is not a form of employment?

Ms Davies—I think we are talking about slightly different things, for example when youwere asking about superannuation. The work is real work—there is no question about that—butthe distinction Mr Abbott was making is that the Green Corps is entirely voluntary. Theseyoung people are volunteering in a program that is, as he says, aimed at environmental projectprimarily.

Senator O’BRIEN—He says:It is a job lasting for six months at the national training wage.

They are very precise words.Ms Davies—It is the equivalent of the national training wage.Senator O’BRIEN—They are being paid the amount prescribed by the national training

wage.Ms Davies—Yes.Senator O’BRIEN—Minister, are you aware of these comments?Senator Vanstone—No, I am sorry—Senator O’BRIEN—I will repeat them for you. The comments were:

Green Corps is an environmental program for young people. Green Corps is a job. It is a job lasting forsix months at the national training wage. It is a real job—

They are important words considering the context in which those words are used by thegovernment—working on real environment problems.

I do not want to quote it out of context. Later on he says:I have to say that the reports the government have suggest that Green Corps is very much a quantum leapahead of LEAP programs—

they are his words, not mine—because of the fact that these people are volunteers. They are not conscripts. They are not slave labourers.They are not there because they have been threatened with loss of any benefit. They are there becausethey want to be there. They are there because they are people genuinely committed to Australia andgenuinely committed to our environment.

The parliamentary secretary has described their participation in the program as being voluntary,but he has also said that they are in a job and it is a real job. I guess the questions I ask abouttheir entitlements to other benefits that employees would receive for being engaged on a realjob are valid questions. I would be interested in your response.

Senator Vanstone—All I can say is that I would like to see the whole context of thedebate—who was speaking before or after, or what he was saying. Some people say, ‘Get real,’and they are not using ‘real’ in the same sense as ‘real job’. It is possible, I think, to use theadjective ‘real’ and attach it to a job and be using ‘real’ in one context on one occasion and



another context on another occasion. The description I use for ‘real job’ is an unsubsidisedjob, but I could equally say this is real work and I might mistakenly call it a real job if I werereferring to Green Corps, because it is real work combined with accredited training.

Senator O’BRIEN—We could start a debate on real jobs—jobstart is a wage subsidy butpeople in those positions are in real jobs, I would have thought—but I do not really want todo that. I would be quite happy for you to have a look at this passage and comment on it,Minister.

Senator Vanstone—I have actually allocated not just the administrative but also the policyresponsibility of Green Corps to Mr Abbott, so if you would care to give me some questionsthat you would like him to answer, I would be happy to get him to answer them for you.

Senator O’BRIEN—I think the key question is: how does he explain his position inHansard that Green Corps is a job, that ‘it is a job lasting for six months at the nationaltraining wage’, that ‘it is a real job working on real environment problems’, in the contextwhere I understand the department to be saying it is not employment. I would like him toexplain how he differentiates his words from those of the department.

Senator Vanstone—You want the differentiation between the use of ‘real job’ in thatcontext and other contexts in which it is used. I understand that. Can I just make the point,though, that it is very important that people understand that the government is not, by any ofthese opportunities being created for young Australians, seeking to massage the unemploymentstatistics. We have always said that whether someone is considered unemployed or employedis a matter for the ABS—it always has been—and we would not seek to offer them any adviceas to what they should say in relation to a question. The absolute caveat I put on it is that—itis up to the bureau to decide when someone is unemployed and when they are not.

Senator O’BRIEN—I do not have any quarrels with what you have just said. I really thinkthat it is the government that has made an issue of the term ‘real jobs’. Your parliamentsecretary uses those words in relation to this program, contradicting what has otherwise beensaid about the program. I think we are entitled to an explanation, and that is what I am askingfor.

Senator Vanstone—I understand the point you are getting at and I will get Mr Abbott torespond.

Senator O’BRIEN—Ms Davies, would you remind me—perhaps you want to take this onnotice—of the legislative provision which would allegedly deem these people not to beemployees.

Ms Davies—I would have to take that on notice.

Senator O’BRIEN—While you are taking that on notice, would you advise me whether,if there is such a provision, that provision purports to remove the common law rights of aperson in relation to the common law definition of being an employee, if you follow what Iam saying—that is, whether the legislation extinguishes the person’s common law right to bedetermined to be an employee.

The other question I have in relation to Green Corps concerns a response that we haverelating to the selection criteria for Green Corps participants. We were told that the selectioncriteria state that participants must reflect the youth profile. Is there a defined youth profile?If not, what mechanism is set down and followed to ensure that everyone understands whatyouth profile means when the selection is made?



For example, one presumes that the youth profile includes people in disabled groups, theAboriginal community, the long-term unemployed, et cetera. The Auditor-General’s report wasable to state that places in the LEAP program went in certain proportions to those groups. Ithink it was six per cent to disabled; eight per cent to the Aboriginal community, et cetera;27 per cent to the long-term unemployed. I would like to know how that mechanism is beingadministered in relation to the Green Corps program. Unless you can tell me now, I am happyfor you to take it on notice.

Mr Grant —The same sorts of statements will be able to be made in relation to Green Corps.I think Ms Davies could speak to you now about some of the particular attributes that makeup the youth profile.

Senator O’BRIEN—I would be happy for that to occur.Ms Davies—Matching the applicant to the community profile is one of the considerations

that the contractor has to take into account in choosing participants; it is one of seven or so.One of the considerations is that people from the locality are given preference as well.Participants in the projects are chosen on the basis of the statistical profile of that community,so that the young people are representative of their local community in that project.

Mr Walters —But that is only one of a number of criteria.Senator O’BRIEN—I understand that.Mr Walters —The other criteria include commitment to environmental issues, previous

training, career aspirations, diversity of hobbies, age and proximity to the project location. Sothere are quite a lot of different factors to balance.

Senator O’BRIEN—Having regard to what I said about the Auditor-General’s report onthe LEAP program, I take it that at some stage there will be similar data available in relationto Green Corps.

Mr Grant —Indeed.Senator O’BRIEN—In answer to question no. 58, the department said that relevant training

was one of the selection criteria. What levels of training have been noted in the applicantswhich is differentiated between successful and unsuccessful applicants?

Ms Davies—Do you mean the training they get before they go into the project?Senator O’BRIEN—If it was one of selection criteria, it would have had to have been.Ms Davies—Yes, it was. It is one of the considerations.Mr Walters —I do not think we would have received an analysis by individual applicant

of levels of training.Ms Davies—No, just broad educational qualifications.Mr Walters —We can check, but I would be willing to bet that that would not have been

compiled as a statistical series.Senator O’BRIEN—I heard Ms Davies talk about broad educational qualifications. Do you

think that that would have been a criteria?Ms Davies—No, I am sorry. I did not say that was a criteria. I said we have that

information.

Senator O’BRIEN—Do you have it only for successful applicants or for all applicants?Ms Davies—I would have to check.



Senator O’BRIEN—It is not much use to us if we know you have selected certain peoplewhen we do not know how to compare that with those who were unsuccessful in regard tothis criteria. If you would check that and if you would, having regard to those comments,advise whether it was collected for the applicants who were unsuccessful as well. As to therelevance of the $500 training grant at the end of the program, has there been any work donein relation to that? I understand you are under way with the first program. Is it completed?

Ms Davies—No, because it started in February and it is 26 weeks.Senator O’BRIEN—When will you be aware of the take-up rate of that $500?Ms Davies—Very shortly, in August or September.Senator O’BRIEN—I would be happy if you would undertake to supply that information

when it becomes available. We will ask in supplementary estimates how far away it is if wehave not got it by then. The participants, as I understand it, must spend 25 per cent of theirtime on accredited training. I am told that, for example, in the state of Western Australia wehad one project in Kununurra which involves weed pulling by hand and weed spraying. Whatsort of accredited training would you expect such a program to be providing to participants?

Ms Davies—Twenty-five per cent of the training is accredited training, as you said, and thatis accredited by their state training authority.

Senator O’BRIEN—Yes. Does it matter what sort of training they provide? Is that entirelyup to the program sponsor?

Ms Davies—No, it is done in collaboration with the contractor and the project sponsor. Theycan use outside training providers, but they have to be accredited. It covers such things asbiology, horticulture and field operations.

Senator O’BRIEN—It is within a very limited range, I take it.Ms Davies—It is within the conventional range of environment studies.Mr Walters —It is worth making the point that the quality is going to be monitored by the

state and territory training authorities.Senator O’BRIEN—Has the department had regard to the provision of training under

Working Nation programs in terms of its monitoring of this aspect of this program?Ms Davies—I do not really understand the question.Senator O’BRIEN—Working Nation programs in many cases involve training and in some

cases accredited training. There would be some experience the department has in this area.I was wondering what regard the department had to that experience?

Ms Davies—I understand in the development of Green Corps that evaluation material,including material on training, was used to help the overall development of it.

Senator O’BRIEN—Do not get me wrong. I fully support the use of accredited training.Indeed, if there was a failing in some of the Working Nation programs it was that there wasnot the requirement for accredited training in all cases. So I was interested to see what thelearning connection there was between them. The minister has made statements about thedevelopmental process of some of the policies that this government has which arise fromfurther developing some of the Working Nation programs.

Ms Davies—My understanding is that with Green Corps and its primary focus onenvironment there was an effort to make the best use of all the training that would fit into thatas far as possible. So that it built on what would have happened in LEAP, for example, butit also builds on other environment programs, not just labour market programs.



Senator O’BRIEN—No. Certainly it is a program which has as its aim an environmentaltheme.

Mr Grant —If I could just go back for a moment to your Kununurra example, I do not thinkthere is any expectation—let alone a requirement—that the nature of the training providedshould relate directly to the particular tasks or activities that participants are engaged in in anyparticular project. The focus of the training, as I understand it, is much more forward lookingthan that. It is geared not only to the immediate activities of the participants, but particularlyto their longer term interests and potential.

Senator O’BRIEN—Does that mean it should be individually focused or program byprogram focused?

Mr Grant —As I understand it—but I would ask Ms Davies for further detail—the decisionson particular forms and modes of training are matters in large measure for the contractor todevise in collaboration with participants in individual projects. I do not think there is anysingle answer to that.

Mr Walters —There is a large component of health and safety training. Even for an examplesuch as you gave, if you are dealing with chemicals and so on, then you would need sometraining. Also any outdoor activity carries its own risks, including exposure to the sun and theelements for which you need to have training.

Senator O’BRIEN—I think that is entirely comparable with a jobskills or new workopportunities program in terms of the proportion of time spent on training and the focus oftraining. In relation to this program, you are saying that there is that focus and there is theneeds of the environment focus in terms of the training. What measures has the departmentin train or ready to put in train to assess the training outcomes and—in so far as there is arelationship—the work outcomes of the particular programs?

Ms Davies—The evaluation will take all of those things into account. The quality ofaccredited training is also monitored by the relevant state training authorities. Where trainingis accredited, recognition will be given to participants for articulation and credit transfer toother courses as well.

Senator O’BRIEN—Will there be some acquittal report from each of the programs?Ms Davies—Definitely.Senator O’BRIEN—And it will give you a report on whether the participants have

successfully completed the program?Ms Davies—There are two things. There is the overall evaluation and our post-program

monitoring system.Senator O’BRIEN—Is that to be done by the evaluation and analysis branch or by your

branch?Ms Davies—No, the evaluation division.Senator O’BRIEN—I am giving them either a heightened or a lessened status. I am not

sure which.Mr Grant —It is the evaluation and monitoring branch within the analysis and evaluation

division.Senator O’BRIEN—Perhaps you can take on notice on their behalf the fact that I would

like to have details of their proposal for the analysis of this program. I would like to knowwhether it is intended to analyse it in relation to the future involvement of the participants,



that is, are they working, studying or are they working in environment or unrelated areas? Isthat going to be a focus of it? If it is an environmentally focused program, it involves work.Is there a relationship between that program and working and working in environmentalprograms or not?

Mr Potterton seems to jump into the fray every time we get into these evaluation areas, butI would be happy to receive some advice from him as to what is intended in that regard. Iwould like him to have regard to those comments and let me know whether it is the intentionto focus on those.

There seems to be some connection made between this program and the LEAP program.I think the department advised us in answer to question 68 that no 1996-97 LEAP projectswould have wound up before the end of the contract period. Do the regions that had LEAPprojects, either for the previous contract or for this coming contract, have access to GreenCorps projects? In other words, have the same areas been targeted with LEAP as have beentargeted with Green Corps? Is there any relationship, or is it just random?

Ms Davies—Green Corps is organised by the contractor, and it is not done with any regardto the location of LEAP. It is done quite separately.

Senator O’BRIEN—So if there is a correlation it is random?

Ms Davies—Yes, it would be coincidental. That is right.

Senator O’BRIEN—Could you advise me whether there has been such a correlation.

Ms Davies—Okay.

Senator O’BRIEN—Perhaps the department will want to take this on notice. Could youtell me for what programs and at what level of funding young people have been targeted inrelation to these youth and employment programs, comparing the 1995-96 financial year withthe 1996-97 financial year.

Mr Grant —Sorry, Senator, I would need to be clearer about the scope of coverage of yourquestion. For example, does it include the totality of labour market programs as they operatedin 1995-96?

Senator O’BRIEN—Programs that targeted youth are what I am asking about. Youth mighthave been picked up in jobstart, but it did not target youth. They may have been employed,but I doubt it, in new work opportunities, but they should not have been employed in jobskills.They would have been specifically employed in LEAP.

Mr Grant —So we are talking about programs that are exclusively for young people?

Senator O’BRIEN—Targeting youth, yes.

Mr Grant —The focus, then, of your question is the cumulative scale of those?

Senator O’BRIEN—I would like the number of people and amount spent in those twofinancial years.

Mr Walters —And this is programs which provide employment or training?

Senator O’BRIEN—Yes, it is employment related in some way.

Mr Grant —Sorry, I would like just to check again. Therefore, programs of support, forexample, for young homeless people would be out of the scope of your question? I am simplyseeking to clarify it.



Senator O’BRIEN—Yes. I may ask questions in relation to JPET shortly. This questionis employment related. We called them labour market and this government says they are not,but they have some employment focus.

Mr Grant —And out of scope, therefore, would be all education and training programs?

Senator O’BRIEN—Yes. I am not talking about TAFE places—

Mr Grant —No, not schools, TAFE ed and so on. Okay.

Senator O’BRIEN—I think that is all I have on Green Corps for the moment. I would liketo ask some questions in relation to the job placement, employment and training program. Thisprogram was previously, in some form or other, a program run by Health, Housing andCommunity Services, wasn’t it?

Ms Davies—That is right.

Senator O’BRIEN—And I think it is correct to say that it is targeting people under 21 whoare homeless. Could you just give me a brief outline so I make I am not departing from the—

Ms Davies—It is true that it targets young people who are under 21 and who are homelessor at risk of homelessness. But in addition it has a focus on ex-offenders, wards of the stateand refugees, who have similar characteristics to homeless young people.

Senator O’BRIEN—There have been announcements about the agencies recommended toreceive JPET funding in 1997. Are there any regions that have not been targeted for funding,or is there no regional basis for the funding of organisations?

Ms Davies—The selection was done in part based on a mapping of where homeless youngpeople resided rather than on a regional basis.

Senator O’BRIEN—How do you do that if you do not have regard to regions? That is, Isuppose, the question.

Ms Davies—That is true. The other consideration was that rural remote areas too, wherethere might not be a large number of young homeless people but there was nevertheless astrong need for some such project.

Senator O’BRIEN—So if you got out a very large map of the country you could hatch theareas of coverage in and you could explain the areas for which there is no coverage?

Ms Davies—I think so, yes.

Senator O’BRIEN—So the intention was to spread the coverage to the areas of need?

Ms Davies—As far as possible.

Senator O’BRIEN—Are there any areas where there is a need that in the department’sopinion have not been funded in this program?

Ms Davies—I would have to take that on notice, Senator. I cannot think of one off the topof my head.

Senator O’BRIEN—Okay. I am not being sensitive about this, but I noted the wide rangeof funding of all states. In the state of Tasmania you funded an organisation in Hobart, Colony47, another in Hobart, Key Training Centre Inc. at Rosny Park, and Burnie City Council atBurnie. That being a decentralised state, with a number of population centres, it appears thatcertainly the north-east of the state is not being funded. When you are looking at thatbreakdown, could you please advise me why no funding was allocated to the north-east ofTasmania, unless you can answer it now.



Ms Davies—I cannot off the top of my head, but as Mr Walters reminded me, we are aboutto have another round very shortly.

Senator O’BRIEN—That is why I was asking those preliminary questions to find outwhether this round had targeted the areas. You are saying that there is more money to be spenton top of this $11 million, are you?

Ms Davies—Yes, that is right. It was $11 million for two years.Senator O’BRIEN—So this is the 1997 funding and the next funding is for 1998?Ms Davies—Yes, that is right. We expect to advertise in September this year for the next

round.Mr Walters —Effectively, you are seeing only part of the picture there. I think what we are

tempted to do is to pick projects on merit but with a reasonable regard to geographicaldistribution. But it is not the last word; there will be another round.

Senator O’BRIEN—I was asking questions about that to understand whether, if there weregaps, they were deliberate gaps or not. I asked the question about Tasmania because it standsout at me that there is a part of the state population that is not covered. I have not, forexample, done an analysis of Queensland, South Australia or any of the other states to knowwhether there are gaps there also.

Mr Walters —I think what we tried to do was to ensure a reasonably geographical spreadwith regard to the distribution of homelessness around the country, without attempting at thisstage and in one round of the project to ensure that there was a comprehensive coverage oras comprehensive as they could be with a program of this sort.

Senator O’BRIEN—Could you please, having regard to the list of funded centres whichattached to the minister’s press release of 26 May, advise me what area each recommendedagency is supposed to cover with its funding. That will be the other side of the picture whenyou also tell me the parts of the country that are not covered, so that we can have anunderstanding. You are also saying that this is the funding for 1997—

Mr Walters —Not quite that, Senator. We are hoping that there will be another round whichwill kick in before the end of the year.

Senator O’BRIEN—How much money is in the budget over two years—$11 million, didyou say?

Mr Grant —Yes.Senator O’BRIEN—I have not done the sum. How much is recommended to be expended

to the agencies as of the 26 May release?Ms Davies—It is $11 million.Senator O’BRIEN—So that is two years funding?Ms Davies—No. It was $11 million per year for two years.Senator O’BRIEN—So this is the total funding of $11 million, and next year there will

be another $11 million?Mr Walters —There will be another round of projects which will start towards the end of

this year. The totality of the funding will be—Senator O’BRIEN—So these will not be funded next year—or some will and some will

not?Ms Davies—It depends on whether they bid again. Technically, they could be, yes.



Senator O’BRIEN—Were they funded on the basis of priority need—that is, theseorganisations who tendered, or—

Ms Davies—There was a selection process and it was done on merit in terms of criteria likeconcentration of young homeless people, the availability of other services, the value formoney—issues like that.

Senator O’BRIEN—Could you supply us with a copy of the criteria, please?Ms Davies—Yes.Senator O’BRIEN—Who made the selections?Ms Davies—We have a selection process within the department that went through the 500-

odd applications, and included membership from relevant parts of our department.Senator O’BRIEN—Was it made in Canberra or was it made on a state-by-state department

basis?Ms Davies—At that time we gathered intelligence from our area officers about each of the

applicant’s applications.Senator O’BRIEN—And the decision was made centrally?Ms Davies—Yes.Senator O’BRIEN—The final decision lay with the committee in the department, the

assistant secretary, the minister?Mr Walters —There was a committee in the department, Senator, which went through this

process, as Ms Davies suggests, which had a series of criteria and weightings which werelooked at, and it drew up the provisional list of recommendations. A number of those weresubject to further inquiries because there were a number of points about which we wereuncertain in the applications.

So there was a short list, and that was put to the minister for agreement, and then there wasa final list, and that was put to the minister for agreement. I was a newcomer to the departmentat the time, and the minister asked me to look through the process to see whether I thoughtit was fair and reasonable in the circumstances. I did so and, to the best of my understanding,it was, and the officers concerned have tried to do a conscientious job on it.

Senator O’BRIEN—It was a departmental committee recommendation vetted by you, MrWalters? You gave it your personal recommendation, and the minister approved it?

Mr Walters —Yes.Senator O’BRIEN—We have got to that point. So the funding runs from the middle of June

to the middle of next year? It is expected to cover 12 months?Ms Davies—It is expected to be for that period, yes.Senator O’BRIEN—And you are going to seek tenders later in the year?Ms Davies—We are hoping at this stage to do that in September.Senator O’BRIEN—And you are going to fund a 12-month period from January to

December?Ms Davies—Hopefully, December to the following December.

Senator O’BRIEN—The same difference I suppose. We are talking about the 12-monthcalendar year 1998. It would seem that if you are going to do that you are not going to selectthe same groups because those groups are already funded to the end of June 1998.



Ms Davies—I find it difficult to be categorical about that because I suppose technically acurrent provider could tender on the basis that they expected to start that following June. Itis unlikely.

Senator O’BRIEN—I am in your hands; I am trying to understand. This bucket of moneyis going to be spent over the two years. The two years start on 1 July. You have a series ofcontracts starting around then and going for 12 months. But you are talking about anotherseries that is going to start in January for 12 months.

Mr Walters —I think the truth of the matter, Senator, is that we have not gone back to theminister on the rules to be run for the next round of tendering. So you are raising a very goodissue which we have not got a final answer to at the moment. We need to settle the terms onwhich we will go on the next round of applications.

Senator O’BRIEN—I think this committee needs an answer to that, too. Certainly, if youtake that question on notice, bear in mind the supplementary estimates are in the latter partof August, so we really do need to know, either to put that question to bed or to follow itfurther. And whilst you are doing that, if the answer is that you are going to fund organisationsfor the calendar year 1998, can you confirm that that means that you will not fund successfultenderers, or tenderers who have been successful in the first round?

There are a number of variations. For example, if you are going to, I assume you are notgoing to fund them twice, so what arrangements will be made in relation to the funding ofthose organisations? I think the other question that applies is this: if the funding is to beexpended by the end of 1998, does that mean there will be no funding for the period Januaryto June 1999 as part of this two-year program?

Ms Davies—No, it does not, Senator.Senator O’BRIEN—It does not mean that. It means you will get more money in the next

budget.Ms Davies—Oh no. Sorry, I misunderstood you. I have no idea what we will get in the next

budget.Senator O’BRIEN—I was wondering. It would be unusual to get advance notice 12 months

ahead. I think that is all that I have on program 5.2.CHAIR —Thank you, Senator O’Brien. I thank the officers very much.

[4.22 p.m.]

Program 2—Higher EducationSubprogram 2.1—Higher Education System

Senator STOTT DESPOJA—Minister, according to information tabled by your departmentyesterday, enrolment applications have declined. The figure put forward yesterday was 3.4 percent. Can you confirm that?

Senator Vanstone—I do not have the answer they gave you in front of me, but I have noreason to suspect that they are not providing the appropriate information. Mr Gallagher mighthave something to add.

Senator STOTT DESPOJA—Before I ask Mr Gallagher to comment, Minister, can youexplain to me the difference between enrolment applications and enrolments?

Senator Vanstone—Yes. Enrolments are applications that have been accepted byuniversities. People have been offered a place, and the student enrols.



Senator STOTT DESPOJA—Thank you. Mr Gallagher, do you want to elaborate on thequestion regarding the decline in enrolment applications for this year?

Mr Gallagher —I can confirm, Senator, that the number of applications in 1997 is downon the number of applications in 1996, but that enrolments in 1997 are up on enrolments in1996.

Senator STOTT DESPOJA—Thank you.Senator Vanstone—That means—and I am only pointing it out since you wanted some

elaboration on the difference between applications and enrolments—that there are moregovernment-funded undergraduate students this year than last year, and it means that thegovernment is funding, and it means over and above that that universities have taken in evenmore students. And I think the figures further indicate that, on the totals, that is the case. Thatis including postgraduate students. There are more. So, so much for higher education fallingapart, Senator. Under the guiding hand of this government and this minister, it is in fact farhealthier than it was last year.

Senator STOTT DESPOJA—Minister, why do you think that is the case, if you werearguing that universities have a stable, if not higher number, of enrolments, as opposed to thedecline in enrolment applications? Why is that? Do you believe or give any credence to theargument that universities have, in fact, made additional offers, have overshot their enrolmenttargets?

Senator Vanstone—Are you asking me why they did that?Senator STOTT DESPOJA—No. I am asking you to elaborate on your answer. If you

believe that universities have taken on more students, why is that and how have they doneit?

Senator Vanstone—Do you accept that? Let us get the premise right. Do you accept thatthey have?

Senator STOTT DESPOJA—I accept that universities have been aware of enrolmentapplications and were nervous about a decline in enrolment applications. Some institutionswe know of have overblown or overshot their enrolment target and thus made available moreplaces to students so that they would not be left in the lurch. I believe they have done thatby a number things, including reducing the tertiary entrance score in some cases. I amwondering whether you have heard that, whether your department has any information aboutit, whether you believe it and give any credence to it and whether you are worried about it.

Senator Vanstone—Let us just get some understanding here first. Do you agree that therewere more government funded undergraduate student places this year than last year?

Senator STOTT DESPOJA—It is not for me to agree or disagree. At this stage I can seethat there are a large number of enrolments which do not reflect the enrolment applications.

Senator Vanstone—Senator, I am not interested in having a debate with you unless youare interested in actually getting some agreement on what the facts are. This is not anindulgence. We tried that with Senator Carr this morning. It is a pretty simple question. It isnot that difficult. Either you are prepared to accept the facts of the matter and perhaps havea discussion about why, which I am happy to indulge in with you but, if you cannot even bringyourself to admit that there are more government funded undergraduate students this year thanlast year, it either means you are incapable of reading the budget papers or simply playinga political game here other than engaging in proper parliamentary scrutiny—you choose which.If you want to play it on a political level, then we will, and we will give you as little



information as we are required to do. If you want to be decent and fair about it, we will giveyou as much as we possibly can. That is a pretty simply outline of my position. So lets startagain.

Senator STOTT DESPOJA—Now will you answer my question?Senator Vanstone—Will you answer mine? Do you agree there are more government funded

undergraduate students this year than last year?Senator STOTT DESPOJA—Minister, I will accept that premise. I have no problems with

that.Senator Vanstone—A premise. Do you acknowledge it is a fact?Senator STOTT DESPOJA—Crikey! I wish I was getting your salary to answer the

questions here, Minister.Senator Vanstone—Do you accept that as a fact?Senator STOTT DESPOJA—I am entitled to ask you about why universities have overshot

their enrolment level.Senator Vanstone—And I am coming to that. I just want to know: do you accept it?Senator STOTT DESPOJA—I accept it.Senator Vanstone—Great, there we are. Now what is your next question?Senator STOTT DESPOJA—My answer does not depend on me accepting that particular

fact.Senator Vanstone—It may not to you, but it does in the train of thought that I am about

to raise with you.Senator STOTT DESPOJA—Okay, here we go.Senator CARR—You have a train of thought, Minister. That is very interesting. I look

forward to hearing this.CHAIR —Order!Senator Vanstone—You would never follow it, Senator. Don’t even try—you’re not quick

enough.Senator STOTT DESPOJA—Would you like me to repeat the question?Senator Vanstone—You asked a number. Which one do you want me to go to first?Senator STOTT DESPOJA—Are you aware of, or does your department have any

information about institutions which deliberately overshot their enrolment targets, that is, theymade additional or a larger number of enrolment offers this year, and the motivations behindthat. I am happy for to speculate as to whether or not—

Senator Vanstone—Mr Gallagher might have some information to give you and I am happyfor him to give you that. I am not sure what you mean by ‘deliberately overshot their targets’.What you might have meant to say is, deliberately offered more places because they wereworried that there were not enough applications, but that of course does not follow becausethey knew how many applications there were when they put their offers out and more peopleaccepted than they expected.

The plain fact—you just can not get out of it—is that, despite all the hoo-ha and drumbeating about the changes to higher education last year, the savings largely born by students,not by universities, despite people such as yourself and Senator Carr saying that universities



have been cut by dramatic amounts—I have never shied away from the fact that the savingswould largely be born by new students and existing students paying back earlier—despite allthat, students recognise the value of an education and have been enrolling. In other words,they have not been deterred. On that basis I draw the conclusion the sector is alive and well.

Senator CARR—Was your department actively—CHAIR —Order, Senator Carr! It is not—Senator Vanstone—Yes, you’ve had a fair go, Senator Carr. Let’s just be as fair to Senator

Stott Despoja, as we have been to you.Senator CARR—Actively encouraging—CHAIR —Order, Senator Carr! We will come to you later. You have got plenty of time.Senator CARR—I want to be fair—CHAIR —Senator Stott Despoja has the floor.Senator Vanstone—Senator, I am happy to answer your questions.Senator STOTT DESPOJA—Thank you. I am just trying to remember what I was going

to ask next. It was along these lines: when you say that people have not been put off, I amwondering what the better indication of demand is. Is it applications for enrolment, or is itindeed the final number of enrolments? If you argue that people have not been put off becauseof the final number of enrolments as opposed to applications, or you argue that universitiesgot more than they expected, I am wondering about that. There are a number of ways thatuniversities can ensure their enrolment load, can ensure that they meet those enrolment targets.That is not always that they have a large number of applicants who fulfil the normal criteria;they can actually do it in a number of ways, by for example lowering the entry requirements.What is the best indicator of demand—is it applications or is it the final figures in terms ofenrolment?

Senator Vanstone—I think that in the end it is enrolment, although I accept that the mattersthat you refer to have a bearing on that. I think you are drawing a very long bow to say thatany changes that any universities might have made, because they were worried about keepingup their end of the bargain, have inadvertently resulted in not only meeting their targets butovershooting them.

My personal view is that the fall in applications is largely—I stress largely—a function ofpeople such as you happily saying, in a student-political sort of way, that universities will nowbe only for the rich. I think there are people who are very marginal about whether they applyto go to university, and when they hear someone such as you, whom they have in the pastrespected—and perhaps because they do not know the truth still do respect—saying, ‘Oh,universities are now only for the rich,’ I do think that that puts some people off.

The former president of the National Union of Students was quoted in one of the verypopular papers as saying, ‘You’ll need $30,000 to go to university.’ If she was correctlyquoted—I did not see a correction offered by her—I think that to kids in years 11 and 12 thatis very, very off-putting. I think the self-indulgent politics that some people have engaged inhave sadly put some off some people who otherwise might have applied.

Senator STOTT DESPOJA—So, Minister, you are suggesting that the political environmentand perhaps the media have affected enrolment applications—that there may be—

Senator Vanstone—I would nominate you and the former president of the National Unionof Students as key players in that.



Senator STOTT DESPOJA—So you accept that factors have affected university enrolmentapplications this year—obviously, you have just specified two—but you give no credence tothe suggestion, anecdotal or otherwise, that people might be put off by changes to the highereducation sector?

Senator Vanstone—Some people—I stress some people; I do not have a crystal ball withaccess into everybody’s mind—may be marginal about whether they want to go to university,and they would be put off by outrageous misrepresentations such as those that I havementioned. Other people may be marginal about whether they would go to university, and theywill make a decision about whether they want to go. If they find an increase in the HECScontribution unsatisfactory they may decide not to apply. But that will be people at the margin,and when you have ended up with an overenrolment, Senator, I think you are pushing a barbedwire canoe uphill to say that the higher education sector is falling apart. Not only have theymet the government targets for undergraduate students, which were increased from last year,but they have exceeded those targets. I think you can try any measure you like but in the endyou are going to be battling to convince people that the higher education sector is anythingbut alive and well.

Senator STOTT DESPOJA—Perhaps, Mr Gallagher, you would like to elaborate on myearlier question regarding any information that your department was aware of in relation tochanges to the tertiary entrance score at universities—specific universities; I am notgeneralising about all universities—that may have exceeded their usual number of offers.

Mr Gallagher —One of the main reasons apparent to us for the overenrolment this year isa higher than usual continuation rate. There has been an increase in enrolment of newcommencers, but a larger increase in the total enrolment, which suggests that there is a highercontinuation rate operating here. There is no evidence to us that universities have distortedtheir entry requirements to boost numbers artificially. But we do not monitor the admissionsprocedures of the universities; that is their business.

Senator Vanstone—I think I am right in saying, though, that it was ANU which put someof its TERs up.

Senator STOTT DESPOJA—Do you have information that you could make available tothe committee?

Senator Vanstone—I would have to go back. It was a vice-chancellor that told me that.I would just have to ask the vice-chancellor whether it was his university and, if not, go downthe list of ones that might have told me that. It is not something I have seen on paper. Therewas a vice-chancellor who said, ‘Despite all these claims about what is going to happen tothe higher education, you might like to know that’ and so on. I just took it on board and havenot made a paper note of it.

Senator STOTT DESPOJA—In relation to, again, enrolment applications and theinformation tabled by your department yesterday, are you concerned about the decline inenrolment applications relating to mature age entry applications, Minister?

Senator Vanstone—Senator, it would perhaps be useful to draw some conclusions whenwe have had another year, a more peaceful year when there is not so much misinformationout on the airwaves—when students, for example, understand that new HECS fees apply tonew students and not to old students, when they understand that they are not going to berequired to pay fees up front and when they understand that they do not have to pay theirHECS until they earn $20,700. In other words, when there is a settling down period I thinkyou will be able to draw some useful conclusions. In the meantime, other than the very



obvious conclusion that universities have enrolled above an already increased governmentfunded undergraduate load target, it is very difficult to draw useful conclusions. We can sitand navel gaze about what they might be, but I suggest that it is not appropriate to do thatat taxpayer’s expense.

Senator STOTT DESPOJA—In relation, then, to assisting, I suppose, a settling downperiod and, for example, making available information such as what HECS changes and risesapply to what students: is the government satisfied with its current publications andpropaganda, for lack of a better word, in terms of informing students about this? Will therehe an additional education campaign—apart from HECS booklets, but—

Senator Vanstone—It is interesting you raise that, Senator, because I have been soconcerned about the misinformation going out to students that I have in fact been turning mymind to this matter over the recent period. I take that hint from you to be an indication thatI am heading in the right direction. It would be important to ensure, wouldn’t it? How pleasedwould I be if every student had the truth.

Senator STOTT DESPOJA—I will keep ignoring that inference, Minister. Notice that Iam not going to indulge in that—

Senator Vanstone—It is not an inference. I am acknowledging that you have had a verygood idea which happens to be on track with one that I have had recently, and the only thingthat does worry me is that ad idem there might be a problem. Nonetheless I will take youracknowledgment that it might be useful for students to have the truth as an indication thatperhaps I am on the right track in thinking about some sort of mechanism—I cannot think whatat the moment; I have a couple of ideas up my sleeve—and when I come to it I will makesure you know about it very early on.

Senator CARR—What about a few ads on TV, Minister?Senator Vanstone—I would think that would be a waste of time, Senator.Senator CARR—So do I. What sort of advice did you have in mind?CHAIR —Order, Senator Carr! Senator Stott Despoja has got the floor.Senator Vanstone—It would be a waste of time and money—the sort of thing you did with

Working Nation.Senator STOTT DESPOJA—Minister, following on from the idea of whether you assess

demand by enrolment applications or enrolments, I would be interested to know this from thedepartment, which I believe is reviewing the impact of applications in relation to sciencecourses. I am wondering two things. Firstly, I think that at the last estimates I was given theimpression that there would be a review of the impact or current enrolments due in May.

Senator Vanstone—Yes. What we have consistently said is that we would have a look atthe impact. I think you asked for the figures, and we have given you some. They arepreliminary, I think; they do not finalise enrolments until September.

Senator CARR—September now, is it? It takes to September to actually edit these figuresout, does it?

Senator Vanstone—I will come back to that, but I understand that that has been thesituation in the past. It has always surprised me and seemed far too long a time period, butwe will get to the bottom of that. Despite the predictions that this was the end of the worldfor engineering and science, enrolments in engineering—I understand—are up one per cent.

Senator STOTT DESPOJA—Enrolments are up?



Senator Vanstone—Yes.

Senator STOTT DESPOJA—Not enrolment applications for science or science basedcourses?

Senator Vanstone—No. I choose my words carefully and I said enrolments and that is whatI meant. Enrolments are up. That is, there are more students tootling along, popping intouniversity and hoping to get an engineering degree. Enrolments are up.

Senator STOTT DESPOJA—Don’t you mean students being offered a place are up, asopposed to students tootling along and applying for a place in university?

Senator Vanstone—No, hoping to get a degree; hoping to complete the course is what Isaid and that is what I meant. Now some sciences are up, for example, health sciences are up;mathematics is up; and computing science is up. Basic science—that is, a plain sciencedegree—has suffered a bit of a knock, but I think that is to be expected and is unrelated tothe HECS changes. It is to be expected for the same reasons that I have given you in the past,and that is that over a number of years there has been a fall in students at year 12 doingscience. Over a number of years there has been a fall in applications but a maintenance ofenrolments and sooner or later you would expect a consistent fall in applications to show upas a fall in enrolments.

I think 3 percent is relatively small. You need to bear in mind as well, before some peopleare occasioned to thinking that there is a shortage of science graduates, that in fact Australiaranks very highly in its provision of science graduates on the OECD ranking. I think it is aboutthird. That was the last information I was given for graduates between the ages of 18 and 24,but we will get to the detail of that. There are two ratings that I have had drawn to myattention. I will get them and send them to.

Senator STOTT DESPOJA—I am happy for this to be taken on notice, but the committeewould benefit from information gained from perhaps looking at the pattern over the last fiveyears of enrolments for science courses and specifically in the last year enrolment applicationsfor science and science based courses, such as pure science, mathematics, engineering andcomputing. I will table that to make sure it is specific as to what I am asking for.

Senator Vanstone—Yes, we will put some information together.

Senator STOTT DESPOJA—Just clarifying your earlier answer about an investigation intothe impact of HECS on science applications—

Senator Vanstone—It is an ongoing monitoring arrangement.

Senator STOTT DESPOJA—But will it monitor the enrolments, not the enrolmentapplications?

Senator Vanstone—Enrolments are what I am particularly interested in. In the end that iswhat you end up with.

Senator STOTT DESPOJA—I understand from your answer that it will obviously be anongoing process, but is unlikely to report before September this year, for example.

Senator Vanstone—That will only give you finalised figures for one year. Last year as youknow was a very disruptive policy year in the sense of that the information students were beinggiven was coming from all over the place. As I indicated to you earlier, in order to drawconclusions you have to give something a bit of a run. I would not necessarily take one yearas being appropriate, especially since the first year shows things that were, according to some,



destined to fall apart, doing very well. A small fall-off in science is quite explicable. I thinkthat is an indicator that there is no need to rush to a conclusion at all.

Senator STOTT DESPOJA—I asked that for two reasons.

Senator Vanstone—There is one other point. The department is preparing a paper for theScience Council on this matter and no doubt that will be a public paper. I think we willinclude some information on employment outcomes and salary payments, because that is anindication of what is driving these things as well. You get a bright student and tell them thatafter four years out of medicine they can earn $100,000 working for the Queenslandgovernment. You can then ask them if they would like to do a science degree and give themthe salary outcomes there. Someone who is not particularly motivated one way or the other,and for whom money might therefore tip the scale, might head off up to Queensland to domedicine.

Senator STOTT DESPOJA—I imagine there would be a number of other issues taken intoaccount, especially the paper to which you were referring. When will that be published?

Mr Ruby —The paper is in the final stages of preparation and is going to the ministers forconsideration. It will then be forwarded to the Science Council for its next meeting. I apologisethat it is not in my head, but it is within a month or so.

Senator STOTT DESPOJA—I appreciate the idea that it is an ongoing review. I think thatevaluation is appropriate. But, given the comments made previously by yourself and MinisterMcGauran in relation to a review of science for the purposes of perhaps changing the HECSbands, would you still consider changing the HECS bands depending on the evidence providedby this evaluation? When would be the first opportunity for you to do that?

Senator Vanstone—I cannot win with that answer, because if I say yes, you create theexpectation that something is going to happen. You will rush out and say, ‘As a consequenceof questions asked by Senator Stott Despoja today, Australia’s youngest senator’—

Senator STOTT DESPOJA—No, that is not what I am looking for.

Senator Vanstone—And they can all now have an expectation of a lowering. If I say no,I am unwisely indicating that, despite whatever information comes before me, I will not changemy mind. Now in relation to what should happen here, my answer stays the same. All theindicators are perfectly explicable and indicate for no rush to judgment. But the governmentis going to keep its ears and eyes open and look at what happens next year and any otherinformation that comes before it. If at any time it decides a change is needed, it will makeit.

Senator STOTT DESPOJA—Actually that was not intended as something to trap you,because you are on record already acknowledging that you would be prepared to evaluate thatinformation. I have no reason not to believe you. What I am curious about is the time line.I accept it is an ongoing inquiry. I think that is a valid ongoing inquiry, but I am wonderingwhat would be the first opportunity—if ever—that you would be prepared to look at theevidence. Would it be after the publication of the council meeting? Would it be afterSeptember?

Senator Vanstone—No, that is what I am trying to explain to you. It will be when I seeinformation that indicates there needs to be a change. Ongoing means ongoing. It does notmean, ‘Well, I’m going to look at this until September and if there’s no information by then,hell, we’re not going to change.’ It does not mean, ‘We’ll look at it until July and if there’sno information by then we’re not going to change.’ It means, ‘We’ll keep looking at the



information as it comes.’ It will be the information that will be the trigger for a change, notsome stupid date on a calendar.

Senator STOTT DESPOJA—Can I put on notice a question concerning—unless anyonecan tell me now—the average proportion of science units in a standard nursing undergraduatedegree?

Mr Ruby —We would be happy to provide you with a written answer.

Senator STOTT DESPOJA—Thank you. In relation to the HECS merit scholarships, I havereceived examples of some universities that have tied eligibility for the scholarship to studentsbeing in receipt of Austudy. How do you feel about that? Is that appropriate?

Senator Vanstone—We have said it is up to the institutions to allocate these. Certainlypeople who are getting Austudy—unless they have found a way to rort it in one way oranother—you would have to describe as being lower income students, but I would want tosee what other criteria they had as well. But in the end we have said that this is up touniversities, because different universities will have different pools of people available. Forexample, you might consider that a university in a regional area with a significant indigenouspopulation would target there. I really do not want to prejudge any of them. And thegovernment has made the right decision, in keeping with its commitment for freedom ofdiversity and choice, to give the universities the freedom to make that decision themselves.

Senator STOTT DESPOJA—I realise it might be early days, but if your department couldtake on notice—or perhaps answer now—whether they are aware of any cases of students whohave applied for a HECS merit scholarship but have missed out because they are not eligiblefor Austudy. Are there any incidents that you are aware of now? Have you had much contactwith people applying for HECS merit scholarships, that is, correspondence or phone calls?

Senator Vanstone—No, I have heard of only one. I believe someone wrote to mecomplaining about one university’s criteria and as I recall that did not relate to Austudy. Ithink they had targeted them either to faculties, nearby schools or something, and in any eventthis person was not in that category and was complaining. But I am pretty sure it did not relateto not having Austudy and in any event there is only one that I can recall. There is noparticular reason. The only people whom we would come in contact with are people who areso dissatisfied with the universities and they have thought, ‘I will write to the minister.’

Senator STOTT DESPOJA—I am not particularly interested necessarily in concerns. I amjust wondering if the department has had anyone ringing up either inquiring about the meritscholarships or—just as you explained—some people who are questioning the criteria thatuniversities are basing eligibility for those scholarships on. I am quite happy for that to betaken on notice as well if there is anything that people are not aware of or if it shows up.

Mr Burmester —There have been a number of inquiries on the HECS hotline of peopleinquiring about criteria. They have been referred to the universities and that is the only contactthat my branch has had on these matters.

Senator CARR—Can you confirm answer no. 231 to questions that I placed on notice?

Senator Vanstone—I do not have it in front of me, so it is a bit difficult for me to do so.

Senator CARR—Perhaps you could get that for me.

Senator Vanstone—Perhaps we will wait until I get it, because it is pointless you askingme until I have got it.



Senator CARR—Can you confirm that your department has provided me with informationthat the variation on the previous targets for undergraduate study in this country in 1997 showsthat there are 1,875 less places and the variation between 1996 and 1998 would produce aresult of 2,500 places less?

Senator Vanstone—I am having a look at the tables that have been provided and I see thefigures you are referring to. You are as capable as anyone else of drawing your ownconclusions. Just to save you dragging it out in your usual inarticulate, long-winded fashion,let me cut to the chase for you to save us all a bit of time. What you want to say, no doubt,is that the previous government would have provided more places. You get annoyed when Ipoint out we are providing more places than last year.

Senator CARR—That is dishonest, is it not? That is dishonest.

Senator Vanstone—No. It is not.

Senator CARR—Because it is not an accurate reflection of the facts.

Senator Vanstone—You will get your chance. It is an accurate reflection of the facts tosay that there are more places this year than last year and there will be more again next year.What you want to talk about is Labor’s forward planning, which I have told you before wereunsigned cheques on empty bank accounts.

Senator CARR—The forward targets are that this year there are 1,875 less opportunitiesas a result of your government’s policies and 2,500 less opportunities will exist next year asa result of your government’s policies. In fact, there 17,000 less opportunities overall as aresult of your government policies. Those are the facts.

Senator Vanstone—The fact is that there are more government funded undergraduate placesthis year than there were last year. You can talk about the pipe dreams of what might havehappened if you had managed yourselves fiscally properly and there was money left in thebank and if, woe be tide us, your government had been re-elected. But the point is that Labor’sforward estimates in this area, and frankly in every other area, were nothing more than blankcheques on—not an empty bank account—a bank account that was $8 billion in the red.

Senator CARR—You say that, but I say to you that your own department highlighted theinaccuracy of the figures.

Senator Vanstone—The fact remains that there are more government funded undergraduatestudents this year than last year and there will be more again next year. In addition to that—sadly for you—universities have overenrolled.

Senator CARR—There are 17,000 less places overall. Will you deny that your officialsadvised universities in the profile rounds that they should more aggressively than usual offerplaces to ensure overenrolments? Will you deny those strategies were ever undertaken by yourdepartment?

Senator Vanstone—I am not in a position to deny it, because I was not there. But whatI can say is that no such discussion or piece of paper has ever come my way that such aproposition ought to be put to universities. I think the department that conducts the profileprocess might have something to say about that. If you are going to put the proposition thatthat is the case, then I invite you to tell us which university wants to make that suggestion.

Senator CARR—I am making the suggestion.

Senator Vanstone—You have been here before and made suggestions that have been provedto be untrue.



CHAIR —Order! The minister has not finished her answer.Senator Vanstone—Actually the officers do not have to answer anonymous allegations. I

think that is just ridiculous.Senator CARR—I am making the allegation. It is not anonymous. I am making it.Senator Vanstone—Yes, it is. You are passing on an anonymous allegation and it deserves

to be treated with contempt.Senator MARGETTS—On a point of order. Since when do questions that come to this

estimates process have to show the source? I would think that this is the means by which thecommunity can bring questions to the parliament without having to reveal the sources.

Senator Vanstone—If the question was put simply, ‘Did you in the profiles process engagein X, Y or Z activity’, I would be quite happy with it. I am sure that is the way you wouldput it, but you will have heard that Senator Carr did not say that. The last time he came hereI think he had been told by every Tom, Dick and Harry that enrolments were going to be downand that has proved not to be the case. Either people lied to him or he just drummed up somefigures out of his head. He came in here and did not just ask the question. He made theallegation that it had happened. That is an anonymous allegation. It is not a question. Icompletely support the right of any senator or member to put whatever question they like inthese proceedings, but to come in, make anonymous allegations and then dress them up asa question, no. There is a difference.

Senator STOTT DESPOJA—Do you want to finish that particular question?Senator CARR—I do. I would ask: did you or any of your officials put to universities in

the profile round that the universities should follow a more aggressive than usual offersstrategy?

Senator Vanstone—I get the gist of your question. I can assure you that no such instruction,hint, nudge, nudge, wink, wink or whatever came from me. Mr Burmester here informs methat he did half of them and no such suggestion was made in that half. I understand DavidPhillips did the other half and I would be extraordinarily surprised if Mr Phillips were to makesuch a suggestion. You could not be critical on past record of anything that Mr Phillips hasdone and I would be very surprised if you could on this occasion.

Senator CARR—It has been put to me that in fact that that is precisely what has occurred.Your officers, and I can only presume acting on advice from government—

Senator Vanstone—No, you cannot. You have just been told that if that did happen, it didnot happen on the advice of government. You do have something else to assume now.

Senator CARR—I put to you that, on the advice of DEETYA officials during last year’seducational profile negotiations, senior officers of your department told universities that itwould be advisable that they follow a more aggressive than usual offers strategy, because itwas likely that take-up rates on offers would fall following the announcement of increases inHECS and the introduction of differential rates for HECS charges.

Senator Vanstone—I have given you the answer. Mr Burmester is sitting on my left withhalf of these profiles processes and he tells me no such suggestion was given. I told you thatDavid Phillips—no longer with the department—was at the other half. I therefore cannot tellyou with respect to Mr Phillips, but I have indicated my confidence in him and theunlikelihood that he would ever have suggested that that was a government suggestion. I knowas the minister responsible that no such suggestion was ever made. You have just repeatedyet again—as you have earlier today when indulging yourself—the same question three times.



Senator CARR—It is normal, is it not, for universities to in fact offer more than 20 percent over their total because of their uncertainty of the number of students actually rejectingoffers. Is that the case, Mr Gallagher?

Mr Gallagher —That sounds a very high margin to me.

Senator CARR—But it is around that. What would the normal offer of over-enrolment befor any particular university?

Senator Vanstone—Senator, can I explain to you: that is a matter for the universities, andit—

Senator CARR—Oh, come on, Minister, you know very well that—

CHAIR —Order! Senator Carr—wait for the minister to finish the answer.

Senator Vanstone—It is a matter for the universities. The government indicates to themwhat the funding for the places will be. What offers they send out is a matter for them. Youwant to know to what extent departmental officials acting either on their own or on my behalfhave interfered in that process and put suggestions to them; you have asked that question andyou have been given the answer.

Senator CARR—And you deny it.

Senator Vanstone—Yes. That is right and now we have got it four times. Would you liketo make it five? Perhaps at the taxpayers’ expense we could keep rolling on all night and youcould ask me a dozen times. You’ll get the same answer.

Senator CARR—I might do that. Your office also advised me, Minister, at the last roundof hearings, that the enrolment figures that you have been bandying about were in fact puttogether on an unedited basis. Is that a fact?

Mr Gallagher —Yes.

Senator CARR—That is correct? I asked you whether I could have an analysis of thosefigures based on a state, regional and university breakdown; and you said that it was possibleto do that. Mr Burmester has indicated that, as a matter of fact, when you get unedited data,and it is not the final confirmed information from the universities, the further you disaggregateit, the more the deficiencies in the data—if they are there—will show up once you get downto the smaller categories. That is correct? If that is the case at the lower end of this analysis,why isn’t it the case at the higher end? If the foundation stones are unreliable, how can youtell what the edifice looks like?

Senator Vanstone—I will get Mr Potterton to answer because I do understand the LaborParty has some difficulty in understanding evaluation. I am not so equipped as to give youan articulate explanation. He is not here so we might take that on notice. Perhaps we will ringhim up and he can come. You do understand, Senator, that just in normal surveys—you willhave had some experience of this in your political career—the smaller the numbers are, theharder it is.

Senator CARR—Minister, I understand that this has not actually been put through theprogram’s checking devices. There is a process you have got within the department to actuallyconfirm the accuracy of those figures. Is that correct—is there actually a method of establishingthe accuracy of these figures?

Mr Gallagher —Senator, for our formal data collection the information is sieved througha computer system whereby any codes that may be wrongly assigned are detected and the



institutions can correct the input. This early estimates information has not been through thosesieves. However, it is broadly indicative of what is going on.

Senator CARR—That is the whole issue, isn’t it—broadly indicative? You say to me thatthe final edited data from the universities is due to the department on 31 May. Has thatarrived?

Senator Vanstone—It hasn’t come to me.Mr Burmester —I haven’t got a list of those files that have turned up as yet, but we can

tell you that.Senator CARR—I would appreciate it if you could tell me that. You said to me in the last

hearings that you would be able to provide me with the final edited data from the universitiesafter 31 May. I appreciate that we are now after 31 May. I also understood you to be givingme an assurance, and I said, ‘I ask the department to provide the committee with theinformation about the number of applications for enrolments in subject areas, the number ofactual enrolments by institution, at a national and a state level, as close to 31 May as possible.’Mr Burmester, I understood that when you said yes to that question that that is what wouldhappen. I am wondering when will that occur?

Mr Burmester —As I said, I personally don’t know which files have turned up. I am prettysure that not all of them have. It is only about a week since the cut-off, and we have notstarted compiling any output tables. The university statistics collection is quite complex. Partof it is we re-edit the data after the universities have edited it to make sure that it is absolutelyclean. So we will be applying those same edits, those same sieves as they were described, tothe data. That will take some time. I do not have a timetable in my head. After that, we willstart compiling output tables.

Senator CARR—It is just that the minister was very quick off the mark to claim there were26 thousand extra places, but in fact you were drawing upon unedited data which may change.

Mr Burmester —That is correct. That is why we explained at that sitting that it was unediteddata.

Senator CARR—I did understand the importance of your answer. I wonder whether theminister understood it. I also understood the circumstances of the advice the department gavethe universities last year. They were concerned about the take-up rates following the HECSchanges.

CHAIR —You seem to be moving to a new area. We are being very indulgent, because whatwe are supposed to do is ask the supplementary for clarification then go back to whoever isasking the questions—which was Senator Stott Despoja.

Senator CARR—I am quite happy to return to it.CHAIR —And we return to Senator Stott Despoja. Thank you.Senator STOTT DESPOJA—Thank you, Senator.Senator Vanstone—We do realise, Senator, you are always happy to have attention referred

back to you.Senator CARR—Yes. It is a pity that you could not actually answer the question.CHAIR —Senator Stott Despoja.Senator STOTT DESPOJA—Just following on a couple of additional questions in relation

to enrolments, given that Senator Carr has led us in this direction; Minister, what is yourunderstanding of the impact, if any, of the higher continuation rates on enrolments this year?



Senator Vanstone—Senator, there are a number of interpretations you could put on thatquestion. Do you want to just clarify for me what direction you are wanting to go in?

Senator STOTT DESPOJA—In response to an earlier question of mine in relation toenrolments, Mr Gallagher said that there was a higher retention rate or continuation rate. I amjust wondering how much of that is responsible for the current enrolment figures. Does itactually mean that there has not necessarily been an increase in enrolments and perhapsenrolment applications are a better measure of interest in education?

Mr Gallagher —Senator, I am sorry: I thought I had indicated that there had been anincrease in commencing enrolments, but a larger increase in total enrolments, indicating thatthere was also an increase in the continuation rate. But there has actually been an increase ofabout one per cent in commencing enrolments.

Senator STOTT DESPOJA—Right. I wanted to clarify that. So it is one per cent.

Mr Gallagher —Yes. And an overenrolment both at the undergraduate and at the total levelof eight per cent on the institutional plan targets.

Senator STOTT DESPOJA—So in regard to Senator Carr’s question, he nominated 20per cent as an overenrolment figure or target. Although I am not expecting you to knowwhether or not that is a standard rate, I am just curious as to what information DEETYA hasavailable now as to individual institutions and what their levels of overenrolment currentlyare—or could I have it when you have that information?

Mr Gallagher —This varies a lot. Institutions have become much more sophisticated inrecent years in having projections of application rates, continuation rates and acceptances ofoffers as a proportion of offers. They model these by field and they monitor that on a regularbasis to see where they need to shift in order to achieve their target. Most institutions shootto something between three and five per cent. As an outcome, the better managed institutionsin our view can shoot at two per cent and manage within that. I would think shooting at 20per cent would be a very, very risky target.

Senator Vanstone—Senator, I just wanted to check something with Mr Gallagher. He willcorrect me if I have misunderstood, but there is of course another explanation foroverenrolment this year and that is repositioning for the benefit that this government willprovide to universities which the previous government did not; and that is the return of thebasic HECS contribution for overenrolled students. It might suit universities, you mightwonder, to have some of those students in the pipeline so that they could add to them nextyear and have, therefore, significantly increased payment for overenrolment next year.

Senator STOTT DESPOJA—Minister, does it concern you though that universities maybe projecting in this way, in relation to the overenrolment HECS rebate that institutions get?The amount that they are getting in terms of what they are providing does not really tally up,does it, with the materials, the infrastructure, the staffing and other resources that they areexpected to provide?

Senator Vanstone—It depends how you choose to cost, and there are plenty of people whothink that management costing is something that universities could well have a significantamount of assistance in. For example, if you have a lecture theatre in which there are—justfor the sake of argument—20 spare seats, and you have got the lecturer, then the additionalcost of overenrolling and filling up those seats is negligible, because you are only talking aboutextra course materials. Your infrastructure and all the rest of the stuff is there, the lights andeverything are on in any event. So you can engage accountants ad infinitum in arguments



about the best way to do this, but in a sense it is revenue that the universities were nototherwise going to get.

Since we believe universities should have the opportunity to take on more students than theCommonwealth can afford to pay full-up for, if you like we are bending over backwards tosay, ‘Look we cannot afford more at the full rate so that is your target enrolment, but if youwant to go over that we can help you out with a bit more money’, which is the basic HECScontribution. It is a counterbalancing aspect maybe for regional universities and universitiesthat are not interested for one reason or another in taking up the full fee option for extrastudents next year.

Some universities might find the administration and marketing and the other attendantmatters associated with that not to their liking, but they do have an additional source ofrevenue to simply overenrol students, knowing they will get the basic HECS contribution back.These are changes that were made last year, if I say so myself rather cunningly designed, andthey interlink together. You can consider each of them on their own but they do each havean impact on each other and are designed to provide more opportunities for universities andfor students.

Senator CARR—And they are funded at 25 per cent.Senator Vanstone—If I were a vice-chancellor it might occur to me to put some over-

enrolled students into the pipeline.Senator STOTT DESPOJA—Apart from the cunning aspect of it, I thought it was

designed—at least the government rhetoric—as more of a compensation for those institutionsthat do overenrol. Is it designed as an incentive for overenrolments?

Senator Vanstone—I would not say it is compensation. Universities have it in their powerto not overenrol. They might here and there by the odd couple of students, but if managementof universities is all it ought to be on the basis of the MBA programs that they run, they verymuch have enrolments in their control—and if they choose to overenrol we are prepared tohelp them out with some more funds.

Senator CARR—At 25 per cent the average cost. That is right, is it not, Minister?Senator Vanstone—I am not sure that it comes out at 25 per cent of the average cost, but

Mr Gallagher or Mr Burmester might be able to add that—Senator CARR—Would they be able to answer that for me?Senator Vanstone—My point to Senator Stott Despoja is that there are courses where the

lecture theatres are not full and they might be willing to take more people in where themarginal cost—I think that is the way it is described—of taking extra students on is negligible.So the comparison with the full cost of your first student is frankly irrelevant, just polemics.

Senator CARR—So it is 25 per cent?Senator Vanstone—No, I have not said that.Senator STOTT DESPOJA—Mr Gallagher, would you like to elaborate on the minister’s

response regarding HECS figures—and that way satisfy Senator Carr.Senator Vanstone—It varies from course to course, Senator, you just cannot make silly

allegations.Senator CARR—Are the overenrolled students funded at a rate equal to about 25 per cent

of the full average cost?Mr Gallagher —It depends on the field of students.



Senator CARR—Yes, but what is the mean running through that?Mr Gallagher —The average funding rate is about $11,400. But that covers all fields of

study and all levels of study. If you took the lowest teaching unit cost in arts, and you lookedat the discount of the HECS rate—which is about $2,475 as a proportion of around $6,200—then you are looking at the marginal value to the university being something like 40 per centof the full cost that we pay for a place. And 40 per cent marginal cost would seem to us tobe in an affordable ballpark.

Senator STOTT DESPOJA—I am curious about your comments relating to institutions,and obviously their ability not to over-enrol. Mr Gallagher, your comments are quite interestingabout the modelling that they use these days in order to avoid over-enrolment. Does that meanthe days of over-enrolment of the early 1990s—1991—was as a consequence of demand orbad modelling or, as you have described, not as sophisticated practices? That is just an aside;I was curious.

Mr Gallagher —Senator, different interest groups will have different views on this matterbecause it is quite a sensitive one. But I think, too, to some extent, if you look at whathappened between planned enrolment and actual enrolment over the period 1990 to 1997, youfind the big over-enrolment occurred in 1991 and 1992 where there was some sheltering froma depressed labour market and lack of experience of institutional management with thisphenomenon, in a couple of institutions particularly. They have since improved their internaladmissions management procedures so that we do not expect that we will see a repeat of theblow-outs of the order of 22 per cent which occurred in 1991.

Senator STOTT DESPOJA—Thank you for that. I would like to move on to issues aboutthe thresholds exemption regarding HECS.

Senator CARR—If you are moving off that, I have other questions.CHAIR —Senator, that is not the way we have been running estimates for several years.

We have sat here for hours listening to you in and out, going through all your questions.Senator Stott Despoja has the floor.

Senator STOTT DESPOJA—I am happy to take direction as to whether you are happyfor me to keep going.

CHAIR —Yes, I am quite happy for you to keep going. Yes; go ahead. People can comein with other questions for clarification of a particular issue on a one-question basis.

Senator STOTT DESPOJA—I am wondering how the department intends to administerthe HECS, the exemptions, for the threshold. The Medicare-type exemptions, how will theybe administered? Are you able to give us a table or a plan of how that will work?

Ms Morahan—That aspect will be administered through the Australian Taxation Office.I understand that they have been looking at taking the steps but we do not have a final answeron that yet.

Senator STOTT DESPOJA—So no idea of when that is likely to be finalised?Ms Morahan—It needs to be finalised by the end of this year.Senator STOTT DESPOJA—Fairly soon.Mr Burmester —Senator, the Medicare exemption is also applied by the tax office. Where

they apply Medicare exemption under that part of the tax rules, then they will also translatethat result to whether they charge HECS or not. So it is a matter of the tax office combiningthe two bits of information in their own computer system.



Senator STOTT DESPOJA—Do you envisage any difficulties in that process?

Mr Burmester —They have not told us they have a problem.

Senator STOTT DESPOJA—Has there been much consultation between the departmentand the ATO on this particular matter?

Mr Burmester —At the time that it was being developed and announced we had a seriesof meetings, and it is in their ballpark.

Senator STOTT DESPOJA—You have not had any particular concerns over—

Mr Burmester —They have not come back to us in the last few months.

Senator STOTT DESPOJA—I look forward to the follow-up on that. In relation to theCommonwealth industry places scheme, perhaps this is best addressed to the minister or thedepartment. In relation to the CIPS places, I am wondering what places you imagine or whatpeople would take up the undergrad, up-front, full cost, fee-paying places? Do you imaginethe role of CIPs, for example, will be subsumed by the charging of up-front and full cost fees?

Senator Vanstone—I certainly hope that NSW state government pays for the education ofits public servants. That is a key aim. There is an opportunity for people to move into that.The over-enrolment provides an opportunity for universities to put packages together andincrease employer contributions. There is a range of opportunities for universities to puttogether packages that continue their training of people in industry.

You might like to know that we have had discussions with three universities that areprimarily involved in CIPS, and are having, I think, very sensible discussions with them asto how we can assist them to phase out of this. It is not a case of saying, ‘Right. Look, youare on your own; here come the scissors and you can just swallow it’. It is a case of saying,‘This is no longer a sensible program because we have other opportunities and in particularbecause the states are hopping into it.’ But some people are midway in that and they arecaught with those students. We want to help them through that—and we will.

I just might add that it was mentioned—it might have been you, or it might have beenSenator Carr—that the Goulburn campus of Charles Sturt was going to close. Far be it for meto wonder whether that had anything to do with the police graduation that was going on thatday or the next day. My office tells me that it was going to close last year, too. It seems tohave survived, and I think you will find it will continue to survive. It is an unwise thing forpeople to run around and say, ‘This is going to close’ if it is not. Cry wolf one too many timesand people do not believe you the next time. I thought I would add that for information.

Senator STOTT DESPOJA—That is okay. I am telling them, believe me. Minister, Iunderstand that the previous government—and the department can correct me on this—hada specific aim for CIPS that there was to be an emphasis on access and equity. That is whyusing the example that you use, encouraging stronger links between, say, regional institutesand district groups—

Senator Vanstone—That was particularly industry groups. It was particularly to get industryinvolvement, as I am advised.

Senator STOTT DESPOJA—I understand the industry focus, but I was just wonderingif there were any specific targets within that as well, whether various industries would beinvolved in certain types of campuses or institutions such as regional ones and thus an accessand equity target. Is that the case?



Mr Gallagher —Senator, the main motivation for the program was to break down someacademic insularity and get curriculum a bit more responsive to industry needs, and also tolook at professions where degree qualifications were emerging as a requirement—and policingwas one such example in the case of New South Wales and Charles Sturt. The program hasactually been very successful in New South Wales. Now there is—built into the promotionalarrangements for the police—the need to attain different educational qualifications. So theprograms basically built that foundation. If you like, it seed-funded a sea change in policetraining and police education. Given the new deregulatory arrangements, the financialarrangements for CIPS are no longer needed, and that platform can now continue with thepolice paying, as other students do, HECS for their places.

Senator STOTT DESPOJA—So that is the argument presumably for its phased abolition.Minister, is there anything that you would like to add to that?


Senator STOTT DESPOJA—Thank you. I understand the industry focus, but I was curiousthat perhaps a by-product of fostering those links between, say, industry and some regionaluniversity institutions was that it had an access, it had an equity component. That is more aby-product of that as opposed to a specific aim of the actual policy. I was wondering if thedepartment could provide a list of the current Commonwealth industry places scheme—thatis, detailing the amount of industry sponsorship, those institutions, the courses that arecurrently involved and any CIPS places that are due to continue beyond 1999. Is thatsomething you will take on notice?

Mr Gallagher —I think we can provide that, Senator. That is in addition to what is in thefunding report in terms of the number of funded places.

Senator STOTT DESPOJA—Yes, please. I think the specificity of institutions and coursesis what I want, but I have this one written down so I will lodge it and, if it is superfluous, sobe it.

Mr Gallagher —We will do what we can.

Senator STOTT DESPOJA—You don’t have to do it again. I will just take the one, if ithas that information. I think I will lodge some more in that area, but move on to BM4regarding the restructuring and rationalisation package. Minister, the funding allocation forthis program: I note that during the budget process you said that this was designed tostrengthen some institutions that may be having difficulties or whatever. Is this anacknowledgment in any respect that some of the funding policies or programs of thisgovernment have impacted harshly on institutions in particular regions?

Senator Vanstone—Senator, take, for example, the capacity to introduce full fees. Someuniversities will want to do that, others won’t. And in any restructuring exercise those withbig bank accounts find it easier to restructure, to reshape themselves. Those with lesser bankaccounts find it harder. So quite unrelated to whether it was higher education or somethingelse, I would say that it is a sensible thing when you engage in changes that will necessarilyinvolve restructuring—unless you are happy to see the weaker ones go by the board, whichwe would not be—to indicate that you will look on a needs basis at assistance.

It is fairly clearly spelt out that there is going to be no come-on by wealthy universities thatthey need money for restructuring. It is a case of genuine need. And we suspect that that mightbe a particular case with regional universities.



There is one other point I want to make. Senator, what some universities might want to dois change course offerings. They might want to use technology to have new and creative orinnovative offerings to students. All of those things would be more easily accommodated ina financial sense by the universities which are wealthy. People tell me that a couple of ourgovernment funded universities could go private tomorrow and it would not make a crackerof difference, that they have got buckets of money. It is just a sensible acknowledgment bythis government—and I would hope you would agree—that different strengths mean differentcapacities to cope with change.

Senator STOTT DESPOJA—My understanding is that it is specifically aimed at regionalinstitutions. Are there any other institutions that would have access to those funds by virtueof the qualification or criteria that you have just outlined?

Senator Vanstone—The wording has indicated regional institutions because we wanted tosend a clear signal that they are of value and we want to be helpful to them, but not limitedto. A regional institution, for example, might go into a collaborative arrangement with anotheruniversity, or there might be other collaborative arrangements that would be very beneficialto students. So there is not a closed door. That was simply an indication that that was wherewe would expect that some of the first calls would come from.

Senator STOTT DESPOJA—And what about guidelines for the allocation or theadministration of these funds?

Senator Vanstone—I am about to get some suggested guidelines.

Senator STOTT DESPOJA—And can you tell us when they might be publicly availableor available to the committee?

Senator Vanstone—I haven’t got them yet, so give me a fair crack at it. But we want toget on with the job. People clearly want to put in their applications and they need to get anidea what the limitations are.

Senator STOTT DESPOJA—So presumably people will be applying for, or you will beallocating, that money from 1 January?

Senator Vanstone—It is application based and I think the only limitation is passage throughthe Senate. So you could assist us in that respect. So, no bill, no money.

Senator STOTT DESPOJA—Ah, so it is a bill?

Senator Vanstone—It is an amendment to the HEFA Act.

Senator STOTT DESPOJA—Moving on to the improvement and streamlining of the HECSarrangements, I will put some of these on notice, but in relation to voluntary payments thatwere made in the last 1995-96 financial year, can the department provide me with informationabout HECS debtors who made voluntary contributions of $500 during that period?

Mr Burmester —Yes, we will take that on notice. We have to get that data from the taxoffice, it is not our own data.

Senator STOTT DESPOJA—Right, I understand. In relation to those students or thoseHECS debtors who take advantage of the voluntary payment option, would you have figuresavailable as to the number of those students?

Mr Burmester —Yes, we would be able to obtain them.

Senator STOTT DESPOJA—I will break down my specific queries. I am not sure whetheryou will have information on these. Do you know how many of these are school leavers and



how many of these are indigenous students? Don’t you keep that kind of information? Howspecific would that information be? Would it be by postcodes or socioeconomic background?

Mr Burmester —We would have to ask the tax office because it is a tax office file whichprovides the data on payments. But the tax office does not have all the details of student status;they simply have that they are on a certain level of HECS debt. We have data on all theirstudent characteristics, but we do not have a link to the tax file number.

Senator STOTT DESPOJA—So there would not be data matching in that respect orcomparisons going on?

Mr Burmester —No.

Senator STOTT DESPOJA—Do you see that as a problem? Is that something that thedepartment or the minister might consider doing—that is, get an idea of who is paying themoney and why? I cannot remember if it was a HECS report that analysed the impact of HECSa few years ago, but they did so by using postcodes. Was that one way of determining aperceived socioeconomic status? I am just wondering if there is any evaluation likely to takeplace. I think that is important.

Mr Gallagher —The issue of socioeconomic status measurements has been subject to severalreviews. We have not yet settled on any particular approach that is satisfactory. The problemwith postcodes is that it depends on whether it is the postcode of the student as at age 15 oras at commencing university because some will move from the bush to the city whereby thepostcode enrolment represents where they are renting rather than where they come from. Sopostcodes have failed us, as have a lot of other proxies. There is currently another piece ofwork being commissioned in this area to help identify proxies for low socioeconomic status.

Senator STOTT DESPOJA—Would you be able to make available to the committee someof that departmental information or advice? I would just be curious to see what mechanismsare being investigated.

Mr Gallagher —Would you prefer a briefing on the matter, Senator?

Senator STOTT DESPOJA—Very much. I will contact you about that. I do not supposeyou know offhand the number of HECS debtors who took up the voluntary lowered repaymentthreshold offered in the 1995/96 taxation package?

Mr Burmester —I do not have that information today.

Senator STOTT DESPOJA—Could you make that available? I will also lodge thatquestion. I will turn briefly to the issue of up-front fees. Again, I would like to know whenthe guidelines will be finalised. I know it is a question I have asked before.

Mr Gallagher —The guidelines have been issued as interim guidelines because, in effect,under the act the minister is not authorised to issue them until 1 January. However, theinstitutions have been advised that they are broadly what the minister intends, subject tosignificant strong advocacy from institutions. We have now had feedback from a number ofuniversities. There are some issues at the margin that vary against the interests of particularinstitutions. We are currently assessing those with a view to advising the minister. But it isimportant for us to be able to say to those institutions that have decided upon a fee payingpolicy for 1998 that the broad direction of the draft guidelines will remain.

Senator STOTT DESPOJA—So you obviously have had a range of feedback frominstitutions.

Mr Gallagher —It is still coming in.



Senator STOTT DESPOJA—I want to return to the 25 per cent discount, the $500. Whydoes it have to be before the census date? Why can’t it operate all year?

Mr Burmester —The measure to allow partial up-front payments will bring it into line withthose students who pay full up-front payments before the census date. In effect, the censusdate is the trigger at which the tax office and the government side of the HECS debt becomea reality. Up until that point it is managed by the university.

Once it is locked in and sent off to the tax office and in the system, the only way to get adiscount is to make a voluntary payment. If you make a partial payment before the census date,before it becomes a debt, then you are eligible for a 25 per cent discount. After that event,when all the bureaucracies swing into action and you have a record in the tax office, anyvoluntary payment of $500 or more gets a 15 per cent discount. So there is, if you like, a 10per cent difference there.

In reality, the numbers of people who pay shortly after the census date and make voluntarypayments are probably very low. They would have made those payments prior to the censusdate if they had the opportunity to do so. So we are looking at people making voluntarypayments at any time from the time they incur the debt until they finally pay it out, whichmay be 10 or 15 years down the track. You would not want to reward people who pay 10years after the event the same discount as those who paid up-front.

Senator STOTT DESPOJA—You can’t even give me a ballpark figure right now of thenumber of people who made those voluntary payments of under $500? I know it is an unfaircall.

Mr Burmester —Sorry. We do not have those figures on us.Senator STOTT DESPOJA—It was not fair, but I was curious about the census.Senator MARGETTS—Which university—Senator Vanstone—Senator Margetts, before we continue, Mr Potterton has arrived. There

was an earlier question from Senator Carr so, as a courtesy to Mr Potterton to save himhanging around and waiting, could we get him to give a brief explanation to Senator Carr whowas asking: if things are unreliable when you go down to smaller numbers, why isn’t itunreliable for the total?

Senator CARR—Can you explain to me why these figures might not be accurate, since theyare unedited?

Mr Potterton —I am not familiar with the figures in question.Senator CARR—He sounds like quite an expert, Minister.,Mr Potterton —The basic point is that if we are talking about what is effectively a small

sample then when you get down to a small sample inevitably the—Senator MARGETTS—Statistical significance.Senator CARR—Thank you very much for your advice. But, as I understand it, the minister

is claiming that there are 26,000 extra student places. Departmental officials advised me inthe estimates committee—and, Minister, I am sure you would be very interested in this—thatthere were some 37 files containing 600,000 records. We were not talking about a survey; wewere talking about 600,000 records.

Mr Burmester —That reference that you have just read out referred to the full files thatcome to the department after 31 May. The preliminary data was from collections that theuniversities themselves prepared and sent us summary tables of. There is no way that we can



edit the data because it is no longer individual student data; it is already aggregated when weget it.

Senator CARR—The figure of 26,000—

Senator Vanstone—Perhaps we could go to Mr Potterton. I think he has something elseto add.

Senator CARR—I am sorry Mr Potterton, I just hope we are not wasting each other’s time.

Mr Potterton —I apologise for my lack of familiarity with the specific issue, but I thinkthe point is that where you have the possibility of errors and have only a small number youeffectively have what is in statistical terms a sample. The smaller that number, the larger thepotential error—

Senator CARR—So, in fact, all we are talking about here is a survey?

Mr Burmester —It is a compilation from universities of their own data sent to us in a veryaggregated form. Therefore, when you start disaggregating it into smaller and smaller cells,if there were—

Senator CARR—What is the basis of the aggregation? How many overenrolments haveyou considered before you reached the conclusion that there were in fact 26,000 extra studentsin higher education?

Mr Burmester —That was the sum of all the returns from all the universities.

Senator CARR—So can you indicate to me what was the basis of that calculation? Wasit on a survey? If so, how large was the sample?

Mr Burmester —It was a collection that the universities told us, on the basis of unediteddata, what their enrolments were.

Senator CARR—So you considered all universities?

Mr Burmester —Yes.

Senator CARR—All 37 universities have provided you with the advice?

Mr Burmester —Yes.

Senator CARR—That is my question. If you know what the story is for the 37 universities,why can’t you tell me what the overenrolment is at each university?

Mr Burmester —You were asking about enrolments in particular disciplines.

Senator CARR—I was asking that, too. Let us be clear. Maybe we are talking at cross-purposes, Mr Burmester. But I understood the report to say that we could get enrolments acrossthe country and a region and a university. I am also looking for information on a subject level.

Mr Burmester —Yes. At the time you asked those questions, we had compiled only anumber of the aggregates that indicated total enrolments on a national level. The data on whichthose aggregates were based came from universities, unedited, to us. Our caution was that,in breaking it down, there could be errors in the data which would show up in the smaller cellsand lead to misinterpretation.

Senator CARR—Thank you very much, Mr Burmester. What is the margin for error?

Mr Burmester —I do not know because the universities gave us unedited data as a guideand an assistance to the department to get some early figures on where they thought theirenrolments were going to end up.



Senator CARR—But the minister has gone all over the country. She has made quite a majorissue of this. You are now telling me—

Senator Vanstone—I have gone all over the country, did you say?Senator CARR—Yes, that is what you said. Is there not a media release published on 11

May 1997, which went to all media outlets in this country, claiming that there was an extra26,000 places, which was vindication of your government’s policy? Now we are being toldthat there is the possibility of a significant margin of error.

Mr Burmester —I did not say significant.Mr Potterton —Even if there was a difference of plus or minus a small number at that level

of 26,000, even if that was the case, it would not make any effective difference to that bottomline estimate. The difficulties only come in when you go down to the much smaller levels.

Senator CARR—Just like the ABS surveys.Mr Burmester —I would like to correct the record. I did not say that there was a significant

level of error. I said that I did not know what the level of error was.Senator Vanstone—Could I make an additional point, since Senator Stott Despoja has

returned, relating to questions that you were asking and that Senator Carr is asking. If senatorswant to say, ‘The fall in applications is a function of increased HECS,’ what would youattribute to the fall in applications but rising enrolments in 1995?

Senator STOTT DESPOJA—Sorry, what was that?Senator Vanstone—To what would you attribute the fall in applications and yet rise in

enrolments that happened in 1995? I just make that point. This is not anything new orparticularly unusual.

Senator CARR—No, it is quite complex, but you can hardly claim it is necessarilyvindication of your policies.

Senator Vanstone—I think we can, Senator. I obviously would not have put out the pressrelease if I did not.

Senator CARR—Unless you thought that this was—CHAIR —Do you have a question, Senator Carr?Senator CARR—Minister, were you aware that that the data upon which you were relying

was an unedited collection?Senator Vanstone—Yes, it is the preliminary data.Senator CARR—You were aware that this was preliminary data and that it was unedited?Senator Vanstone—Yes, I think that is what preliminary data means. It is a synonym for

each other in that context.Senator CARR—Let us be clear. And you understood that there was no final confirmed

information from universities?Senator Vanstone—Mr Gallagher might be able to help you hear.Senator CARR—No, Mr Gallagher, this is not a question for you. It is a question for the

minister.CHAIR —Order, Senator! The questions go through the minister. If the minister chooses

to direct, she can.Senator Vanstone—I think there is a bit of a misunderstanding.



Senator CARR—You said you knew the basis on which you put out your press release.It is not a question for Mr Gallagher; it is a question for you. Were you aware—

CHAIR —Order, Senator Carr! The minister will take the question or direct it to an officer.It is not for you to do that.

Senator Vanstone—I think Mr Gallagher might be able to assist you, because I think youdo misunderstand.

Mr Gallagher —Senator, the term ‘unedited’ and ‘preliminary’ were used deliberately.Unedited primarily refers to the coding of these numbers into particular fields of study. Ourediting checks are coding checks to ensure that an enrolment is in the right field of study,particularly. What we can not—

Senator CARR—You have the write columns, you mean?Mr Gallagher —The right columns, yes. The absolute numbers are likely to be pretty robust,

we think.Senator Vanstone—In other words, the information is a very good indication.Mr Gallagher —But if you were to say, ‘Has institution X increased its enrolment in the

field of science by Y amount?’ we can not be so confident because we are not sure whetherthe fields of study coding in this unedited data are that correct and reliable. But when youaggregate it up to the total enrolment of the system then it is broadly reliable data.

Senator CARR—I just want to be clear, Minister, and ask a direct question to you. Wereyou aware that this was unedited and not final confirmed information from the universitieswhen you published that press release in your name?

Senator Vanstone—Senator, I was aware of the limitations on the data. I do not believethat the data has been misused in any way whatsoever.

Senator CARR—That is fine, Minister. I asked a question before, Mr Gallagher,concerning—

Senator Vanstone—Just in case you misunderstand that or seek to misrepresent it, becauseyou have a track record on this respect.

Senator CARR—What? Misrepresenting you?Senator Vanstone—Yes.Senator CARR—Where would I do that, Minister?Senator Vanstone—In the chamber usually so you can not get pinged for it.Senator CARR—You have no trouble in the chamber debating these issues.Senator Vanstone—You are a great user of privilege in your own case. When I say that

I was aware of the limitations, I should also add that the limitations are not significant.Senator CARR—Good. Mr Gallagher, I asked a question before concerning the funding

of over-enrolled students at the rate equal to 25 per cent of the full average cost. You gaveme one example.

CHAIR —Senator Carr, you are now going on to a new matter. We did call the officer into explain the statistics. He has explained that and there was a question arising from that.

Senator Vanstone—If we have dealt with that matter we can let Mr Potterton go.

Senator CARR—I am quite happy to, whatever you want to do. I have plenty of time, MrChairman.



CHAIR —Okay, if we have finished with that matter we better go to Senator Margetts.Senator CARR—I have plenty of time, Mr Chairman. It is up to you.Senator Vanstone—It is a question of whether you have finished on the statistics.Senator CARR—No, I have not.CHAIR —You have some more questions for Mr Potterton?Senator CARR—No, I do not have any questions for Mr Potterton.CHAIR —Okay, well that is fine.Senator CARR—Mr Potterton has been very helpful. He does not know anything about

this particular matter.CHAIR —That is the only reason we made the diversion.Senator CARR—Thank you, Mr Potterton.CHAIR —We are back to Senator Margetts.Senator Vanstone—Thank you, Senator Margetts.Senator MARGETTS—Which universities, to date, have voted to introduce up-front fees

for undergraduates?Senator Vanstone—Four, I understand. Mr Gallagher can help you with that. I think there

are more to come.Mr Gallagher —Sydney, University of NSW, Melbourne and Deakin.Senator MARGETTS—Which universities, to date, have voted to reject the introduction

of up-front fees for undergraduates?Senator Vanstone—Look, I think I saw a report of UWA rejecting it. I do not know if that

was a complete report or, for that matter, a final decision. I also understand that Universityof Canberra has.

Senator COONEY—Has the Victorian university decided to—Senator Vanstone—Yes. They have chosen a different path. I welcome that because it

highlights the diversity that will come when you give universities freedom.Senator MARGETTS—Would you be able to take that second question on notice in

relation to checking out which universities have voted so far to reject the introduction of up-front fees?

Senator Vanstone—Well, we can ring around 37 universities to save you doing it, Senator,if you like.

Senator MARGETTS—So, they do not have any contact in any way or pass thatinformation on to anybody?

Senator Vanstone—I certainly have not asked them to. We will find that out at the profilesmeetings, but that will be some time off. If you want the answer tomorrow, we will have toallocate an officer to sit and ring up. But if you are happy to wait until the profiles processis concluded, we can give you the result then. I do not ask them to let me know, Senator,because this is a matter where we have decided to give the universities that choice. It is reallyup to them to run themselves and make those decisions in their Senates or councils or whateverthey want to call them.

Senator MARGETTS—Any advice on RMIT?



Senator Vanstone—No, I am sorry, at this stage I have no idea.Senator COONEY—I do not think they have made up their mind yet.Senator Vanstone—If I may add, though, it is an excellent university.Senator COONEY—Minister I think that is a very—Senator Vanstone—It is a very outward looking university that understands the needs of

its students.Senator CARR—A particularly astute university in accepting the enrolment of particular

students.CHAIR —Order! Senator Carr. Senator Margetts has the floor.Senator MARGETTS—Why do you think that the universities from amongst the group

of 8 have been first to introduce up-front fees?Senator Vanstone—I understand three of them have. Perhaps they have been thinking about

it for longer and are keener. I have had the proposition put to me—I do not seek to necessarilyargue the case—but some people say that the unified national system never was, that alluniversities were never the same and they were never going to be. Some argue the case thatthe so-called ‘Big Eight’ will have a greater capacity to attract fee paying students. They arguethat because some people think that people would rather go to university that they see ashaving more prestige. Other people argue it on the basis that prestige is irrelevant and thatpeople will pay to go to a university where they believe the course offerings and quality arebetter. I have heard all sorts of arguments about this; different propositions from differentpeople.

Senator MARGETTS—The ‘Big Eight’ are favoured with perhaps students, resources andresearch funding compared to other CAE institutions. Therefore, they have the market powerto attract more fees. Doesn’t that increase their advantage?

Senator Vanstone—Senator, I have just been given some information that is actually quiteinteresting: people talk about the ‘Big Eight’ as if they are at the top. The information indicatesthat there are about 19 universities that are in the top ten for any one particular field ofdiscipline. If you divide it up into 12 fields, there are 19 universities that have got a placesomewhere in the top 10 for one or more of those fields. That is a fair description of it. I amjust wondering if I have myself clear to you?

Senator MARGETTS—I would suggest that it would be fairly distressing if those kindsof figures were not the case.

Senator Vanstone—Yes. You may well be right. I was simply trying to highlight that whensomeone is wanting to undertake study and they know the field they want, the ‘Big Eight’ isnot necessarily the sort of market, if you like, that they will look to. They will look to whoare the top 10 in that field. Across the 12 fields, there are about 19 that feature in the top 10,which out of 37 is pretty good. I think that that does highlight that, for students who areprepared to pay full fees, they will be looking to the faculty of their interest. If anything, thatis the incentive, if you like, for people to pay full fees to get not only the university of theirchoice but also, more likely, the course of their choice.

Senator MARGETTS—In fact, one of those 19 could in fact be No. 10 on one of thosefields of 12.

Senator Vanstone—Yes. Or it could be No. 1 in one, two or three of those fields. But itis there.



Senator MARGETTS—Is that data published or available to the committee?

Senator Vanstone—Sure.

Senator MARGETTS—Thank you. The National Union of Students has said:Divided voting on up-front fees has emphasised sharp divisions between those universities committedto equity within the community and those which are motivated by profit.

Would you care to comment?

Senator Vanstone—Yes, I certainly would. I do not agree with a number of things theNational Union of Students have said, not the least of which was the outrageous remark lastyear by a president, as reported, that you would need $30,000 before you could go touniversity. As for the differences highlighting different commitments to equity—is thatbasically the thrust of it?

Senator MARGETTS—I would think that if you were doing law or medicine you wouldprobably need more than that, wouldn’t you?

Senator Vanstone—If you wanted to pay an up-front fee, yes, but the remark was notqualified to full fee places. It was if you wanted to go to university. That is what annoyed me.It could have led some people, who do not follow these things very closely and are marginallyinterested in university, concluding that, therefore, it was not for them and they would not putan application in. That is why it annoyed me. Could you just give me that quote again? Whatdid they say?

Senator MARGETTS—The National Union of Students said:Divided voting on up-front fees has emphasised sharp divisions between those universities committedto equity within the community and those which are motivated by profit.

Senator Vanstone—Yes, that is right. Of course, that contains an outrageous assumption:that those universities who choose to, in addition to their government funded places, sellplaces, are not committed to equity but are only committed to profit. That is the assumptionthat is contained in that. I put it to you that that is not only simply incorrect but also right atthe other end of the spectrum. Where a university decides to sell places—in addition to theirgovernment funded places—there will be people who have already got a government fundedplace and who give that up in order to go into a fully funded place. They will do that in orderto get the university of their choice or the course of their choice.

Students who desperately want to do law, who do not get into law in the capital city wherethey live, for example, have sometimes decided—it certainly happened at Adelaide, and it maywell happen in Melbourne and other places—to enrol in law at Darwin, if they can get in.Their family would foot the bill for them to be boarding or whatever—it would be moreexpensive than staying at home—to get into law at Darwin.

Those families will now have a choice as to whether they pay for a full fee place at theuniversity, where the kid lives, or whether they send the kid away on a HECS place to Darwinand pay the boarding costs. That is one sort of student who I believe will move out of agovernment funded place and buy a place.

Senator MARGETTS—With all due respect, through you, Mr Chair, you are discussingthe motivations of students, not necessarily the motivations of big universities.

Senator Vanstone—I am coming to that. In order to understand my position, you need tounderstand what I believe are the motivations of people who will pay, where they will comefrom, and why they will come out of government funded places. When I say to someone that



students will come out of government funded places, some people shake their head and saythat they do not understand. I am just giving you two examples. That is one sort.

The other is the son of a friend of mine who got into arts, I think, at Melbourne, not thatfar off the entry point for commerce. He wants to do commerce. He believes the employmentopportunities will be greater. His family is prepared, they say, to lend him the money—Isuspect they will, in the end, not collect it—or pay for him to enrol in commerce. He willmove out of a government funded arts place. Both of those places become vacant. Thegovernment funded places have to be filled before universities can sell places.

In a sense, while many people would chant ‘make the rich pay,’ we have devised a systemthat will allow them and entice them to pay. I think the universities that accept that and workwith it are very equity minded, because what they are saying is, ‘In the pool of students we’vegot here, we know we’ve got some students whose families will pay, and we’re going to letthem. Because that will let other kids, who otherwise wouldn’t have got in, get in.’

Some would be prepared to stand at the university gates and say to kids who want to comein, those who did not make it, ‘Listen, I know there are kids in here who could afford to pay,but we’re actually happy for them to ride on the taxpayer for a whole variety of other reasons.I’m sorry that means you’re kept out.’ I would rather be on the other side of the passagewayto the gate, saying, ‘Listen, there are some kids in there who can pay, and I’m going to letthem pay. I’m not going to make them, but let them, pay. I am going to entice them out ofgovernment funded places so other kids like you will be able to get in.’ I regard my positionas being a more equitable one.

Senator MARGETTS—Is there a correlation between those universities who so far havevoted to introduce up-front fees and the resources per student available to those universities,compared to those universities who so far—

Senator Vanstone—I do not know. If I am right in having seen that the UWA rejected fullfee paying—I think they were particularly interested in some of the dentistry and dental scienceareas—then that is one of the wealthiest universities in Australia. Universities will decide forreasons best known to them.

Senator MARGETTS—There is hope for UWA yet perhaps.

Senator Vanstone—I think it is a prestigious institution. I would be reluctant to say thatthe only universities for whom there is hope are the ones who do not allow additional studentsin, because they are the ones that are determined to give the so-called pejorative rich aneducation at taxpayers’ expense and therefore to keep out other students who might otherwisehave got in.

Senator MARGETTS—Does the government agree that reducing funding for universitieshas created the conditions where universities are likely to bring in fees which the governmentcan then blame the institutions for?

Senator Vanstone—No, university funding has, if I could describe it for you, beeneffectively capped at about 1995-96 levels. It has not been drastically cut. The cuts tooperating grants were $680 million over four years—and that is against forward estimates. Thisis the old unsigned cheque on the empty bank account. Against four years that is $20 billionin expenditure.

That should show—when you look at other things like research funding, which went up—thenet position of universities is in fact improving. I am just getting the rest of the information.I will speak with Mr Gallagher and put it in readily usable form for you. The vast bulk of the



savings that were made in higher education came from new students paying more and payingback more quickly.

There are, however, significant changes happening in a number of universities and I quiteunderstand them saying, ‘Oh, it is because of that government.’ If I was a vice-chancellor Imight be tempted to say that too as I was shutting faculties that I had wanted to shut for along time. But the bottom line is that, since their funding has, I think it is perfectly fair to say,been capped at 1995-96 levels, those changes are being made to achieve productivity orefficiency gains to pay salary increases, because this government came to the same conclusionas the last government, that is, the straight-out supplementation for a salary increase was noton, that everyone else in the community had to find efficiencies and it was about time theuniversities were asked for them as well.

So the changes that are being made are, if you like, part of this government’s decision, thatis, to endorse the previous government’s decision not to provide supplementation for salaryincreases. If there was a justified claim for a salary increase, we could argue about what levelit ought to be, but I do not know anybody who thinks it was not time for one and so they hadto find the money. They had to start being more efficient. I am yet to find someone who isprepared to say—put their life on it, put their reputation on it—that universities have beenoperating at 100 per cent efficiency, because they simply have not been.

Now they are finding those efficiencies, that means making changes—in some cases, changesthat are not welcome—and I would expect vice-chancellors to say, ‘It is all because of thatnasty government.’

Senator MARGETTS—So it is the universities’ fault?

Senator Vanstone—People keep trying to paraphrase and put words into people’s mouthsthat are not there. I am not laying fault here. I do not think it is a question of innocence andfault. It is a question of simply what the facts are. Their funding has been capped at 1995-96levels.

It is the students who provided the majority of the savings. The savings against forwardestimates were savings against rising estimates against unsigned cheques on empty bankaccounts. As for their funding compared to last year—in fact, they have more this year. Youmight ask why they are making these changes. The answer that I give you is because they wantand should find efficiencies to meet the salary claim.

Senator MARGETTS—Will the government be prepared to review its policies on fees inlight of the strong show of opinion in protest action by students around the country and theviews of social justice oriented universities who have refused to bring in fees?

Senator Vanstone—No, Senator, because I do not accept your view that there is socialjustice in allowing the wealthier people in the community to have an education vastly attaxpayers’ expense and thereby to shut out other kids who would not get in. I think that isan extraordinary distortion of the situation.

I have those figures that I was going to mention to you earlier. The base operating grantfor universities last year was $4,799 million. I will not bother with the thousands. For nextyear it is $4,871 million. For the following year it goes to $4,779 million, the following year$4,758 million and the following year $4,734 million. So you can see the marginality of thechanges.

Senator MARGETTS—But in real terms those are fairly substantial cuts.



Senator Vanstone—This is in constant prices. Can I add, though—as I was mentioningearlier to Senator Stott Despoja—that these things come as a package. When you look at 1998,next year, if universities overenrol next year at the same level that they have this year, therewill be another $64 million each year to the universities. We estimate that overseas studentrevenue is going to substantially increase from $530 million last year to $620 million this year.That is good news that overseas student revenue is up despite the publicity that has been givento overseas students partly as a function of Ms Hanson’s comments and partly as a function,I believe, of people unwisely saying that the quality of higher education in Australia wouldbe damaged by what we had done and actively seeking from one campus to advertise thatoverseas, which is just disgraceful. But despite that, there is nonetheless in overseas studentrevenue—

Senator MARGETTS—On the contrary, a lot of the reports that were concerned about thereliance on income from overseas students were saying that the universities would actuallybe specifically geared to the needs of overseas students and may do that at the expense of localstudents so you would end up with the tail wagging the dog. That might be a very attractiveprospect for an overseas student.

Senator Vanstone—I just mentioned the publicity that was drawn to my attention, whichwas generated by people from one university—maybe others, but one I know of. From $530million to $620 million to $682 million to $750 million to $825 million, so there is a bigincrease in money there. Postgraduate fee paid revenue is up from $54.5 million last year to$66 million this year and we believe it will continue to increase to $76 million and $87million.

I notice some remarks in theFinancial Reviewthis morning from Geoff Wilson, who mustbe Acting Chair while Ms Gale must be away somewhere, saying that the AVCC does notagree that postgraduate revenue will increase to that extent, but we believe it is a perfectlyreasonable assumption. There was a 22 per cent increase between 1996 and 1997 and if everthere was flack on the airwaves designed to discourage people, it was last year. Despite that,there was a 22 per cent increase, and we have calculated these figures for universities on thebasis of a 15 per cent increase—very conservative.

Adding those things together—the base operating grant, the payment for overenrolment, theoverseas student revenue, the postgraduate fee paying revenue—the total teaching resourceswere $5,384 million last year, $5,570 million this year, $5,601 million the next year, $5,660million the year after and $5,725 million the year after that. That should put a complete full-stop on the folly and stupidity of people running around saying that universities are hard upand that this government has damaged them in any particular way.

Senator MARGETTS—I think it probably lacks some level of qualitative analysis, but Iwill go onto my next question. Will the government be penalising or pressuring in any waythose universities who do reject fees as an option for students?

Senator Vanstone—Certainly not. That is why the policy is called ‘Freedom, diversity andchoice’. I have made the point before that it is entirely up to universities to decide. Iunderstand your question. You looked a bit surprised when I did not have a list in front ofme. We are not monitoring this; it is a choice that parliament has agreed to give universities.Universities can take it up or leave it as they choose.

Senator COONEY—Can I just ask this? Can universities decide to charge fees one yearand, if the experiment, as they see it, does not work, they can withdraw from that system? Inother words, is their flexibility in the university?



Senator Vanstone—I think they would have an implied contract with the students they havealready admitted.

Senator COONEY—I understand that. But, of course, once they have made the contractthat is it. But, say, I said, ‘All right, we are going to allow students’—

Senator Vanstone—Any more new students?Senator COONEY—Yes.Senator Vanstone—Yes, sure. It is entirely up to the university.Senator MARGETTS—In effect it is a bit like a voucher system already, isn’t it? It is like

you give a voucher to the university and, if they can raise more money, they can top up theirvoucher.

Senator Vanstone—No, it is nothing like that.Senator MARGETTS—It is like a very big voucher.Senator Vanstone—No, nothing like that whatsoever. There is no similarity whatsoever.

We negotiate with universities their total load, and we pay them for their target load. Theycan over-enrol. In future we are going to give them a bit of money back for over-enrollingstudents; we think that is an incentive for universities that will not be at the top end of feeselling. And then we say to universities, ‘Look, over and above all this, once you have filledyour government-funded quota, you can sell additional places.’

Senator MARGETTS—But that is exactly what I am saying. You said you did not needto be advised whether or not they were charging fees or had voted to charge fees, so in factthey could, if they are able to raise money—and perhaps some are better able to raise moneythan others through raffling off extra places—get an advantage because they are able to dothat.

Senator Vanstone—Yes. But what I am saying is it is completely unrelated to a vouchersystem.

Senator MARGETTS—No. It was a metaphor; sorry—like a great big voucher. You givethe voucher to the university based on set criteria which has got nothing to do with whetherthey can gain other revenue or not.

Senator Vanstone—We do not give a voucher; we do not give anything to the universitieswhere they charge fees.

Senator MARGETTS—No, but you do give them funding for their running costs and othercalculated costs.

Senator Vanstone—Yes. Look, I think you will just have to accept that I do not accept youranalogy. I think it is so far out of the ballpark that we will spend an hour getting to the bottomof it.

Senator MARGETTS—Sure. How does the government expect to reach pure marketconditions if some universities charge fees and some do not?

Senator Vanstone—I do not think there is a pure market, is there? In fact, I have oftenturned my mind to whether there is a pure market anywhere in the world.

Senator MARGETTS—Alright. How is there in fact rational student choice when someuniversities are charging fees and some are not?

Senator Vanstone—Students get the choice because they have the existing choice that isavailable to them now out of the universities—such as they can get accepted—and then some



universities will offer additional choices so the choices to students increase. But not alluniversities will offer that.

Senator MARGETTS—The NTEU has outlined that the government might be able tointroduce measures that ensure that institutions are prevented from enrolling fee-payingundergraduate students beyond the 25 per cent quota in existing legislation.

Senator Vanstone—You say that they think we might be able to or might not be able to?

Senator MARGETTS—That you might be able to.

Senator Vanstone—Might be able to? We have already passed legislation to do that.

Senator MARGETTS—Yes. What is the penalty for universities currently if they—

Senator Vanstone—For doing so?

Senator MARGETTS—Yes.

Senator Vanstone—Two things, Senator. The penalty applies obviously when a universitydoes not meet its target and it substitutes, in a sense, fee-paying places—that is, it sells places,but it does not meet its government target. They then get the $9,000 penalty plus the take-backof the HECS, so it works out at $11,475.

And to save you asking the next question, which is, ‘Oh well, would it not be worth it fora university to do that if they were getting, say, $15,000 from that student’—which is areasonable question—I am working on the basis that the universities understand the powersthe education minister has. In an answer to Senator Stott Despoja—and she was kind enoughto say she thought it was the most sincere answer I had given, or something like that; sheunderstood that I really meant it—I think I recall commenting, ‘Yes, and universities oughtto understand after last year that, if I say something, I do mean it.’ I give you a categoricalundertaking that, if a university seeks to subvert the government’s intention in this respect,they will be dealt with, and there will not be another one following that path.

I just remind you, Senator, if we did not believe the changes we have made for highereducation were for the better, why would we have bothered to go to the effort, if you like,of putting legislation before the Senate to increase HECS, to have a differentiated HECS, todo all the things that we have done? If we just wanted to make boring old savings, we wouldhave cut operating grants, cut student load and we would not have had to come and askanybody anything.

I am just highlighting the point for you. That should underline for you the commitment thatwe have to these policies and the direction we want to go. One slightly greedy vice-chancellorwould not want to stand in the way of that.

Senator MARGETTS—It should do that, but earlier this evening you indicated that yourability to be accurate, campus-by-campus, with information was very unreliable. So I wonderwho the numbers police will be and how that will be operated, considering you have actuallygiven quite a lengthy explanation as to how difficult it is to get accurate figures of universitiesand enrolments and you did not want to know which universities were going to be chargingfees and which were not?

Senator Vanstone—Senator, the answer is very simple. The preliminary data might beunreliable at the course level—this is the point Senator Carr did not understand—but not atthe total level. That is one point. You are asking about the course level, and that is appropriatebecause the limitations on fee-paying places are that you have to fill the government-funded



load in each course. So it is obvious that you would ask that. The final data is not unreliableat all, and that is the basis on which payments and penalties will be laid.

Senator MARGETTS—Can the committee have access to whichever clear instructions aregiven to the university about what penalty they will incur if they exceed the 25 per cent quota?

Senator Vanstone—I think that is in the guidelines, and they have been distributed. Sadly,some people cannot read them. Sadly, either Senator Stott Despoja was misinformed by herstaff—and that happens every now and then—or she did not read them herself. There is animpression given in one of your press releases, Senator, that the 25 per cent limit only appliesto the year 2000 when you and I know that that is not the case.

Senator STOTT DESPOJA—I know we discussed this at estimates last time and I askedif you could—

Senator Vanstone—I do not think the press release that I was looking at the other day wasafter estimates, and you deliberately—

Senator MARGETTS—Sorry, I thought I was talking to you, Minister.

Senator Vanstone—Sorry, I was just making the point. Some people have misunderstoodthose. One of the first press releases of Mr Latham—about whom Kim Beazley says, ‘Watchout: Latham is going to fix her up’—indicates he either cannot read or cannot be botheredreading. The 25 per cent limit is there and it is not changing unless parliament wants to changeit.

Senator MARGETTS—So in what form is that fine stated? In what legal form is that finestated?

Senator Vanstone—I will just quickly read it to you.

Senator MARGETTS—And what is the document you are reading from?

Senator Vanstone—Guidelines for domestic fee-paying undergraduate and postgraduatestudents in award courses.

Senator MARGETTS—Does that have the same stature as a regulation?

Senator Vanstone—Yes. Let me just read it to you:

Financial penalties will apply where a higher education institution enrols domestic fee-payingundergraduate students in award courses but fails to meet its Commonwealth-funded undergraduate targetstudent load. For each fee-paying EFTSU which could have been counted towards target, a fundingpenalty will be applied at the rate of the average undergraduate teaching grant—$9000 in 1998, indexedin subsequent years . . .

Separate funding adjustments will be applied to institutions’ operating grants for under- or over-enrolmentsagainst Commonwealth-funded undergraduate student load target.

In addition—

and this is the key point—

to these specific funding adjustments, it continues to be the case that if the Minister is satisfied that ahigher education institution has failed to fulfil a condition of its financial assistance from theCommonwealth, then under s.108 of the Act there is discretion for the Minister to reduce the level ofCommonwealth financial assistance to the higher education institution up to the amount of that assistancein a year.

Senator MARGETTS—It is discretionary; you can decide whether they get funding.



Senator Vanstone—It comes back to the point I was making. We could have cut operatinggrant just by signing something and saying, ‘You are getting less’, and cut student load andthat would have been that.

Senator MARGETTS—You read it quite quickly. If I understand it, that only applies ifthey have not fulfilled their quota.

Senator Vanstone—Yes.Senator MARGETTS—But it would appear to let them off the hook if they have fulfilled

their quota.Senator Vanstone—It is a condition of the grant that they operate in accordance with the

act. To do what you are suggesting would not be in accordance with the act, and that powerwill come into play.

Senator MARGETTS—But if that is the only document that indicates a potential fine, thenI think it might be a reasonable thing that people might be expecting to have that clarified bymeans of legislation, would they not?

Senator Vanstone—This here is just a reminder, if you like—put it that way—of section108 of the act. That power is there in the act.

Senator MARGETTS—So you would not be in favour at all of any further clarifyinglegislation?

Senator Vanstone—I do not think it is required. Look, I do not look forward to a universitymisbehaving, but I have got plenty of strength left to have a go at them if they do. You cancount on it.

Senator MARGETTS—I should not have to remind you, Minister, but you did give theSenate and the parliament absolute guarantees about that 25 per cent.

Senator Vanstone—Senator, I have tried to indicate to you that I have got absolute power.Let me read it to you:. . . up to theamount of that assistance in a year.

So that is the whole operating grant. Now I am not suggesting that, if a university took25.0001 per cent—like one extra student—we would take their complete operating grant. Thatwould be ridiculous. But I am indicating that there is what you might describe as a small fineset there. But there is also the indication that you have got to comply with the act, and youhave got to comply with the profiles process and the agreements that are reached, and anyuniversity that does not will rue the day.

Senator MARGETTS—When will we have access to those figures?Senator Vanstone—Which figures?Senator MARGETTS—The figures that you say you will be able to operate on to make

sure that the universities do not exceed the—Senator Vanstone—The guidelines are available now.Senator MARGETTS—No, not the guidelines. You are saying you will be able to be

absolutely certain, and in fact you yourself mentioned that you would have—

Senator Vanstone—The final figures?

Senator MARGETTS—Yes.Senator Vanstone—I suppose about September next year.



Senator MARGETTS—Next year.Senator Vanstone—Perhaps Mr Burmester can answer. But your question relates to full

fee-paying students, so that is next year.Senator MARGETTS—So they could be overseas fee-paying students also, if I caught that

correctly. It is local fee-paying students that the 25 per cent—Senator Vanstone—Yes, that is right.Senator MARGETTS—And is it not in fact a transitional measure, this 25 per cent limit?Senator Vanstone—No. I can explain that to you. If we did not have a transitional element

in the guidelines, what could happen is you could have a university that said, ‘Right; we willfill our government funded quota for law students, and then we are going to sell an additional25 per cent of the places.’ But a greedy university might have said, ‘Gee isn’t it a shame thatwe can’t do that in every year, that it only started this year.’ And someone might have said,‘Well, let’s total up the law course going up to four years. Let’s take the total of thosestudents, and this year, just in the first year, we can sell 25 per cent of our total law students—that is, including the latter years.’

What they would do is obviously sell 25 per cent of their first year’s and then they wouldtry and cream off final-year students from perhaps less strong, less prestigious—call it whatyou like—universities so that they could go and do their final year at a more prestigiousuniversity. That would be a short-term windfall for a couple of universities and havoc for thestudents they drew it from. So what we have said is, ‘This is a transitional phasing-in. Youcan only sell 25 per cent of the students after this year. So any students you have already got,do not count.’ So it will phase in. It is a protection mechanism, not a cut-out.

Mr Ruby —Just before we leave this matter, Senator, the very first part of your questionwas whether the guidelines were a regulation. I am not sure I caught the exact words.

Senator MARGETTS—Do they have the power of regulation?Mr Ruby —I think the minister has explained the authority and the power that they have

and how that derives from the act. But I wanted to make it clear that they were not aregulation and they will not be disallowable.

Senator Vanstone—That is in fact why the 25 per cent was put, I think at Senator Colston’srequest, into legislation, because I said, ‘I will put it in the guidelines,’ and he said, ‘You couldchange them because these are not a disallowable instrument.’ So we said, ‘Okay, we will putit in the legislation.’

Senator MARGETTS—Thank you. They are my questions for that section.Senator COONEY—You have been giving four projects between here and the year 2000.

Are you expecting perfection in the new millennium?Senator Vanstone—Senator, if governments were able to predict and provide perfection

by the year 2000, we would be in Nirvana and we would have been at perfection in the 1940s,the 1950s and the 1960s. This is always something to strive for.

Senator COONEY—But you do believe in the coming millennium?Senator Vanstone—I believe in the coming millennium in the sense that the dates are going

to change and I think lots of things are going to change, but I suspect long after I am deadand gone people will be sitting here in 50 years time and they will be talking about how toimprove the higher education system. They will look back and say, ‘Gee, the Vanstone erawas a bloody good thing.’



Senator COONEY—I do not know whether you will be able to answer this. Is thedepartment able to give me a picture of what amounts of money the universities are raisingthemselves from the private sector, or is that something that does not concern you?

Senator Vanstone—It is not always easy to get all the information one might want fromuniversities. For example, in the postgraduate fee paying revenue there might be some industrymoney. There might be other aspects of industry money. I was surprised. Someone wrote tome a couple of months ago asking me what the remuneration packages were for vice-chancellors. You would think, since we provide $5 billion a year, we would know. But wedo not know. I understand there is some difficulty in getting this information, which, I mustsay, surprises me because I thought that, with so much public money going in, this would bea matter of public record. So I have asked the department to find out who is prepared to saywhat their packages are and who are not.

Senator COONEY—I am not sure how far you should be—Senator Vanstone—I have got some information, though, for you. It comes fromSelected

higher education finance statistics 1995. I am sure we can get a copy for you if you want.It is on page 3, for the purposes of reference. And it indicates:For the 40 universities entities in 1995 the total operating revenue before abnormal items was $7.5 billion.Of that amount over half, $57.2 billion, was from Commonwealth Government grants. The other sourceswere HECS 12 per cent, fees and charges 11.7, investment income 4 per cent, state governments 1.4—

yet they still of course appoint the councils and everything—Senator CARR—You should do something about that, Minister.Senator Vanstone—Well, if we got support, if we had a bipartisan resolution, we could

do something.Senator CARR—I do not know about that. Have you seen some of these state governments?Senator Vanstone—Donations and bequests are 1.7 and other—and we do not know what

‘other’ is—12.6. It is probably consultancies and things like that.Senator COONEY—I do not think for one minute that any government should inquire into

the way the universities conduct themselves.Senator Vanstone—No.Senator COONEY—Given all the saving clauses in that statement, which we will not go

into—Senator Vanstone—Generally speaking, you mean?Senator COONEY—Yes.CHAIR —It being 6.30 p.m. it is time for the committee to adjourn. But just before we do,

Senator Carr has a matter to raise.Senator CARR—Thank you, Mr Chairman. At a previous session today—Senator COONEY—I was going to ask a question.Senator CARR—You will get plenty of time. We have got tonight and all night tomorrow

night and Friday yet, so you will have plenty of time. Minister, in a previous session of thiscommittee your office has indicated in response to a question from myself on Condell ParkChristian School that, as they understood, it had been exempt from registration by the NewSouth Wales authorities. Are you aware of the document prepared by the New South WalesBoard of Studies stating that the advice from the Crown Solicitor in New South Wales said:



The Education Reform Act does not provide for exemptions from compliance with the requirements forregistration on religious grounds and, accordingly, the school cannot be exempt from the requirementsin s.47(f).

Minister, can you provide the committee with urgent advice as to whether this school is inreceipt of Commonwealth funding and, if so, whether or not it is now registered and, if not,what steps will be taken by the Commonwealth?

Senator Vanstone—If you would like to give me or Mr Gallagher the relevant information,of course we will get an answer for you as soon as we can.

Senator CARR—Thank you.Senator Vanstone—Can I just ask the committee’s indulgence?CHAIR —Sure.Senator Vanstone—This matter that Senator Cooney was on was interrupted for Senator

Carr to go back to another unrelated matter.Senator TIERNEY—Well, it was 6.30 p.m. I thought we could continue that at 7.30 p.m.Senator Vanstone—Is it a quick question, Senator Cooney?Senator COONEY—I was simply going to ask how that works.Senator Vanstone—Well, that might take a bit longer.Senator COONEY—And how far members of the staff are engaged in raising money. Just

a very interesting question.Senator Vanstone—I would appreciate you being back here at 7.30 p.m. There are a few

other things I could say about that.Sitting suspended from 6.32 p.m. to 7.46 p.m.

Senator COONEY—I would just like to follow up that question that was asked before thebreak about the position of university lecturers and professors and what have you, the teachingstaff, raising money. I will just list the general thoughts that I have. What is the position withthe universities and what should government’s relationship with it be? This is a problem thatis struck not only by this government but also by others. I suppose if you interfered too muchwith universities we would be here asking you questions about having been too oppressiveof universities. On the other hand, you have been taxed, and probably properly, about the levelof aid you give. What do you say about university staff raising money? What do you say aboutthe proper relationship between government? I do not mean only this government butgovernments generally. It seems to me that one leads on to another.

Senator Vanstone—Indeed. There are a number of things I would like to raise in general.Last year, obviously, my focus was the government’s broad reforms. As you no doubtappreciate, that took up a significant amount of my time that was allocated to higher education.This year I obviously have more time. One of my passionate interests in higher education isthe quality of teaching. Universities do a number of things, but teaching and research areessential elements. As you know, we have increased funding to the research aspect. I wouldargue, Senator Cooney, the quality of higher education has not been damaged to the extentthat dollars can tell you about. I want to come to why dollars cannot tell you.

Just as a matter of interest, if we look at the operating grant, a portion of the money thatgoes to universities on a per FTSU basis, full-time student union, it was about $11,271 in1990, dropped to $10,892, went up to $10,951, dropped to $10,982 and went up to $11,075—and that was in 1994, still not back to the 1990 level. Then in 1995 it went to $11,134, in



1996 to $11,122 and in 1997 to $11,214. There are lots of other figures you could use. Youcould use, for example, the one for total higher education resources. That would includeresearch money and other moneys. There you would shift from $12,429 up to, this year atleast, $13,117—with one drop in there under Labor in 1991.

But, generally speaking, it is fair enough to say that funding per student remains pretty muchthe same. So, to the extent that dollars tell you, you can say quality has not been damaged.But dollars do not tell you because universities quote as the cost of teaching their staff costs.But I do not know the degree to which enough serious work has been done on what the staffdo all day. I do not mean by that that they are not busy. I am sure they are, but they are notbusy teaching or necessarily in teaching related duties.

Senator COONEY—Can I interpolate there, Minister—no, I won’t. I will defend the stafflater.

Senator Vanstone—They might be, for example, doing work that they say will benefit theirteaching in the end but which should, if you were costing properly, be allocated to research.They might be doing research work. It is not certain that, in all the time that is set asidenotionally for preparation, lectures from the previous years are being updated. Students whohave failed will tell you that it is the same lecture they got last year. Some, I am sure, put alot of time into brushing them up, but not everybody does. So there is some money there that,if you were costing in a pure sense, you would say should go to research.

Equally, they might spend time on their work associated with their various learnedacademies. That all advances them as academics, but it is not teaching. Equally, they mightbe spending time on consultancies, which raise money for the university and may broaden theacademic’s mind and have some indirect effect, but it is not teaching.

While I would argue anywhere that it is a perfect justification for asking students to paymore because the personal benefits they get far outweigh those that go to kids who do not goto university, I would also argue that they are entitled to get more. I flag that that will be onesignificant focus of my attention this year—to ensure that university students get more. Weall put—not we the Liberal coalition government but taxpayers—$5 billion into this and wedid not do it for a joke. We did it because we want our universities to provide the best thatis possible for students.

In addition to it being fair to charge more, since there is one Commonwealth educationminister and 37 vice-chancellors and about 600,000 students, you do not have to be bright tofigure out which body is the best body to mobilise to increase quality of 600,000 students.I was very pleased when a vice-chancellor told me earlier this year, quite sheepishly, becausehe had been critical of our changes, that his university was over-enrolled. It might have beenthe particular faculty he was talking about, but I think it was his university as well. But, inany event, he had his first delegation of law students saying, ‘This is not good enough. We’repaying $5,500 now and we don’t expect to get the lecture relayed to us in a second lecturetheatre by video because your guys haven’t been smart enough to run the place properly sothat we can be in the room.’

Senator Cooney, we could start on a student services charter with all the things they areentitled to. It is important that students understand that taxpayers put in $5 billion for oneexpress reason—that is, that students get the best. So the question of what people who areallocated to teaching are doing with their time that you ask in relation to funding I answerwith a particular interest in ensuring that students, who do not necessarily accept higher fees,produce some ownership of their degrees.



When I went to university and did not pay anything—as people constantly remind me—youwere expected to take what you got. I am worried that students do not complain now becausethey are worried that they will be penalised in some nitpicking fashion. I know the vice-chancellors are very happy to listen to complaints. But if you are an 18-year-old who is intheir first year at university, it takes a lot to bowl up to the vice-chancellor’s office and say,‘I’d like to complain about a lecturer.’ I think it takes too much.

Senator COONEY—I would agree with that. But, on the other hand, would you see thatas a basis for any government—state, federal or of either colour—taxing a university, or avice-chancellor, chancellor or any teachers, about that or should they be left to go about theirown business?

Senator Vanstone—I think universities should be free to choose their paths and not bedictated to by the Commonwealth. But that does not mean that we make a grant and we donot care what happens with it. As Mr Burmester said, they have to comply with HEFA forstarters. There are some limitations.

Over and above those quite specifically outlined limitations, of course the Commonwealth,with a $5 billion investment, has a very specific interest in seeing that universities performwell. We need to turn our minds to how we can ensure that without interfering with theuniversities. My party argues, you may disagree, that making students pay more gives themownership. That is one pressure point for more quality.

I would argue that allowing full fee places, once they have filled government funded places,in addition to providing extra revenue for universities builds their opportunities to spend themoney on quality—note I say opportunities, they are not necessarily guarantees, but it is thebest opportunity they have. I would also argue that returning the minimum HECS fee for over-enrolled students is another opportunity for income. But both of those student related fundingmechanisms create a competitive edge so that someone can compete for particular niches.

The University of Melbourne might want to charge $20,000 a year for dental science orsomething, and there will be some kids who will take that up. But there will be otheruniversities who will get opportunities by charging the minimum HECS or by over-enrollingand getting the minimum HECS return irrespective of the courses people have been put in.But there will be competition for the additional money that is out there. I think competitionmeans that universities will focus even more closely on that.

Speak to any vice-chancellor. They are concerned about what students want. They areconcerned about ensuring that what they teach provides something that is useful to industryso their graduates can more easily get jobs. They are not just sitting there as vice-chancellorstwiddling their thumbs. They are very involved in these issues. But I, nonetheless, think thatthose market pressures will add a sharper edge to that focus and competition.

I think there are some other things that we can do. That is what I want to turn my mind tothis year. It is a hell of a lot of money to have students saying, ‘Oh, I put in my secondassignment and haven’t got my first one back.’ How damned outrageous is that? It is a pettylittle example, isn’t it, but this is no way to run a university.

Senator COONEY—It depends, I suppose, on what you want from your staff, doesn’t it?I mean, a university must mean more than just teaching.

Senator Vanstone—Of course it means more than just teaching. But perhaps we should lookat what those other things are and, in allocating the costings, say, ‘We’re paying this muchfor this and that much for that,’ and recognise those other things. We should not just take all



those other things that staff do and say, ‘It improves teaching in the end and it is related tothe university.’ Let us have a close look at recognising what resources are really being putinto teaching and what are going into other things—For example, consultancies to earn moneyfor the university.

Senator CARR—Minister, could you please indicate when you will be able to provide uswith final and confirmed details of the number of commencing undergraduate students in eachinstitution as of 1 September 1997 compared with the previously agreed targets?

Mr Burmester —The statistics for the university sector are compiled from two collections.The first collection is returned to the department on 31 May. They provide actual enrolmentsin the first semester and estimated enrolments for the second semester. They are the basis onwhich most publications are derived. The actual enrolments on which we will be makingadjustments to grants and checking compliance with other aspects of guidelines and so forthdepend on the actual enrolments for semester one and the actual enrolments for semester two,which is only available to the department after 30 September.

Senator CARR—September?Mr Burmester —Yes, because you need the final data for the second semester to get the

actual data for the second semester rather than the estimated data for the second semester.From the first semester collection we produce publications so that we do not have to wait untilthe end of the year. The answer to your question when will the data be available is: when weprepare and compile the tables from the 31 May collection.

Senator CARR—Will you be able to, on the finding of that data, compare existingenrolments of the first semester 1997 with the previously agreed targets?

Mr Burmester —Yes, that will be able to be done, once the data is published. If you areasking for a table to be specifically prepared to answer that question, we can undertake to dothat.

Senator CARR—Thank you.Senator Vanstone—But I can tell you, forever and a day, we are not going to be producing

things two years later saying, ‘By the way, Labor has this dream that if they got re-electedthey would continue to spend money they did not have. This is the magical mystery pie tourof what they think they would have provided had they got re-elected and ignored the $8 billiondeficit.’ If you think that is a dream that you can look forward to at future estimates, I wantto tell you now, it is coming to an end. I thought I would be of assistance.

Senator CARR—No, that is terrific, very helpful. I can see this is going to be a very longnight.

Senator CROWLEY—It is like applying a plaster cast before you have broken the leg.Senator CARR—That is right, that has almost guaranteed it I would have thought.CHAIR —Do you have any other questions, Senator Carr?Senator CARR—I have a few here.CHAIR —Okay, let us go.Senator CROWLEY—Mr Chairman, perhaps I might ask a question at this time. Senator

Vanstone, this is an answer to a question on notice. I asked:Does that actually mean that higher education charged moneys are essentially hypothecated throughgeneral revenue back to universities?

The answer:



A copy of the pie chart to which the Minister referred is attached for your information.

It goes on to say—and I do want to read this on to the record:In any year, the size of the HECS trust fund is determined by the HECS obligation incurred in that year.Funds equal to this amount less the funds paid direct to institutions up-front are allocated to the trust fundfrom the receipts of debt repayments made in the year made through PAYE deductions, assessment debtor voluntary repayments, with the balance made up through the subvention from the consolidated revenuefund. Funds from the trust fund are paid to institutions in the year as a component of their operatinggrants.

Senator Vanstone—Subvention is not a word I would have used, I admit.Senator CROWLEY—First of all I will ask you: what does subvention mean?Senator Vanstone—Taking from, doesn’t it? That is how I read it. Just to say—Senator CROWLEY—I am asking, because I am not clear. I know what circumvent means,

but I am not sure what subvention is.Mr Gallagher —Subvention is another word for hypothecation, if you like. It is a drawing

upon.Senator Vanstone—Taking from.Senator CROWLEY—Drawing upon or hypothecation.Senator Vanstone—As I said in the beginning, taking from.Senator CROWLEY—Drawing upon. Thank you. One imagines that that is what it meant,

but it is not clear to understand. What do you mean by:. . . is determined by the HECS obligation incurred.

What does HECS obligation mean?Mr Gallagher —When a student is enrolled in a HECS liable place—that is, a publicly

subsidised place—there is a liability or an obligation on the student to contribute the HECSamount eventually into the trust fund.

Senator CROWLEY—What you do each year is calculate the number of students who oweX dollars for HECS repayment per year?

Mr Gallagher —Each semester.Senator CROWLEY—It is in a year and the size of the HECS trust fund is determined

by the HECS obligation incurred in that year?Mr Gallagher —Yes.Senator CROWLEY—So it is the number of students multiplied by the HECS liability.Mr Gallagher —Yes.Senator CROWLEY—That figure having been calculated, funds equal to that amount, less

the funds paid direct to the institutions up front, are allocated to the trust fund and from thereceipts of debt repayments made in the year through PAYE. That is presumably from generalrevenue?

Mr Gallagher —No, from repayments through the PAYE system.Senator CROWLEY—Thank you. They are HECS debt repayments. That makes sense

there. The assessment debt or voluntary repayments, is that again of HECS?

Mr Gallagher —Yes.Senator CROWLEY—With the balance being made up from consolidated revenue.



Mr Gallagher —These are all the different ways students can pay their HECS. They caneither pay it up front, they can pay it through PAYE or they can make voluntary payments.Those payments go into the trust fund as they are made, but the trust fund does not have init sufficient at the moment in any one year to meet the full HECS liability of the enrolmentin that year to all institutions.

So the Commonwealth draws upon the consolidated revenue fund to make up the differencebetween what is in the HECS trust fund and what is payable to the institutions by way of theHECS liability. That is the subvention. That subvention is declining as the actual paymentsfrom HECS liable students to the trust fund is growing.

Senator CROWLEY—Funds from the trust fund are paid to institutions in the year as acomponent of their operating grants.

Mr Gallagher —Yes.Senator CROWLEY—So some funds are paid to the institution up front, which is what

the second line of this says. The HECS obligation incurred is the amount in the trust fund,less the funds paid direct to the institutions up-front.

Mr Gallagher —By the students.Senator CROWLEY—By the students? I am actually trying to interpret this answer before

I make any reference to Sir Humphrey at all.Mr Gallagher —I thought it was a succinct reply.Senator CROWLEY—Did you write this? It might be an interesting little exercise for the

minister to find out who did. I think this is a fantastic answer. It has so far reduced me to aminus score in my assessment of answers. It is less the funds paid direct to institutions up frontby the students, is that right?

Mr Gallagher —Yes, or on their behalf, maybe by their parents or somebody else.Senator CROWLEY—I understood that to mean paid direct to the institution up-front by

the Commonwealth.Mr Gallagher —No.Senator CROWLEY—I am glad you explained it. I do not wish to argue with you, but you

allow that it might be open to that interpretation?Mr Gallagher —Not intentionally.Senator CROWLEY—I more than understand that it was not intentional. Are you agreed

with me that this is a somewhat tortuous answer to interpret?Mr Gallagher —It is technically a very correct answer, but it is a bit difficult to navigate.Senator Vanstone—I think that means yes.Senator CROWLEY—We are pleased that that is on the record, Minister. I know you told

me last time—and I would prefer that we did not run this again—that this is no different fromwhat it was under a Labor government. Notwithstanding that, this is an area that I was notpreviously wholeheartedly across. I am just trying to understand what is this HECS trust fund.It is essentially a book entry. The money is not put into the fund to earn five per cent on theinternational market, is it?

Mr Gallagher —No. It is a book entry, yes.Senator CROWLEY—So it is really one way in which you can keep tabs on the dollars

in higher education?



Mr Gallagher —Yes, contributed by the students, given the policy that the costs should beshared between the public and the private beneficiaries.

Senator CROWLEY—Do you have the pie chart too?Mr Gallagher —Yes.Senator CROWLEY—There is a very nice little pie chart.Senator Vanstone—And if you were at the last estimates, you would have had the benefit

of a whole series of very colourful charts that I prepared.Senator CARR—No. That was the states grants bill. You dazzled us for hours and hours

with pie charts.CHAIR —Order! Could we return to the questions?Senator CARR—I was incredibly impressed.Senator Vanstone—They were very nice colours.CHAIR —Senator Crowley has the floor.Senator CROWLEY—I want to be absolutely clear about this. This is university revenue

from the Commonwealth, state and other sources, so it is not actually a pie chart of the HECStrust fund?

Mr Gallagher —It is not a pie chart of the HECS trust fund. It is total revenue from theCommonwealth.

Senator CROWLEY—A copy of the pie chart to which the minister referred. I have reallyhad an exercise of how to interpret my answers to questions.

Senator Vanstone—Just to show you what proportion—and it is deduced by somewhatcomplicated means—the HECS liability puts in.

Senator CROWLEY—The HECS trust fund is equal to what part of this pie chart?Senator COONEY—Does this chart not show the receipts of the universities?Mr Gallagher —That is right, of all universities.Mr Ruby —My recollection is that when you asked your question, another senator asked

if the pie chart would be made available. My recollection is hazy. In this context, we haveattached it to the answer.

Senator CROWLEY—You have given me a pie chart which was one part of the questionand I am not to confuse the pie chart as having any relationship to the HECS trust fund?

Mr Ruby —That is right.Senator CROWLEY—We are doing well. On this pie chart, presumably some percentage

of that measure of university revenue is from the HECS trust fund. Could I presume it is the13 per cent HECS liability?

Senator COONEY—The liability and the actual receipts would be different, would theynot?

Mr Gallagher —That is right. The liability is the liability in the year. Part of that liabilityis met from the receipts and the rest of it is topped up from the subvention from consolidatedrevenue.

Senator Vanstone—The box at the bottom tries to explain it by saying that is made up ofup-front payments—that is, by students to universities—less the 25 per cent discount, although



we give the discount to the universities. Then there is the obligation incurred by students whodo not pay up front, that is, who defer.

Senator COONEY—Can I ask this question? That is a pie chart of the receipts of revenueby the university. How does the government come to know that they are the right proportions?Is it the government’s position that they ought to know how much is put in by the states andhow much is collected by the universities? Or is this simply a chart built out of the informationgiven by good grace by the universities?

Mr Burmester —Each year the universities have to provide some financial statistics whichare published in the financial summary publication each year. This isSelected higher educationfinance statistics, which is an annual publication in the division. It draws its information fromthe financial accounts of each university and they are compiled and aggregated by thedepartment. It is historical information.

Senator COONEY—We are not talking about government here. We are not talking aboutany government of any particular colour, but the government insists that the universities revealtheir full financial position.

Mr Burmester —Yes. There is a requirement in the act that universities provide theinformation to the government and the way that is then formulated is that the departmentdetermines the type of information it requires to report on the sector.

Senator COONEY—If the private sector gave a donation or a particular consultancy wasobtained by the university to raise funds, would the university have to tell about that? Or doyou just want a general idea of the various categories under which the university gets itsfunding? My next question was going to be: what about issues of privacy, commercial-in-confidence and that sort of thing?

Mr Burmester —The information in the publication is drawn from the audited financialstatements of each university that has been signed off by the state auditors; therefore, it ispublic information. They have reported it to their own parliaments. All we are doing isaggregating it. Those accounts would not show individual donations or individual contracts.

Senator COONEY—The university can maintain confidentiality as to the details, at least,but the aggregates, if you like, must be revealed to government. Would that be a fair way ofputting it?

Mr Burmester —They form part of the audited accounts of the university.Senator CROWLEY—Following on from Senator Cooney’s question, I recently received

a letter from the alumni association of Melbourne University—I was a student there—unfortunately, I seem to have arrived without it. The association wrote to me asking wouldI care to make a donation to the alumni foundation so as to assist with the establishment ofscholarships for students to Melbourne University.

The last time I came to talk to you was about Adelaide university writing to me throughtheir alumni, saying that if I bought my private health insurance through the alumni associationthis would enormously assist Adelaide university. Now I am being asked to contribute toscholarship funds, or money that will be used for scholarships for students in Melbourne.Firstly, I want to know to what extent the alumni funds would be detailed. I guess I wouldfind it here under ‘other’ would I, or you would, in the books?

Mr Gallagher —Senator, it would come under our normal financial reporting category ofendowments, donations and bequests.

Senator CROWLEY—That would be here under ‘other’?



Mr Gallagher —Yes, under ‘other’ in that table.

Senator CROWLEY—Do you have any idea of what the alumni funds contributing touniversities are? Is it allowed to be any amount? Is it shrinking?

Mr Gallagher —It has huge potential to grow in Australia compared with, say, the UnitedStates of America, where there has been a tradition of large alumni contributions. Mostinstitutions, as I understand it, are fairly active in seeking to maintain contact with their alumniand improve the flow of contributions from them.

Senator CROWLEY—Yes. I am just a bit concerned that I should get a letter from analumni association asking me to contribute to scholarship funds in the same year that we haveseen a very significant rearrangement of funding to universities. It could be said that thealumni has been resting on its laurels for the last X number of years, or it could be that theuniversities now see a need to seek funding from a wider variety of sources. Do you have anysense of that being the case in universities?

Mr Gallagher —I think the case varies a lot. In the case of Melbourne University, it seemsto us that Melbourne University is taking a particular position in the market, initially one ofloss leadership, where it is seeking to attract students on a fee paying basis but wants toprovide HECS exemption scholarships to those students drawn from anywhere in Australia,probably in order to be able to market Melbourne University, eventually, as the institution thatthe top students want to go to. That is the kind of image it wants to create. It is searching forways by which it can fund those scholarships so that it can carry that market strategy. Otherinstitutions have very different reasons for wanting to maintain contact with alumni. Some ofthem do with employment opportunities for their graduates.

Senator COONEY—The policy that a particular university would adopt in raising moneysand in presenting a particular profile to the community; do you know whether that is a matterfor the council or the vice-chancellor? Or both?

Mr Gallagher —In terms of getting such a strategy endorsed, the vice-chancellor wouldnormally take that for the endorsement of the council.

Senator COONEY—Government would have no interest. Would you go as far as that?

Mr Gallagher —The government is trying to increase the degrees of freedom for universitiesto pursue diversity in those approaches.

Senator CROWLEY—Could you just explain this loss leadership? I have heard it referredto as an inducement to get people into supermarkets; I had not thought of it being used to getpeople into universities.

Mr Gallagher —Only to the extent that, initially, one reading of what Melbourne universityis doing is creating additional places that are fee paying. But it will not make any money outof it—it will actually subsidise the fees by providing scholarships to the students. That is, itis using the fee paying arrangements to increase its attractiveness to the top calibre studentsacross the country.

Senator CROWLEY—As I understood you to say earlier, these would be HECS exemptscholarships.

Mr Gallagher —That is right. They come in as fee paying students therefore they are notHECS liable. Their fees are paid by institution—through the alumni contribution, for instance.



Senator CROWLEY—I am confused here because I understood that the fee paying studentswould be outside the 75 per cent of the students in any course eligible for HECS. I am reallyconcerned if fee paying students are now going to be eligible for HECS exempt scholarships.

Mr Gallagher —No, they are not the HECS exempt scholarships that the government isproviding. These are in effect fee paying places so the student is not liable for HECS. But inthis case Melbourne university is finding benefactors to pay the fee on the student’s behalf.Therefore the individual student is offered a university scholarship.

Senator COONEY—So it may be a scholarship in the sense that, if it is a $10,000 a yearcourse, the student might have to pay $5,000 and the university tops it up by way of ascholarship from donation from the alumni?

Mr Gallagher —Yes.Senator COONEY—The government would not be interested in that—as long as it stays

within 25 per cent?Mr Gallagher —That is right, as long as it is within the 25 per cent.Senator COONEY—I suppose the question that arises from that is: is that likely to change

the character of the university? The government would not be concerned one way or the otherabout that—or the department would not be concerned one way or the other about that?

Mr Gallagher —I think it allows the university to offer scholarships to whomever it regardsas having the merit. That could be equity based scholarships and merit based scholarships.

Senator CROWLEY—Do you understand the universities to have any commitment toensuring that those places are provided on merit only, or do they have other categories of meritplus non-English speaking background, merit plus women into engineering, merit plusAboriginal students?

Mr Gallagher —As part of the history of the profiles process, institutions have developedfairly comprehensive equity plans and strong commitments across each of the designatedgroups, and one would expect them to carry that through into the scholarships.

Senator CROWLEY—A lot of that commitment by universities to equity was in the dayswhen there was funding associated with equity.

Mr Gallagher —There still is, Senator.Senator CROWLEY—That funding still continues?Mr Gallagher —Yes.Senator CROWLEY—The same amount?Mr Gallagher —Yes, Senator.Senator COONEY—On that, is the department concerned about who the universities take

in? Let us say the University of Melbourne said, ‘We are now going to take people intomedicine and into law’—the sought for courses—‘not on the basis of your score but on thebasis of an assessment of your general character so that we can work out whether you wouldbe a good lawyer or a good bedside doctor.’ Would the department be concerned about thator would they say that it is a matter for the university to determine the basis upon which itgives entrance to students?

Mr Gallagher —That is broadly a matter for the university.Senator COONEY—So the issue of merit is one for the university, not one for the

department or for government?



Mr Gallagher —Certainly, Senator.

Senator CARR—I wonder where the minister has gone, Mr Chairman?

CHAIR —Perhaps you could put those questions aside until the minister returns, and askany questions you have of the officers. I am sure you have a few.

Senator CARR—When do you expect her to return?

CHAIR —Very soon.

Senator CARR—It has been 15 minutes now.

CHAIR —I would within 10 minutes. Perhaps you could ask the officers some questionson other matters. That is what they are here for.

Senator CARR—What is the point of her departure? There is a normal provision—

Senator COONEY—Because so much is paid to universities, you have got, no doubt, aninformation databank about various universities around Australia. I do not want to breach anyrules of privacy here, but that databank would simply consist, from what you have said so far,of the financial position of the universities in how they raise money and how they expend it.It would not go beyond that, I suppose? There would not be issues of what sort of people goto the university or whether they are giving a particular quality of teaching or carrying outa particular quality of research or, indeed, anything about the merits of the students at all onthat databank, would there? From what you have told me, I could not see that there wouldbe.

Mr Gallagher —Not on that databank. We have general student statistics, staff statistics andfinance statistics. There are, however, mechanisms in place for quality assurance in highereducation undertaken by the Higher Education Council.

Senator COONEY—Why would you have that information? It seems to me that theCommonwealth government’s role is as a funding body and that the universities are very muchin control of themselves, or perhaps are subject to some statutory requirements from the stategovernments. Why would the Commonwealth be interested—as a matter of power, if youlike—in anything other than the financial information that the university can give?

Mr Gallagher —I am not sure if I understand the question, Senator.

Senator COONEY—What I am saying to you is that the Commonwealth fundsuniversities—in fact, it provides most of the funds that are available to universities—and,because of that, no doubt would want to ensure that there is integrity in the funding and thatthe money travels along the path that it should go along and gets to the destination it shouldget to. But besides that, what other interest has the Commonwealth got? Why should anybodyrelated to the Commonwealth have any interest in the quality of the education that theuniversity gives?

Mr Gallagher —The Commonwealth purchases services from universities by way of studentplaces for teaching, research services and other general community services. The Common-wealth seeks value for money and value for money includes a concept of quality. In order toprotect the kind of international reputation of the Australian higher education system, in orderto be assured that the Commonwealth is obtaining value for money and that students can beconfident that the higher education system is one of quality, there should be, on the part ofthe Commonwealth, some form of quality assurance. It is not an interventionist qualityassurance model that is being pursued in Australia, unlike in other countries. It is one that



basically obtains information from the institutions as to what it is they are seeking to achieveand how they know that they are achieving it.

Senator COONEY—From what you say, it would seem that the only way the Common-wealth could achieve that objective is through a contractual relationship with the university.Am I right in saying that?

Mr Gallagher —We do not have a strict contract so much as a negotiated formula forfunding, whereby the number of students that they enrol earn them a certain rate of funding.If they fail to deliver those numbers, then their rate of funding is reduced. To that extent thereis a form of contract, but it is not a technical contract.

Senator COONEY—Is it set out? Is it done by—

Mr Gallagher —It is under the Higher Education Funding Act, which enables the ministerto determine the conditions of funding and that has been in the form of an institutional profilewhich the institutions submit, and they are funded against that profile.

Senator COONEY—You have probably given this answer many times. So the act givesa basis by which the minister can enter into negotiations and come to agreements withuniversities? And would it not be the terms of that agreement that decided these issues ofquality?

Mr Gallagher —If you like, Senator, the terms of the agreement define the inputs that theCommonwealth makes to the universities. Quality is a function of the process and the outcome.

Senator COONEY—You were saying before—and it makes a great deal of sense—that theCommonwealth is interested in the quality of the services because they are purchasing theservices, which they then, as I understand, give to appropriate students or they purchaseresearch which is given to them.

The terms, if you like, and terms about quality as well, that the Commonwealth looks forand gets, no doubt, will be set out, I would have thought from what you tell me, in a sort ofa written agreement that the Commonwealth—or the minister on behalf of the Commonwealthsigns—with the university. There is not a set of regulations that determines this, is there?

Mr Gallagher —There is a set of conditions of funding which, in effect, define thequantity—

Senator COONEY—But the universities would have to agree to that, wouldn’t they?

Mr Gallagher —They do, Senator. The profile is an agreed outcome.

Senator COONEY—Does the council or the vice-chancellor or somebody sign a documentand say, ‘Here we are signing a document’—and no doubt you press a button on a wordprocessor and out it comes and then the minister signs and the university signs? Is it anythinglike that?

Mr Gallagher —The university in writing forwards their profile. We have an annual processof negotiation with them on that profile and, following that negotiation, there is an adjustedprofile which we send to them and then, unless they want to change it again by sending itback, that is understood to be the agreed profile.

Senator COONEY—That profile would have clause 1, clause 2, clause 3, condition A,condition B, condition C in it?

Mr Gallagher —It is actually simply a matrix of the number of student places in a differentfield of study and a different level of study that the Commonwealth agrees to fund.



Senator COONEY—I do not want to press on because the minister is back, but I have gota picture that makes sense of what you say in that the Commonwealth looks for quality in theservices that it purchases. But what I cannot quite get is whether there is any sort of form,by way of an act or a regulation or an agreement that somebody signs, that sets out that, whenyou are teaching, you teach properly, and that when you are sending surgeons out—the greatsurgeons Melbourne University have sent out, like Senator Crowley here, in the past—she cancut well. Is there any sort of form we can look at, or any sort of process or instrument we canlook at, that says, ‘Yes, this is the sort of quality that the Commonwealth wants’?

Mr Gallagher —There have been reports for the last three years of committees on qualityassurance and higher education in Australia and currently the minister has a reference to theHigher Education Council to undertake quality assurance this year.

Senator COONEY—I can understand the quality assurance. There might not be—and I amnot trying to be difficult—but there must be some sort of instrument, if I can use a word asbroad as that, whereby the sorts of things that the Commonwealth is looking for from aparticular university, whether it is Melbourne University or Wollongong University orsomewhere else, that sets out the sorts of things that the Commonwealth wants from thatuniversity in return for the payment of the amount of money it does pay. I just thought thatthere might be.

Mr Gallagher —In quantitative terms, yes, there is; it is called a profile. In qualitative terms,it varies against each institution’s own distinctive mission, its own strategies, its own fieldsof studies and ways of teaching. That is the quality assurance mechanism I referred to.

Senator COONEY—I can understand the profile, but does anybody sign it? Does theminister sign it, or is it just a document that hangs in the air without anybody signing it off?When Australia has a treaty, somebody signs on its behalf and away we go. That is what Iam looking for. The picture I have got now is that you send off a document that just floatsin the air without anybody sanctifying it, if you like, on behalf of the university. Have I gotthe right picture?

Mr Gallagher —There is an exchange of letters. The vice-chancellor would normally signit on behalf of the university and I would sign it normally on behalf of the minister.

Senator COONEY—And you say, ‘Dear Vice-Chancellor, we would like you to teach thepeople that we are going to send to you well’? Do you say something like that, or is that justunderstood?

Mr Gallagher —We are simply bureaucrats, and judgments of academic quality we do notpretend to make.

Senator COONEY—I will come back because I know Senator Carr has not had a chanceto ask a question today!

Senator CARR—Don’t worry. We have plenty of time. We have several days ahead of us.

Senator COONEY—I don’t want to disappoint him. What you are saying makes sense, ifI may say so, with great respect, but if the Commonwealth is going to pay out the sorts ofmoneys that it does pay out for its citizens to be educated, it wants quality. You said—andit was not an unexpected answer—that the Commonwealth has some sort of quality control.I said, ‘What is the basis of that quality control? Is it an agreement, a regulation, or an actor something like that?’ It seems from the answer you gave that it is some sort of profile thatis signed. I said, ‘That sounds fairly good and it is through that mechanism that you ensure



the quality?’ You said no. This again makes sense; you do not want to interfere with thejudgment of the university in terms of its quality; it is up to them to set the standards.

That has left me with a picture that, as long as people want to go to a university, theCommonwealth will pay for that person, as long as that person gains acceptance by theuniversity. If that is so, it does not seem to me that the Commonwealth itself looks at thequality of the teaching of the university. That might be a good thing because it is up to theuniversity and people go according to competition and competition might assure quality. Iunderstand all that. But am I right in saying that the Commonwealth itself does not set anystandards as to quality, certainly not by way of any agreement, or regulation or anything likethat?

Mr Gallagher —The Higher Education Council undertakes a quality assurance exercise.Senator CARR—The funding has actually been withdrawn from that, hasn’t it?Mr Gallagher —No. The Higher Education Council has been given the funds to undertake

a quality process. It is integrated into the profiles process for the first time this year.Institutions are asked to bring forward evidence as to how they know they are achieving theobjectives that they strive for and the claims that they make about the quality of their owninstitution.

Senator CARR—What are we spending these days on quality assurance? What preciselyis the figure?

Mr Gallagher —Something like $5 billion, Senator.Senator CARR—On quality assurance?Mr Gallagher —On the higher education system, and we want quality assurance for that

$5 billion.Senator CARR—I understood there was a quality assurance program.Mr Gallagher —That ran its course, Senator.Senator CARR—That is what I am saying; that program has now ceased. I am just

wondering, Senator Cooney, if you are aware of that.CHAIR —It was an absolute disaster, Senator.Mr Gallagher —That was a quality reward system rather than a quality assurance system.Senator CARR—But there is no actual mechanism that we can improve to ensure the

quality?Mr Gallagher —There is now a tighter relationship between the matters Senator Cooney

was pursuing, of the linkage between the quantitative profiles agreement and the externalquality assurance. It has now been brought together into the one framework.

Senator CARR—I just had the impression from what you have told us in the past that thegovernment is actually winding back the profiles process in terms of providing greater levelsof autonomy for the universities to pick and choose how they interpret that.

CHAIR —Order, Senator Carr! Senator Cooney, have you finished your questions?Senator COONEY—Yes.Senator CROWLEY—I have a couple to follow here. I am sorry, Mr Gallagher, to go back

to this, but I have actually now found the letter from Melbourne University. One of the thingsthat shocks me is that I am being asked to contribute to South Australian students gettingscholarships in Melbourne. That is not something we need necessarily encourage, is it? I also



know that it is not for me to be flippant, but I do find it a bit shocking to find that the lastline says, ‘Your contribution to the university fund or your provision to support the universityin your will, will make an important difference’. I am prepared to die for lots of things, butI am not sure that I am prepared to die to pay for South Australian students to go toMelbourne. I know what the letter means, but I find it amazing that this letter is the first letterI have ever had from the Melbourne University Alumni asking me to contribute to the Alumnifund to help fund scholarships. I note that it arrived the year the funding formula foruniversities changed dramatically. I will leave that aside and say that I do get the strangestletters.

Senator Vanstone—They probably realise that you are in parliament and an importantperson and want to have you on their Alumni giving money and everything.

Senator COONEY—You have to keep lecturers at the Melbourne University employed.Senator CROWLEY—I am not. It is only to keep students there, but I am pretty sure that

my name is like one of 5,000 million others that comes up when they press the Alumni button.Senator Vanstone—Not all as important as yourself.Senator CROWLEY—Thank you, Minister. Can I just turn now to a recent article in a

newspaper. It says:Sydney University plans to set a precedent in the search for funding by demolishing lecture theatres tomake way for a $40 million 188 bed private teaching hospital on campus. The university, in acontroversial money making joint venture with a private developer, is expected to provide most of thecapital for the hospital. It will be operated by Health Care Australia, a division of Mayne Nickless.

Particularly in light of what conversation you have been having with Senator Cooney aboutwhat might be the contract between the Commonwealth government and our tertiaryinstitutions, does it sit easy with you that a university, any university, let alone SydneyUniversity, would be demolishing lecture theatres to build a private hospital in a country thatis significantly oversupplied with hospital beds? As we all know, Prince Albert Hospitalborders or abuts Sydney University as it is.

Senator Vanstone—In response to a question yesterday, Wendy Jarvie was asked aboutskills vacancies and made the very sensible point that, for example, we are very short ofdoctors in some areas and oversupplied in others. It is not always easy to indicate where thereis a shortage, but it is useful. You will appreciate, though, that in medicine we are not goingto permit universities to sell additional places there because we believe we have enoughdoctors. Now, as to the question of—

Senator COONEY—Are we are going to give internees provider numbers?Senator Vanstone—You might take that up with Dr Wooldridge.Senator COONEY—Could you take it up for me?Senator Vanstone—I see the point you raise. It might be something Dr Wooldridge has

some interest in. But do not assume that all the lecture theatres—I do not want them all therein 100 years. Some of them have to go to make way for new and better teaching arrangements.If the lecture theatres were, for example, in a medical school and a hospital was going to takeits place with accompanying facilities for lectures when it was appropriate, that might be better.I am not going to say it is a good or a bad thing without knowing more about the proposal.

Senator CROWLEY—I accept your point on that, Minister, but, as a notion, the idea ofuniversities now turning their minds to using some of their very precious land to build aprivate hospital by way of a money making to deal with—and that is what it is; this is a



controversial money making joint venture. Let us forget whether it is a hospital. Perhaps theyare building a big top; they are knocking down lecture theatres to build anything as a moneymaking venture.

Senator Vanstone—No. Let us not forget it is a hospital, because if it is related to teachingof medicine, it might be—

Senator CROWLEY—Well, private hospitals have almost invariably never been relatedto the teaching of medicine.

Senator Vanstone—It might not be, but, as I say, I have indicated there is little point inme offering a view without knowing more about the proposal. But if it is related to theteaching of medicine, then there might be a particular value in it. I just do not know enoughabout the proposal to help you, I am sorry.

Senator CROWLEY—It is a veritable spit from Sydney University to the Royal PrinceAlfred Hospital, which has been effectively the large teaching provision of service throughthe Sydney University. But, Minister, we could get distracted here about whether it is ahospital or anything else. Is it of concern to you, as the minister, that a large university inAustralia, let alone a small one, is now doing something like this as a money making venture?

Senator Vanstone—Well, you say they are doing it as a money making venture, Senator.Is it Sydney or UNSW you are talking about?

Senator CROWLEY—Sydney.

Senator Vanstone—I have not had a discussion with the vice-chancellor about that, andI am not going to comment until I know more about it. But if you want to put the proposition:am I concerned that universities want to make money, I am about as concerned as previousLabor ministers would have been when the operating grant per student was reduced underLabor and the emphasis was put on lecturers to go out into consulting, which is the sort ofthing Senator Cooney was asking me about. I might have been concerned about Labor allowinginternational students in if I thought it was only about money. I might have been concernedabout Labor allowing postgraduate course work places to be sold if I thought it was only aboutmoney. You see, life is generally not that simple. I will take this opportunity to indulge myself.That is one of the problems, from my perspective, with the member for Oxley. She seems tothink that everything is black and white and very simple. By and large it is not. One of themost enchanting things about life is its complexity.

Senator CROWLEY—I sincerely hope there is in no way any suggestion that any of uswould have black and white limitations that might correlate us with the member for Oxley.

Senator Vanstone—I hope not, Senator.

Senator CROWLEY—You were saying it, Minister. I just want to be clear that that wasnot your intent.

Senator Vanstone—I was just sort of trying to point out that we did not want to get intothat box.

Senator COONEY—Minister, when you were talking about the previous government, Ithink the relationship between you and the previous government is closer than the relationshipbetween us who are great parliamentarians and the previous government. You are the directdescendant, may I say, of previous ministers from both sides of the government. So to saythat the government has done a particular thing now or in the past is fairly irrelevant.



Senator Crowley asked whether you should have concern about that $40 million hospitalas a minister. The point I am making is that it is not something for them to decide. This iswhat I was asking before in relation to this inequality stuff. Is this of any concern togovernment as government—

Senator Vanstone—Whether one university buys three notepads a week or 300 is not aconcern. The issues that would be of concern to the government are broader generic issues—and you raise one. You might ask Senator Carr. He has, I understand, supported the Universityof Queensland, a government funded university, spending money to buy Bond University.Now, if there was a money making exercise it would be that. So there are a wide variety ofviews on these matters and the need for universities to diversify their funding base so that theyare not at the whim of one government from one day to the next. Senator Carr might like to,at some later point, tell you why he thinks it was appropriate to let the University ofQueensland do that.

Senator CROWLEY—Minister, what are some of these broader concerns that would cometo the front of your brain? What are some of these things? I just find this—

Senator Vanstone—I think I have indicated my answer to Senator Cooney. The broadconcern that I intend to devote significant time to this year is quality teaching.

Senator CROWLEY—Yes, I did hear you talking about that, Minister, but can we staywith this question of what universities do with their land. Are there any guidelines or are theuniversities, by and large, under their own cognisance and can—

Senator Vanstone—Well, they are under state acts and have responsibility to the stategovernments in that respect. I cannot tell you what the state government arrangements are andwhat responsibilities they have vis a vis their dealings with land in that respect. Ourrelationship with them is one of funding.

Senator COONEY—So the $40 million hospital seems to me to be a good illustration. Youmight like it or you might not, but it seems to me that the Commonwealth cannot do muchabout it except to say, ‘Well, we’re going to cut back funding because we don’t like youbuilding the hospital.’

Senator Vanstone—Well, through the profiles process, yes.Senator COONEY—But, if you did that, wouldn’t you be interfering with the decision

making economy of the university?Senator Vanstone—You would be. I think we have made this as clear as it is possible to

do without going on raising example after example and saying, ‘What about this; wouldn’tit be nice to consider that?’ Under the profiles process, we make an agreement with eachuniversity. A whole range of things can come up under that profiles process and has fordonkeys years. I do not know what the previous government would have done if, through theprofiles process, the question of UQ buying Bond came up. I do not know whether they wouldhave taken Senator Carr’s advice and turned the other way or not.

Senator CROWLEY—Have you ever had a profile come up that you say is unacceptableand send it back.

Senator Vanstone—No, the profiles are negotiated completely by the department and thenthe broad agreement is sent up to me. That has happened only once. I assume that is whathappens every year. I did not have a concern last year.

Senator COONEY—Senator Carr has given me this article from theCanberra Timesabouttenure.



Senator Vanstone—About what?

Senator COONEY—Tenure.

Senator Vanstone—Oh, yes.

Senator COONEY—I must confess that I am very interested in this. There is some concern,I would have thought, about tenure. This is a matter the universities have gone to—and I donot know whether this is a matter for government. Universities are switching out tenure to alarge extent. It is pretty hard to get tenure. It is a bit like judges. It seems to me that if youare a judge you have to have tenure to be independent and do your best. Does the governmentor the department have any thoughts about tenure or do you think that is a matter for theuniversities to decide one way or the other?

Senator Vanstone—Senator, there have been a number of reports that may have touchedon this. I think the Hoare committee inquiring into the management of the universities,appointed by Simon Crean, had some fairly negative comments about that. I would say touniversities, who regularly complain about the difficulties put upon them by tenure, that somevice-chancellors would not tell you that tenure is hard to get. They say it is hard to get ridof. They have a concern about the capacity to bring on new, young, innovative teachers andresearchers. Many of them would like to get rid of it.

We have freed up the Industrial Relations Act. We think we have given them some capacityto work in that respect. We also mentioned in the previous budget, without there being a lineallocation for it, that we would find the money—this is quite separate from the restructuringmoney—where universities want to make work place changes that might have significant costsassociated with them to increase efficiencies. If they have a cash flow problem because of it,we will look very kindly on them. A classic example might be a university that comes to anagreement for redundancies for tenured staff and changes its new agreements with future staff.So, in effect, get rid of tenure because they want the flexibility to bring on new and youngpeople. We would look very kindly on that.

Senator COONEY—Correct me if I am wrong, if a university is minded to get rid oftenure, that approach would find favour with the government? Am I putting that too simply?

Senator Vanstone—If you had bad faith in the way you put it, I would say you were, butI do not attribute that. I give you that as one example of work place restructuring that mightbe expensive. There might be others. I will give you another example. Irrespective of tenureyou might say that we have 30 lecturers at this level but we do not need them all. Thereshould be 20 and we should increase their salaries significantly and make the others redundantand still keep tenure. But you might say that having 20 better paid but, nonetheless, tenuredpeople was a much better incentive for young people to come on and be academics than having30 medium paid tenured people. So it might be completely unrelated to tenure. Someone raisedwith me some calculations they had done about shaving 10 per cent of staff off and givingthem all a 20 per cent increase and what difference that would make. It is not up to us to runthe universities. Each of the—

Senator COONEY—That is a matter for the universities.

Senator Vanstone—They will all have different things. Incidentally, since we all take greatpride in those Nobel prize winners that are either born here or come here and do some training.I know we did not disown Professor Zinkernagel, even though he is from Switzerland and onlysort of passing through at the time. We sort of claim him as a credit because some of theresearch was done at the ANU. Professor Doherty, on the other hand, is a local boy. He said



about tenure, as I understand, something close to this: ‘Those who should have it don’t needit. Those who should not have it don’t deserve it.’

Senator CROWLEY—That is worthy of a tram ticket, Minister.

Senator Vanstone—Worthy of what?

Senator CROWLEY—Worthy of a tram ticket.

Senator Vanstone—A tram ticket, maybe. I understand one of the difficulties in awardprovisions was the ratio of tenure to non-tenure. That is one of the inflexibilities—not justtenure in itself but the award provisions that set up ratios between the two.

Senator CROWLEY—But, essentially, Minister, you are saying that there is not too muchthat would fairly immediately cause you to be concerned about what universities now mightdo by way of fundraising?

Senator Vanstone—No, Senator, I reject the constant desire on behalf of opposition Senatorsto put words in my mouth. We keep an eye on what is going on. If something comes up thatis of concern, you would obviously be concerned about it. But I do not sit down saying tomyself, ‘Heavens. Let me quickly write a list of the things that would concern me were theyto happen.’

Senator CROWLEY—I understand you were talking earlier about things that might bepriorities for universities, such as, teaching and research. In discussing this, for example, withSydney University or any other university that got into a similar venture, would you ask whatpercentage of funds given to the university was being used to pursue the money raisingventures—have they taken on three staff? Have they started a new unit called fund raising unitor something? Would that be a concern?

Senator Vanstone—Well, you would have an interest in the application of Commonwealthfunds.

Senator CROWLEY—Exactly.

Senator Vanstone—That is why, as I understand it, University of Queensland was keen toindicate that. I never got to the bottom of why, because this matter, as I understand it, is stillbefore the courts—unless, in the last few days, there has been some resolution of it. If thematter is resolved one way, then I will have to get to the bottom of it. But I understand thatthe University of Queensland was saying something to the effect that Commonwealth moneywould not be used. I then responded, ‘Well, that is fine but what if Commonwealth moneyis at risk—that is, that the university entered into a deal where they were not initially usingCommonwealth money, but if a deal went wrong the university was liable and we would eitherhelp them out or not.’ That is very important. As I recall—and I do not think this is somethingI have in writing—if we have to face this issue, we will and get it all down pat. But that wasa feasible argument for them to run.

Senator COONEY—Would I be putting the government’s position fairly if I said that thegovernment’s position is that it is up to the universities to decide who they will admit, whatbuildings they will put up, how they will use their land and how they will engage staff andthat government will not interfere unless there is a particularly gross example of somethingthe university does—

Senator Vanstone—That is, in general, a fair—

Senator COONEY—And that you are not able to say what that gross issue is until it arises?Was that a fair way of putting it?



Senator Vanstone—Yes. I think it is a reasonably fair way. Someone asked me recently:what would have to be so bad that would occasion you to cross the floor?

Senator CARR—Interesting.

Senator Vanstone—Yes, I cited the example when I did in fact do that: when yourgovernment, having told everybody in my state that you would not increase the wine tax,sought to double it, and I found myself voting opposite my party. I raised a couple of othermatters generally on which I would have enormous difficulty in deciding what my positionwould be. But I could only come up with a couple because I do not sit around thinking aboutwhat could possibly happen that would make my brain go into a spin, such that I would say,‘This is not on.’ I do not sit around making lists of the bad things. But I agree with you thatwe have to keep our eyes open and be prepared to act when they happen.

Senator CROWLEY—So, again, on the information that is also in this article about theprospect of Melbourne University having plans for a large private capital raising and sharemarket listing for a private university on the inner city docklands, you would say, ‘Well, thankyou for bringing that up, Senator, I will find out about this’?

Senator Vanstone—Once you have accepted that there can be a private university, whyshould you say that there is a limitation on who can run it?

Senator CROWLEY—I am concerned, Minister, that Commonwealth dollars, preciousthings that they are—

Senator Vanstone—I have that concern—you can rest assured of that—to look at the useof Commonwealth dollars. That is why I raised the Bond University example of the questionsthat were asked.

Senator CROWLEY—I am very concerned that these precious Commonwealth dollars arenot in any significant percentage—in fact, I would say not at all—diverted into things likewhether or not a university should be pulling down lecture theatres and building privatehospitals.

Senator Vanstone—Take, for example, the notion that a whole lot of private developers—philanthropists, shall we say, so we are probably talking about the United States (I do not thinkenormous philanthropy is alive and well in Australia because people are not wealthy enoughto have the resources)—came along and said to a university such as the University of Sydney,‘We would like our names in granite in relation to this university, and we would like to setup a centre of excellence in copyright law as it relates to Asia and the Pacific. We do not wantto get tied up with all that profiles rubbish and all that other stuff, but we will make a contractwith you to do the teaching of it,’ and the university could get revenue and better lecturersfor the publicly funded university and saw it as a great opportunity. You would need to thinkvery carefully before you said no.

One of your keys concerns would be the use of Commonwealth money. That has to bewatched, obviously. It is not given to them as a free-for-all to run around and play with, andthe previous government did not take that attitude either. But, equally, one would not wantto put braces on the brain and stop a university from maximising an advantage for governmentfunded students at a government funded university.

Senator COONEY—Could university councils around Australia be assured that the federalgovernment would not interfere with the decisions they make and the processes they gothrough in coming to that decision?



Senator Vanstone—Senator, I have answered that. Our policy was captioned, ‘Freedom,choice and diversity’. We want to give universities more freedom and we have taken a numberof steps to do that, and we intend to continue to do it. But that is not to say, ‘Here you are,guys, here is $5 billion and it is Rafferty’s rules.’ There is always a balance to be found.Generally speaking, we would like universities to have more autonomy.

Senator COONEY—I understand entirely what you said before, that you do not sit aroundthinking of examples of where you would step in. But I was wondering whether there are anysorts of parameters whereby universities could be absolutely assured that there would not beany interference from government.

Senator Vanstone—I have not turned my mind to try and think of some.Senator CARR—In the case of the Sydney University, was the construction of those lecture

theatres publicly funded?Senator Vanstone—Not necessarily. They might have been from bequests. Sydney

University would have a lot of that. That is one of the difficulties. If you have a look at thispie chart which so bored you when it was raised, Senator Carr, you will see 60 per centCommonwealth government—

Senator CARR—That is in recent years, Minister. Those lecture theatres, presumably, arenot brand new.

Senator Vanstone—Hold on. There is a 13 per cent HECS liability and 25 per cent othersources. There were some very wealthy families who made huge bequests to universities.

Senator CARR—To build lecture theatres?Senator Vanstone—They did not always say, ‘This is exactly what you can and cannot do

with them.’ But you walk around and there is the ‘this’ building and the ‘that’ building, andwhatever.

Senator CARR—Is there any way of knowing whether or not there was Commonwealthmoney involved in the construction of these lecture theatres?

Senator Vanstone—You see, if they were old lecture theatres, as has just been pointed outto me, the Commonwealth proportion of funding has significantly increased. In 1951, forexample, a year before this globe was blessed with my own presence, the federal governmentcontribution was 20 per cent; the state government, 43 per cent; student fees, incidentally, 16per cent; investment donations, 8.5 per cent. So I am at a loss to see why you can claim theywere probably paid for by—

Senator CARR—I just ask the question, Minister: will you take steps to establish whetherthere was Commonwealth money involved in the construction of these lecture theatres whichthe university is about to pull down, to replace them with a private hospital?

Senator Vanstone—We will have a look at the proposal.CHAIR —Are there any more questions on 2.1? Senator Carr, let us start, let us get on with

it.Senator CARR—In terms of the issues that were raised this afternoon concerning over-

enrolments, you advised, Minister, that your officers did not in the profile process adviseuniversities that they should offer a more aggressive than usual office strategy to compensatefor the likely—

Senator Vanstone—No, that is not true, Senator.Senator CARR—What was true then, Minister? They did advise?



Senator Vanstone—Senator, it is hard enough helping you through public documents thatyou have been through four or five times, but to have to go over questions that you were givenanswers to earlier today is asking a bit much. You got your answer earlier today; I draw yourattention to it.

Senator CARR—What is the situation?CHAIR —Will you move on, Senator Carr? You have actually asked these questions already.Senator CARR—I have asked one question—Senator Vanstone—You asked that a number of times and you got the answer a number

of times earlier today. I have no intention of repeating it.CHAIR —You got the answer. Can we move on to another topic, please? We have covered

this, Senator Carr.Senator CARR—We have not covered this.CHAIR —Have you got something totally new on this issue?Senator CARR—No, I have not. I have numerous questions.Senator Vanstone—If you have new questions I am happy to answer them but, if you only

have the same question, I refer you to the earlier answers.Senator CARR—Is it the case that in fact universities, this year, did not have a sudden drop

in the number of persons accepting offers? What was the offer acceptance rate this year?Senator Vanstone—I do not know.Senator CARR—Do any of the officers know?Mr Gallagher —I do not know, Senator.Senator CARR—Is there any way in which you can establish that?Mr Gallagher —We would not normally do that. We would have to go and seek information

from each of the institutions.Senator CARR—Has the claim that students who had a substantially lower TER score were

offered places been checked at all?Mr Ruby —Whose claim, Senator? Could you help us with which one it was?Senator CARR—I understand that a number of public claims have been made. For instance,

is it the case that for environmental engineering at the University of New South Wales theTER score was reduced from 88.5 to 80?

Mr Gallagher —We would not know, Senator. It is not until the enrolment process iscompleted that you actually know what the range is in terms of the entry score.

Senator CARR—Presumably you will not be able to advise me what the TER score forsciences courses was? Has that been reduced by up to eight percentage points?

Mr Gallagher —No, we do not Senator. We do not intrude in the admissions policies ofuniversities.

Senator CARR—But you claim that there has been an over-enrolment. We are just tryingto establish how this has come about.

Mr Gallagher —The universities told us their numbers.

Senator CARR—Is it the case that there have been fewer later year student drop-outs—thatthe so-called attrition rate was down?



Mr Gallagher —We think so, yes.Senator CARR—You do think so, or you said yes?Mr Gallagher —As I said to Senator Stott Despoja earlier in the day, the total overenrolment

is higher than the commencing overenrolment, which would suggest that there has been ahigher than normal continuation rate.

Senator CARR—Is that particularly the case, as I say, for mature age students?Mr Gallagher —We have absolutely no information of the composition of the continuation

groups.Senator CARR—Is it the case that the year 12 type applications have declined?Mr Gallagher —No.Senator CARR—It has not declined from 131,998 to 130,964?Mr Gallagher —Year 12 applications?Senator CARR—Yes, year 12 type applications.Senator Vanstone—From what to what, Senator?Senator CARR—From 1996 to 1997.Senator Vanstone—No, the numbers.Senator CARR—The numbers decline from 131,998 to 130,964—is that an accurate figure?Senator Vanstone—Yes, 131,000.Senator CARR—That is an accurate figure?Senator Vanstone—I do not think the officers can help you on that.Mr Gallagher —We do not know, Senator. We could check whether it is a demographic—Senator CARR—Would you take that on notice, please?Mr Gallagher —Yes.Senator CARR—And is it accurate that other applications for 1996—the category called

‘Other Applications’—has declined from 103,344 to 96,077?Mr Gallagher —We will check that, too.Senator CARR—And the total applications are down from 235,007 to 227,041?Mr Gallagher —Down or up?Senator CARR—Down.Mr Gallagher —What were those numbers again?Senator CARR—They are 235,007 down to 227,041. Can you confirm whether those

figures are correct?Mr Gallagher —We will have to get back to you, Senator.Senator CARR—Thank you. How often is it that universities have underenrolled in the

past?Mr Gallagher —Underenrolled?Senator CARR—Underenrolled.Mr Gallagher —For the last decade they have overenrolled every year.Senator CARR—Every year? By how much?



Mr Gallagher —We have the absolute numbers here to answer your question. In broad therewas huge overenrolment in the 1991-92 years of the order of 22 per cent in some universities.As you may recall, there were many stories about students in the aisles, of overcrowded lecturetheatres and all the rest of it.

As I said earlier about this matter today, I do not expect that we will go back to thosenumbers because the institutions have improved the sophistication of their admissionsprocedures. However, they continue to carry a buffer of overenrolment and increasingly it willbe in their interest to carry a modest buffer of overenrolment.

Senator CARR—You did take on notice that you would give me the figures foroverenrolments over recent years?

Mr Gallagher —Yes, we do not have them to hand. We can get you those for the lastdecade.

Senator CARR—Thank you very much. Would you be able to tell me whether or notDEETYA regards the present overenrolments as what is being used by DEETYA officials isa technical glitch?

Mr Gallagher —Technical glitch? An eight per cent overenrolment is hardly a glitch.Senator CARR—So you do not expect this to be the case next year?Mr Gallagher —I expect to see overenrolment next year, yes, Senator.Senator CARR—By what sort of figure do you expect?Mr Gallagher —I cannot put a figure on that. Institutions tend to be shooting at about a

three-to-five per cent buffer.Senator CARR—That is the general rule.Mr Gallagher —Yes.Senator CARR—What do they offer in terms of placements? You say three-to-five per cent

over-enrolment is the norm: what is the level of those to places, what sort of ratio is it? Isthere an expectation that there will be a number of people that decline an offer?

Mr Gallagher —Yes, Senator, and I do not know the details of this because each institutionknows its own characteristics for each of its fields of study. These things tend to be volatile.They have various assumptions that they build in and they monitor at different periods whetherthe behaviour of students in that year is consistent with the equivalent period in the previousyear and, if it is not, then they will start to ask some questions or make some internal shifts.

Senator CARR—So if you tell me that there is a three-to-five per cent buffer as a rule, youcannot tell me what the level of over-offer is by universities?

Mr Gallagher —No, Senator. You are into internal admissions management that is not ourarea.

Senator CARR—So when I said before that I understood that the universities offer as muchas 20 per cent more places than they have available—

Mr Gallagher —I find that very hard to believe.Senator CARR—You find that difficult to believe. What would you find a reasonable

figure?

Mr Gallagher —Somewhere around five per cent.Senator CARR—About five per cent.



Mr Gallagher —Maybe even up to 10 per cent.Senator CARR—Up to?Mr Gallagher —Up to 10 per cent.Senator CARR—Up to 10. And in this particular year—Mr Gallagher —For some institutions.Senator CARR—Oh yes.Senator CROWLEY—And some courses?Mr Gallagher —It is variable across courses, yes, Senator.Senator CARR—So that in this case, where we have additional over-enrolment, to what

extent was that as a result of the universities offering more places than in fact were available?To what extent was there a presumption that places would not be accepted?

Senator Vanstone—We have covered this ground, Senator.Senator CARR—Sorry.Senator Vanstone—We have covered this ground.Mr Gallagher —These are very speculative questions, Senator.Senator CARR—I say it is speculative saying that people were not deferred or deterred

from undertaking university as a result of changes in the HECS policy. It is as speculative asthat.

Mr Gallagher —But the fact is, Senator, there is an overenrolment.Senator CARR—There is an overenrolment and, I am suggesting to you, for a range of

reasons, and given that the number of—Mr Gallagher —Deterrence would hardly explain overenrolment.Senator Vanstone—It might explain universities offering more than what they wanted to

but it does not explain why people would nonetheless take them up.Senator CARR—But the point is, if there is a drop in applications, five per cent overall

and nine per cent amongst mature age applicants, it does suggest a deterrent effect.Mr Gallagher —In the applications.Senator CARR—Yes.Mr Gallagher —But not in the enrolments.Senator CARR—But that is a consequence of the universities lowering their TER scores.Mr Gallagher —We have no evidence of that.Senator CARR—You have no evidence of that?Mr Gallagher —No.Senator CARR—I have put to you a couple of cases tonight, but you say you just do not

know. That is how I understand your response. You do not say that is untrue; you say youdo not know.

Mr Gallagher —We have no evidence that institutions are lowering their TER.

Senator CARR—The department is not aware that, for instance, the two examples I havegiven you are in fact the case. In the case of environmental engineering at the University of



New South Wales, the TER rate dropped from 88.45 to 80.00, and in several science coursesthere was a reduction of up to eight points.

Mr Gallagher —That may or may not be the case.Senator CARR—Is it the case also that other universities have in fact accepted extremely

low TER scores as the basis for admission—some as low as 20.00? Are you aware of anycases that would meet that criteria?

Mr Gallagher —No, but I have heard these allegations in previous years, Senator.Senator CARR—And you say they are not true.Mr Gallagher —They tend in the wash not to be as dramatic as that.Senator CARR—Can you take that on notice? Presumably the department can establish

whether or not it is the case that environmental engineering at the University of New SouthWales TER acceptance scores reduced from 88.45 to 80.00.

Mr Gallagher —We will look at that, Senator. But I also need to say—because this debatehas been had over several years, particularly in relation to teacher education—that theminimum TER does not necessarily represent the average of the student body within thatcourse.

It does not necessarily mean that the numbers are being inflated in a course by virtue oflowering the TER. I can see that there is a connection. But when you actually look at thecomposition of students against the minimum TER—this becomes important in terms of thedebate about the quality of the next generation of teachers—they tend to have a higher averageTER score than the minimum.

Senator CROWLEY—But as you said, Mr Gallagher, this is not the first time this hashappened; is it? Universities have been moving their entrance scores up and down a bit overthe years, depending.

Mr Gallagher —Precisely. Therefore, to say that any shift in TER is a HECS driven effect,I do not think is able to be substantiated.

Senator CROWLEY—But it is also not able to be denied.Mr Gallagher —Like a lot of things.Senator CROWLEY—I think it is one of those things. I guess the point of my colleague’s

question is: to what extent might you conclude that the drops are more significant or lesssignificant? To what extent might you ascribe some of that to within the bounds of universitieshaving done this before—usual practice, you might call it—and what might be ascribed tochanges to HECS?

Mr Gallagher —The popularity of different courses varies year on year. Universities findthemselves seeking to maintain student numbers in particular courses and, while they canadjust into new courses, shift their entrance requirements. That would be happening now inphysics and in classics and in some sciences.

Senator CROWLEY—What would they be doing in physics and classics?Mr Gallagher —Student demand for those courses has been declining. In order to attract

students, one option that universities may adopt is to reduce the TER from previous years. Thatis not a HECS driven factor. That is just a response to changes in student demand.

Senator Vanstone—I will make two points in this respect: firstly, if you want to say thatit is no big deal, that universities are overenrolled—they have been overenrolled for plenty



of years—you are, in fact, confirming that this year is not much different to others. I wouldsay that that, overall, confirms that the changes last year have not changed things much. Weare still on a pattern where universities overenrol.

Secondly, with respect to TERs—in addition to quality, if there was another issue I wantedto have something to say about this year, it would be the TERs—they are not a reflection ofthe intellectual skill required to complete a course. They are simply a function of theintellectual skill that you have and they are used as an indication of how many places that auniversity has available in that course.

You might have 50 people who, on any objective judgment between all parties, were capableof completing the course, but if there are only 10 places, then the TER score is going to bebumped up to let only 10 in. With regard to the lower end of the TERs, I think there is ageneral community concern—not just this year, but for a significant period—that some TERshave perhaps been edging down. There is a concern that in some areas they have beeninappropriately edging up.

Senator CARR—Would you say, in your theory on the TER scores, that there is acorrelation between success and TER, particularly at the higher end of the TER? And is thereless of a correlation between success at university and the bottom end of the TER scale?

Senator Vanstone—I have not seen anything on that but, generally speaking, I would beinclined to agree with that.

Senator CARR—Therefore, if the universities are in fact reducing their TER basis ofapplications, we do have—

Senator Vanstone—No. I know what you are going to say, and it is a stupid assertion foryou to make. You know full well that a person at the top end of the TER spectrum would findmost university courses a pushover so, of course, it follows that it is easier in some respectsfor people at the top end. It does not follow that, by every point which you come down, itis difficult. If you make big jumps, yes. The world is not black and white. All the lego piecesare not big ones. I am sorry if you find—

Senator CARR—What does that have to do with the question?Senator Vanstone—I am sorry that you cannot see the analogy. The point is: you are trying

to say, ‘Because it is clearly more difficult for someone with a low TER to complete a coursethan it is for someone with a very high TER, anytime you reduce the TER, you must bemaking it more difficult for everybody.’

CHAIR —Senator Carr, this matter is in the hands of the states.Senator Vanstone—They are the simplistic, big lego pieces. You cannot understand the

smaller complexities of life, so you go for the big bits.CHAIR —It has nothing to do with the federal estimates.Senator CARR—It is not quite the case.CHAIR —It is the case, because the TERs are set at a state level.Senator CARR—It is the basis upon which there is allocation of money to students. That

is the entry score on which students can get into universities.CHAIR —Which is a state matter on the setting of TERs. It has nothing to do with us.

Senator CARR—Minister, what is the rise in the number of overseas students studying atuniversities? What is the aggregate number there?



CHAIR —Any questions on 2.1?

Senator CARR—I have asked a question. I am waiting for an answer.

Senator Vanstone—The information I have is that there were 45,569 in 1996, and 51,798in 1997. But that is early estimate data.

Senator CARR—What do you anticipate the number to be now?

Senator Vanstone—1997?

Senator CARR—That is early estimate data. How early was that data?

Senator Vanstone—I do not know.

Mr Burmester —This was the early estimate data returned to the department in the middleof April.

Senator CARR—So it is consistent with this material claiming that there is a 26,000 over-enrolment.

Mr Burmester —Yes. It is on the same basis.

Senator CARR—Of the 26,000 over-enrolment, how many of those come from overseassources? This is a dramatic increase in overseas students; isn’t it?

Mr Burmester —6000 increase.

Senator CARR—That is quite a substantial percentage rise; isn’t it? It is something like17.3 per cent.

Mr Burmester —No. It is 13 per cent on our view.

Senator CARR—On your figures. I understood that other data—

Senator Vanstone—Senator, I think you might possibly be a bit confused. I am not surewe are talking about the right thing here. Fee paying overseas students are not a part of theCommonwealth load, so they are not a part of the over-enrolment estimations.

Senator CARR—So the international students are not part of the over-enrolment at all.

Mr Burmester —No.


Senator CARR—Are postgraduate students part of the load?

Senator Vanstone—We have information on the undergraduate load, the total load, and thepostgraduate load.

Senator CARR—Is that part of the 26,000? Does that include postgraduate students?

Senator Vanstone—I will just check that for you.


Senator Vanstone—The information I have is that the just over 26,000 is on undergraduateload. If you take the total, which includes postgraduate—but not overseas—the estimatedoverenrolment is 33,000.


Senator Vanstone—I wish I had used that in the beginning.

Senator CARR—We would have had a great time with it.



Senator Vanstone—But I was primarily referring, as you know, to the government’sdetermination to provide more government funded undergraduate student places this year thanlast year, and more again next year, and that is my prime focus.

Senator CARR—Are there any universities that have enrolled fewer students and targetedload in any course?

Senator Vanstone—There is one university that is underenrolled that I know of, but it isless underenrolled than it was under your government’s initiatives.

Senator CARR—So, it is only the one university?

Senator Vanstone—No, there might be more. This is the one I know of. Yes, there arethree.

Senator CARR—Which are the three?

Senator Vanstone—UNE, James Cook and Northern Territory.

Senator CARR—So, it is the regional universities. Is that in all faculties or just in some?

Senator Vanstone—That is just total for the university. It is not broken down by faculty;it is by university.

Senator CARR—When will you have the faculty breakdowns?

Senator Vanstone—During the profiles process, Senator.

Senator CARR—In terms of the overenrolments, do the regional universities tend to bemore over enrolled than the—

Senator Vanstone—No, I can give you some information on that, actually. For totaloperating grant load the regional institutions have increased by 1.8 per cent, metropolitan bythree.

Senator CARR—Sorry, 1.8?

Senator Vanstone—That is right, per cent. This is 1996-97. Is that what you are wanting?

Senator CARR—Yes.

Senator Vanstone—We do not have enrolment. This is now the difference between 1996and 1997. Is that clear to you? The regional institutions on undergraduate load were 0.32 upand the metropolitan institutions 3.83. So the metropolitan institutions are more up on last yearthan the regional ones were, in percentage terms.

Senator CARR—I understand, Minister, that you do not keep records of the universitiesthat are now charging up-front fees. Is that the case?

Senator Vanstone—Well, I keep records, I am not making a list. I mean, I read the papers.

Senator CARR—You read the papers. So that is the basis of your information, is it?

Senator Vanstone—Yes, I think that is fair enough at the moment. I am sure that I willhear about it as universities proceed down that path or decide not to. I think VUT might havewritten to me, or maybe they just sent me a copy of a press release they did. As I say, it isan opportunity that parliament has decided to give universities, and it is up to universities todecide whether they want to take it up or not.

Senator CARR—How do you respond to the Sydney University Vice-Chancellor, Mr GavinBrown, who said that the University of New South Wales Senate had little choice but toapprove full fee paying places because of federal funding cuts?



Senator Vanstone—I would point out that the operating grant money is more this year thanlast year, that university funding has been capped rather than cut, and that any cut is againstforward estimates, which were growth estimates. So I would simply to say at students at thatuniversity, ‘Look, the money has been capped and not cut.’ I frankly would not put up withthat for one minute as being a reason for introducing fees. On the other hand, the Vice-Chancellor could have said, ‘Look, without an increase in funding, without the Liberalgovernment rejecting Labor’s premise that supplementation for salaries should not be paid,that is, whilst the new government agrees with the old government that supplementation forsalaries should not be paid, we will have to find these salary increases out of other moniesand so we have to make the cuts in that respect.’

I point out that I was reading something recently where one person purporting to be aqualified commentator says, ‘The cuts were effectively something like 12 to 15 per cent.’When you take into account the need to provide a salary rise, universities have to decidewhether they believe what should be described as a cut is against what they had last year,against forward estimates, or against the pipedream of what they thought you were going toget.

Over and above all of that, I would say to the students of the University of New SouthWales: ask your Vice-Chancellor if he has ever participated in discussions calling upon thegovernment to introduce those fees. Ask him how long he has been a member of the AVCCand how long it has been AVCC policy to allow universities to introduce fees. Ask him thenumber of occasions he has raised it with me.

Senator CARR—I see. So, you would suggest that that is just wrong, would you?Senator Vanstone—I have given you my answer. I do not care to choose your words. You

can put whatever words you want on it.Senator CARR—You are saying, of course, that the payment of fees does not deter

university enrolments, are you? You are saying it actually increases opportunity, I suppose.Senator Vanstone—I do maintain that, by allowing universities to sell full fee places, some

students will move out of government funded places. In other words, letting the rich pay willmean that they are no longer on the taxpayer and that taxpayer funded spot will be free forstudents who might otherwise not have got in.

Senator CARR—It seems that the only universities that are agreeing with you are the onesthat are already very well off. The older, more prestigious institutions seem to be the ones thatare actually accepting—

Senator Vanstone—What about Deakin? There are not that many that have agreed to thisat this stage and, frankly, I do not mind if they do not (it is an option we have given them),but Deakin University has made this decision—a very forward thinking university, with fairlystrong international profile, good links with industry, and right up to date.

Senator CARR—But by and large it is in fact the older and more prestigious institutions,is it not?

Senator Vanstone—The University of Western Australia has apparently said no. I do notknow where UQ are. ANU has said no. I do not know that you can draw that conclusion. Youcan draw whatever conclusion you like, but do not invite me to, though.

Senator CARR—Can I ask then, Minister, because we will probably have to return to thatissue, about this question of the funding of the overenrolled students at the marginal rate. Iunderstood that Mr Gallagher was giving me one example, before we were interrupted, of the



fees being charged. I think you mentioned arts at a particular university. They are 25 per centof full average cost. Is that not the standard impact of the government’s decision to fundoverenrolments at marginal rather than average cost?

Senator Vanstone—Senator, you have asked this question before. You have been given theanswer.

Senator CARR—No, I have not.

Senator Vanstone—You have, and I refer you to the answers you were previously given.

Senator CARR—Mr Gallagher, you gave me an example in arts. What is the situation inveterinary science? Is it still 25 per cent?

Mr Gallagher —I would have to do the calculations, Senator, but I would not think themargin for overenrolment is as attractive there as it would be in the volume courses. If youare going to go for margins, then you go for volume; you do not go for margins in smallnumbers at high costs.

Senator CARR—So the overenrolments are essentially in the arts and the large volumedisciplines?

Senator Vanstone—This is supposition. Mr Gallagher has put to you a perfectly sensibleproposition that, if you are going to overenrol, that is what you would do. Presumably if youare talking about something expensive like vet science, rather than work on the overenrolmentbasis you would sell places.

Senator CARR—In medicine is that the same case? Are you funding a medical place at25 per cent of full average cost?

Mr Gallagher —Medicine is capped, Senator, and it is also excluded from fee paying.

Senator CARR—And architecture? Is it 25 per cent of average cost?

Mr Gallagher —We would have to do the calculation, Senator. I was trying to give you anillustration for the volume class courses—

Senator CARR—I know. I thought you were actually telling me that you did not believethat in fact the government was funding at 25 per cent of full average cost. I am justwondering whether or not—

Senator Vanstone—Mr Gallagher did not say that. He said he did not have that informationto hand and chose to give you an example. I will just draw your attention tomorrow to theHansardthis afternoon where you were given those answers.

CHAIR —So can we go on to something new, Senator Carr? We are trawling over what wedid this afternoon, again.

Senator CARR—I indicated to you this afternoon—you wanted to cut me off—that I neededto return to these matters.

CHAIR —I gave you plenty of time.

Senator CARR—I am asking a specific question, Minister: do you—

Senator Vanstone—Senator, you were not cut off. Believe it or not, implausible andunacceptable as it may seem to you, there are other members of the committee and SenatorMargetts and Senator Stott Despoja gave you enormous indulgence yesterday and were entitledto come in and ask a few questions today. If you regard that as being cut off, I am sorry. Isuggest you get professional help.



Senator CARR—Is it the case that the extra, overenrolled students are funded at a rate equalto 25 per cent of full average costs?

Senator Vanstone—As I say, Senator, you have been given the answer to that. The officersdo not believe they have got the information to answer you fully on that.

Senator CARR—Will they take that on notice?Senator Vanstone—Senator, I am not going to ask the officers to go through and calculate

a whole range of material. If there is readily available material to which they can refer to giveyou a sensible answer, they will. I am not going to ask them to do a whole lot of calculationsto indulge you.

Senator CARR—Can you indicate to me, Minister, how many students are paying theirHECS fees up-front and in full?

Senator Vanstone—We might be able to give you some information on that.Mr Ruby —Do you have your copy handy, Senator, and we can show you the relevant table?Senator CARR—Which particular table is that?Senator Vanstone—Selected higher education student statistics.Senator CARR—No, I’m sorry, I do not have that particular copy. I appreciate you drawing

that to my attention. Have we got a copy of that?Senator Vanstone—Have you never had one of these?Senator CARR—No.Senator Vanstone—We will send you one, eh?Senator CARR—I did not get an answer to the question.Mr Burmester —Out of a total number of HECS-liable students of 530,466, there were

151,972 students who paid up-front in 1996.Senator CARR—Thank you very much. The decision to actually discount up-front payments

of $500 or more—how many have taken up that proposition?Senator Vanstone—You mean the proposition that was just announced in the budget the

other day?Senator CARR—There has been none at all? This is the first year of operation, is that what

you are telling me?Mr Burmester —The legislation has to be changed this year for commencement in January

next year.Senator CARR—Thank you.Senator CROWLEY—Have you made an assessment, Minister, of how much you expect

that might be taken up, and therefore what will be the cost to the Commonwealth?Mr Burmester —Yes. The figures in the budget reflect the calculations that were done.Senator CROWLEY—I’m sorry. I beg your pardon, I didn’t realise they were spelt out

like that. What is the extra cost?Mr Burmester —It should be in the measures table—Senator CROWLEY—Minister, while Mr Burmester is looking for that figure, can I ask

you this—they pay in packets of $500 and a student will then get 25 per cent reduction? AmI understanding that correctly?



Senator Vanstone—It is $500 or more, not $500 packets. If someone wanted to pay $600they could; it is not $500 or $1,000 or $1,500.

Senator CROWLEY—Can you just make it clear to me—I am not sure that if you pay—letus take the $500 figure—does that cover you for—

Senator Vanstone—I think it is about 660-something-dollars of your HECS debt comesoff—

Senator CROWLEY—That is then assessed to be 75 per cent—is that right?Senator Vanstone—What you pay is 75 per cent of what comes off, yes, I think that is—Senator CROWLEY—If you pay $500, you have actually paid equivalent to $650 or

whatever it is—Mr Burmester —Yes, your liability or your deferred amount is reduced by $666.Senator CROWLEY—Thank you. Okay. Can that be paid at any time?Mr Burmester —Before the census date.Senator Vanstone—It is up-front. It is an up-front payment.Senator CROWLEY—Oh. I see. So you cannot enrol for a course and then just work

during the holidays picking grapes or something in May or April and then find that in Mayyou actually have got a parcel of $600 and then proceed to pay off your HECS?

Senator Vanstone—No. The measure is designed—right at the moment, as you know, underthe previous government’s arrangements—which I don’t dispute in the sense of theirappropriateness as they were—if you were able to pay your HECS up-front each semester,you got a 25 per cent discount. Some students would not be able to pay the full amount up-front and they would miss out. I think that is inappropriate and it is fair enough to say, ‘Look,if you want to make an effort at paying something up-front, we will give you the discount’.We have picked a figure of $500 and said, ‘If you pay it all up-front, you will get the discountbut if you can only pay $500, we will still give you the discount.’

Senator CROWLEY—It may surprise you, Minister, but I think that is a commendableproposal. I just want to be clear when a person is going to be eligible to pay it. I want to knowwhat up-front means. Does it mean before each semester?

Mr Burmester —Yes.Senator CROWLEY—So that means three or four times a year?Mr Burmester —Twice a year before the census date for each semester. That is, before 31

March and before 31 August.Senator Vanstone—After those dates, the existing procedures—which we are not

changing—stay; that is, if you want to make a voluntary payment, there is a 15 per centdiscount.

Senator CROWLEY—I just needed to be clear about that. I had the feeling that maybeyou could slap in whenever you had the $500.

Senator Vanstone—No, that is the 15 per cent discount that still stands. This is a way ofletting some other people into the 25 per cent up-front.

Senator CROWLEY—I am clear on that fact now, thank you very much.

Mr Burmester —Senator, can I just provide those figures?Senator CROWLEY—Yes, thank you.



Mr Burmester —Budget measure No. 5 is a cost to the budget of $0.988 million in 1997-98;and $1.579 million, $1.879 million and $2.088 million in the following years.

Senator CROWLEY—That is modest, isn’t it?Mr Burmester —It represents the cost—Senator Vanstone—We will have to give the discount if we have calculated badly. If a

whole lot of them do it, we will still have to give the discount.Mr Burmester —This represents just the cost of the discount. It is not the amount of money

that flows into the budget as a result of the measure. This is a cost to the government ofproviding the discount—

Senator CROWLEY—No, that is the question I asked. What is the extra cost? If you arepicking up the 25 per cent, what do you anticipate that pick-up will be? Is that a generousassessment or cautious?

Senator Vanstone—Who knows? It is not intended to be wild.Mr Burmester —It was a prudent budget assessment.Senator CROWLEY—Prudent?Mr Burmester —As all budget figures should be.Senator CROWLEY—That, I think, Mr Burmester, is the word I will take home. Not

cautious or extravagant—prudent.Senator CARR—What is the current discount? I thought you said it was 25 per cent.Senator Vanstone—Yes, that is right; for full fees up-front.Senator CARR—That is the current arrangement before the legislation goes through?Senator Vanstone—Yes, if you pay the full amount.Senator CARR—Is there not a rate of 15 per cent? Is that for partial payment on a semester

basis?Senator Vanstone—That is as you choose after the cut-off. That is not up-front. That is

what Senator Crowley was just asking.Senator CARR—I just wanted to be clear. I thought you used the figure of 25 per cent.

I am just wondering whether I understood that.Senator Vanstone—No, I said the 25 per cent we will apply to $500 or more for up-front

payments and, in addition, the 15 per cent applies to the time when you can wander in whenyou like and pay.

Senator CARR—While we are on the question of HECS, can you explain to me thedifference between the HECS assessment debt, not including outlays in 1996-97, and the HECSreceipts through the tax system 1997-98 which I notice are in the PBS—

Senator Vanstone—Perhaps you might draw officers’ attention to what you are reading fromso that they can get an answer.

Senator CARR—Perhaps I might want to look myself. I am wondering whether or not—Senator Vanstone—We are not going back to the PBS are we?Senator CARR—If you turn to PBS page 43—

Senator Vanstone—Not at 10 minutes to 10? We are not finally going to get onto theprogram budget statements are we?



Senator CARR—I told you it was going to be a very long day. You had the option to gohome early tonight but you chose not to take it. That is entirely a matter for you.

CHAIR —We are still on the program, Senator Carr.Senator Vanstone—It is not a question of timing. It is a question of them surviving.CHAIR —Look at the program, Senator Carr.Senator Vanstone—Finally we are getting onto the budget estimates.Senator CARR—You are the people who broke the agreement, so you just bear that in

mind, Minister. If you want to complain about it—CHAIR —Senator Carr, there was no agreement.Senator Vanstone—There was no agreement, Senator, and you know it.CHAIR —There was no agreement with anyone.Senator CARR—You would say there was no agreement—Senator Vanstone—In your dreams!CHAIR —I would not put that on theHansardrecord if I were you.Senator CARR—I would. And I would put on the record, Minister, that the reason you were

not here on Monday when you were at the cabinet is that there was, in fact, an agreement.The only committee that did not meet on Monday was this one.

Senator Vanstone—I cannot help that there was a cabinet meeting.Senator CARR—I am not excited about that. As I indicated to you, if you want to stay here

tonight and tomorrow night, we will.CHAIR —Have you got any questions, Senator Carr?Senator CARR—Yes, I have. I would like to draw your attention to page 43 of the PBS

book. I am wondering whether you could explain to me the difference in the HECS receiptsbetween 1996-97 budget of $219.524 million and the estimated outcome of $290.062 million?

Mr Gallagher —Can we take that on notice? There seems to be a technical adjustment,which we will need to just verify, rather than give you an answer here.

Senator CARR—Thank you. There seems to be quite a dramatic growth in the outlays, asI read that. Can you explain to me why that is? The 617.232 has a variation of 112 per cent.Could you explain to me how that occurs?

Mr Burmester —Senator, the increase from the 1996-97 financial year to the 1997-98financial year is largely the result of the previous budget measure of reducing a threshold and,therefore, the payments through the tax system increased.

Senator CARR—That is quite a dramatic increase, isn’t it?Mr Burmester —I do not have a breakdown of the full increase, but a large component of

it would certainly be the reduction in thresholds.Senator CARR—How does that figure of 112 per cent variation come about?Mr Burmester —That is just the increase one year to the next.Senator CARR—Yes. Is the 112 per cent increase from the 1996-97 and 1997-98 years?Mr Burmester —Yes.Senator CARR—A 112 per cent increase.



Mr Burmester —I am not sure whether it is off the 1996-97 budget estimate or the actualestimated outcome for 1996-97. I would have to do the arithmetic.

Senator CARR—Could you explain to me, Mr Burmester, where that 112 per cent thencomes from? If you are not sure, I wonder—

Mr Burmester —If I had a calculator, it would be easy to do.

Senator CROWLEY—Is it 219 over 617 or 290? That is the problem, isn’t it? I reckon,on the figures, it is the 219. I could be wrong. It might be 290. It might be the estimatedfigure.

Mr Burmester —No. It is on the 290.

Senator CROWLEY—It is too.

Senator CARR—Right, 290.

Senator CROWLEY—Why would you do that, Mr Burmester? Why would you make apercentage variation on an estimated outcome rather than the actual outcome?

Mr Burmester —This is part of the way that the budget is reported when it is an earlybudget. The actual final outcomes for the year are not known at the time that the budget isbrought down.

Senator CROWLEY—Thank you. So when would you have arrived at this estimated 290figure?

Mr Burmester —Between when the budget was first estimated back in August last year andwhen the budget papers and estimates were prepared in the run-up to the budget this year.

Senator CROWLEY—So you have a fair amount of evidence that it is going to be morethan 219.

Mr Burmester —I think it would have been estimated on later figures from the tax office,who could advise us on the actual collection through the PAYE system.

Senator CARR—If I could get your further advice, what was the estimate of the HECSreceipts last year?

Mr Burmester —We estimated that in the 1997-98 year it would be a savings of $229million.

Senator CARR—What have you got this year? What is the actual—

Mr Burmester —The total increase shown there is $327 million, which is about $100 millionmore. That is why I said it was only a component, but certainly a major component of thatshift. Another part of the component could be the same reason that the $219 million has goneup to $290 million due to later information.

Senator CARR—A hundred million is a lot.

Mr Burmester —The previous year, between the budget estimate and the estimated outcome,went up by $70 million.

Senator CARR—So it is not unusual for you to play around with those sorts of levels offigures?

Mr Burmester —They are re-estimated as required for budget—

Senator CROWLEY—They are pretty wildly out, aren’t they? I presume you are tryingto make an assessment of what, based of the previous year of performance, you anticipate



students will be paying this year. But it seems to me a significant difference between whatwas proposed for the 1996-97 budget and what is the adjusted estimate for the 1996-97 budget.

Mr Burmester —This is talking about estimating collections of, in 1996-97, roughly $300million off a total outstanding HECS debt of some $5 billion. It is still a small proportion ofthe total outstanding debt. The only way we can do that is by using tax data from previouscollections and modelling it through a projection to estimate what the outcome will be.

Senator CROWLEY—I know it is a small percentage, Mr Burmester. Your first figure wasin the ballpark, I guess, but it is quite a variation. I suppose what you are saying is that arough estimate is the best you can do. You are really trying to guess how humans are goingto behave.

Mr Burmester —Two hundred and thirty million dollars of the increase from 1996-97 to1997-98 is a direct consequence of the budget measure taken the previous year. So that isexplainable. Seventy million dollars at least represents a change that happened in a base inthis financial year, so I do not think there is a lot that is not explained in that total.

Senator CARR—Can you tell me, just to refresh my memory: this increase in revenue—what is that figure there? What is the increase in revenue on the basis of your newcalculations?

Mr Burmester —I am not sure what you mean by ‘increase in revenue’.Senator CARR—HECS receipts through the tax system. You have an increased estimation

on your revenue. How much is that, again?Mr Burmester —The original budget estimate at budget time last year was $219 million

and it has gone up to $290 million—a $70 million increase.Senator CARR—Right. What has happened to that revenue? Where has that gone?Mr Burmester —It would have been paid into the trust fund and reduced the subvention

that would have otherwise been made.Senator CARR—Can you show me where that appears in the PBS?Mr Burmester —In the line above—which is payments from the Commonwealth to the trust

fund account—is the balance between the total trust fund and the amount that is received.Senator CARR—That has been increased by the $70 million?Mr Burmester —No, it has been reduced. It has been reduced by an amount—not an

equivalent amount, and I am not sure why. I would have to go and disaggregate those figures.Senator CARR—Could you tell me why it is not by the equivalent amount?Mr Burmester —There may have been offsetting amounts for other reasons, such as the trust

fund increasing in size because of larger numbers than were known at budget time last year.Senator CARR—Yes. It is a decrease of $33 million on that, isn’t it?Mr Burmester —Yes.Senator CARR—The point I am trying to get to—Senator Vanstone—It would be helpful if you could find it.Senator CARR—I have found it. I could see $33 million there and I have been advised

it was $70 million so I am trying to work out what has happened to the money.

Mr Burmester —Another $22 million of it could be explained by the impact of differentialHECS which was estimated to cut in in the last year and rising to $66 million in the 1997-98



year. That would increase the size of the trust fund by that amount, the $33 million plus the$22 million, which is $55 million, so we are getting closer. I am happy to go away and getthe disaggregation of it and give you an explanation.

Senator CARR—Thank you very much. I am trying to follow this because there is adifferent layout to the way these figures were produced in the previous year’s budget measuresand I am trying to reconcile the two, which is the point I made in other programs. Can youexplain to me how budget measure 5 actually works by improving and streamlining the HigherEducation Contribution Scheme arrangements?

Mr Burmester —It has two components. One is the provision of a 25 per cent discount forpartial up-front payments that we have discussed. The other component is changes to theremission procedures that allow students, when circumstances beyond their control preventthem from completing their course, get a remission of their HECS liability. That has beenstreamlined from a two-tiered timing arrangement to a single 12-month period to apply.

Senator CARR—And that covers both those components?Mr Burmester —Yes.Senator CARR—What is the total impact of budget measure 5 on that?Mr Burmester —They were the figures I read out earlier. Point 9 which was the figure I

read out.Senator CARR—In terms of what was in the last budget measure where it refers to the

exemptions from scholarships for Australian undergraduates, HECS exemptions, does thataffect that at all? Is there no impact on the budget for exemptions for HECS scholarships?

Mr Burmester —No, they were included in last year’s budget and they were costed at thetime as zero outturn prices rounded to $1 million.

Senator CARR—So up to $1 million?Mr Burmester —No, I think that is because this is all done in underlying basis and therefore

it would not have appeared in the underlying basis calculation of the budget.Senator CARR—So that does not appear in this year’s budget either?Mr Burmester —It was a measure from last year so it now forms part of—Senator CARR—This is forward estimates. I am just wondering how you pick up forward

estimates in the way in which this is presented.Mr Burmester —Once a measure is introduced and reported in the budget measures of the

budget in which it was introduced, it then enters the forward estimates as part of the forwardestimates. It is not separately identified.

Senator CARR—I see, it does not have to be repeated. In terms of the higher educationrestructuring and rationalisation package, what is the impact on the budget there?

Mr Burmester —That is budget measure 4. It is $10 million, $7 million, $4 million and $4million.

Senator CARR—Over the forward estimates period.Mr Burmester —That is over the financial years.Senator CARR—Could you explain to me how the additional one per cent cut that was

announced in the budget to the operating grants would actually work? What is the dollar valueof that?



Senator Vanstone—It is not additional, of course, it was there in the last budget papers forthose who have the capacity to read!

Senator CARR—Perhaps you could draw my attention to that.

Mr Burmester —In last year’s budget papers, because the reductions in university fundingoccur on a calendar year basis, only half of the 2000 year was reported and that providedfurther savings reported in the budget between 1998-99 and 1999-2000 of an increase of $51million.

Senator CARR—$51 million, that is in the year 2000-2001 is it, or just 2000?

Mr Burmester —That will be the impact in the year 2000, but it was also shown as anincrease on a financial year basis in last year’s budget.

Senator CARR—What page of the PBS last year was that on? Would you have that handyor not?

Mr Burmester —No, I was reading from the minister’s budget statement last year whichincluded a copy of the budget measures that subsequently, the following week, appeared inthe budget papers. I do not have a set of last year’s budget papers with me.

Senator CARR—I see, it was not in portfolio budget statements 1996-97 was it?

Mr Burmester —It should have been.

Senator Vanstone—In the budget document that shows that the savings were made up ofrevenue measures primarily.

Mr Burmester —They certainly appeared in the PBSs from last year.

Senator CARR—I am just looking here on last year’s page 34: estimated effect on outlays.I have got 1996-97, 1997-98, 1998-99 and 1999-2000—and I am just wondering where it isthere.

Mr Burmester —Which page are you on?

Senator CARR—I was on page 34.

Mr Burmester —In budget measure No. 16 last year, there was an increase in 1998-99 from$215 million to $266 million. That is the $51 million difference that I just referred to frommy document. It also appears in the budget statements. It is the fourth last line in the tableon page 34.

Senator CARR—You were saying the $266 million includes the $51 million, were you?

Mr Burmester —That is correct.

Senator CARR—The total higher education spending in 1996, what figure is that?

Mr Burmester —Total Commonwealth outlays in 1996 dollars was $5,447 million.

Senator CARR—In the year 2001, what will the figure be?

Mr Burmester —Total grants will be—

Senator CARR—Total higher education spending, on the same basis, what is the equivalentfigure?

Mr Burmester —$5,289 million—that is in constant prices.

Senator CARR—$5.2 billion.

Mr Burmester —$5.3 billion.



Senator CARR—What is the growth rate likely to be? In terms of impact of inflation andgrowth in student numbers, how much of the—

Mr Burmester —In outturn prices?Senator CARR—Yes.Mr Burmester —We have got to go back and put the 1996 one in outturn prices as well.

The 1996 figure would be $5.356 billion and the 2000 figure would be $5.372 billion. Thatis an increase of $20 million in outturn prices.

Senator CARR—And how many extra students do we expect to be able to cater for in thatperiod? What is the growth in student numbers throughout that period?

Mr Burmester —Total places, which includes postgraduates as well as undergraduates in1996 was 417,395 and in 2000 it will be 411,515.

Senator CARR—So you actually have fewer students in the system?Mr Burmester —There are approximately 6,000 fewer funded places.Senator CARR—Six thousand fewer funded places?Mr Ruby —Commonwealth funded places.Senator CARR—I am just wanting to get a fix on the forward estimates effect.Mr Burmester —The consequence of that adjustment if you are going to calculate the per

EFTSU rate is as follows: for the operating grant we estimate that in 1996 the per EFTSU was$11,214; in 2000 it will be $11,164.

Senator CARR—What do you expect to be the inflation rate in that period? What is yourcalculation based on this?

Mr Burmester —I do not have the parameters that would have been used. Treasury issuethe parameters that would be applied to outturning those prices and they have been built intothose figures.

Senator CARR—Are they in constant dollars? They are not likely to be in constant dollarsare they?

Mr Burmester —No, that is why I gave you both the constant price figure followed by theoutturn price. The outturn price is the one to which Treasury inflation parameters have beenapplied.

Senator CARR—The EFTSU figure, that is in outturn prices?Mr Burmester —An EFTSU figure is a count of students. It does not have an inflation thing

in it.Senator CARR—I was just trying to get—Mr Burmester —Sorry, per EFTSU figure—Senator CARR—If you are spending $11,000—Mr Burmester —Sorry, that is in constant prices.Senator CARR—That is the point I am trying to make: that is in constant prices?Mr Burmester —Yes. Constant or real prices.Senator CARR—Yes. On these higher education restructuring and rationalisation packages,

how do you expect that to be administered?Senator Vanstone—I answered that this afternoon, Senator.



Senator CARR—You will not have any trouble in refreshing my memory, will you?Senator Vanstone—It has been answered and I have nothing to further—Senator CARR—I was not present at the time.Senator Vanstone—I have nothing further to add to the answer, Senator.Senator CARR—So you do not wish to answer that now?Senator Vanstone—It has been answered, Senator.Senator CARR—You say in your budget measure that this measure can expect to influence

program performance and enhance the sector’s capacity to respond flexibly to its environment.How will that work?

Mr Gallagher— Senator, as answered earlier, it will help institutions to strategically positionthemselves in the new deregulated environment by enabling them to undertake courserationalisation or collaborate on other activities with other institutions or investments in newtechnologies which will improve their program delivery quality and attractiveness to studentsso that they may penetrate new markets.

Senator CARR—What work has been done by the department to establish the best waysin which that money can be spent?

Mr Gallagher —Initially, Senator, we asked institutions for ideas. On the basis of those ideaswe have almost completed constructing a draft set of guidelines for the minister’s approval.

Senator CARR—So these guidelines, what areas will they cover? What issues do theycover?

Mr Gallagher —Course rationalisation, technological improvement, course delivery andinterinstitutional collaboration.

Senator CARR—And presumably that is the basis on which the universities will be ableto apply for access to those funds?

Mr Gallagher —Subject to the minister’s agreement to the guidelines.Senator CARR—When do you expect, Minister, to issue those guidelines?Senator Vanstone—That was answered this afternoon, Senator.Senator CARR—I did not hear it, Minister. What was the—Senator Vanstone—Perhaps we could rehearse everything you were not here for. Perhaps

we could do it again and again and again. You could just waltz in and out as you like. If youdid not hear anything, you could ask everybody to go through it again to indulge you.

Senator CARR—When, Minister, will you have these guidelines ready?Senator Vanstone—I am not sure.Senator CARR—Will they be disallowable instruments?Senator Vanstone—Yes.Senator CARR—Will the distribution of funds be entirely upon submission or will there

be any ministerial discretion?Senator Vanstone—Let me track that back. I have not fully turned my mind to whether

they should be or must be disallowable. The officer’s expectation is that they would be, butI will have a look at that.

Senator CARR—How do you determine whether guidelines are disallowable or not?



Senator Vanstone—I suppose the same way you look at what the legislation requires youto do. As you know, there are certain guidelines and determinations that are not. The previousgovernment, for example, as I understood it, set the guidelines for fee paying for postgraduatecourse work students under non-disallowable instruments.

Senator CARR—Is it your understanding that the legislation requires you?

Senator Vanstone—No. As I said, I have not turned my mind to that. The guidelines havenot come to me. I will have a look at it.

Senator CARR—Is it the opinion of the legal branch that these guidelines should bedisallowable?

Senator Vanstone—I have not turned my mind to it. I will get some advice and then I willbe able to turn my mind to it. As I said, if they have to be, they will be.

Senator CARR—Have you had advice from the legal branch on this matter?

Senator Vanstone—Not that comes to my mind.

Senator CARR—When do you expect the funding packages to be available to universities?

Senator Vanstone—They are not packages that are available. People have to makeapplication.

Senator CARR—When do you expect applications to proceed?

Senator Vanstone—Certainly not until the bill is passed.

Senator CARR—So there is a legislative requirement that the bill be passed?

Senator Vanstone—Yes. If you wanted to get together with the Democrats and stop theuniversities having access to this money, you could.

Senator CARR—When do you expect to introduce the bill to the parliament?

Senator Vanstone—It has been introduced.

Senator CARR—When do you expect it to be on the legislative program in the Senate?

Senator Vanstone—That is not what you asked and it is not what you meant. Since yougot an unsatisfactory answer to your first question, you now ask another one. I don’t know.

Senator CARR—I can see we will be here for a very long time. Minister, you say here inyour PBS that these funds will be carefully targeted and will be allocated in accordance withthe guidelines. What is the nature of the targeting?

Mr Gallagher —Primarily regional.

Senator CARR—So you see them as essentially going to regional universities?

Mr Gallagher —Primarily regional, but not exclusively.

Senator Vanstone—That was answered this afternoon.

Senator CARR—I am delighted to hear that. Is it the case—this is a recognition, Minister—that the university is having trouble coping with your budget?

Senator Vanstone—No. That was answered this afternoon, and I draw attention to theanswer that was offered this afternoon.

Senator CARR—So you do not see that this is an issue of responding to the universitiescomplaining about your cuts, particularly at a regional level?



Senator Vanstone—No, certainly not. This was, in fact, referred to in the previous budgetstatements, but no funding allocated. This is, in fact, living up to a commitment made in thelast budget. I am not responding to anything in that respect.

Senator CARR—Perhaps I will have a look at theHansardovernight and we will comeback to this tomorrow.

Senator Vanstone—Half your luck if you have theHansardbefore you go home.

Senator CARR—I asked you a question in the chamber at the beginning of May concerninga faculty of veterinary science at the University of Sydney. You undertook to get back to meafter checking the claims that were made about the downgrading of HECS liable students. Youhave not responded. Are you able to now?

Senator Vanstone—Just give me a second. Senator, I have just read a letter from GavinBrown, the Vice-Chancellor, to Mr Gallagher, who made some inquiries, I think, as aconsequence of your question. He indicates that the adjustment to the veterinary sciencecommencing load was made in October 1996 as part of the regular budget process.

He goes on to explain that there was concern over attrition in the program and a newselection process to look more closely at career motivation was introduced. The intake wastherefore reduced from 83 to 67. Nonetheless, the acceptance of offers was higher thananticipated, as was the take-up of the third offers. So they have overenrolled by seven.

In 1998, despite the 1997 overenrolment, they intend to follow the agreement they cameto in October 1986 and that was the target of 67. He says:Accordingly, we have made

no decision to reduce HECS places

after fees legislation and, indeed, have decided to live with the pipeline effect of overenrolment andveterinary science.

Senator CARR—So you are saying, Minister, that that is not a breach of your guidelinesunder section 108?

Senator Vanstone—What Professor Brown is indicating is that the decision to reduce placeswas made actually quite well before the capacity to charge fees was introduced and was madeas a consequence of concern over attrition in the program.

Senator CARR—Well, that is an interesting—

Senator Vanstone—That is what the answer from the professor says.

Senator CARR—That is a very interesting answer, Minister. I am sure you will seek toverify that.

Senator Vanstone—Do you think I should write back to Gavin Brown and say—

Senator CARR—No, I just ask, Minister, is it the case that the University of Sydney Facultyof Veterinary Science minutes of 5 March 1997 indicate that on 3 March, at the start ofsemester one, the number of undergraduate students enrolled in each of the course was follows:year 1, 88; year 2, 92; year 3, 68; year 4, 7l; year 5, 70? Did not the minutes indicate thatfrom 1997 the quota for year 1 HECS paying students has been changed to 65 in order toaccommodate a mixture of 25 prospective international and Australian fee paying students from1998?

Senator Vanstone—I am advised that the minutes were incorrect. But Mr Gallagher knowsmore about it, so he can tell you.



Mr Gallagher —I spoke with Professor Brown on this matter and he wrote confirming, asthe minister has outlined, that the decision had nothing whatsoever to do with the fees policy—it was rationalisation of the program in view of high wastage rates. He did say, however, thatwhen he was contacted by the media, the journalist that interviewed him had a copy of minutesfrom the meeting of the Veterinary Science Faculty which purported to represent this changein the quota as being allied with the fee policy. He was able to say that this was amisinterpretation by a particular academic and it just found its way into the minutes, whichwere anecdotal records of a meeting simply reflecting what different people had said. But itwas an improper representation of the motivation that led to the change of policy.

Senator Vanstone—I can assure you, Senator, that in October last year I could not haveguaranteed you that the government’s intention of allowing universities to introduce full feeplaces would be accepted. I do not see how the University of Sydney could know it if thegovernment did not know whether its policy would be accepted and if the parliament had notvoted on it.

Senator CARR—This, as I say, is purported to be in the minutes of a meeting that occurredthis year, Minister.

Senator Vanstone—Yes, I understand that, but I have given you the best information I havegot. You have got an explanation as to the problem with the minutes.

Senator CARR—When did that reply come in from Professor—Senator Vanstone—22 May.Senator CARR—22 May.Senator Vanstone—Received by the department 22 May.Senator CARR—When were you intending to respond to my question, Minister?Senator Vanstone—I understand, Senator, that a brief has arrived with a whole lot of other

briefs and things in the office and that it was not put in the format of a reply to a questionon notice and that it should have been. I have got no desire to hold up this information. Thereis no particular reason why anyone would hold up an answer.

Senator CARR—I just want to be clear that you are saying that this is really a case of theuniversity not acting to rearrange its affairs in order to maximise the property circumstances?

Senator Vanstone—No, Senator, you can keep trying to put words into his mouth—Senator CARR—I just want to be clear. You have made it very clear to us that you are

going to come down very heavily on any Vice-Chancellor or any university official that seeksto circumvent your guidelines—

Senator Vanstone—That is right.Senator CARR—And you are saying that this is not a circumstance that has circumvented

your guidelines?Senator Vanstone—I have not said that to you at all. I happen to be of the view that, on

the face of it, if the change was made before the legislation was passed—it is very difficultto say if it is a consequence of the legislation—but, nonetheless, I have just turned to MrGallagher and got this advice now. I was not aware there was a brief in my office in relationto this matter. On the face of it that appears to me to be a plausible explanation.

Senator CARR—Except that we have this other document, the minutes of the meeting.Senator Vanstone—You have but I do not.



Senator CARR—I see. If we could provide you with a copy of the document would youtake this matter any further?

Senator Vanstone—You provide me with a copy of the document and I will think aboutit, but as I say, there is a prima facie case that this change was made prior to the legislationbeing introduced. The change was made as part of the 1996 profiles process. We agree withthat. This change would have taken effect in any event, whether the bill allowing full feeplaces had passed or not.

Senator CARR—I guess that is a matter that I will have to—presumably Mr Gallagher willwant to see copies of the minutes and can verify them against what he has been told by theuniversity. Have you come across any other universities, Mr Gallagher, that have sought torearrange their affairs? Have you had any discussion with any other universities about theexamples of rearranging their affairs to get around the guidelines?

Mr Gallagher —None whatsoever, Senator.

Senator CARR—As far as you are concerned the guidelines are working well.

Mr Gallagher —There are only four institutions that have so far decided to pursue fees for1998 and they have only recently obtained the clearance through their councils. They are yetto work through the implementation arrangements and no doubt at the profiles meeting theywill discuss with us their proposals in respect of the courses for which they will seek to mountfees.

Senator CARR—At the last round of hearings we discussed the whole question of theguidelines in the context of whether or not the 25 per cent quota applied to individual subjects.I understood that the advice that you gave me, Mr Gallagher, was that they would not. WasI correct in understanding that? The 25 per cent quota does not apply to individual subjectswithin a course.

Mr Gallagher —That is true, but it applies to the course.

Senator CARR—To the course itself. I recall that our discussion hinged around whetheror not the present guidelines prevent a situation where a token number of HECS liable studentswere allowed to go into a particular subject with most places being reserved for fee payers.Are you saying that that does not occur? Are you still of that view?

Mr Gallagher —Senator, fee paying does not operate until 1998.

Senator CARR—Yes. I will rephrase it; that is quite a reasonable point that you make. Itis not possible that that will occur? That a token number of HECS liable students will be takeninto a particular subject while most places will be reserved for fee payers.

Mr Gallagher —The reason we have set it as a proportion of the course is to avoid anyparticular subject being crowded out by only fee paying students. The guidelines also makeit clear that every elective must be available to a HECS liable student.

Senator CARR—What monetary mechanisms has the department established to supportthese guidelines?

Mr Gallagher —In the first instance, Senator, we will conduct profiles meetings with theinstitutions, whereby they will reveal their plans. We will obtain from them, as Mr Burmestersaid earlier—twice a year by 31 May and 31 August—their actual enrolments by status, bycourse. We are able to crosscheck HECS enrolments with our record system with the TaxationOffice. That gives us a basis for being able to monitor the total enrolment in the program.



Senator CARR—I notice, Mr Burmester, that in last week’sCampus Reviewthere was anarticle based on the estimates hearings last time around. I thought you were saying in thatarticle that the guidelines provide that all options in the course must be available on a HECSbasis. Is that the case?

Mr Burmester —That is correct. That article was quoting what I said in theHansard.Senator CARR—Following that through, am I correct in inferring that that means that all

options would be subject to a 25 per cent quota?Mr Burmester —No. The course—Senator CARR—The course itself, but not the subjects that make up the course?Mr Burmester —That is correct.Senator CARR—I come back to this point: is it the situation, in your opinion, that we

would find a quota applying to places in particular subjects or units in relation to full payingunder graduate students? That others would, of course, be open to fee paying students?

Mr Burmester —The guidelines require that each unit, elective and so on in a course mustbe made available on a HECS liable basis. Therefore, those HECS students who wish toundertake a particular unit will be able to do so.

Senator CARR—You believe it is not possible then for universities to allow institutionsto enrol in particular subjects a majority of fee paying students?

Mr Burmester —They have to make available every unit on a HECS liable basis. Thenumber of HECS students who take up those units is up to the HECS students themselves.In total, the fee paying enrolments in a course cannot exceed 25 per cent of the courseenrolment. Within that, it is up to the fee paying students and the HECS students to nominatewhich units they undertake as part of the course in line with the rules of the university.

Senator CARR—I turn to budget measure No. 3: phased abolition of the higher educationcommonwealth industry places scheme. Minister, could you indicate to me what the basis wasfor the government’s decision?

Senator Vanstone—That was also answered this afternoon, Senator.Senator CARR—What was the rationale, Minister?Senator Vanstone—As I have indicated, Senator, I am not going to waste taxpayers’ time

by rehashing questions that have already been asked and have already been answered. Thatwas answered this afternoon.

CHAIR —Have you any new questions, Senator Carr?Senator CARR—I have a considerable number of questions.CHAIR —Can we have new questions, Senator Carr, and stop wasting the committee’s time?Senator Vanstone—And taxpayers’ money, more importantly.CHAIR —I might do a costing of tonight, actually.Senator CARR—It will cost you tomorrow night, too. Minister, what work has the

department undertaken, before this government announced the abolition of the higher educationCommonwealth industry places scheme, on the likely impact on regional universities?

Senator Vanstone—Consideration was given, as it usually is to budget measures, in cabinet,so I am not going to discuss the decision any further in that context. Vis-a-vis the impact onuniversities, I refer you to the answers that were given this afternoon.



Senator CARR—I am not asking you about the deliberations of cabinet. I am asking youabout the deliberations of the department in terms of assessing the likely impact of this budgeton—

Senator Vanstone—It is policy advice of the government in the context of the budgetprocess, Senator.

Senator CARR—Presumably, there was a clear understanding that there would be adramatic impact on a number of universities, particularly Swinburne and Deakin; is that thecase?

Senator Vanstone—And do not forget Charles Sturt. Senator, if you were here thisafternoon, you would have heard all this and you would get the answers, wouldn’t you?

Senator CARR—I understood, Minister, in the questions that were raised on this matterin the chamber, you told the Senate that you were in fact meeting the vice-chancellors of thoseuniversities.

Senator Vanstone—No, I did not.Senator CARR—Who was it that you were meeting, Minister, about the impact of the—Senator Vanstone—I think I would have said something to the effect that discussions were

being held with those people—perhaps at that point, had even already been—and they havebeen continuing since then.

Senator CARR—I believe that, at the time the question was asked—I thought I might haveasked the question—you said that you were meeting officials from the universities. I thoughtyou said the vice-chancellor, starting that day. In fact, your adviser, Mr Nation, had rung thevice-chancellors the night before I asked that question. I am just wondering, Minister, whatprogress has been made? What changes have been made on the implementation of theCommonwealth industry places scheme’s abolition?

Senator Vanstone—When some decisions have been finalised, I will be happy to tell you.Senator CARR—The decision has not been finalised? This is not a budget measure that

has been finalised?Senator Vanstone—Yes, the budget measure has been finalised. I am talking about anything

that can be done to accommodate the easing out of universities. I indicated at the time, in theSenate—just repeating an answer that you have had in the Senate—that we were keen toensure that this did not have a deleterious impact on the institutions that were into SIPs in abig way and that we would be having discussions with them. And that is the case.

Senator CARR—What actions have been taken to alleviate the situation with regard—Senator Vanstone—Those discussions are still progressing.Senator CARR—The question of Charles Sturt University and the closure of the entire

campus; has that been avoided?Senator Vanstone—Of which, Senator?Senator CARR—The closure of their campus.Senator Vanstone—Oh! This is the ‘golden’ campus that was closing last year; was it? The

‘golden’ campus is closing again this year.Senator CARR—You are saying that that is untrue; is that what you are saying?Senator Vanstone—I have no reason to believe that the ‘golden’ campus will in fact close—

no reason at all.



Senator CARR—There is no question of other campuses closing at other regionaluniversities? There have been representations—

Senator Vanstone—Certainly not because of SIPs.Senator CARR—As far as you are concerned, there has been no representations to either

you or the department, from regional universities, about the prospect of campuses closing?Senator Vanstone—No. That is not what has been said. You did not ask, earlier, about

representations.Senator CARR—I am asking you now.Senator Vanstone—You had not. You said, ‘So, you’re saying that.’ You are trying to put

words in people’s mouths, which is your usual bullyboy approach to questions.Senator CARR—Has there been representations from regional universities?Senator Vanstone—I am advised that the question has been raised with respect to one

campus. Negotiations are well under way with that university and, as I say, negotiations areproceeding. When they are finalised, we will let you know.

Senator CARR—There has been no representations from Victorian universities concerningthe possible closures of Victorian campuses?

Senator Vanstone—I did not say that. I just said there was—Senator CARR—I am asking that question. Is that the case?Senator Vanstone—I have said that there has been representations, to the best of my

knowledge, from one university and when—Senator CARR—Which university is that?Senator Vanstone—I will consider what you have asked. I am not of the view that any

campuses are going to close as a function of the government’s decision with respect to CIPSand I am very reluctant to participate in a scaremongering exercise. I understand, from theperspective of opposition that you are not, but I am reluctant to participate.

Senator CARR—It is quite clear. Most newspapers in the country have carried thecomments from Professor Cliff Blake concerning the situation at Goulburn and, particularly,the police—

Senator Vanstone—I think that ‘most newspapers in the country’ is a wild assertion on yourpart and you are prone to wild assertions.

Senator CARR—The vice-chancellor has issued a press release which received quiteconsiderable publicity concerning this matter. I am asking you specifically whether there havebeen any Victorian institutions—

Senator Vanstone—I am answering you the same way that I answered you before. I thinkthat the institutions that have raised those matters with us are entitled to have negotiationsproceeding before they are canvassed, and that includes their views with respect to anyparticular campus. I have nothing further to add to that.

Senator CARR—You commented that these were matters that the state government shouldpick up. Is that a position you still maintain?

Senator Vanstone—I certainly indicated earlier today and on other occasions that I thinkthe CIPS scheme was used by one state government, in particular, to train their staff. I do notthink that is appropriate because it is cost shifting to the Commonwealth.



Senator CARR—Is that the view you hold against the Victorian case, as well?

Senator Vanstone—It is a view that I hold in any circumstance whether to be for Victoria,New South Wales, or any other government using the CIPS scheme to ensure that theCommonwealth pays for the training of its public servants.

Senator CARR—Would it be normal for universities to be told of such dramatic changeson the night of budget? Would that be the normal consultative mechanism?

Senator Vanstone—Since I have only participated in two budgets, I am not in a positionto say what you did in the past.

Senator CARR—The officers would, presumably, have that institutional memory. Was thatthe normal practice in terms of consultation? Mr Gallagher, you have been in the departmenta while—

Senator Vanstone—I think that as soon as you can let someone know, you should.

Senator CARR—So, in fact, when Mr Cliff Blake said that he was advised by a telephonecall on the night of the budget by your adviser, Dr John Nation, that was the normal methodof consultation on these matters?

Senator Vanstone—I do not think that is consultation. That is a courtesy in letting someoneknow as soon as you possibly can.

Senator CARR—Were other universities advised on the night of the budget?

Senator Vanstone—I think that one of Dr Nation’s tasks was to contact such universitiesas he could that were particularly affected by this, and there are three of those. I am not surewhether he was able to get through to everybody concerned, but I know that he made theeffort.

Senator CARR—So, as far as you are concerned, the advice given to those vice-chancellorsthat the phasing of the CIPS abolition was negotiable, remains the case.

Senator Vanstone—The budget decision stays as is. What would have been indicated touniversities is that we were happy to discuss with them an easing out of the situation theymight find themselves in.

Senator CARR—Can you confirm that in regard to Charles Sturt University the abolitionof a program would mean a loss of some $5.6 million per year and the possible loss ofbetween 70 and 80 staff positions?

Senator Vanstone—Certainly not.

Senator CARR—You cannot confirm that?

Senator Vanstone—I think that is incorrect.

Senator CARR—Why is it incorrect?

Senator Vanstone—The funds for this year would have been closer to $3½ million.

Senator CARR—Yes. But what Mr Blake points to is that the end of the program wouldmean a loss of $5.6 million per year. Do you think that is not correct?

Senator Vanstone—No. I just indicated to you that the funds this year would have beenabout $3½ million. The funds needed the following year would be less again and, for the yearafter that, less again. So you cannot come to a $5 million per annum figure when you havegot a reducing commitment.



Senator CARR—I see. What he has said is that in 1999 the cost to the Commonwealth ofCharles Sturt University would be $5.6 million. Is that figure—

Senator Vanstone—Cumulatively, or in 1999?

Senator CARR—I just noticed it under tables here. Perhaps that is where he has got thatfigure from. He said that the end of the program would mean a loss of $5.6 million per year,and so presumably he is referring to the 1999 figure. That would be correct, would it not?

Senator Vanstone—Not for Charles Sturt. Are you talking about Charles Sturt?

Senator CARR—Then $5.6 million is not the appropriate figure for Charles Sturt?

Senator Vanstone—Per annum for Charles Sturt, no.

Senator CARR—In 1999, was it not your expectation that the cost to the Commonwealthfor Charles Sturt University would be $5.6 million?

Senator Vanstone—Senator, I am not happy to go any further. We are negotiating withCharles Sturt and the other relevant universities. They are providing figures which they thinkshould be the basis of negotiations. We are comparing them with the previous figures theyhave provided, and I really think it quite inappropriate to now try and drag those figures outbefore they have all been agreed.

Senator CARR—Minister, in theHigher Education Funding Report 1997-1999—

Senator Vanstone—On page 56?

Senator CARR—On page 56 there is a table. I understand this was published in about Aprilthis year, was it not?

Senator Vanstone—Yes. And what you are referring to there is an estimated cost to theCommonwealth if the program continued, which is not the same as the cost to theCommonwealth of withdrawing from the program. The difference is—just in case it does notimmediately come to you—as I am advised, that the cost of withdrawing a program relatesto students already there. The cost in 1999, if it continued, includes new students taken onsubsequent to a decision to not continue. So there is the difference.

Senator CARR—Yes. I can see the point you are making.

Senator Vanstone—Good.

Senator CROWLEY—Minister, I want to introduce a small change. I am about to haveto retire from the committee this evening, so I thought I would draw your attention to page7 of the portfolio budget statement. I hope this will amuse you, Minister. You actually havethere a reference to higher education, and in the second half of it you say:. . . objectives including meeting the increasing need for an educated and skilled population; and tomaintain a diverse higher education system that takes a long-term independent approach . . .

Was it intentional to then refer in brackets to the Anglo-Australian Telescope Board?

Senator Vanstone—Perhaps not the best placed paragraph and brackets!

Senator CROWLEY—I thought it was perhaps not a bad note to go out on. Can we bringdown the curtain?

CHAIR —No. Any more questions on 5.1.

Senator CARR—Yes, there are. Minister, has there been any lobbying by National Partymembers on this issue of your office?



Senator Vanstone—Not that has been drawn to my attention, Senator, but there may havebeen.

Senator CARR—Have you received any correspondence from members of parliament onthis issue?

Senator Vanstone—Not that I have yet had responses to sign, as I recall.Senator CARR—Are you saying you haven’t replied to any letters?Senator Vanstone—I have given you the answer, Senator.Senator CARR—Does the department still stand by the figures in the table?Mr Gallagher —At the time they were prepared, they were accurate.Senator CARR—They were accurate as of April this year. Is there no need to vary them

in any way?Mr Gallagher —The policy in relation to SIPs has subsequently changed since the budget.Senator CARR—I see. So you are saying that, as a result of this, there will be additional

costs at each university. Is that it?Mr Gallagher —No, I did not say that, Senator. The figures in the table assume a

continuation of the program by new intakes. The government has announced following thebudget that new intakes will cease as of 1998 and the program will be terminated as of 1999.

Senator CARR—Are these three-year programs?Mr Gallagher —They vary, Senator.Senator CARR—What is the average length of a course under this program.Mr Gallagher —Some are two, some are three and some—but only a few—are four.Senator CARR—In the cases of three and four year courses, if the program is to be

terminated in 1999, how will they be accommodated?Mr Gallagher —The fact that there are no new intakes and yet the funds available in 1998

are retained allows for funds that otherwise would have supplied new intakes to be used forthe pipeline.

Senator CARR—Will there be no further students involved in these programs after 1999?Will you be able to cover everybody’s course options?

Mr Gallagher —Institutions have various ways of maintaining their enrolments in industryrelated programs, either by charging HECS or by increasing the employer contribution or othermeans. Continuation of students in the program is a matter for institutional policies. The coststo the Commonwealth do not go to new intakes in 1998 and the funds that are available in1998 as funds and this year as well can be dedicated to the pipeline which will provide aguarantee for those students that have entered those courses.

Senator CARR—By when would you expect all students currently enrolled in Common-wealth industry-placed schemes to be through the system?

Mr Gallagher —I cannot answer that, Senator, because it depends on the nature of theirstudy.

Senator CARR—So the money will actually be rolled over beyond the 1999 figure.Mr Gallagher —The institutions will have that capacity.Senator CARR—But you will finish payments at that period, and that will then be stored

at the university level, will it?



Mr Gallagher —Yes.Senator CARR—Thank you. Has there been any consideration in the government, Minister,

to extending the phasing out beyond the 1999 figure?Senator Vanstone—Senator, I do not care, at this stage. It is not a whim of mine. I do not

think it is appropriate for the institutions to discuss what negotiations we are having with themuntil those negotiations are concluded.

Senator CARR—I see. The Victorian education minister has indicated that he believes thatsome 2,000 places are to be lost in Victoria. Were state ministers consulted about this matter?

Senator Vanstone—No.Senator CARR—Are they being consulted now?Senator Vanstone—Negotiations are being held with the particular institutions.Senator CARR—So is there no consultation with state governments?Senator Vanstone—It has been raised at the joint planning committee, as I understand it,

at officer level, but negotiations are primarily with the institutions.Senator CARR—Have you had representations from state governments in this matter?Senator Vanstone—I have had a discussion with Minister Honeywood about it.Senator CARR—That is the only state government that has raised the matter, is it?Senator Vanstone—Certainly that has been brought to my attention at this point, yes. That

is not to say that Minister Aquilina has not sent a letter that is in there somewhere. Iunderstand he has raised it in materials vis-a-vis the MCEETYA meeting.

Senator CARR—Yes, I was going to draw your attention to that, Minister.Senator Vanstone—New South Wales has been having a lot of training done at

Commonwealth expense.Senator CARR—It says in his paper here that an amount of $18 million was saved from

this particular program—43 per cent of industry places allocated for the period 1997-99 ,withone-third of the national places being allocated to Charles Sturt and smaller numbers allocatedto Southern Cross University. The abolition of this scheme will have a severe impact onCharles Sturt. It will have the largest program in Australia, one-third of the total FFSU,primarily focussing on police, ambulance and emergency services.

The abolition of the scheme will mean a loss of some $5.5 million to Charles Sturt—aslightly different figure from the previous one you mentioned. Were those figures essentiallycorrect, in terms of New South Wales?

Senator Vanstone—We have just answered that; we have just been through that, haven’twe, just a few seconds ago? This isn’t a question that you missed this afternoon; it is aquestion that you asked a few minutes ago.

Senator CARR—Minister, you were saying that you thought only Victoria at first, andpossibly New South Wales. I am just drawing your attention to the statement made in—

Senator Vanstone—No doubt it will come to my attention when I do all my MCEETYAwork.

Senator CARR—Thank you. I just draw your attention to that in the document entitledCrippling the future. That might improve your knowledge of that matter.

Minister, did you have any discussions with the industry minister about these changes?



Senator Vanstone—No.Senator CARR—So there was no consultation with peak bodies about these changes?Senator Vanstone—No.Senator CARR—So there was no industry consultation more generally?Senator Vanstone—That is right.Senator CARR—I am just wondering then, Minister, what do you say—Senator Vanstone—You should understand, of course, that the industry minister would have

had the opportunity to make coordination comment.Senator CARR—Will there be any criteria within your new guidelines for the allocation

of moneys for restructuring and rationalisation for this type of funding to fill the gap left bythis sort of program?

Senator Vanstone—I think you misunderstand, Senator. We do not think SIP is requiredany longer.

Senator CARR—Sorry?Senator Vanstone—You do not—negative—understand, comprende. We no longer believe

that the SIP scheme is required. So why on earth would we abolish a scheme in one budgetmeasure only to introduce it through the back door in another? That would be extraordinary.

Senator CARR—I am glad you find that is the case, Minister. What programs are in thisbudget then to improve the relationship between the universities and industry?

Senator Vanstone—Quite a few. The option for full fee places, of course, providesflexibility. The option for over enrolment provides flexibility. There is plenty of flexibilitythere for universities to get in with industry. It is precisely that flexibility which makes theSIP scheme redundant.

Senator CARR—So is this particular budget measure being welcomed? Has anyone withinindustry actually congratulated you for the abolition of this scheme? Have you had any positivecomment from industry on this abolition?

Senator Vanstone—Of course, that was the trouble with the previous government; it madeits measures up on the basis of whether it got the sort of ping-pong rating on the polling thatday.

Senator CARR—I just draw your attention to the time, Mr Chairman. In view of theprogram, I believe this meeting is now adjourned.

CHAIR —Senator Carr, I thought you were prepared to sit all night.Senator CARR—No, I told you I would sit until 11 o’clock tonight and 11 o’clock

tomorrow night.CHAIR —We have only three more subprograms to go. Why don’t we try to finish them?Senator CARR—That is not what the program says, Mr Chairman, as you well know.

Committee adjourned at 11 p.m.


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