John Garnaut and David Crawshaw
May 10, 2007
THE Federal Government is poised to take its "education revolution" an extra step by using controversial constitutional powers to strip the states of their control over universities.
In her first post-budget interview, the Education Minister, Julie Bishop, told the Herald the states had tied the universities in red tape but contributed nothing financially.
"The states take out more in payroll tax than they invest in our universities," Ms Bishop said.
Recent financial scandals at Macquarie University had "raised questions" about whether state controls over universities were working, she said.
Ms Bishop said she would write to state education ministers asking them to refer regulatory powers over university financial administration, reporting and auditing.
If they refused, she raised the possibility of assuming control of universities through the Commonwealth's constitutional power over corporations.
"The full Federal Court has deemed them to be trading corporations," she said. "Now, I'm not suggesting that needs to be tested. I'm asking for a very sensible approach for the state governments to hand over their regulatory powers."
Education dominated the post-budget debate in Parliament yesterday, with both sides anxious to establish a political advantage in the run-up to the election later this year.
In the budget, the government unveiled major changes to university funding, including a $5 billion Higher Education Endowment Fund to pay for campus infrastructure and research facilities, and lifting caps on the numbers of full fee paying students. Its detailed package, which dramatically reverses the government's assault on the tertiary sector, is designed to undermine Labor's proclaimed "education revolution".
Labor accused the government of deceiving Australian voters, with the Opposition Leader Kevin Rudd claiming the figures did not support the government's assertion the education sector was the big budget winner.
Mr Rudd seized on budget papers showing education spending as a proportion of total government expenditure is expected to fall from 7.7 per cent in 2005-06 to 7.4 per cent in 2010-11.
"How can this be a budget about the future when the government's investment in education, as a proportion of total spending, falls over the next four years?" Mr Rudd said.
Mr Howard said the figures were percentages of aggregate government spending and "made no allowance for the fact that expenditure in other areas may have increased at an even faster rate than education."
Education spending was estimated to increase nine per cent in real terms from 2007-08 to 2010-11, or 3.4 per cent annually.
Mr Howard defended the government's decision to remove limits on the number of full fee-paying students in all university courses.
Students condemned the move, saying it would shut more people out of tertiary education. Democrats Senator Natasha Stott Despoja warned it would dramatically increase the debt burden on students.
But Mr Howard said the change would give universities greater control over their finances.
'"What we are doing is expanding the size of the university sector … and the capacity," he told Sky News.
The package has been well-received by most universities. "I seriously believe this budget is the best news for Australian universities for decades," the vice chancellor of Sydney University, Gavin Brown said.
Professor Brown warned the issue of removing red tape would need to be carefully negotiated with all stakeholders, including the states.
Ms Bishop said she wanted a negotiated outcome that would liberate academics from much of their administrative work and create world class centres.
Under her proposal, underlying state legislation would remain in place and the states would continue to own university real estate.
