Magazine of Socialist Action in Australia

Higher Ed deregulation set to price out most

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In late May around ten thousand students rallied across Australia against the most regressive changes to higher education policy since the introduction of fees in 1989. The complete deregulation of fees from 2016 – while dramatically increasing the real cost of borrowing to pay for those fees – would mean that the majority of young people would be priced out of higher education altogether.

The Socialist Party is resolutely opposed to these counter-reforms. Instead of ‘saving’ an annual $0.8 billion over the budget period, small change in a $1.65 trillion economy, we should fund free quality education out of the skyrocketing profits of big businesses. The big four banks, for example, increased their profits by 9.3% to $27.4 billion in 2012-13 – over 34 times the ‘saving’!

According to Bruce Chapman, architect of the HECS borrow-for-fees system, deregulation will see some course costs triple, while $100,000+ degrees will become the new norm. To maintain demand for universities in the face of a probable doubling of fees, the Abbott government will try to implement an ‘earn or learn’ policy that aims to push young people into either high-cost education or low-wage work.

Such a policy would cruelly punish those who could neither afford fees nor find work. Those under 25 will be forced to try and survive on a tiny ‘youth allowance’ payment which is far less than the dole. This is the direction that has long been pushed by lobbyists for the richest sandstone universities.

Protesters also railed against the unilateral rewriting of student debt contracts. Plans are afoot for the imposition of a real interest rate on debt for the first time – up from 2.9% to a maximum of 6%. This move toward commercial rates amounts to an additional long-term tax of 4% to 8% on those with the least income, and could see many trapped in life-long debt cycles. Higher interest rates will also fatten up HECS debts, which the Liberals proposed to sell to financial speculators following the 2013 election.

Together with the lowering of repayment income thresholds, from $53,345 to $50,638, the real cost of borrowing to finance study will dramatically increase. It will mean significant cuts in living standards for anyone who borrowed to pay fees through the HECS-HELP scheme. Students thus face a double whammy: education costs will skyrocket while the below-poverty ‘youth allowance’ is drastically curtailed.

These changes bring the Australian higher education system remarkably close to the socially dysfunctional US system. If implemented, it would pave the way for the full scale privatisation of public universities. Already universities are run on a business model and receive large ‘investments’ from big businesses that allow private profits to be made at public expense.

These changes however can be stopped. The budget is merely papers which have to be accepted and implemented to take effect. Through non compliance, students and university staff could potentially stop the government from implementing the measures.

Student unions should link up with trade unions to organise a one day nation-wide strike. An escalating campaign of strikes and occupations could stop the government in its tracks and also send a warning shot across Labor’s bow.

Given that Labor cut over $2.3 billion from higher education last year it is clear that neither major party can be trusted to defend the interests of students and higher education staff. We need to build a political alternative to the Liberals and Labor – an alternative that sees education as right and not a commodity to be bought and sold.

By W. van Leeuwen


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