Swapping billionaire wealth for more brains

The Higher Education Contribution Scheme (HECS), introduced in 1989 by the Hawke Labor Government on the basis that those receiving a university education should repay the community. A university education was understood to be a privilege or special bounty which advantaged those receiving it. The assumption was that those gaining this advantage should pay directly for it, through what were, effectively, fees. Fees could be paid 'up-front' or, having completed the degree, when the now former student gained a job providing an income above a stipulated amount.

The proposition that if financial advantage accrued to those with university degrees, then this would be recognised – and effectively repaid - by income tax in higher brackets was not recognised, or at least not deemed sufficient to rule out the introduction of HECS. Paying directly through HECS became the rule, on top of income tax.

The change did not come about without dissent. That at least some in government and in Parliament at the time had benefited from the 'no fees' period in Australia's history (whether directly or as parents) received some comment, but did not stop the policy from being legislated and implemented.

Critics saw it as ironic that the 'no fees' era was a consequence of the Whitlam Labor Government's abolition of fees, yet reinstitution of fees came through a Labor Government. Under Whitlam, the aim was to broaden university access: effectively to 'democratise' university education by ensuring that clever, bright, energetic and committed working-class students, in particular, would fill Australia's universities. Where universities had been, generally, the preserve of those with families equipped to pay, the abolition of fees was designed to entice students with different family backgrounds.

HECS advocates asserted that the 'no fees' policy had not brought about the intended education revolution. Rather, they said, well-off middleclass students continued to dominate, taking full advantage of not having to pay for a university education. The working-class, it was said, had not benefited.

Yet how HECS would enable the working-class to have access to university was unclear. HECS is, in the end, far less a deterrent to the well-off middleclass – and if they are so well-off, the middleclass can pay up-front, ultimately receiving a university education at a lower rate of (re)payment than those unable to pay before graduating.

The group that may be particularly disadvantaged, if 'middleclass' is the focus of fees, is women from 'well-off' families – or families seen, at least, as 'advantaged'. For this was precisely one of the groups specifically assisted by 'no fees'. The idea that boys need careers and good jobs (requiring skilled training, higher education and the connections a university place can provide) was not replicated for many girls. If it was, then beyond marriage and family life (if any 'beyond' was envisaged for them), 'career' for a girl or young woman was teaching or, perhaps, nursing. Otherwise, it was secretarial school.

Pre-abolition of fees, girls who took the teachers college route were precluded from applying for, or receiving, Commonwealth Scholarships which funded high achievers' university education: Commonwealth Scholarships were awarded on the basis of examination scores at Matriculation or Leaving – now HSC - levels. Teachers college students were, however, seen as having received government largesse already, and thus not entitled to a 'double dose'. A teachers college 'scholarship' ruled out any receipt of a university scholarship. Hence, once they completed teachers college, young women teachers' lot was to pursue teaching, not get ideas 'above themselves' by believing that university might be for them. In any event, once bonded to the Department of Education through having gone to teachers college, young women were obliged to teach: a teaching bond locked them in. If they married, they had to return the bond in full and lost their career as a teacher, as well.

Some HECS advocates did not see this use of 'no fees' as anything positive. Rather, they saw middle-class women's advance through university as just another benefit to 'well-off women'.

Yet in the 1960s and 70s, as in the decades before, if the family could pay for one university student only, it was not the daughter of the family who profited. After all, she was expected to marry, the notion of 'career' so often carrying a masculine configuration. In the Whitlam 'no fees' era, these women, and others whose brothers were sent off to university whilst they, the sisters, were sent into banks or the public service as clerks, or to complete typing and shorthand courses, gained the opportunity to have their minds and career possibilities opened precisely through the 'no fees' prospect. The Whitlam government is recalled with gratitude by so many women – middle-aged, now, and beyond – who despite their apparently affluent family circumstances gained a university education solely because of fees abolition.

The betrayal of Whitlam's 'no fees' has led to students who are not in the 'well-off' family category being burdened by having to pay off HECS as well as (rightly) paying income tax based on income levels, if they advance to university at all. Even the argument that unless they earn above a certain sum they will not have to repay HECS doesn't make much difference. Students still have to bear the prospect of repayment and until they pay off HECS the burden remains. Who wants to live with a money-sum continually owing to the government? Is it really an 'advantage' to earn so little that HECS remains permanently outstanding?

Why did the Hawke Government not attempt ways of attracting a broader-base of students to university? Surprising though it may be to those coming from families where a university education is expected, some Australians do not know what a university is. If they do, many see it as way out of their league.

Why were schools not encouraged to take their students on excursions into universities – visiting the grounds, walking through the buildings, sighting notice boards with information about student activities, going into lecture theatres and classrooms, sitting in on lectures. In this way, students who knew nothing of universities or who saw universities as outside their realm, could and would have gained knowledge of just what universities are and what they offer. Parents could have been invited to accompany school students or might have been encouraged to visit in parent groups, or simply to visit as entitled, simply by being Australian, to enter the premises. To those unaccustomed to the idea of university, university grounds are intimidating: 'not for you' screams out of the buildings, the spaces and places constituting every university.

The 'no fees' policy did make a difference. Many were those returning to study as mature-age students. This, because the Whitlam Government made it possible. Many did come from middle-class backgrounds. Yet during the fee-paying period which preceded Whitlam's initiative, some (as noted) had brothers whose entry to university had been prioritised. If the choice had been really open to them, young women who went off to teachers college would have opted for university, just as if the notion that girls might study law, medicine, architecture, engineering had been universally recognised, pre-'no fees' they would have sought a Commonwealth Scholarship and, on the basis of their grades, may well have gained one.

The reason given now for HECS is that the country cannot afford 'no fees'. Yet can we really afford fees, when fees discourage those whom Whitlam wanted to include in the university demographic?

Perhaps the federal government – and the Australian Parliament – might take note of the remarks of Gina Rinehart as to 'millionaires and billionaires' 'doing the most for social good'. The mining and resources tax is certainly one way that at least some millionaires and billionaires can contribute. This would enable Ms Rinehart to fulfill her pledge as to contributing to social good through enabling those who want to 'work hard' at university but do not have the chance because HECS stands in their way – to do so. Rather than lowering the minimum wage and cutting taxes 'to stimulate employment' as Rinehart argues, why not do away with HECS through diverting some of the resource and mining tax revenue to that cause?

And rather than putting prisoners to work in millionaire and billionaire's businesses, or on the projects of would be millionaires and billionaires as Rinehart advocates or at least applauds – why not provide rehabilitation through education for those who can make it through university, who can then repay society through their own income tax payments, rather than facing a HECS bill?

Rinehart's view appears to be that the working-class is without wit or ambition, brains or educational-capacity, yet she ignores the barriers standing in the way of those who are not financially advantaged or asset rich. In particular, she overlooks the huge advantage from which she profited: a father whose exploits in mining and associated activities resulted in his dying a billionaire – so that she, too, could lay claim to mass-monies and accumulated assets. It seems right, therefore, that those whom she denigrates ought share in some of that wealth – for 'the workers' mostly work, hard, for their money without the advantage of parents-who-profit.

Although Rinehart and her ilk object to the mining/resource tax, it applies only to 'super profits' of those coal and iron ore enterprises amassing profits over $75m. A 30 per cent levy, it is estimated as raising $10.6 billion from commencement (1 July 2012) to 30 June 2015. The government has planned uses for the sums gained, including tax breaks for small businesses and a cut to company tax of one per cent – small businesses again gaining, the cut first applying to them. Superannuation is boosted, with the compulsory contribution increasing from 8 to 12 per cent over the period 2012/2014 to 2019/2020. The remainder is to be invested in infrastructure, including roads and bridges, with mining regions, in particular, gaining a share.

With such a large amount in the offing, however, there is no reason for not reassessing the latter part of the equation. Infrastructure is vital. At the same time, educational attainments add to the wealth of the country, and extending higher educational possibilities and opportunities to those who might never have so profited is one way of ensuring the country gains in wealth terms. 'Infrastructure' should be seen as including not only roads, bridges and other physical construction, but the educational attainments of all Australians, and – apart from any other benefits, the benefits this brings to research and development, income tax contribution, and other expansions of industry, business and intellectual endeavour.

As well, there is a question whether the one per cent reduction in company tax will be extended to large businesses, with the Greens and others demurring. This leaves open the possibility that a sum not originally calculated in that remaining to be expended will be available for higher education – further enabling HECS to be abolished.

In 2003, HECS was estimated on Australian Taxation Office figures as providing more than $1000 million, approximately 20 per cent of funding for Commonwealth higher education institutions and their programmes. To deduct this sum annually from the $10.6 billion gained over three years through the mining/resource tax still leaves sufficient to cover the superannuation boost, tax cuts to small business and a substantial contribution to infrastructure.

Even if one takes the HECS estimate provided by its architect, Dr Bruce Chapman, as $1.2bn annually, the cost of collecting it comes in at $60m. This might better be spent by the ATO on collecting tax from individuals and companies managing to evade paying what they ought. After all, this category includes those who, if paying income tax and company tax at the levels they should, would contribute far more to Australia's coffers than the bulk of HECS contributions.

Certainly, a university education is not the only way to add to Australia's intellectual capacity, innovation and skills-base. TAFE and trade courses – including apprenticeships – must be reinstated at full-levels to ensure that this sector of Australia's training and education provides real opportunities for all wishing so to extend themselves. Indeed, many trades generate high incomes – many far higher than a large proportion of the university educated can ever hope to achieve.

Still, the idea that universities are for those who are able to pay - whether upon entering the hallowed halls or some time after leaving and gaining a job – without acknowledging that this impacts differentially upon the working-class which Whitlam's 'no fees' policy sought to benefit, needs to be confronted.

Chapman contends that HECS has not deterred many – if any – from seeking a university education. Yet in the next breath he asserts that, in any event, Australians in 'relatively disadvantaged' brackets 'were less likely to attend university even when there were no student fees'. This sounds very much like an excuse for maintaining the status quo – not only the status quo of HECS and fees, but that of reserving universities for the middle-class.

Chapman says the argument that without student fees, the more disadvantaged sectors of Australian society were less likely to go to university 'provides further support for the view that a no-charge public university system (that is, financed by all taxpayers) is regressive'. Surely what it shows is that implementing a 'no fees' policy requires more than simply eliminating university fees. It requires a full-on, well-targetted policy of ensuring that those unlikely to see university as 'for them' have a real opportunity to discover what a university is, what it could mean to and for them. This requires opening up university grounds, buildings, classes and classrooms so that children and young people from disadvantaged backgrounds – along with their parents – can visit, walk about, investigate and acquaint themselves with just what constitutes a university.

Writing off an entire sector of Australia's population as 'not for university' is not only regressive. It is surely the sort of thinking that accords with the philosophy projected by Gina Rinehart and her cohort. Does Australia wish to remain 'true' that ideology? Surely not.

The resource/mining tax is an open opportunity for a return to the proposition that universities are for all – not just the well-shod or those sufficiently fortunate to have parents who can pay.