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Pyne will concede on interest in return for fee deregulation

The Daily Telegraph    |    19 October 2014

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The Commonwealth education minister Christopher Pyne has confirmed that, if the Senate will agree to his fee deregulation plan for universities, the government is willing to back down on the budget decision to set the interest rate for HECS debt at the 10-year government bond rate which is currently set at the Consumer Price Index.

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$100 notes

Pyne has been in regular talks with Palmer United Party leader Clive Palmer about the university changes, expected to be voted on in the Senate next week.

A Senate committee report on the legislation is due by 28 October.

Pyne has made clear  that deregulation is the key reform he and Tony Abbott want to achieve, even if it meant $5 billion in planned savings fell short. He told told Sky News’s Australian Agenda:

We all want to bring about a return to surplus but the Prime Minister and I are very keen to ensure that there is a reform. The higher-education reform that’s on the table is far-reaching and important.

Pyne said he was “making great progress” and “getting closer to an outcome” in his negotiations with the Senate crossbench. “I don’t believe the key elements will be negotiated away,” he said, adding there would still be savings in the medium to long term and universities would get the chance to find new sources of revenue.

There’s widespread concern that deregulated fees plus higher interest rates would result in “$100,000 fees”.

Incoming Group of 8 universities director Vicki Thomson said the reality that some medicine, and psychology degrees already cost taxpayers $100,000.

That’s a bit of a scare campaign. There are degrees now that cost $100,000 — it’s just that the student is not paying it. The taxpayer is.  Hypothetically a university could charge as part of a student’s contribution $100,000. But what university is going to do that because they will price themselves out of the market.

But as we have pointed out before, $100,000 fees may be scary, but it’s not necessarily scaremongering to point out that’s the direction in which we’re headed – see $100,000 degrees?  Sure thing!

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