Statutes Amendment (Universities) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 18 May 2017.)

The Hon. J.S. LEE (12:25): Today, I rise to speak on behalf of the opposition in relation to the Statutes Amendment (Universities) Bill in the Legislative Council. I wish to firstly commend my esteemed colleague in the other place, the very hardworking member for Morialta and shadow minister for education, Mr John Gardner, for his great work in being the lead speaker for the opposition in the other place on this bill. The opposition consulted widely on this bill, and Mr Gardner made a comprehensive contribution in presenting the views of a range of stakeholders in his deliberation. I will not repeat that information because it has already been well covered by the member for Morialta.

As the shadow parliamentary secretary for trade and investment and multicultural affairs, I am fully aware of the extent to which South Australia is relying heavily on our universities to be internationally competitive. It is important that our universities maintain the credibility to continue to attract local students and also international students to South Australia.

The international students and higher education sector injects more than $1 billion into the South Australian economy each year, and it is the largest service export earner. International students play a significant role in our education sector. In 2015, 32,000 onshore international student enrolments in South Australia spent $1.2 billion on education fees and other goods and services, including accommodation, food and beverages, transport and retail, etc.

I am very proud that our universities provide education and career advancement for business, community and political leaders in South Australia and around the world. University graduates are making life better for themselves and serving our society as doctors, nurses, researchers, teachers, lawyers, bankers and other professionals. They are making a fantastic contribution to our state economy.

This bill will make a series of amendments to the University of Adelaide Act 1971 and The Flinders University of South Australia Act 1966, with the intent to improve the governance arrangements of these universities. There are seven specific areas that the University of Adelaide and Flinders University seek to amend within their acts. I would like to touch on the easier amendments first before speaking to the more contentious amendment that deals with reducing the number of the university councils' members.

Firstly, I will speak on changing the name of The Flinders University of South Australia Act 1966 to the Flinders University Act 1966 and making associated consequential amendments. In the modern world where information technology is prompting people to communicate in shorter sentences, or use very cool emojis, and with just about everything becoming an acronym these days, it makes sense to shorten Flinders University of South Australia to Flinders University.

After all, the university celebrated its 50^th anniversary last year. I believe Flinders University has a strong presence in the education sector and is already an iconic education institution of South Australia. The university does not need to attach its name to include South Australia. The shorter title is more user-friendly and fully justifiable.

The nature of the relationship between governments and universities is complex. If we look at the more advanced economies in the world, we will find that those countries have some of the most reputable and high-performing universities. In South Australia, we ought to be proud that our universities are world-class institutions and that we are punching well above our weight. There is no doubt that honourable members would want to see South Australian universities do well and succeed.

As we know, the Australian government is a primary source of funding for the higher education sector. Universities are operating in an increasingly challenging environment and therefore the following two amendments have been proposed. These seek to strengthen and expand the council's existing powers of delegation and to allow for the establishment and administration of common investment funds.

These two measures are highly relevant for universities operating in an ever-changing local and global environment where universities need to expand the council powers of delegation and establish a mechanism to respond to policy and funding changes of the Australian government. Those new sections in the act will facilitate the establishment, management and distribution of funds from common investment funds and are based on provisions applying to the University of Melbourne.

There is a large talent pool across our universities that we need to harness to make our economy more competitive and more productive. I believe there is opportunity for universities to have greater interactions and relationships with the business sector of South Australia. Universities will need to foster new collaboration with businesses to explore new business models that can capitalise on groundbreaking research and innovation that come out of universities. Even though there are some success stories already, South Australia can definitely do with a few more.

My research and experience have informed me that the USA, Germany, Singapore, South Korea, Hong Kong and a number of advanced economies in the world have a more sophisticated culture where their universities have a strong business and entrepreneurial focus. I believe it would be advantageous if our universities were able to create their own companies and have a robust commercialising model that can form new companies through joint ventures with the private sector, create new employment and develop new revenue streams.

Instead of just building human capital, universities have the opportunity to generate wealth and financial capital to fund further growth and development of its facilities, expanding their capacity to take on the best students, the best teachers and the best researchers in a fast-changing environment. Universities have a number of revenue streams. They currently receive federal government grants, research grants, student fees, international student fees, bequests, donations and corporate sponsorship. However, universities should find ways to generate their own source of funding by starting new companies.

We should also link our universities with international students and multicultural business chambers to look at innovative start-up businesses. Only last week, for example, I came across a Hong Kong Trade Development Council business journal released on 27 June, which reported that, out of more than 2,000 start-up businesses that set up in Hong Kong over the past two years, 35 per cent of companies were started by expatriate entrepreneurs. A new initiative was recently launched in Hong Kong to encourage growth of Italian start-ups in the city, coordinated by the Italian general consulate in Hong Kong, the Italian Chamber of Commerce in Hong Kong and Macau, and other private companies.

It allowed Italian start-ups the chance to present their business ideas directly to potential investors and customers in Hong Kong. The program's first winner was ONO 3D, a company that developed a portable 3-D printer that sits on top of a mobile phone. It will take part in a six-month incubation program at the Hong Kong science and technology park. The fact that South Australia already has a vibrant multicultural presence and the leaders here means that we can capitalise on our own expatriate entrepreneurs. We need these types of innovative ideas and programs in South Australia.

The fourth amendment is about extending the existing statutory liability protections. In a highly competitive environment, there are significantly higher expectations from the communities and stakeholders that our universities aim to serve. The request by the universities to extend the existing statutory liability protections by replacing the current immunity from civil liability for council members with an indemnity that also includes other senior officials is a sensible measure. This provision is consistent with the legislation of similar universities in other jurisdictions.

In the fifth area, the university would like to move an amendment allowing for the presentation of annual reports and the subsequent tabling in parliament by the Minister for Higher Education and Skills instead of the Governor. We feel that if the minister has the direct responsibility for higher education and skills, then it makes perfect sense for the annual report to be tabled by the minister rather than the Governor. My understanding is that the minister already has the role of tabling the annual report of the University of South Australia; therefore, being able to table the annual reports for Flinders and Adelaide universities would be the consistent approach.

The sixth area deals with the extending of tenure of student members of university councils from one year to two years. Extending the tenure of student members from one year to two years will allow student members a greater period to understand the process and participate in a meaningful way on university councils. Since being elected to parliament in 2010, I have mentored and hosted many parliamentary interns and provided traineeship employment for many students from various universities.

I have been very fortunate to have some of the brightest young people working in my office. I am sure other honourable members have had similar experiences; therefore, I am very supportive, not only of seeing student representatives on the council, which not only allows them to have a direct voice on the councils on matters most important and relevant to them, but allows an opportunity for them to gain valuable experience that adds to their personal and professional development which will serve them well in their future endeavours.

Finally, we have now come to the key amendment that attracts anxiety and stress for some members of university communities. This amendment calls for the reduction of the size of the university councils from the current levels of up to 21 members to a lower number of members. The main concern of this bill is the reduction of staff and student representatives on the university councils. Extensive consultation by the government and the opposition enabled us to listen and acknowledge that some staff and students raised genuine concerns that the amendment may potentially prevent them from participating in a constructive role in university governance.

As I pointed out earlier, I will not go over the correspondence that John Gardner in the other place has already tabled. However, I will provide a few common themes to put the subject matter in context to demonstrate the level of concern raised by the National Tertiary Education Union and university stakeholders.

Those who are against the proposed amendment raised concerns that university staff and students had not been consulted over the proposed changes and some said that they had not been notified. Some said that consultation at universities has been non-existent. They also said that it is staff and students who provide on-the-ground wisdom and diversity of voices to university councils. The removal of elected councillors will further reduce public accountability. They argue that there is no research that links a reduction in a university's council size to better performance. They also argue that any reduction that threatens the stakeholder representation is likely to be counterproductive.

The universities' arguments that supported the change for the reduction included that the governance of a $1 billion enterprise is compromised by the size of the existing councils and that the quality of the discussion about complex issues is compromised by having 21 people around the table. They feel that it is not a dramatic change in numbers, and that it is attempting to improve the dialogue and contributions by council members at meetings.

They argue that moving towards a more efficient and less cumbersome council will be able to improve governance, and they also argue that the reduction in size of university councils will bring the University of Adelaide and Flinders University into line with the University of South Australia. This amendment will be consistent with Universities Australia's Voluntary Code of Best Practice for the Governance of Australian Universities.

Throughout my career, probably like many honourable members in this chamber, I have had the privilege to sit on many committees and community boards. My personal experience is that the size of a board can make a difference in the decision-making process. The larger is a decision-making body, the harder and more complicated it is to get decisions made, whereas the smallest board can be responsive to a fast-changing environment.

The propositions put forward by Vice Chancellor Professor Colin Stirling from Flinders, by Chancellor Kevin Scarce and former Vice Chancellor Warren Bebbington of the University of Adelaide, are more compelling and suitable for the business operation of the universities. The changes will create a contemporary governance structure that is better suited to addressing the major strategic challenges faced by universities in a rapidly changing environment.

Currently, these two university councils have a total of 20 or 21 representatives each, with at least four staff and four students on the council, yet the proposed changes are requesting the university councils to reduce their numbers to a total of 12 to 16. The reduction is across all aspects of council, but diverse representation and proportions of elected members are maintained.

We must remember that universities are not government departments. They need to be treated with respect to the extent of their independence and the diversity of those who govern them. South Australia needs jobs growth and investment in our economy. I believe every member would want to see our universities succeed. We want to see them compete well internationally and become more viable. We must look at every opportunity to run our institutions, which employ tens of thousands of people, and allow them to be effective and allow them to operate more efficiently. With those remarks, the opposition supports the bill.

Debate adjourned on motion of Hon. T.T. Ngo.