SARAH FERGUSON, PRESENTER: The Government is under pressure tonight to compromise on another of its key reforms, the higher education changes that provoked such controversy earlier this year.

Education Minister Christopher Pyne addressed the National Press Club today, saying that while he wants the package to pass intact, it will be reshaped in the Upper House when Parliament reconvenes in Spring.

I spoke with the Education Minister earlier.

Christopher Pyne, welcome to 7.30.

CHRISTOPHER PYNE, EDUCATION MINISTER: Thank you for having me.

SARAH FERGUSON: You seemed optimistic during your speech today, but have you actually made any progress with Clive Palmer yet 'cause he seems implacably opposed to your deregulation plans?

CHRISTOPHER PYNE: Well I don't think he's ever said that he is going to vote against our higher education reforms. He has been very careful to say he wants to have free education, in fact, but I think Clive realises that neither the Liberal Party nor the Labor Party will vote in favour of free education because obviously we can't afford it. But he hasn't as yet said that he's against our higher education reforms. Now he has said he's against other things that the Government is proposing to put through the Senate, so I do take heart from the fact that if you haven't said no, then we're a long way from ending the siren, as they say.

SARAH FERGUSON: I guess it's a very long way - your positions though are a very long way from each other. You said today that there are core aspects to the policy, which suggests there are non-core aspects as well. What are you prepared to negotiate on?

CHRISTOPHER PYNE: I don't think that Palmer United Party and the Coalition government are a long way from each other on higher education reform at all. I think that we will work closely together to bring about the necessary reform for universities and students that is needed. In terms of what I said today at the Press Club, well, obviously we'll pass the higher education reforms through the House of Representatives unscathed. Then it will go to the Senate. Now we don't have the numbers in the Senate, so I will have to sit down, and I look forward to in fact negotiating with the crossbenches, since Labor and the Greens are being so irresponsible ...

SARAH FERGUSON: Indeed, that's my question: so what is it that you're prepared to negotiate on?

CHRISTOPHER PYNE: Well, I won't be flagging a negotiation position in the media. I'll be sitting down and respectfully talking one-on-one, or in groups, if that's what the crossbenches want. I've already talked to the crossbenches at length about a lot of these issues and I feel very positive that we'll be able to have a higher education reform. Now, will it look exactly the same as what leaves the House of Representatives? If we had the numbers in the Senate, the answer would be yes, but we don't have the numbers in the Senate, so Realpolitik tells us that what will emerge from the Senate will be different. Now, if it's dramatically different, the Government won't be able to proceed with it. If it is still a higher education reform that achieves most of the objectives that I've set for it, well then I will be reasonably pleased with that outcome.

SARAH FERGUSON: I think that's what your colleague Malcolm Turnbull calls a penetrating statement of the blindingly obvious, but we'll move on.

CHRISTOPHER PYNE: He's very clever, Malcolm.

SARAH FERGUSON: On the loan repayments, there's been widespread criticism of the inequity involved. Bruce Chapman says they disadvantage women and the poor in particular. Are you prepared to listen to him, the architect of HECS?

CHRISTOPHER PYNE: Well I'm listening to everybody in the debate. Bruce Chapman and Tim Higgins, his co-author, are one - are two particular people. There've been, as I outlined at the Press Club today, a lot of support for the Government's reforms from vice chancellors and others in the higher education sector. I'm listening to everyone because that's the best way to get the best reform possible through the Senate. Now, ...

SARAH FERGUSON: Let's just talk about these interest repayments because it does seem to be an area - yes, it's true, that there is a lot of support for your reforms, but from those people you talk about, the vice chancellors, they have said that they are very worried about the inequity contained within those loan repayments. Is that something that you're going to consider changing?

CHRISTOPHER PYNE: Well let's see what the Senate decides, Sarah. I'm not going to pre-empt the cross enches, I'm not going to assume that they're going to do one thing or the other, but I will certainly talk to them about all aspects of the package ...

SARAH FERGUSON: But have you been persuaded by Bruce Chapman and the arguments of the vice chancellors that those loan repayments that hurt low income earners and women in particular should be removed from the package or altered?

CHRISTOPHER PYNE: I think it's fair for the students to pay the same interest rate that the taxpayers are paying on their behalf. I think the students should pay back at the same rate that the taxpayers did, otherwise there is an in-built subsidy for the students and the students are already getting at the moment 60 per cent of their tuition fees paid by the taxpayer. I think that's fair.

SARAH FERGUSON: But when Bruce Chapman - forgive me, but when Bruce Chapman explains to you that the effect of setting the repayments at the government bond rate in the way that you have hurts women and poor people, those people whom you want to encourage into the universities, are you saying that you'll only change that if the crossbenches demand it? You don't see any innate benefit in that?

CHRISTOPHER PYNE: Well, Sarah, if you're saying that Bruce Chapman is the oracle and that everything he says, we have to do, then I would advise Bruce Chapman to get himself elected to Parliament, to become a cabinet minister and the Minister for Education and then he'll be able to do that. His voice is a valid one and I will respectfully listen to him, but he's not a member of the cabinet.

SARAH FERGUSON: However, do you accept that there is a hit in the way that you've set up the loan repayments that hurts women and poorer people more than it does high income earners? Do you accept that's the consequence?

CHRISTOPHER PYNE: No, absolutely not. And I don't accept it because what will happen at universities is that vice chancellors and their leadership teams will know that they should not charge and will not charge higher fees for courses which are typically going to be studied by people who'll be nurses and teachers and therefore not earn high incomes over a period of time. Now, women are well-represented amongst the teaching and nursing students. They will not be able to earn the high incomes that say dentists or lawyers will earn, and vice chancellors in framing their fees, their fee structure, will take that into account. Therefore the debts of teachers and nurses will be lower than the debts, for example, of lawyers and dentists.

SARAH FERGUSON: But what happens to a female lawyer or a female dentist who takes, say, 10 years out of from the workplace to raise a family? She will pay a great deal more for her degree than a man who has no children.

CHRISTOPHER PYNE: Well, Sarah, I feel like you're sort of caught up on this subject and the reforms, the higher education reforms are a great deal more than simply the deregulation of fees. So, while you're a bit caught up on one aspect of it, there are many very good aspects of this reform package which I think the Senate will find very attractive.

SARAH FERGUSON: I'll just make the point it's not me who's caught up on it, it's the vice chancellors of the university. But moving on. The legislation that you have also has a cut to university funding of about 20 per cent per course on average, as I understand it. If you don't get your legislation through, are you going to cut the same amount of money from research, for example, which is a move that wouldn't require legislation?

CHRISTOPHER PYNE: Well I don't think there'll be very much support at all in the Senate for not going ahead with the reduction of the Commonwealth Grant Scheme by 20 per cent and obviously that is a important part of the savings measures in the Budget.

SARAH FERGUSON: Can I just make that clear, that if you don't get it, however, because it isn't certain that you rule out taking the money from research through a ministerial measure that doesn't require legislation?

CHRISTOPHER PYNE: Well, Sarah, I wouldn't be ruling anything in or anything out. A good negotiator never rules anything in or anything out and the negotiating that I do with the crossbenches will be behind closed doors.

SARAH FERGUSON: Just to open the door just a little bit on those negotiations, if you would, more generally because the Government hasn't been going very well. Are you going to change your strategy, your approach when Parliament resumes?

CHRISTOPHER PYNE: No, I think my strategy and my approach have been perfectly satisfactory. I mean, we could always ...

SARAH FERGUSON: But not productive.

CHRISTOPHER PYNE: Well we've abolished the carbon tax, which we promised to do in the teeth of the opposition from Labor and the Greens, which was a very important initiative. We are building the roads of the 21st Century. We've stopped the boats. Scott Morrison's been terribly successful. I believe that the Senate will take time to get a lot of things done and I don't think the measure of our success or not is how long it takes measures to get through the Parliament.

SARAH FERGUSON: Alright. Christopher Pyne, thank you very much indeed for joining us.

CHRISTOPHER PYNE: It's a pleasure. Thank you.