Resourcing Australia’s tertiary education sector

LH Martin Institute

Australian Government expenditure on tertiary education has been consistently at 0.8% of GDP since 2000. There has not been a ‘blowout’ in tertiary education spending. If there is a problem, it is simply that the Government needs to bring the Budget back into balance. The contribution that can be made to that objective from the tertiary education sector is at best modest, writes Mark Warburton.

While direct expenditure on higher education student places under the Commonwealth Grant Scheme (CGS) has increased considerably since 2008, this has been substantially offset since 2011 by 13 major savings measures which have reduced spending in other programs of support for higher education teaching. Overall expenditure on higher education teaching has risen broadly in line with GDP. Since 2000, student contributions have increased by 187 per cent, CGS subsidies by 158 per cent and GDP by 144 per cent.

This contrasts markedly with what has been happening in the vocational education and training (VET) sector. Since 2009-10, the Australian Government’s nominal expenditure on VET has declined by $0.6 billion or 16 per cent and this decline will have reached $1.2 billion or 30 per cent by 2017-18.

There is currently a lack of coherent strategy aimed at ensuring that VET resourcing is being used efficiently. The expansion in VET FEE HELP that has occurred could potentially ensure that VET resourcing is maintained despite expenditure reductions. Currently, there appears to be substantial disparity in the level of resourcing of the VET sector in comparison to that in the higher education sector and it is not clear that this relates to a substantial difference in their need for resources. The distribution of VET resources is changing rapidly and is not fully understood. Some areas of VET activity are declining in ways that may have adverse impacts on the availability of skills in the Australian labour market.





Mark Warburton is an Honorary Senior Fellow of the LH Martin Institute. He was Principal Analyst for Universities Australia during 2015 and was in the Australian Public Service prior to that.  He worked on higher education funding policy for around nine years, implementing many aspects of the Transforming Australia’s Higher Education System policy statement and then modifying them in response to subsequent budget pressures.


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