Federal Budget 2017
10 May 2017 | The government is set to save A$2.8 billion over the five years from 2016-17 by reforming the higher education system. This includes a 2.5% efficiency dividend on the Commonwealth Grant Scheme in 2018 and 2019, and a 1.82% annual increase in student contributions to the High Education Loan Program from January 1, 2018 (a 7.5% increase over the forward estimates).
The minimum income to start repaying HELP debt will be lowered to $42,000. The repayment rate will increase with income, from 1% at the minimum threshold to 10% at A$119,882, the maximum threshold.
The government will save $181.2 million over the forward estimates by limiting eligibility for VET student loans to certain courses.
Government spending explained in 10 charts: from Howard to Turnbull
Education spending rose dramatically during the global financial crisis, with spending on primary and secondary education increasing 81% to A$24.7 billion in the year to 2009-10 as part of the economic stimulus package.
Rudd’s “education revolution” led to a 12% growth in education spending in the 2008-09 budget, quickly followed by a further 61% spending increase in 2009-10 as part of the economic stimulus package. Spending in the following year fell as the temporary stimulus measures came to an end, but overall, education spending has remained significantly higher in real terms than pre-global financial crisis levels.
Spending on the university sector rose to around A$10.9 billion over the same period, but has remained relatively stable since.
One size does not fit all unis
There’s a hint in Budget announcements on higher education that the Government might be entertaining the notion of “teaching-only universities”, reveals Emmaline Bexley (Higher education reform: small changes for now but big ones to come). And about time, too, that the fiction of the “teaching-research nexus” to which Australia slavishly clings be abandoned. The case for a different type of university has been argued for years.
The case for a new university type
It would be reasonable to assume, as many people do, that the word university derives from the Latin universitas, meaning the whole, entire, and is related to the universality of knowledge and learning that notionally characterises a university. Reasonable but not quite on the mark. It actually comes from a contraction of the Latin phrase universitas magistrorum et scholarium, meaning a community of masters (teachers) and scholars (students). So from the earliest times, teaching and learning – the transmission of knowledge and understanding – have been at the heart of a university’s mission. Through the centuries, universities have further emerged as the primary agents of knowledge creation in societies through their research.
Resourcing Australia’s tertiary education sector
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 (LH Martin Institute).
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.
