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Federal budget 2014: education experts react

Written by Dr Stewart Riddle (USQ), Distinguished Professor Brian Schmidt (ANU), Professor Bruce Chapman (ANU, NCSEHE), Dr David Zyngier (Monash), Professor Ed Byrne (Monash), Emeritus Professor Graeme Turner (UQ) and Dr Tim Pitman (NCSEHE) for The Conversation

The government has unveiled a higher education deregulation agenda in Tuesday’s budget, including continuation of the demand driven system in public universities.

In a major shake-up, universities, TAFEs and colleges will be able to set the tuition fees for their courses from 2016. This is estimated to save the government A$1.1 billion over the next three years.

The government will also provide financial assistance to students studying diplomas, advanced diplomas and associate degrees, as well as bachelors degrees. This is estimated to affect more than 80,000 students by 2018, at a cost of $820 million over three years. Universities will direct 20% of the new revenue raised from this to Commonwealth scholarships for disadvantaged students.

Government funding toward a new students’ course fees will be reduced by up to 20% and indexed at CPI. Loan fees for FEE-HELP and VET FEE-HELP will be removed.

Rolling expert responses follow.

Changes to higher education

Bruce Chapman, Director, Policy Impact, Crawford School of Economics and Government at ANU and NCSEHE Advisory Board member

These are radical changes to the way in which domestic students will be charged for higher education. There is now real capacity for institutions to very significantly increase fees, particularly the Group of Eight universities. This means that we can expect to see domestic fees increase both significantly and rapidly from 2016. How fast and by how much we just can’t know. However it would be unlikely for universities to increase them above international student fee levels, which are currently about two and a half to three times higher than domestic fees.

It is important to stress that this is a world first and no-one is able to say with any authority what, exactly, will happen in respect of fees and student access. It is however a safe bet that all institutions will increase their charges because not to do so would cost them money. The changes are good for private providers who will have access to HECS-HELP without too many constraints.

Critically, the government has maintained the essence of HECS and that is a very good thing. This will hopefully mean that access for all students and particularly disadvantaged students should not be too much affected.


Tim Pitman, Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University

The budget changes to higher education are in the areas expected, but not in the ways expected.

As anticipated, the student contribution will rise but more than predicted. The Commission of Audit recommended an average rise of 14% but the government has opted for at least 20%. The exact amount will depend on how much additional universities charge because again as previewed, from 2016 universities will be able to set their own fees in a deregulated market. So the 20% rise is based on the assumption universities don’t raise their fees. Technically the rise could be lower than 20% if fees drop due to competition but this is extremely unlikely.

For every $5 universities receive from additional fee revenue, $1 will be used by the government to create new Commonwealth Scholarships to “expand opportunities for students from low socio-economic backgrounds, indigenous students and students from regional Australia”. The crucial word here is “new” – if they are truly additional to the financial support currently available to disadvantaged students and not just replacing existing schemes, and if they are appropriately designed, they could make a real difference to increasing access for these student groups.

Research is a winner with the continuation of the Future Fellowships Scheme beyond 2015, which the previous Labor government did not commit to. However, the number of fellowships on offer will be approximately half previously awarded.

Higher education will also probably benefit from the $7 Medicare co-payment, with $5 going towards a “medical research future fund”. The key question will be whether the creation of this fund represents a genuine increase to medical research or whether it will be used to reduce other research funding in the future and indeed whether the money will be spent on public or private-sector research.

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Posted 14 May 2014 Posted in Editorial, General