The main news for the higher education sector in the 2013-14 Budget is its contribution to paying for the National Plan for School Improvement, following the Gonski Review of Funding for Schooling.
The Budget contains three key savings measures for higher education, worth a total of $2.4 billion. These measures were foreshadowed in the Australian Government’s Statement on Higher Education on 13 April 2013.  They are:
- ending discounts for upfront payment (10 per cent discount) and voluntary repayment (5 per cent bonus) of Higher Education Loan Program (HELP) debts, achieving savings of $276.7 million over four years. A brief history of these discounts is provided in a FlagPost article, ‘And then there were none: HECS discounts’
- applying an efficiency dividend to grants to higher education providers of 2 per cent in 2014 and 1.25 per cent in 2015, achieving savings of $902.7 million over four years
- converting Student Start-up Scholarships into income contingent loans repayable under the HELP scheme, achieving savings of $1,186.3 million over five years. Commentary on this decision can be found in ‘Higher education savings – students pick up the bill’.
The combined effect of uncapped student places and these additions to HELP will further load up student debt owed to the federal government. Outstanding HELP debt at 30 June 2013 has been revised up $2.1 billion to $22.3 billion and is expected to hit $42.1 billion by 2016-17.  Student debt is technically a government asset, but one with increasingly doubtful status.
While the budget savings represent a significant blow to higher education (particularly, in the long term, for higher education students) there are some good news items for the sector.
The National Collaborative Research Infrastructure Strategy (NCRIS), which supports major national research facilities hosted by Australian universities, receives a further two years’ funding to 2014-15, with an investment of $185.9 million. This funding takes the pressure off a program that has survived on an interim solution reached last year that involved skimming $60 million from existing block grants.
The Australian Research Council (ARC) Future Fellowships program receives another round of funding worth $135.3 million, through to 2017-18. The extension will give up to 150 talented mid-career researchers (both Australian and overseas) a four-year fellowship to conduct their research in Australia.
There is funding for a further 1,650 Commonwealth supported places annually in priority courses including teacher training (which will move to two years postgraduate) and language education (especially Asian languages), at a cost of $96.7 million over five years.
The Budget also gives effect to the AsiaBound initiative announced in late 2012, with $58.1 million over four years for a range of incentives for higher education students to study in Asia and/or study Asian languages. Further information is available in the Bills Digest for the Higher Education Support Amendment (Asian Century) Bill 2013.
The federal government has pointed to ‘an extra $346 million’ in the Budget to meet increased demand for higher education places.  However, funding for the Commonwealth Grant Scheme (CGS), which provides the per student funding, has only increased by $256.7 million since the previous Budget, and over the period 2012-13 to 2015-16 there is an estimated $286.5 million less funding going to the CGS than in the 2012-13 Budget estimates.
There is no new funding for health and medical research, which will have to wait for the federal government’s response to the recent Strategic Review of this area. There are also no new research and development initiatives or commercialisation schemes—both areas where Australia can do better.
Overall, this is a Budget that imposes big savings on the higher education sector, but also extends a few lifelines—albeit short ones. The federal government’s total investment in higher education continues to grow, just at a slower rate than the sector was hoping for.
. C Emerson (Minister for Tertiary Education, Skills, Science and Research), ‘Statement on higher education’, media release, 13 April 2013, accessed 15 May 2013.
. Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, ‘Collaboration Research Infrastructure Scheme’, Department website, accessed 15 May 2013. Note: During the interim funding period NCRIS was known as Collaborative Research Infrastructure Scheme (CRIS).
. Department of Health and Ageing, Strategic review of health and medical research: final report, (McKeon review), Commonwealth of Australia, February 2013, accessed 15 May 2013.
. Department of Industry, Innovation, Science, Research and Tertiary Education, Australian Innovation System Report - 2012, Commonwealth of Australia, September 2012, accessed 16 May 2013.
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