Tertiary education

Budget Review 2018–19 Index

Hazel Ferguson

This is not a major budget for tertiary education. However the Government has addressed a number of outstanding issues arising from earlier announcements in both vocational education and training (VET) and higher education.

Vocational education and training

The most significant 2018–19 budget measure in VET addresses the future of the apprenticeship-focused Skilling Australians Fund (SAF), which was announced in the 2017–18 Budget, but has not yet been implemented.[1]

Skilling Australians Fund announcement: 2017–18 Budget

In the 2017–18 Budget, the Government announced a four-year National Partnership Agreement worth approximately $1.5 billion, to replace the expired National Partnership Agreement on Skills Reform.[2] The new Agreement was funded from 2017–18, subject to negotiations with the states and territories. However, funding for the measure was based on revenue from a levy on skilled visas from March 2018, which is yet to commence.[3] The legislation to give effect to the levy passed Parliament on 9 May 2018.[4]

With the National Partnership Agreement on Skills Reform having expired on 30 June 2017, skills training providers have raised concerns about the delay in implementing the SAF and uncertainty about the stability of revenue from the levy.[5] This has been particularly pressing given declining apprenticeship numbers and trade skill shortages in recent years.[6]

2018–19 budget measure—‘Managing the Skilling Australians Fund’

The 2018–19 Budget makes a number of changes to manage the delayed implementation of the SAF:

  • $250.0 million is provided in 2017–18, to allow the SAF to commence
  • an additional $50.0 million is available each year from 2017–18 to 2021–22, to be shared between states and territories—the first year is only available to those that sign on to participate in the SAF by 7 June 2018 and
  • the proposed Agreement with the states and territories will be delayed by one year, shifting the four-year Agreement from 2017–18 to 2020–21, to 2018–19 to 2021–22.[7]

The total value of the SAF remains the same as in the 2017–18 budget announcement (although running over five years rather than four), at approximately $1.5 billion.[8] However, the funding for 2017–18 will not be included in the Agreement, leaving total funding for the National Partnership on the Skilling Australians Fund at $1.2 billion.[9] It is not clear what the implementation arrangements for the first year of SAF funding (2017–18) will be.

While these changes provide some additional certainty to states and territories being asked to commit to matched funding through a National Partnership Agreement, levy revenue is also predicted to be lower than estimated in the 2017–18 Budget, partly due to amendments to its application, which are discussed elsewhere in the Budget Review 2018–19.[10]

In the 2017–18 Budget, total funding available through the SAF in 2017–18 was $350.0 million, with only $90.0 million of this coming from revenue from the levy. [11] Therefore, while the 2018–19 Budget makes available $300 million in 2017–18, it does not appear that this whole amount is new spending.

The full implementation of the SAF remains subject to negotiation with the states and territories.

Higher education

The Mid-year Economic and Fiscal Outlook 2017–18 (MYEFO) addressed the major outstanding funding issue in higher education by announcing that unlegislated reform measures from the 2017–18 Budget would not be pursued.[12] Unlike these recent higher education reform announcements the most significant MYEFO saving was achieved without legislation through a 2018 and 2019 freeze on funding for Commonwealth Supported Places (CSPs).[13] CSPs provide subsidised higher education courses for domestic students, primarily at undergraduate level. The challenge in higher education in this budget has therefore been in balancing between strategic growth in some areas, particularly regional universities, with the overall pause in demand-driven funding.

Response to the Review into Regional, Rural and Remote Education

The 2018–19 Budget provides $96.1 million over four years from 2018–19 to implement the Government’s response to the higher education components of the Review into Regional, Rural and Remote Education.[14]

Of this funding, $28.2 million will support an estimated 500 additional sub-bachelor (including enabling) places at higher education providers in regional areas from the 2019 academic year. Another $14 million is allocated for 185 additional bachelor CSPs per year for students studying through a Regional Study Hub (RSH)—funding for up to eight RSHs was included in the 2017–18 Budget.[15] According to the Department of Education and Training (DET), RSHs will ‘provide infrastructure such as study spaces, video conferencing, computing facilities and internet access, as well as pastoral and academic support for students studying via distance at partner universities.’[16] The response also includes $53.9 million for expanded access to Youth Allowance, which is discussed elsewhere in the Budget Review 2018–19.[17] The Regional Universities Network has supported the Government’s response but ‘looks forward to a further Government response to the Halsey review recommendations’.[18] There is no response, for instance, to the Review’s recommendations to expand the affordability and availability of VET in the regions.[19] 

Other support for regional universities

Additionally, $123.6 million funding is committed over five years from 2017–18 for additional CSPs at the University of Sunshine Coast, University of Tasmania and Southern Cross University. These places were announced following the MYEFO funding freeze.

Funding of $83.3 million over five years from 2017–18 is also committed to establish a Murray-Darling medical schools network under the Stronger Rural Health Strategy.[20] No additional funding for medical CSPs is committed in the Education and Training Portfolio for this measure, although a new pool of medical CSPs is being created from 2021.[21] Instead, places are being made available through partnerships with universities which already have medical places allocated. More information on the Stronger Rural Health Strategy, including the Murray-Darling medical schools network, is available in elsewhere in the Budget Review 2018–19.[22]

Cost recovery and regulation

The Budget includes cost recovery measures in both higher education and VET.

New charges will apply to higher education providers from 1 January 2019, moving Higher Education Loans Program (HELP) administration to partial cost recovery and Tertiary Education Quality and Standards Agency (TEQSA), the higher education regulator, towards full cost recovery. Consultation will be undertaken on both charges.[23] The new TEQSA charge offsets the cost of an additional $24.3 million over four years from 2018–19 for TEQSA to manage increased workload resulting from growth in provider applications, and to address contract cheating.[24] Innovative Research Universities, while welcoming the Budget overall, is ‘disappointed with “pointless” new university charges’.[25]

The Australian Skills Quality Authority (ASQA), the national VET regulator, already operates on a partial cost recovery basis and is moving toward full cost recovery in line with a 2009 Council of Australian Governments (COAG) decision, with provider application and ongoing charges in place under the VET Student Loans Act 2016 and VET Student Loans (Charges) Act 2016.[26] The Budget commits $18.6 million over four years from 2018–19 to support ASQA to move to full cost recovery. This is estimated to achieve $52.7 million in revenue, or a net saving of $34.1 million.[27]

An additional $1.0 million in 2018–19 has also been allocated to the Office of the Commonwealth Ombudsman to support the workload of the VET Student Loans Ombudsman in managing and investigating student complaints about VET FEE-HELP and VET Student Loans providers.[28]

Legislation would be required to apply new charges to providers.



[1].          Information on the Skilling Australians Fund (SAF) is available from Department of Education and Training (DET), ‘Skilling Australians Fund’, DET website.

[2].          Australian Government, Federal financial relations: budget paper no. 3: 2017–18, p. 35.

[3].          Migration Amendment (Skilling Australians Fund) Bill 2018.

[4].          At the time of writing, these bills, the Migration Amendment (Skilling Australians Fund) Bill 2018, and Migration (Skilling Australians Fund) Charges Bill 2017, are yet to receive Royal Assent.

[5].          As examples, Victorian TAFE Association, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Migration Amendment (Skilling Australians Fund) Bill 2017, and the Migration (Skilling Australians Fund) Charges Bill 2017 [provisions], 15 December 2017, p. 3; National Apprentice Employment Network, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Migration Amendment (Skilling Australians Fund) Bill 2017, and the Migration (Skilling Australians Fund) Charges Bill 2017 [provisions], 15 December 2017, p. 3.

[6].          As discussed in C Petrie, H Ferguson and H Sherrell, Migration Amendment (Skilling Australians Fund) Bill 2017 and Migration (Skilling Australians Fund) Charges Bill 2017, Bills digest, 76, 2017–18, Parliamentary Library, Canberra, 2018, pp. 5–6.

[7].          Australian Government, Budget 2018–19: budget overview, 2018, Appendix C: major initiatives, p. 34; Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2018–19, p. 90.

[8].          Australian Government, Federal financial relations: budget paper no. 3: 2017–18, p. 35; Australian Government, Federal financial relations: budget paper no. 3: 2018–19, p. 35.

[9].          Australian Government, Federal financial relations: budget paper no. 3: 2017–18, p. 35; Australian Government, Federal financial relations: budget paper no. 3: 2018–19, p. 35; Department of Education and Training (DET), Skilling Australians Fund, fact sheet, DET website, 2018.

[10].       H Sherrell, ‘Immigration overview’, Budget Review 2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra, 2018.

[11].       Australian Government, Portfolio budget statements 2017–18: budget related paper no. 1.5: Home Affairs Portfoliop. 15.

[12].       Australian Government, Mid-year Economic and Fiscal Outlook 2017–18 (MYEFO), pp. 143–4.

[13].       Other higher education reform measures announced in MYEFO are still before Parliament in the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. Previous higher education reform bills are the Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017 (the HESLA Bill), which was a post-consultation replacement for the Higher Education and Research Reform Bill 2014, which was an amended version of the Higher Education and Research Reform Amendment Bill 2014, which sought to legislate the far-reaching 2014–15 Budget reform announcements, including the deregulation of undergraduate higher education fees and an average 20 per cent cut to funding for CSPs.

[14].       Australian Government, ‘Part 2: expense measures’, op. cit., p. 94.

[15].       Ibid, pp. 81–82; DET, ‘Access and Participation’, DET website.

[16].       DET, op. cit.

[17].       M Klapdor, ‘Student payment changes’, Budget Review 2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra, 2018.

[18].       Regional Universities Network (RUN), RUN: budget a step in the right direction for regional students and universities, media release, 8 May 2018.

[19].       Australian Government, Portfolio budget statements 2018–19: budget related paper no. 1.5: Education and Training Portfoliop. 10; J Halsey, Independent Review into Regional, Rural and Remote Education, Department of Education and Training, Canberra, 2018, p. 56.

[20].       Australian Government, ‘Part 2: expense measures’, op. cit., p. 106.

[21].       DET, ‘A pool of medical Commonwealth supported places (CSPs) to support innovative medical initiatives’, DET website.  

[22].       M Biggs, ‘Rural health workforce’, Budget Review 2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra, 2018.

[23].       DET, ‘HERI Budget overview 18–19’, DET website.

[24].       Australian Government, ‘Part 2: expense measures’, op. cit., p. 95.

[25].       Innovative Research Universities, IRU welcomes budget investment in research but disappointed with 'pointless' new university charges, media release, 9 May 2018.

[26].       Australian Skills Quality Authority (ASQA), ‘Fees and Charges’, ASQA website.

[27].       Australian Government, ‘Part 2: expense measures’, op. cit., p. 85.

[28].       Australian Government, ‘Part 2: expense measures’, op. cit., p. 96.

 

All online articles accessed May 2018.

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