The Government has made a feature of its increases to education expenditure in the 2007–08 Budget although expenditure increases on measures in other areas such as national security and defence, transport and infrastructure, and the environment are greater. The increase in education expenditure is associated with a range of new measures in all three education sectors, presented in the budget papers under the uniform banner Realising our potential.

The additional expenditure provided by these measures totals $3.5 billion over the next four years, increasing from $534 million in 2007–08, to approximately $970 million in each of the out-years. The relative share of this additional funding is 57 per cent for the higher education sector, 24 per cent for schools and 19 per cent for vocational education and training.

The measures have widely been viewed as a government election year strategy to counter the ALP’s blueprint for education, The Australian economy needs an education revolution, released in January 2007. Much of the Government’s budget presentation and the media’s commentary have focused on the $5 billion investment in the new concept of a Higher Education Endowment Fund. Consequently the education measures more generally have been represented as the Government’s own ‘revolution’ in education policy.

The following notes consider some of the main measures in this context.

Higher education

Dr Coral Dow
Social Policy Section

Higher education is the centrepiece of the Government’s education initiatives. However in an election year and with an anticipated spending budget the Treasurer opened his budget speech with an investment rather than a spending measure: the announcement of a $5 billion perpetual Higher Education Endowment Fund (HEEF).

Higher Education Endowment Fund (HEEF)

The HEEF measure invests $5 billion of the budget surplus in an endowment fund, the earnings of which will provide funds for university capital works and research facilities from 2008–2009. Budget papers estimate the HEEF will earn $304 million annually but the Australian Vice-Chancellors’ Committee (AVCC) suggests this is conservative and that the HEEF could secure earnings of $500 million or more a year.[1] Earnings would have to be much higher than the estimates if the HEEF is to fund a reported $1.2 billion maintenance and infrastructure backlog.[2] However universities will not be guaranteed an annual share of the earnings which will be distributed to eligible higher education providers in a competitive tender process by the Minister for Education, Science and Training after advice from the HEEF Board. Eligible providers are the public universities and any private universities eligible for grants to support research and capital development projects as Table B providers under the Higher Education Support Act 2003. Currently there are three Table B providers: Bond University, the University of Notre Dame and the Melbourne College of Divinity.

Budget papers make it clear that the HEEF may also receive additional capital from future budget surpluses, from philanthropic investment which will be tax deductible and, if asked, will also manage individual institutions’ endowments. Less clear is how applications for funds will be assessed. The Minister’s media release suggests the best proposals will ‘support Australian Government policy with respect to diversity, specialisation and responsiveness to labour market needs’ and that ‘the Board would take into consideration whether universities had been able to raise matching funds, for example from state or territory governments, industry, alumni or members of the public.’[3] This has been interpreted as a mandatory requirement but the President of the AVCC, Professor Sutton, is reported as having been assured by ‘Department of Education, Science and Training officials that it was not a requirement that universities must raise matching funds to get earnings from the endowment.’[4] However it seems likely that the HEEF will benefit those universities, such as the Group of Eight, that already win 70 per cent of national competitive research grants and have substantial revenue from private sources.[5] In 2004 the Group of Eight raised $98 million of the $171 million university income from donations and bequests.[6]

Funding for capital works and research facilities has been provided from the Capital Development Pool (CDP), the Research Infrastructure Block Grants (RIBG) programme and the annual Appropriations Act. The Portfolio Budget Statements for 2007-2008 provide estimates for the CDP and RIBG programmes of $80.09 million and $207.98 million respectively. The annual appropriations have been in the order of $186 million over 3 years. [7]

There is no indication in the budget papers that dividends from the HEEF would replace this existing funding. In fact the supporting information in the HEEF measure media release describes the HEEF as ‘additional and ongoing funding’ and the Treasurer in a post budget interview guaranteed that the fund would not ‘take over existing education funding’.[8] However the Minister has since been reported as stating that HEEF funds would ‘eventually supersede other capital funding sources such as the Capital Development Pool’.[9] HEEF dividends would have to be substantially higher than the $300 million forecast if they were to replace all existing capital funding sources, let alone provide the additional funding promised, and funding sufficient to meet existing shortfalls in capital and research facilities. The Group of Eight claim a notable weakness of the budget initiatives is the failure to address the shortfall in research infrastructure funding.[10]

The Government claims the HEEF as an ‘unprecedented investment for the future of universities.’[11] The measure has been interpreted as doubling the $5.8 billion funding to higher education but the more modest $304 million annual dividend, not the capital investment, provides the additional funds as part of the $1.7 billion additional higher education funding. The HEEF measure has been welcomed by the universities but other budget measures have attracted more comment, in particular additional funding and changes to the Commonwealth Grants Scheme.

The funding of student places

University student places are funded through the Commonwealth Grants Scheme (CGS). Under the CGS the Australian Government funds each higher education provider for an agreed number of Commonwealth supported places (previously called HECS places) in particular disciplines. The disciplines are grouped in twelve funding clusters with both the Commonwealth and the student contribution amounts varying across the clusters. Universities can offer full-fee places to domestic students once the Commonwealth supported places are filled. The Budget makes a number of changes to the operation and funding of the CGS and has removed the cap on the number of domestic full-fee places universities can offer, which until now has been capped at 35 per cent of course enrolments.

Under the budget measure, Realising our potential – increasing university funding, $559.6 million over four years will fund changes to the CGS. From January 2008 the number of funding clusters will be reduced from 12 to 7.[12] CGS funding will be increased for Commonwealth supported places in mathematics and statistics ($2729), allied health ($1889), engineering, science and surveying ($684), clinical psychology ($2729), education ($109), nursing ($109), behavioural science and social studies ($840), and medicine, dentistry, and veterinary science ($1081). The significant increase in funding for mathematics and statistics meets the findings of the final report of the National Strategic Review of Mathematical Sciences Research. In the final report, Mathematics and Statistics: Critical Skills for Australia’s Future, the authors claimed that the ‘relative funding of mathematical sciences departments in universities is inadequate and does not reflect either their crucial importance or the cost of delivering quality training of students.’ The report emphasised increasing the Commonwealth grant for supported places in mathematics rather than reducing the student contribution. By increasing the Commonwealth grant for mathematics and statistics the budget measure contrasts with ALP policy to reduce the student contribution fees for those students and further reduce them for those mathematics and science graduates entering teaching.

Conversely the accounting, administration, economics and commerce disciplines have been aligned with law thus reducing their Commonwealth funding and increasing the maximum student contribution rate. Student contribution rates are based on graduates’ potential earnings, and the Government’s decision is based on the higher salaries and competitive nature of the labour market for these disciplines.[13] The Minister has stated that universities do not have to increase the student contribution for these disciplines, but considering that most universities took the opportunity of increasing HECS by the maximum 25 per cent in 2005 it could be expected that graduates in accounting, administration, economics and commerce will have an increased HELP debt.

In Realising our potential – allowing more responsive universities the Budget provides $223.2 million over four years to relax the caps on Commonwealth supported places and domestic full-fee paying undergraduate places. Universities will be fully funded rather than penalised for over-enrolments of up to 5 per cent in Commonwealth supported places. While they will be required to deliver specified Commonwealth supported places in nursing, teaching, medicine and engineering they will now be allowed ‘to adjust student numbers and course mixes to meet student demands and employer needs.’[14] Included in this mix will be the ability to offer an uncapped proportion of domestic full-fee places. There is some confusion in interpretation of this initiative. Currently the number of full-fee paying places is capped at 35 per cent and the Higher Education Support Act 2003 (HESA) ensures that providers fill Commonwealth supported places before accepting other enrolments. The Minister’s budget press release states universities ‘will still be required to offer their Commonwealth funded places before offering full fee places.’[15] The difference between filling or rather offering places is not explained.

The effect of both removing the cap on full-fee places and creating greater flexibility in the course mix has the potential for universities with high demand courses to ask for fewer Commonwealth-supported places and replace them with full-fee places, particularly in courses where revenue from full-fee places is higher than that from Commonwealth grants.[16] However the University of Technology Sydney’s Vice-Chancellor, Ross Milbourne, predicts the number of domestic full-fee places might actually fall due to the ‘expansion in commonwealth-supported offers and the fact universities can move commonwealth-supported places to high-demand areas.’[17] Regardless of the different possibilities this initiative is another means for universities to create niche markets and, like the HEEF budget measure, to differentiate the providers in the sector.

The policy to remove the cap on domestic full-fee places also differentiates government and opposition policies. Since 1998, when full-fee places were introduced, the ALP has promised to abolish or phase them out.[18] A Labor government would need to compensate universities with further funding for Commonwealth supported places. Estimates of this have varied widely with the focus on full-fee places in medicine costing over $100 000. However it should not be assumed that fee-paying courses in demand are all expensive, like medicine. Law, for example, is one of the cheapest courses to run.[19]

In the 2007–2008 Budget the Government is providing $208.6 million over four years to assist the universities to specialise and diversify through the Realising our potential – Diversity and Structural Adjustment Fund.[20] This and other budget measures further implement the Government’s policy to remove the ‘one-size-fits-all’ model in the sector. In a wide-ranging speech on the need for diversity the Minister claimed the ‘sector must stop trying to be all things to all students … that means I want to see the development of a diversified higher education sector, made up of universities which differ from each other in terms of mission, discipline mix, course offerings, modes of delivery, management and in academic structure.’[21]

Increased funding of $1.7 billion to higher education is strategically directed to enable greater specialisation and diversity in the sector. Vice Chancellors responded positively to the measures with AVCC President Gerard Sutton reported as saying it was ‘a fantastic outcome ... spectacular for the university sector.’[22] Criticism focuses on perceived outcomes of a more privatised, stratified and less equitable sector.[23] However all stakeholders have welcomed the increased funding to the higher education sector which may overcome criticism of previous funding cuts and perceptions that since Commonwealth spending on non-government schools has overtaken Commonwealth spending on universities the Government has neglected the higher education sector.[24] 

School education

Marilyn Harrington
Social Policy Section

The justification for the school education measures in the 2007–08 Budget is widely accepted because it is well documented by research that improving student outcomes, including literacy levels, will improve life outcomes. A number of the measures have also been foreshadowed by the recommendations of recent inquiries and reports commissioned by the Government, covering such issues as the teaching of literacy, a national Year 12 certificate, Year 12 curriculum content, the teaching of Australian history, and performance pay for teachers.[25]

The Budget introduces new measures, and continues and/or expands existing measures that directly fund schools, school communities and parents. These measures include literacy and numeracy vouchers, Australian Technical Colleges (ATCs), and rewarding schools for improvements in literacy and numeracy. The Investing in Our Schools Programme, which also falls into this program category, was extended by legislation passed in March 2007.[26]

Another feature of the budget measures for school education is that they reinforce the trend towards greater Australian Government involvement in school education—a trend which is also evident in the ALP’s policies announced to date.[27] The Budget also signals the introduction of a number of new conditions for funding for the next quadrennium of schools funding (2009 to 2012), thereby expanding the conditions for funding that were legislated by the passage of the Schools Assistance (Learning Together—Achievement Through Choice and Opportunity) Act 2004.[28]

Continuing and expanded programs

There have been some concerns about the effectiveness of some of the programs which are continued or expanded by the budget measures. For instance there is concern about the measure to provide literacy and numeracy vouchers for students, thereby expanding the Reading Assistance Scheme which had its origins in the Tutorial Voucher Initiative (TVI), a pilot scheme that ran in 2005. While an evaluation of the TVI reported that most parents were satisfied with the TVI, fewer tutors assessed the TVI as effective.[29] Of more concern was the uptake rate which was 40 per cent of eligible students, although the government regarded this as a ‘successful result’ for a national pilot.[30] There were some refinements to the Reading Assistance Scheme as a result of the TVI evaluation and more are proposed for the new program. To date the uptake for the 2007 program, at about 60 per cent, is a significant improvement on the TVI.[31]

The TVI attracted criticism from those who considered that the funds would be better directed towards schools.[32] These criticisms have continued. Typical of these criticisms is that of the Victorian Branch of the Australian Education Union:

The voucher program has been running in Victoria for three years and take-up is less than 30 per cent. That money should be made available to support programs in schools. Teachers and principals know these kids and know what their needs are in a way that private tutors simply cannot.[33]

Other concerns may be aroused by the Government rewarding schools for improving literacy and numeracy attainment while giving parents rather than schools the means to achieve this. As the Victorian Association of State Secondary Principals, which considers the tutorial vouchers ‘a complete waste of money’, asks: ‘Why not put the money directly into schools so we could lower class sizes, have more targeted literacy and numeracy programs?’[34]

The 2007–08 Budget provides for another three Australian Technical Colleges (ATCs). The establishment of the ATCs has not proceeded as anticipated. The funding for the original ATCs program has been increased and shifted between program years, with various reasons given. The previous Minister for Vocational and Technical Education attributed the additional costs to the flexibility of the program which had resulted in higher operational costs, and more new sites and multiple campuses than were anticipated.[35] The proposed ATC for the proposed Lismore Ballina region has not yet eventuated.

Critics of the ATCs view them as duplicating, at greater cost, existing state systems of vocational training and education.[36] Some have argued that the colleges should take on a broader range of subjects to ensure their viability in the long term. Given that the ATCs, with the addition of three more, are intended to cater for a maximum of 8400 students, some critics see them as having little impact on the skills crisis. There are also concerns about retention rates given the workload demands that will be placed on these students.[37]

The announcement of three new ATCs also comes ahead of the Government’s expectation that there will be an evaluation of the ATCs in 2008.[38]

New programs

Two budget measures—the Summer Schools for Teachers and the rewarding of schools for improvements in literacy and numeracy outcomes—and the announcement that performance pay will be a condition of funding for the next quadrennium of schools funding, signal the arrival of performance pay for teachers.

Performance pay for teachers is contentious. The April meeting of the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) rejected the federal Minister’s proposal for performance pay, instead opting to investigate different approaches to recognising and rewarding teachers through enhanced career structures.[39] The Government’s own commissioned report from the Australian Council of Educational Research (ACER) noted that: ‘The historical record is clear that few merit based pay schemes have survived when applied to teaching.’[40] ACER was cautious in its response and considered that its review of performance pay schemes indicated ‘the need to move gradually’, recommending further research focussed on developing ‘valid and reliable systems and measures for gathering evidence for individual performance pay decision … [and] … learning how to operate team- or school-based performance award programs.’[41] It is not clear from either the budget measures, or the announced performance pay condition for the next quadrennium of funding, whether the implementation of either will take into account these recommendations.

The bonuses for teachers to attend summer schools could be perceived as a de facto performance pay system—they have been announced as ‘Rewarding Australia’s high quality teachers.’[42] The school based rewards for schools that improve their literacy and numeracy attainment also have the potential to operate as a performance pay system with the Minister for Education, Science and Training confirming that the funding could be used to pay ‘greater rewards to outstanding teachers.’[43]

Save our Schools has voiced other concerns about the school reward measure, considering that such schemes have the potential for schools to manipulate outcomes and disadvantage certain categories of students:

… overseas experience with school performance rankings shows that schools generally respond by cheating on tests, ‘gaming the system’ and poaching or creaming-off high achieving students from other schools rather than taking on more low achieving students … Many schools in England and the US increase their test outcomes by excluding low achieving students from tests in a variety of ways such as exempting them from tests … suspending them at test time and …encouraging them to be absent … or to leave the school.[44]

General recurrent grants for schools

Both the Government and the ALP are intent on improving the quality of schooling and educational outcomes through the funding of targeted programs. Only one budget measure—the additional funding for regional and remote non-government schools—impacts on general recurrent grants (GRGs) for schools which form the bulk of Australian Government specific purpose payments for schools (an estimated 82 per cent in 2007–08).[45] This is in spite of the findings of two reports. The first, a MCEETYA report, called for additional funding of $2.4 billion for government schools to enable them to achieve a minimum National School Resourcing Standard.[46] The second, a government-commissioned report on government primary school resourcing, concluded that without additional financial and other resources, the National Goals for Schooling were outside the reach of many government primary schools.[47] Last year the Australian Primary Principals Association (APPA) drew attention to the lower rates of general recurrent grants for government primary schools and called for them to be funded at the same rate as government secondary schools, thereby providing an additional estimated $101 million for government primary schools.[48]

The measure to increase funding for non-government regional and remote schools is recognition that the socio-economic (SES) system of Australian Government funding for non‑government schools does not currently factor distance into its funding formula. The measure also requires state and territory government education systems to provide an equivalent increase for regional and remote government schools, in spite of weighting mechanisms for distance that already exist in their funding formulae.

The Government is currently reviewing the SES system of general recurrent grants for non‑government schools.

Other issues

One area of school policy not mentioned in the Budget is languages education. The ALP has announced that it will re-establish an Asian languages and studies strategy for Australian schools. The Department of Education, Science and Training has commissioned two inquiries on languages education which are due to report by July this year. It may be the case that the Govenment will announce changes to its school languages program as a consequence.[49]

There is no information in the Budget that the school education budget measures, and the proposed new funding conditions for the 2009–2012 funding quadrennium, take account of any administrative costs that may result. However the Minister for Education, Science and Training has stated, in announcing funding for the APPA to hold a national forum to create a draft charter to define the role of primary schools, that:

Schools have been asked to provide a huge range of services that go far beyond what was traditionally the role of schools, and this has the potential to have a negative impact on their ability to teach students and allow them to develop the fundamental skills in areas such as reading, writing and mathematics … The charter will help to define the role of primary school education and to allow schools to focus on the vital task of educating young people.[50]

There are claims that the some of the new conditions of funding foreshadowed in the Budget and by the Prime Minister do not appear to take account of policies and programs already in place in schools. For instance, the NSW education minister has pointed out that NSW government schools have bullying programs and annual reports, and that principals have capacity to choose their staff.[51]

The Australian Government is intent on improving school performance and education outcomes. Many like Kevin Donnelly, education consultant and former government advisor, consider the federal government’s approach to education is on ‘the right track’. However, as Donnelly has expressed, the government’s reforms have the potential to undermine their policy gains to date by formulating a policy program that is ‘overly bureaucratic, intrusive and centralised.’[52]

Vocational education and training (VET)

Carol Kempner
Social Policy Section

The $638 million increase in expenditure over four years on new Realising our potential – VET measures builds on the $837 million over five years Skills For the Future initiatives announced by the Prime Minister in October 2006. In effect the new budget measures are broadly consistent with already established government policy priorities. These priorities are for the funding of the Commonwealth’s own VET related programs (e.g. Australian Apprenticeships and Australian Technical Colleges), with an increasing focus on payments to individuals in preference to increasing grants to the states and territories for the running of their VET institutions.

The Realising our potential and previous measures have extended the regime of financial incentives available to individuals to encourage them to engage in VET. Traditionally the Commonwealth’s VET financial incentive payments have largely been in the form of wage subsidies to employers of apprentices. These subsidies have been enhanced and in recent years have become more targeted to areas of skill shortage, e.g. employer support for mature age apprentices in occupations in high demand. In addition, a range of financial supports that target individual VET students have been introduced. Some of these apply to VET students generally, e.g. income support measures, while others target particular groups, e.g. skills vouchers for mature workers to enhance basic skills, and toolkits and scholarships for apprentices in areas of skill shortage. The Realising our potential - VET measures continue the targeting of apprentices in areas of skills shortage with the introduction of a tax-free wage top-up and training vouchers to help them meet the cost of their course fees.

An interesting addition to the range of financial support measures for VET students across the board is the introduction in this budget of student loans in the form of FEE-HELP for Diploma and Advanced Diploma students. The VET sector’s role in meeting the growing demand for higher level skills has been evolving. This has focused attention on the inter‑relationship between the VET and higher education sectors, and issues associated with the differences in their fees and funding arrangements. The measure is one that could potentially have longer term implications for the future direction of VET funding.

A comparison of the size of the increase in expenditure on these measures with the other main area of Commonwealth VET expenditure—its grants to the states and territories to support them in the funding of their TAFE institutes and other providers—brings the Government’s priorities into relief. Its contribution under the 2005–08 Commonwealth-State Agreement for Skilling Australia’s Workforce provided additional funding of only $215 million for the quadrennium. If matched by the states and territories, it was expected to deliver 128 000 additional training places.[53] With the new expenditure in this budget the Commonwealth’s expenditure on grants to the states and territories will decline as a proportion of the Commonwealth’s administered expenses on VET, from 52 per cent in 2006–07 to 47 per cent in 2007–08.

Another point of comparison is the Government’s expenditure on the establishment of Australian Technical Colleges (ATCs). The aim of these secondary colleges is to promote apprenticeships in traditional trades by giving students a head start in school-based apprenticeships in these areas. Although a school education expense, the 2007–08 budget proposal to establish three more ATCs, in addition to the original 25, has been presented as a Realising our potentialVET measure. With the added funding for the three new ATCs the establishment costs for these colleges is expected to amount to a total of $552 million (this excludes ongoing schools funding to which ATCs will be entitled). In 2007 there will be approximately 2000 students in the ATCs and this number will rise to 8400 by 2009.[54] While this initiative is adding to the supply of apprenticeship training it is small in comparison with that provided by the broader state and territory VET system. As at September 2006 there were 404 200 apprentices in-training, 159 100 of whom were ‘traditional apprentices’. It is also interesting to compare the cost to the Commonwealth of creating these 8400 places in the ATCs, with the 128 000 training places provided for in the state and territory VET systems under the 2005–08 Commonwealth-State Agreement for Skilling Australia’s Workforce (see above).

There is some evidence that the Government’s funding of individual incentives is having some impact on the demand for, and participation in, VET. For example, between 2005 and 2006 there has been an 8 per cent increase in ‘traditional apprentices’ in-training. These policies, together with other factors, such as the demand for workers to develop higher level skills, are expected to contribute to an increase in the demand for VET.[55] A consequence is likely to be a focus on the adequacy of supply side funding, i.e. funding for the state and territory VET sector which annually trains approximately 1.6 million students. Some have estimated that funding would need to grow by 5 per cent per annum to meet this demand.[56] How the VET sector is to be funded to meet this demand is therefore likely to be an ongoing issue and one that will arise in the context of the negotiations for a new Commonwealth-State Agreement for Skilling Australia’s Workforce when the current one expires in 2008.



[1].     R. Lebihan and S. Morris, ‘Unis optimistic about higher returns’, Australian Financial Review, 10 May 2007, , accessed 17 May 2007.

[2].     S. Morris, ‘Funding fears lift as unis eye cash flow’, Australian Financial Review, 12 May 2007,, accessed 17 May 2007.

[3].     J. Bishop (Minister for Education, Science and Training), Higher Education Endowment Fund media release,, accessed on 17 May 2007. See also, ‘Campuses that get donors favoured’, The Australian, 11 May 2007,, accessed 17 May 2007.

[4].     R. Lebihan  and S. Morris, op. cit.

[5].    The Group of Eight consists of: The Australian National University, Monash University, The University of Adelaide, The University of Melbourne, The University of New South Wales, The University of Queensland, The University of Sydney and The University of Western Australia. See: The Group of Eight website,, accessed 17 May 2007.

[6].     Department of Education, Science and Training (DEST), Finance 2004, DEST, Canberra, 2005,, accessed 17 May 2007.

[7].    2007–2008 estimates for the RIBG are $207.98 million, a slight increase on the estimated actual for 2006–2007. Funding to the Capital Development Pool shows a reduction from $110.71 million to $80.09 million. (Portfolio Budget Statements 2007–2008: Education, Science and Training Portfolio, pp. 63, 104); $186 million has been approved for special infrastructure projects between 2005 and 2008 from the appropriations. See DEST, Higher Education Report 2005, p. 47,, accessed on 17 May 2007.

[8].    ‘Budget 2007: Treasurer discusses budget’, 7.30 Report (Budget Special), 8 May 2007,, accessed on 17 May 2007.

[9].    C. Armitage, ‘Fund will steer clear of politics’, The Australian, 16 May 2007,, accessed on 17 May 2007.

[10].   Group of Eight, Higher education package could transform the sector, media release, 9 May 2007, accessed 17 May 2007.

[11].   J. Bishop, op. cit.

[12].   This decision partly pre-empts the findings of the Review of the Higher Education Support Act 2003 which is focussed on funding cluster arrangements and the funding of clinical disciplines and will continue throughout 2007 and 2008,, accessed 17 May 2007.

[13].   J. Bishop (Minister for Education, Science and Training), Increased funding and flexibility for universities, media release,, accessed on 17 May 2007.

[14].   J. Bishop (Minister for Education, Science and Training), Greater flexibility for universities, media release,, accessed on 17 May 2007.

[15].   ibid. The supporting information in the media release also speaks only of offering, not filling, Commonwealth funded places.

[16].   See, for example, A. Norton, Some Perestroika in Higher Education, 8 May 2007,, accessed on 17 May 2007.

[17].   R. Lebihan  and S. Morris, ‘Inequity fears unfounded’, Australian Financial Review, 11 May 2005,, accessed on 17 May 2007.

[18].   The policy to permit universities to charge fees for domestic undergraduate students was introduced in the 1996–97 Budget and implemented in 1998 when 829 undergraduate students accepted fee paying places. See A. Vanstone (Minister for Education, Training and Youth Affairs), Higher Education Budget Statement, 9 August 1996. At the 1998 election, and again at the 2004 election, the ALP policy was to abolish domestic full fee places. In 2006 Kim Beazley reiterated the policy (Meet the Press, 9 April 2006), and Kevin Rudd has stated that they will be phased out. See S. Morris, ‘Full-fee stance clarified’, Australian Financial Review, 11 May 2007, accessed o 17 May 2007).

[19].   In 2006 AVCC President Professor Gerald Sutton is reported as estimating compensation to universities might cost between $150 million and $200 million. See: M. Grattan, ‘Beazley vows to scrap full-fee university places despite cost’, The Age, 10 April 2006,, accessed on 17 May 2007.

[20]    The fund will also incorporate the existing Collaboration and Structural Reform Fund and some funding from the current Learning and Teaching Performance Fund. See J. Bishop (Minister for Education, Science and Training), New diversity and structural adjustment fund for universities, media release,, accessed on 17 May 2007.

[21].   J. Bishop (Minister for Education, Science and Training), Speech: Curtin Institute Public Policy Forum, 24 July 2006,, accessed on 17 May 2007.

[22].   C. Armitage, ‘$1.7bn boost exceeds hopes AVCC hails spectacular outcome’,; and ‘Unis expectations exceeded’, Australian, 9 May 2007,, accessed on 17 May 2007.

[23].   See National Tertiary Education Union, Universities benefit from election budget bonanza, media release, 9 May 2007; and L. MacNamara, ‘Pressure on to take paying students’, The Australian, 11 May 2007, accessed on 17 May 2007.

[24].   However despite the increased Commonwealth funding to higher education, which will increase to an estimated $5.8 billion in 2007–2008, it will still be less than the estimated $6.2 billion in funding to non-government schools. See Australia. ‘Budget Strategy and Outlook 2007–2008’, Budget Paper No. 1, p. 6-10.

[25].   For further information see Australia. National Inquiry into the Teaching of Literacy, Teaching Reading, Dept of Education, Science and Training (DEST), Canberra, 2005, ; Australian Council for Educational Research (ACER), Australian Certificate of Education: Exploring a Way Forward, DEST, Canberra, 2006, G. Matters and G. Masters, Year 12 Curriculum Content and Achievement Standards, DEST, Canberra, 2007, The Australian History Summit, DEST, Canberra, /; and L. Ingvarson, E. Kleinhenz and J. Wilkinson, Research on Performance Pay for Teachers, ACER, Camberwell, Vic., 2007, , accessed on 11 May 2007.

[26].   For further information see Marilyn Harrington, ‘Schools Assistance (Learning Together—Achievement Through Choice and Opportunity) Amendment Bill 2007’, Bills Digest, no. 117, Parliamentary Library, Canberra, 2006–07,, accessed on 11 May 2007.

[27].   See, for instance, the ALP’s policy documents, A National Action Plan on Literacy and Numeracy ; and Establishing a National Curriculum to Improve our Children’s Educational Outcomes, accessed on 14 May 2007.

[28].   For information about the current conditions of funding, see Department of Education, Science and Training (DEST), Australian Government Programmes for Schools Quadrennial Administrative Guidelines 2005–2008: 2007 Update, DEST, Canberra, 2007, pp. 211–222, accessed on 11 May 2007.

[29].   Erebus International, Evaluation of the Pilot Tutorial Voucher Initiative, DEST, Canberra, 2006, accessed on 11 May 2007.

[30].   Answer to DEST Question No. E849_07, Senate Standing Committee on Employment, Workplace Relations and Education, 2006–2007 Additional Estimates Hearing,, accessed on 11 May 2007.

[31].   T. Croker, Reading Assistance Voucher Program: Report to APPA National Executive Council: Reference Group Meeting No. 2, 23 February 2007, Australian Primary Principals Association,, accessed on 11 May 2007.

[32].   Australian Education Union, Principals slam Minister's reading voucher, media release, 29 May 2004,, accessed on 11 May 2007.

[33].   Australian Education Union Victoria, Costello’s budget – where is the vision?, media release, 10 May 2007,, accessed on 14 may 2007.

[34].   M. Rout, ‘School schemes hit: money wasted, say teachers’, Herald Sun, 10 May 2007,, accessed on 15 May 2007.

[35].  Gary Hardgrave, Minister for Vocational and Technical Education, ‘Second reading speech: Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006’, House of Representatives, Debates, 7 December 2006,, accessed on 14 May 2007.

[36].   J. Gordon and B. Doherty, ‘Howard’s technical colleges struggle with costs and students’, The Age, 12 May 2007,, accessed on 14 May 2007.

[37].   For an overview of some of these criticisms see L. D’Angelo Fisher, ‘Slow learners’, Business Review Weekly, 18–24 January 2007, pp. 26–29,, accessed on 14 May 2007.

[38].   Answer to DEST Question No. E823_07, Senate Standing Committee on Employment, Workplace Relations and Education, 2006–2007 Additional Estimates Hearing,, accessed on 14 May 2007.

[39].   Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA), Information statement, 21st MCEETYA Meeting, Darwin, 12–13 April 2007,, accessed on 14 May 2007.

[40].   L. Ingvarson, E. Kleinhenz and J. Wilkinson, op. cit., p. 64.

[41].   ibid., p. 112.

[42].   J. Bishop (Minister for Education, Science and Training), Rewarding Australia’s high quality teachers, media release, 8 May 2007,, accessed on 14 May 2007.

[43].   F. Tomazin, ‘Stealth merit pay for teachers hits flak’, Age, 11 May 2007,, accessed on 14 May 2007.

[44].   Save Our Schools, ‘Howard Government encourages cheating, poaching and discrimination by schools’, media release, 13 May 2007, accessed on 15 May 2007.

[45].   For an explanation of the Australian Government’s system of general recurrent grants for schools, see M. Harrington, Australian Government General Recurrent Grants for Schools – A Brief Explanation, Parliamentary Library, Canberra, 2006, http://libiis1/Library_Services/electoralatlas/SchoolGrants/Explanation.htm, accessed on 14 May 2007.

[46].   Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA), Schools Resourcing Taskforce, Resourcing the National Goals for Schooling : Stage 2 Report, MCEETYA, Carlton South, Vic., 2005,, accessed on 14 May 2007.

[47].   M. Angus et al, The Sufficiency of Resources for Australian Primary Schools, DEST, Canberra, 2004, p. vi, accessed on 14 May 2007.

[48].   Australian Primary Principals Association, Primary/secondary government funding anomaly, media release, 1 November 2006,, accessed on 14 May 2007.

[49].   For further information see DEST’s Languages Education website, accessed on 15 May 2007.

[50].   J. Bishop (Minister for Education, Science and Training), New charter for Australian primary schools, media release, 4 May 2007,, accessed on 14 May 2007.

[51].   See, for example, ‘Della Bosca says Howard is over simplifying schools debate’, AAP, 15 May 2007.

[52].   K. Donnelly, ‘Choice would be eroded by centralisation’, The Australian, 10 May 2007,, accessed on 17 May 2007.

[53].   Australia. Department of Education, Science and Training (DEST), 2005–08 Commonwealth-State Agreement for Skilling Australia’s Workforce, DEST, Canberra, 2006, p. iii,, accessed on 17 May 2007.

[54].   A Robb (Minister for Vocational and Further Education), Three new Australian Technical Colleges announced, media release, 8 May 2007,, accessed on 17 May 2007.

[55].   G. Burke and C. Shah, ‘Expansion of vocational education and training’, AVETRA Annual Conference, April 2007,, accessed on 17 May 2007.

[56].   ibid.