Budget outlook

Monday, 8 May 2017

Last week on Monday night, I joined Vice-Chancellors, representatives of student bodies and industry leaders in Canberra to hear the Minister present the government’s proposed reform package for the higher education sector.

There were distinctly mixed feelings in the room about the reform package. There was clear relief that the spectre of full fee deregulation and a 20 per cent cut to university funding appear to have been laid to rest.  It was disappointing, however that the government proposes to cut $2.8 billion from the university sector at a time when the contribution of universities to educating the future workforce and supporting the economic transition of Australia and its regions has never been more critical. The proposed 2.5 per cent cut (aka ‘efficiency dividend’) to Commonwealth Grant Scheme funding in 2018 and again in 2019 will have a substantial impact on the operations of Australia’s universities, particularly given the disappearance of major capital development schemes such as the Education Investment Fund.

It was also extremely disappointing that the Commonwealth proposes to decrease its contribution to Commonwealth Supported Places by 1% a year for 4 years from 2018, which means that student contributions will have to increase in parallel. While it remains the case that no student fees need to be paid upfront and that there is a clear benefit for graduates in terms of their salaries and career prospects, we know that many of our students are doing it tough.

Even amid the Sturm und Drang of cuts, there was some positive news for universities who are focused  on equity of access and success for students from all backgrounds. The decision to maintain the Higher Education Participation and Partnerships Program (HEPPP) was welcome although we will have to work through the detail of the revised allocation of the HEPP funding in terms of any impacts on UON.

Equally, the news that the demand-driven system will be retained and expanded to include sub-bachelor qualifications such as diplomas, advanced diplomas and associate degrees was welcome. The government has also committed to supporting a fixed number of places in enabling programs (such as UON’s Open Foundation, Newstep and Yapug programs) across the sector which will be allocated by competitive tender. These measures should ensure more students from a range of backgrounds come university to achieve a qualification and determine whether further study is for them.

Other measures – such as new arrangements for postgraduate education and a proposal to tie 7.5 per cent of university base funding in 2018 and 2019 to what the government defines as performance measures –will  be worked through post the Budget announcements. Like many universities, we will engage with the government to contribute to discussions on these proposals given the significance of a 7.5% ‘performance contingency.

At present, we are working through what we understand to be in the reform package to identify potential financial impacts for UON, should the package as presented be legislated. There is no doubt that cuts to our base CGS funding will require us to make difficult choices.  In this context, the ongoing work across the institution to develop more flexible study offerings and delivery systems will be critical, particularly in helping  students to understand how their investment in UON programs will deliver a better outcome for them and their families.

Caroline

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