Budget night special: Birmingham goes back to basics

An education election budget intended to end degree costs as an election issue and set up policy changes in a second term Turnbull Government

The government accepts defeat on deregulation

The government has “listened to community concerns” and has abandoned university full fee deregulation in a budget designed to defuse higher education as an election issue. The cut to the Commonwealth Grant Scheme, already on the books but not levied, is also withdrawn (but not dropped) for 12 months “to give universities certainty for the year” at a cost of $500m. Abandoning deregulation will cost the budget a further $84m

Instead of cuts tonight Education Minister Simon Birmingham released a comprehensive options paper. Any plan adopted from it will begin in January 2018.

While widely anticipated cuts to support for learning and teaching and equity research will proceed these measures are not as severe as expected. The Office of Learning and Teaching will close but funding will go to the Tertiary Education Quality and Standards Agency (an extra $10m) and the Quality Indicators for Leaning and Teaching student information website ($8.1m). The Higher Education Partnerships and Participation Programme loses around a third of its previous funding being cut by $40m a year over the forward estimates.  The international education strategy announced on the weekend will receive $12m over four years.

Funding for research remains as previously announced in the well-received innovation plans, with modest increase in the out years to help universities adjust to changes to block grant funding and $200m for Antarctic science. While the Australian Research Council takes a small cut over $5.3m over the next four years, as the Future Fellowships end, the National Health and Medical Research Council is not hit.

As with university funding and student fees funding for vocational education is on a holding pattern, waiting on an outcome from the discussion paper released by training minister Scott Ryan last Friday.

This budget will not end university complaints of systemic underfunding but the cuts are off the table, if only for now. And Australian families who heard warnings of $100k degrees will be relieved that an open market in all university fees is off the agenda for years to come.

The discussion paper (below) reflects Minister Birmingham’s pragmatic approach. He has long argued that the only reform that will work is one that passes the Senate. This budget indicates that the government is keen to neutralise university fees as an election issue but still does not expect to control the upper house in the next parliament. By putting issues on the table that university leaders have long demanded be addressed the minister is signalling that he is prepared for the long policy slog needed to set up the sector for a generation.

The universities would have preferred he just write them a cheque. That was never going to happen but no cuts now and the promise of a reformed funding base is a lot better than many people expected they would be reading about tonight.

Addressing unfinished business

Senator Birmingham’s discussion paper includes fundamental issues lost in the fog of battle over fee deregulation. There are ideas here, such as “flagship courses” for universities, not seen since the Lomax-Smith Base Funding Review. Most important the minister wants to address funding for discipline clusters and student band funding rates, established decades back, on the basis of reasoning no-one remembers and which do not reflect actual delivery costs.

The government also puts ideas up for discussion that were expected to be imposed in the budget; a 20 per cent cut in what Canberra pays towards courses cuts, presumably offset by a matching student hike in student fees plus a “small increase in the maximum capped student contribution that institutions may charge.” Unspecified changes to the HELP repayment threshold and rates are also on the agenda.

The paper also signals the need for a policy on publicly funded professional masters degrees, funding for which is now allocated on the basis of ad hoc arrangements and political fixes.

There are many more issues and ideas in the paper and the expert group Senator Birmingham will appoint to work on his paper will have its work to cut out dealing with them in a year. But dealing with them is long overdue.

Know something the world needs to know? Anonymity guaranteed but lots of questions asked, stephen4@hotkey.net.au