The Turnbull Government has all-but abolished the demand driven system, introducing a cap on public funding for undergraduate student places. And there is a freeze on Commonwealth Grant Scheme funding, with the 2017 amount, cemented for the next two years. All up, yesterday’s Mid-Year Economic and Fiscal Outlook estimates these, and other less expansive changes, will save $2.2bn over the forward estimates, down $500m from the original plan in the May budget.
From 2020 universities must meet unspecified performance targets to qualify for an increase in public funded places. The base for any increase will be 2017 actual enrolments, with growth set at the per centage increase of the working aged population.
The new cap on funding for places returns the university system to the ad hockery prevailing before demand driven funding, when universities could “over-enrol” as many students as they chose but only receive discounted Canberra cash per head.  Under the new arrangement universities will be able to enrol as many extra students as they choose but the government will only pay them the student contribution to the cost of the place.
As expected, students will also begin to repay their study debt once they reach a lower income than now, although it is $45 000 instead of the $42 000 base announced in the budget. But there is no increase in payments under the HECS HELP loan scheme.
The government has abandoned a range of proposals it did not have the numbers to pass in the Senate, including a proposed 2.5 per cent cut per annum in CGS funding for next two years. It has also dropped a plan to require students to borrow for enabling courses.
However, the budget proposal to expand sub degree places in universities, which some welcomed is also gone. These places, along with what the government calls 3000 “under-utilised” Commonwealth supported masters places will be “better aligned” with student demand.
MYEFO has left research funding untouched, yesterday signalling its continuing credentials by announcing $70m for the National Computational Infrastructure to buy a new super computer. And in-line with its expressed support for disadvantaged student programmes, the government defied widespread media predictions to leave the Higher Education Participation and Partnerships Programme in place.
While university lobbies focused on funding and capped student numbers, a modified version of the budget proposal many feared most attracted little attention yesterday. In May, the government proposed to tie public funding to performance measures, expected to focus on each university’s undergraduate attrition rate and employment outcomes. The new plan is to reward universities which meet performance criteria by allowing them to increase funded enrolments. Measures of success are not decided, with the government expected to consult universities in the new year.