University confusion

The Budget’s $1 billion funding for university research, the centrepiece of the Government’s higher education budget measures, is welcome. The measure in part responds to the dramatic drop in overseas student enrolments which universities have traditionally relied on to significantly fund their research programs. The drop in overseas student revenues and a more general decline in university funding in real terms has resulted in stand-out cuts to staffing and courses.

Overlaying this is the Government’s Job-ready Graduates package which has now passed the Senate. According to the Government’s own estimates these funding reforms will save the Government $125 million over the forward estimates. However, Mark Warburton from the University of Melbourne’s Centre for the Study of Higher Education predicts much higher losses to university revenue as a result of the 2021 funding cluster changes and funding caps imposed in 2018 – he estimates university revenue for teaching will be reduced by nearly $1 billion each year from 2021. More generally, Universities Australia has estimated revenue losses of $16 billion from 2020 to 2023.

These figures do not take into account the costs to students. Under Job-ready, the Government will increase fees for some courses, including humanities and law, to fund cuts for other courses, such as sciences, while overall cutting its contribution from 58 per cent to 52 per cent. Future university students in law and the humanities could pay up to 113 per cent more than current students.

Unlike their private university counterparts, public universities have so far not had the benefit of COVID-19 compensatory measures such as the JobKeeper payment. And although the Budget introduces some short-term compensatory measures for universities, overall higher education funding will decrease in real terms from 2019–20 to 2023–24 by 2.8 per cent.

TAFE’s economic contribution goes unrecognised

The Budget’s focus on stimulatory measures for apprentices and trainees raises the question as to why there is no commensurate increase in funding for TAFE apart from $50 million over two years to improve TAFE infrastructure. The Productivity Commission’s Report on Government Services 2020 shows that expenditure on vocational education by all governments has dropped by more than 20 per cent or $1.6 billion since 2012. Student enrolments have also fallen significantly

In spite of this chronic underfunding and failed market-led VET policies, recent research by the Australia Institute’s Centre for Future Work, An Investment in Productivity and Inclusion: The Economic and Social Benefits of the TAFE System, found that Australia’s investment in the TAFE system continues to generate an enormous and ongoing dividend to the Australian economy. In 2019, TAFE supported $92.5 billion in annual economic benefits, exceeding the annual costs of operating the system by a factor of 16.

Early childhood education

Once again, there is no ongoing commitment to early childhood education in the Budget. The National Partnership on Universal Access to Early Childhood Education (the NP) continues to be extended on a short-term basis only to the disappointment of those in the sector who seek surety of funding. The latest extension, announced in May 2020, extends the NP until the end of 2021 with funding of $452.3 million.

There is still no commitment to extend universal access to three-year-olds in spite of the recommendations of an independent review of the NP. The Australia Institute has written more generally about the value of free childcare for economic recovery in its recent report, Participating in Growth: Free Childcare and Increased Participation.

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