Shocker Budget!

Higher ed set for an even more precarious future

The 2021-22 Budget is a major disappointment, but not only because the outlook is short term and new funding primarily targeted at for profit, private providers.

Terri MacDonald Director, Policy & Research

With 17,000 job losses and a $1.8 billion revenue fall, higher education was one of the worst hit sectors in the Australian economy by the pandemic. The sector had optimistically hoped that the Government would finally acknowledge the crisis and at least partly offer emergency assistance. But the 2021-22 Budget is a major disappointment.

NTEU’s Budget submission called for public funding to be increased to 1% of GDP (in line with the OECD average) which would boost government funding of the sector and allow the abolishment of tuition fees for domestic student (alleviating the problem of compounding unpaid HELP debt) as well as improving research funding. We also put forward a proposal for regulatory reform which would mean that universities could work to individualised goals and objectives that include workforce planning and resourcing guarantees.

Federally, the reforms would also create independent body determined university funding, which would operate at arms-length from government thus depoliticising higher education funding. None of this is impossible; indeed, many other countries already have higher education that is fee-free for students and with far better government funding.

The Morrison Government’s response to the COVID-19 crisis has not been to reimagine what a world leading tertiary sector could look like; indeed, they haven’t even acknowledged the vital role that our public universities and TAFEs could play in revitalising our economy, leading innovation and in rebuilding our communities as we move beyond the pandemic.

The 2020-21 Budget is a major disappointment, but not only because the outlook is short term and new funding primarily targeted at for profit, private providers. Nor is it because it fails to assist Australia’s 4th largest export industry during a time of unprecedented revenue and job losses. The greatest disappointment is that this is a Budget that has no vision for the sector, and instead sets our public universities and TAFEs up for even greater financial stress which could threaten the future of quality education and research.

Under the Budget, universities will see a decline of 8.3% in real terms between this financial year and next year, and a decrease of 9.3% in real terms from 2021-22 to 2024-25. Vocational education will also take a hit, with total funding to drop 10.8% next year and another 24.2% between 2021-22 and 2024-25. In fact, almost every line item under higher education investment in the Budget fails to keep pace with inflation – the exception being the increases in unpaid student HELP debts.

The Budget’s forward estimates show how deep the cuts from last year’s JobReady Graduates package changes are, with Commonwealth Grant Scheme (CGS) funding (used to support teaching of domestic student places) falling from $7.34 billion this year to $7.31 billion next year, before plummeting in 202223 and 2023-24 to $7.12 billion and $7.14 billion respectively. It starts to recover in 2024-25 with just under $7.3 billion in CGS funding – but this is almost 4% less than what it is for the current financial year.

Worst of all, the reductions in higher education funding – especially in relation to the CGS funding – will coincide with the sudden increase in the university entry age population as a result of the Costello ‘baby boom’, with around 14% more Australianborn people expected by 2024-25.

In a sector with already reduced funding per student, this will see providers teaching even more students for less. Instead of taking the opportunity to put in place a higher education system that will meet our future innovation, workforce and research (the $1 billion additional ‘emergency COVID funding’ for research last year has not been continued) needs, the Government has stuck with the same structural system that was in place in 2019 (and was showing cracks then) but with even less funding per student.

Even worse, the financial crash in the higher education sector will now be exacerbated by a future shortfall in domestic funding, at a time when student enrolments are likely to surge.

In reality, this Budget sets our public universities and TAFEs up for even more financial stress, and their reliance on other avenues of funding – primarily through international student fee income – will only be driven further. This is despite the Government building into the Budget the assumption that it will be at least another year or two before they even consider opening our international borders.

Clearly, the Government has little regard for our public universities and TAFEs. With talk of a federal election possible even as early as the second half of the year, the message is clear – if the Government will not change its attitude towards higher education, then we need to change this Government. •

...the financial crash in the higher education sector will now be exacerbated by a future shortfall in domestic funding, at a time when student enrolments are likely to surge.

Image: Melissa Walker Horn/Unsplash