The not-quite-nothing higher education budget

Last night’s budget is widely perceived as having delivered nothing for higher education. But if DEEWR’s portfolio budget statements are compared to last year’s, we can see that this isn’t quite true.

The relaxation of rules on how many students can be enrolled on full government funding rates is having more of an effect than the government anticipated last year. The extra students will cost the taxpayer $600 million more over the next three years than originally forecast. HELP lending will go up even more, with an extra $650 million in outlays if current predictions are right (this includes people borrowing full fees under FEE-HELP, as well as the HECS-HELP money associated with more Commonwealth-supported students).

Reaction has been neutral to negative because apart from full-fee students facilitated by FEE-HELP this money doesn’t solve the problems universities face of costs increasing more quickly than revenues. The would-be students who have missed out in the past due to quotas on university enrolments have never had much of a political voice, and so can neither praise nor condemn government policy on this matter.

However the lack of movement on funding per student – not even details of the base funding review promised in last year’s budget – again raises questions about the political strategy pursued by the higher education sector.

Their biggest weakness, as I have argued before, is that their enrolment actions undermine their more-funding rhetoric. But nearly as serious is that for domestic students they continue to put all their eggs in the public funding basket. Fee deregulation would have a similar effect to demand-driven funding, in enabling the system to adjust automatically as conditions change, rather than relying on the political lobbying that has failed in all but a handful of budgets since the mid-1970s.

Update 13/5: Julia Gillard’s estimate of additional spending is twice mine; she’s including an additional year in the forward estimates but even so I am not sure how she gets to her number. But there is the first official figure on over-enrolments for this year, just under 10%.

5 thoughts on “The not-quite-nothing higher education budget

  1. “the political strategy”
    At least to me, the word strategy suggests that there might be planning into the future based on apriori ideas. Perhaps there are more appropriate words — e.g., “the government rules”.


  2. There is a strategy of sorts, such as commissioning external consultants to write reports on the economic returns to education and regular rounds of meetings with key figures. But to me all this can do is reinforce what the government already believes – that education is a good thing. What they need to do is to shift the government’s perception of the politics of higher education. The miners have the right idea – when the government announces some new unreasonable proposition threaten to abandon projects and generally kick up a huge fuss. The government may still win the fight, but at least they need to factor the fight into their calculations. Further the current university strategy locks them into an electorally rigged contest with health, schools, family handouts etc for scarce subsidy dollars. They need to shift their claims to the loans scheme, which while still costly is less so than a straight handout, and so can generate more dollars for unis for each dollar of subsidy.


  3. I just shake my head. We give all this extra money for elite sport, but the cupboard is bear for the tertiary sector.
    My take is that the govt wants to have a uni system that is accesible and cheap, and quality maintenance comes at exploiting the passion of our grossly underpaid tertiary staff.
    So our unis end up as degree factories, classrooms packed with….lets say challenging students and sometimes staff that struggle with the national language! No wonder the challenging students riot from to time – sometimes I don’t blame them.
    But yeah, it’s hard to be optimistic on the sector. My best mate is a leading young scientist. University medal and all. And post Phd, he’s making not much more than 60K, and even then he has to go cap and hand to the reasearch council every 18 months to stay afloat. When personal assistants in the marketplace get 70 to 80K – why would you bother? When you can cruise in the public service for no career risk on reasonably good pay – why would you bother coming up with original research and new patents. He’s hanging in there – but its gotta be borrowed time…unfortunately!


  4. No East German would be proud of you Baz, criticizing elite sport and all. Where will the glory of the nation come without a medal tally bigger than last time?
    If your friend wants to do elite science, then there is a 3 letter solution: “USA”.


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