In the May Federal Budget, the Government announced a $5.7 billion package over four years to deliver reforms across the higher education and innovation sectors in response to the Bradley Review of Australian Higher Education and the Cutler Review of the National Innovation System.

These reforms included:

• a move to a student centred system underpinned by a national regulatory and quality agency, which will enable an extra 50,000 new students to commence a degree by 2013
• substantial resources to promote equity and performance funding tied to quality;
• an increase to university indexation;
• a phased move to addressing the gap in funding for the indirect costs of research;
• major reform to student income support, to better support our most needy students and an increase to postgraduate stipends;
• major investment in higher education, research and VET infrastructure, through the Education Investment Fund totalling $3.0 billion dollars; and
• additional recurrent funding of $2.2 billion over the forward estimates for higher education teaching, learning and research.

These changes will allow more Australians, irrespective of their socio-economic circumstances, to access a quality higher education qualification, enabling an additional 55,000 enrolments by students from lower socioeconomic status backgrounds by 2020.

“There will be less red tape and micromanagement for universities and improved facilities for teaching, learning and research”, according to a Ministerial media release (Source: Budget 2009-10: A new era for Australian universities).

“From 2012, Australian public universities will be funded on the basis of student demand. This will enable an additional 50,000 students to commence university studies by 2013 and produce 217,000 additional graduates by 2025.

The new system will reward universities that are able to attract students.

To ensure that universities have time to prepare for the new demand-driven system, the current funding floor for universities will be maintained for the years 2009–11. The current cap on over-enrolment will be raised from five to ten per cent from 2010. The cap will be removed in 2012.

The move to a student-centred system is estimated to cost $490.6 million over the next four years and (is expected to) result in a substantial increase in student numbers in the higher education sector.

This change is fundamental to the Government’s plan to increase the proportion of 25-34 year-old Australians with bachelor level qualifications to 40 per cent by 2025.” (Source: Budget 2009-10: Student demand to drive university funding)

Currently ANU is sitting at approximately 5% overenrolled. DEEWR though have agreed to pay up to 6.2% over-enrolment, so in 2009 ANU will be fully funded. In 2010 however, ANU will exceed the 6.2% over-enrolment level. This will no longer be a problem as the over-enrolment cap for 2010 and 2011 has been increased to 10%. From 2012 onwards the cap will be completely removed. This will allow ANU to determine its own future with respect to undergraduate CGS load and to negotiate a compact with DEEWR that ensures a sustainable and viable future for our domestic cohorts in line with our own broad strategies and ambitions.

In attempting to meet stringent DEEWR targets over the past few years, our entry cutoffs have experienced a degree of volatility. The more open funding compact will hopefully allow us to provide a better, more constant message to potential students about our entry standards.

The ANU will be discussing the new compact arrangements with DEEWR later this year.

The May Budget also delivered a range of other initiatives that provides additional funding for universities and greater support for students. These changes are summarised below.

New Cluster Funding Structure and Rates for 2010

Funding Clusters have been used for a number of years to provide variable rates of Commonwealth funding based on disciplines, Law being the least funded, Medicine and Agriculture/Environmental Science, the highest. It is intended that from 2010 the CGS Funding Clusters will be increased from 7 to 8 to allow for an increase in funding for Education disciplines (a new cluster 4).

The following table provides an indication of the cluster changes including how the 2010 funding rates differ from the previous rates per EFTSL.

* The Australian Government will also provide $3,318 per EFTSL in 2010 for mathematics, statistics and science units for students who are covered by the lower contribution amounts introduced in 2009.

New cluster and funding rates are also available from DEEWR's website.

More support for students
(Source: Budget 2009-10: More support for students)

• To increase access to income support, the parental income test for dependents under Youth Allowance and ABSTUDY will be increased from $32,800 to $42,559 (for 2009-10). In 2010 this measure is expected to benefit 67,800 new recipients who will now qualify for student income support and a further 34,600 existing recipients who will receive higher payments.
• The age of independence for the purposes of receiving student income support will also be progressively lowered from 25 years in 2009 to 22 years in 2012.
• In 2010, a new Student Start-up Scholarship of $2,254 will also be introduced to replace the current Commonwealth Education Costs Scholarship. An additional 146,600 university students will receive the Student Start-up Scholarship. Existing Commonwealth Scholarships recipients will be grandfathered.
• The package of reforms will also assist students by:
• relaxing the personal income test to $400 per fortnight and indexing this to cost of living increases so students can earn more from part-time work before their income support payments are reduced - this measure will apply from 1 January 2011;
• extending student income support to all masters by coursework programs from 1 January 2012;
• relaxing the means testing of equity and merit-based scholarships provided by universities and philanthropic organisations (this means that scholarships awarded by universities, up to the combined value of the Commonwealth Education Costs Scholarship and the Commonwealth Accommodation Scholarship will not affect student income support payments); and
• removing the OS HELP loan fee to provide more support to Australian students who study abroad.
• As part of these measures, the workforce participation criteria for independence under Youth Allowance and ABSTUDY will be tightened in line with the recommendations of the Bradley Review, which found that 49 per cent of student income support recipients come from families with incomes of more that $80,000. Students who have worked full-time for a minimum of 30 hours a week on average for at least 18 months in a two-year period since leaving school will still be considered independent – but students who have undertaken part-time work or earned over $19,532 over 18 months will not. This change will ensure that only students who are genuinely independent can receive student income support.

Tertiary Education Quality and Standards Agency (TEQSA)
(Source:Budget 2009-10: New agency to set quality benchmarks in higher education)

• The Federal Government will be investing $57 million over four years to establish a new national quality and standards agency as a core component of its response to the Bradley Review of Australian Higher Education;
• The new Tertiary Education Quality and Standards Agency (TEQSA) will work with the higher education sector to develop objective and comparative benchmarks and to carry out rigorous audits;
• The Government will also establish a new performance funding stream to encourage universities to strive for and achieve quality and other benchmarks. This will commence in 2012 and will be worth approximately $206 million over the forward estimates;
• The new agency will accredit providers and carry out quality audits. It will protect the overall quality of the Australian higher education system, encourage best practice and streamline current regulatory arrangements to reduce duplication and provide for national consistency; and
• The agency will work with universities to improve areas such as retention, selection and exit standards and graduate outcomes.

Education Investment Fund (EIF)
(Source: Budget 2009-10: Investing in tertiary education and research infrastructure)

• Almost $3 billion will be injected into tertiary education and innovation infrastructure through the Education Investment Fund (EIF);
• The Government has approved 31 projects selected from over 160 applications received through Round 2 of the EIF worth $934 million;
• Twelve successful projects are for vocational education and training infrastructure, 11 are for higher education teaching and learning facilities and eight are for research infrastructure. Taking account of investment by the project proponents, the total value of the 31 projects is $1.8 billion;
• The Government has also announced a nominal allocation of $500 million for Round 3, which will include around $200 million for projects to help universities, in some cases through partnerships with vocational education and training (VET) providers, to adjust to the new directions in higher education announced in the Budget;
• The Government will also undertake a special $650 million Sustainability Round of the Education Investment Fund. The supplementary EIF Sustainability Round includes:
• $400m for research infrastructure related to the Clean Energy Initiative;
• $250m for VET, higher education and research infrastructure related to climate change and sustainability activities;
• As part of the Government's commitment to creating and supporting the jobs of the future, the planned allocation of $2.5 billion into the Education Investment Fund will be allocated to the groundbreaking Clean Energy Initiative; and
• As part of the Government’s response to the Review of the National Innovation System, $1.1 billion will also be provided for the Super Science Initiative. Of this, $901 million will come from the EIF for the capital components. This initiative will provide funding for large-scale nation-building projects allowing Australia to be at the forefront of the global research community.

ANU was successful in EIF Round 2 with Stage 2 of the ANU Science Transformation: The Chemical Sciences Hub worth $90 million.

Further information on the EIF is available at: www.deewr.gov.au/EIF.

Teacher Education initiatives
(Source: Budget 2009-10: Investing in quality teaching)

• As recommended in the Bradley Review of Australian Higher Education, the Government will increase the maximum student contribution for education units of study for students who commence in 2010, from the national priority band to Band 1 (currently $4,162 and $5,201 respectively) to better support universities to provide high quality teaching courses;
• This measure will deliver an estimated additional $108 million over four years to universities to encourage them to offer quality teaching courses;
• To offset this additional cost for students, the Government’s incentives for mathematics and science graduates will be extended to new teacher education graduates who go on to teach, to encourage more students into the teaching profession;
• Higher Education Loan Program (HELP) repayments will also be reduced for education graduates (by up to $1,536 per year for 2009-10) to encourage them to take up and remain employed in teaching. This is similar to the Government's approach to mathematics and science graduates;
• Students who graduate from education courses from Semester 2, 2009 will be eligible to receive the reduction if they go on to pursue a teaching career. Similar arrangements will also apply to nursing graduates as recommended by the Bradley Review;
• A student who starts their education degree in 2010 will have increased student contributions of around $3,500 over a three year degree. If they take out a HECS HELP loan, this will be the extra that they will borrow. When they start working as a teacher and their income reaches the threshold for making compulsory repayments ($41,595 currently) they will be able to claim the HELP payment reduction. If their income for a full year’s work as a teacher is $50,000, for example, their repayment will be reduced from around $2,250 to ~$700. For the full period of 260 weeks they can claim, they will save more than $7,500 – making them $4,000 better off;and
• Taking steps to encourage universities to improve teacher education courses and to encourage students in to teaching, builds on the Government’s $550 million Smarter Schools – Improving Teacher Quality National Partnership.

Social inclusion agenda
(Source: Budget 2009-10: Reaching out to help more students from disadvantaged backgrounds into higher education)

A key aim of the Government’s Education Revolution is to raise the aspirations of students who would previously never have considered going to university.

In order to reach the Government’s target of students from disadvantaged backgrounds representing 20 per cent of undergraduate enrolments by 2020, the 2009-10 Budget delivered a $437 million reform package including:

• Increasing the completion rates of students from disadvantaged backgrounds will also be important to achieving the Government’s ambition of 40 per cent of all 25-34 year olds achieving a bachelor degree or above by 2025;
• As part of the total package, universities will receive $108 million over the next four years to develop partnerships with schools and vocational education and training providers, to reach students who might not have otherwise considered a university education;
• Universities will be rewarded for attracting larger numbers of students from disadvantaged backgrounds through a per-student loading which will increase over time. This funding is untied and will be used to increase the quality of higher education experience for all students as well as for specific measures to support students from disadvantaged backgrounds; and
• This measure will deliver $433 million to universities to attract students from disadvantaged backgrounds over four years. The Government will also review the Higher Education Indigenous Support Program and other relevant Indigenous programs to determine their effectiveness in increasing the numbers of Indigenous Australians in higher education.

Report prepared by: David Marr, Statistical Services.