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Budget stew
Stakeholders’ comments from all over the sector about the funding cuts and allocations for higher education show some long-time concerns that are still simmering.
Compiled by Antonia Maiolo and Amie Larter
Whilst there were no major surprises for higher education in treasurer Joe Hockey’ s 2015 – 16 federal Budget; stakeholders still have plenty to say.
High on the agenda was the redirection of funding from the Sustainable Research Excellence fund to the National Collaborative Research Infrastructure Strategy( NCRIS), as well as the government’ s ongoing commitment to deregulating fees and the likelihood of this happening.
Here, four key industry leaders have their say.
Faulty assumptions
Andrew Norton, higher education program director at the Grattan Institute Compared with last year, the 2015 – 16 budget for higher education was uneventful. But the Budget Papers assume several things that are unlikely to occur will happen, making the papers a poor guide for how much the government will spend and universities will receive.
Projections for the Commonwealth Grant Scheme, the main student-driven funding program, assume an average 20 per cent cut in Commonwealth contributions per student, to be phased in from 2016. Given the Senate’ s stance on affordable higher education, any per student cuts are almost certainly going to be less than 20 per cent, and probably zero.
On the other hand, the extension of demand-driven eligibility for Commonwealth contributions to students in private universities and non-university higher education providers will probably not eventuate either. This will save the government hundreds of millions a year.
The Budget Papers don’ t distinguish between the cost of student places at public universities and at other providers, and don’ t specify assumptions about grant indexation or the efficiency dividend that is stalled in the Senate. After examining various scenarios, Grattan Institute calculations suggest the budget understates Commonwealth Grant Scheme spending by between $ 2.5 billion and $ 3.7 billion over the years to 2018 – 19. In other words, universities will receive $ 2.5 –$ 3.7 billion more than the papers suggest.
There is a common misconception that fee deregulation saves money, but this is only true to the extent that fees replace public subsidy. Beyond this, fees are an additional expense through the HELP loan scheme. HELP’ s main expenses are the interest subsidy and debt not expected to be repaid. Because the Budget Papers assume that undergraduate fees will be deregulated, they assume more lending and therefore more interest subsidy and doubtful debt than is likely to be the case. There are too many unknown factors
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