2020 Federal Budget: What it means for Education

There was big support for apprentices and young workers in the 2020 Federal Budget – plus more for higher education.

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What did the education sector want from the Federal Budget?

The higher education sector has been directly affected by COVID-19. Physical distancing requirements have made in-person activities difficult, while border closures have disrupted a key source of funding which many universities have become increasingly dependent upon. In addition, a number of universities enacted redundancy programs, as they were unable to satisfy amended requirements related to the JobKeeper program. With universities conducting over one-third of R&D the loss of staff is a key concern.

In their pre-Budget submission, Universities Australia made a number of recommendations to Government including: stabilisation funding for the research workforce; hardship support for international students; and further funding for clinical health experience (given new physical distancing requirements). 

In addition, along with universities, leading industry groups (including Science & Technology Australia and the Australian Investment Council) called on the government to improve the commercialisation of local research in Australia. While the government had already announced a $1.3 billion Modern Manufacturing Initiative that will offer co-investment grants, there were hopes it would go further, with calls for a Research Translation Fund, modelled on the Biomedical Translation Fund or the Medical Research Future Fund (MRFF).  Science and Technology Australia along with Innovation and Science Australia also called for a 20 per cent “collaboration premium” to be introduced to the Research & Development Tax Incentive (RDTI) – something which Innovation and Science Australia also called for.

More generally, there were calls for: further investment in R&D (with Research Australia calling on the government to spend at least 0.75% of GDP on R&D by the end of its current term); more incentives to attract international investment; programmes to attract and retain talent onshore; and tax regimes that incentivised the discovery, exploitation and value add of patentable intellectual property, especially the advanced manufacturing of IP-based products.

In terms of school education, the NCEC (National Catholic Education Commission) urged Government to increase the capital funding allocations to meet the capital funding needs stemming from a rise in student numbers (as it has done in past years). In its second submission the NCEC recommended stimulus funding for capital works especially for areas affected by the economic fallout from COVID-19.

A recommendation of support for indigenous boarding schools is shared with the Independent Schools Council of Australia (ISCA). The ISA recommended the Direct Measure Income (DMI) methodology used for the Capacity to Contribute (CTC) be delayed for schools where their score increased, to allow a better assessment of the effects of COVID-19 and called for the extension of the current 2-year ‘best-of’ arrangements. In addition, the CTC should use the most up to date parental income for the CTC calculation instead of an 18-month lag, given the immediate effects of COVID-19 on incomes.

Key early learning operators also made pre-budget submissions with key recommendations relating to: the allocation of funding across the forward estimates providing universal access; the extension activity test exemptions; a second 13 weeks of child care subsidy for families meeting financial hardship; and removing the current cap per child, and limits for middle and high-income earners. Early Childhood Australia (ECA) called for an increase in the Child Care Subsidy (CCS) to 95% for low-income families, to overcome cost barriers to children’s participation in ECEC.

What did the Budget deliver?

In the July Economic and Fiscal Update, $2.8 billion was allocated for 180,000 apprenticeships and traineeships. In this Budget, under the JobMaker Plan – Boosting Apprentices Wage Subsidy, $1.2 billion is allocated for 100,000 additional positions over the next four years, with the biggest allocation in 2021/22. Eligible businesses can claim up to 50% of an apprentice or trainees wage, capped at $7000 per quarter.

Additional initiatives include:

  • $298.5 million for 12,000 new Commonwealth supported higher education places deemed ‘national priority area’ in 2021.
  • $251.8 million allocated over two years for 50,000 new higher education short courses in agriculture, health, IT, science and teaching.
  • $238.9 million for the government to guarantee the Commonwealth Grant Scheme (CGS) payments for higher education providers between 2021 and 2023 as transitional payments to the ‘Job-ready Graduates’.
  • $1.0 billion in 2020/21 via the Research Support Program to support universities’ costs related to research infrastructure, research jobs, and partnerships with industry.
  • $263 million over four years for Vocational Education and Training (VET). This includes $91.6 million for an apprenticeships data management system, $75.9 million for the Department of Education, Skills, and Employment, $52.3 million for literacy and numeracy skills, and $29.6 million for the National Careers Institute careers information.
  • $146.3 million over five years including $39.8 million over four years for 2,000 positions funded via the Clontarf foundation to assist indigenous men, and $38.2 million over four years to the Smith Family for 76,000 disadvantaged Australians. Both programs aim to assist recipients’ complete year 12 and move into work, training, or further study. There is also $27.3 million over five years for STEM skill related programs.
  • Emergency support for Victorian childcare, as $314.2 million is allocated to support early childhood education and care (ECEC) in 2020/21 so that services remain viable. There is already a $51.7 Child care subsidy that will conclude in January. Key parts of the new initiative include $269 million for recovery payments for all ECECs, $8.6 million for outside school hours and vacation care until school returns, and $36.6 million for the same operators after that.

Read more in our Federal Budget 2020 – What does the budget mean for Education report.