2021 Federal Budget: What it means for Education

Childcare, pre-schools and job training featured heavily in this year’s Federal Budget, with some big spending initiatives on the table.

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What did the Education sector want? 

Universities Australia (UA) highlighted 12 targeted initiatives they proposed would strengthen the sectors role in the economy and support research. While acknowledging the benefits of the $1billion research funding in the October 2020 budget, UA continued to advocate for stabilisation funding for the research workforce; hardship support for students; and the extension of HELP loans for students looking to retrain.   

In addition to universities advocating for research initiatives, in the Science & Technology Australia pre-Budget submission, they maintained a proposal that the government invest $2.4 billion over the forward estimates to support a “Research Translation Fund” which would provide long term research funding. There was also a submission to improve communications to attract more STEM students and fund a STEM specific Teach for Australia program.  

In terms of school education, the National Catholic Education Commission (NCEC) continued to urge 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 January submission, the NCEC recommended stimulus funding for capital works for both schools and early childhood centres, and the consistent application of funding for preschools. The NCEC has a list of project proposals worth $1.02 billion in 2021-22.  

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; 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. The Australian Childcare Alliance (ACA) has also long advocated for the removal of the CCS annual cap arguing it had been a major disincentive for secondary income earners when deciding how many days they would like to work. They have also stressed that for Australian families who have multiple children in early learning, affordability is a major challenge and often results in the secondary income earner remaining out of work until all of their children commence school. 

 

What did the Budget deliver? 

Childcare 

Starting on 1 July 2022, the current $10.3 billion in Child Care Subsidy (CCS) will be increased by $1.7 billion. If a family has more than one child aged 5 and under in the childcare system, the subsidy will increase by 30 percent to a maximum of 95 percent of the daily fee for the second and subsequent children. Treasury estimates that about 250,000 families will benefit from this initiative. In addition, the current $10,560 subsidy cap for families with a combined income above $189,390 will be removed.  

Preschools  

$1.6 billion will be provided over four years from 2021-22, which covers the 2022 to 2025 preschool years under the Guaranteeing Universal Access to Preschools Program. The proposed agreement aims to support 15 hours of preschool per child, per week, and 600 hours per year, in the year prior to starting school. It should be noted that this proposal will be delivered via a yet to be negotiated agreement with the states and territories and replaces an existing agreement. 

 Schools  

There is an additional $40.8 million over two years from 2021-22 for the continuation of the sporting schools program.  

$63 million, over four years from 2020-21, is allocated as part of the Indigenous Skills and Job Advancement Program, to support a further 2700 places in indigenous girl’s academies. However, funding for this measure has already been provided as part of the previous budget.  

As part of regular funding transfers, school funding to non-government schools increases from $13 billion in 2020-21 to $14.7 billion in 2021-22. On the same basis, government school funding increases from $9.0 billion to $9.7 billion.  

 Job training 

$2.7 billion to extend the Boosting Apprenticeship Commencements, which is a wage subsidy that will reimburse businesses up to $7,000 per quarter for 12 months for taking on new apprentices and trainees. While this is a wage subsidy, it is likely to lead to further demand for technical training. Furthera $500 million extension of the JobTrainer fund, conditional upon state and territory governments matching contributions. The aim is to provide an additional 163,000 low fee and free training places, with 33,800 targeted towards aged care skills, and 10,000 places for digital skills courses.  

There are also a series of smaller targeted ‘Next Gen’ programs, although these are partly allocated beyond the forward estimates. As part of the Next Generation AI graduates program, the government has allocated $24.7 million over 6 years to attract and train AI specialists. A further $42.4 million is allocated over 7 years for a Next Generation of Women in STEM.  

Tertiary support 

Additional support to tertiary and international education providers is relatively small. An additional $26.1 million will be available in 2021-22 to non-university higher education providers for 5,000 short course places in 2021. $9.4 million is also allocated in 2021-22 for $150,000 grants to support online and offshore delivery models. A PhD program that links funding to industry placements has been allocated $1.1 million. The $1 billion emergency research funding support of 2020-21 has not been extended.  

 

How did business react? 

Universities Australia Chief executive Catriona Jackson reiterated the need for the facilitation of a return of international students, stating that “another $2 billion will be lost this year” in reference to the likely revenue shortfall from continued border closures. The National Tertiary Education Union went further, citing the cessation of the emergency research funding and limited benefit of allocating 5,000 short course places. The NTEU asks “Where is the rescue package for higher education…which has lost over 17,300 jobs”. The Australian Education Union highlighted a lack of reference to TAFEs, despite the government’s emphasis on apprenticeships and job training.   

The early childhood education sector welcomed the pre-budget announcement for the additional $1.7 billion. Sam Page from Early Childhood Australia (ECA) commented further “We are also pleased that removal of the $10,560 cap on the Child Care Subsidy is part of the announcement”.  However, the delayed timing of changes has not been greeted with the same enthusiasm“While ECA believes this investment is a step in the right direction, we are disappointed that changes are planned to come in to effect in 2022”. The National Catholic Education Commission (NCEC) also welcomed the $1.6 billion for Early childhood learning and $63 million for Indigenous girls academies. Executive director Jacinta Collins said “the continuation of universal access to 15 hours preschool will enable children to build critical foundations…”.  

The Parenthood, an independent not-for-profit, issued a mixed response. “$1.6 billion over 4 years for preschool funding for 4 year olds is great news. Nothing beyond $1.7 billion over three years for child care – with nothing for educators – is disappointing.”  

Science and Technology Australia CEO Misha Schubert said “New women in STEM scholarships would pave the way for more women and girls to study science and technology.” 

For more information read the full Federal Budget 2021: What does it mean for Education