What did the Budget actually deliver?

Education was a significant area of expenditure in the 2024-25 budget, accounting for 7.2% of total expenses after social security and welfare (36.3%) and health (15.3%). Total education expenses are estimated to increase by 7.3% over the period 2024-25 to 2027-28, reflecting ongoing investment in schools, higher education, and vocational education and training programs. Expenditure is driven by more funding to states and student enrolment growth, including higher enrolment rates for ‘students with disability’, which will drive expenses for schools. Increased funding for universities and vocational education under the Australian Universities Accord and National Skills Agreement and the changes to indexation arrangements for outstanding debt for student loans are also estimated to increase expenses.

Childcare

Early learning and childcare received no significant additional funding measures in this budget. Of what has been provided, $98.4 million for 2024-25 will be to help childcare services increase their capacity to support additional needs children through tailored support and funding to services. This is, however, reallocated funding from other programs.

The government aims to achieve net savings of $410.7 million over four years from strengthening enforcement of audits of childcare providers, compliance and transactional measures related to anti-fraud and anti-money laundering measures.

Schools

Of the $110 million in education measures for Closing the Gap over four years, $32 million is aimed at helping engagement for First Nations students at risk. However, this measure is not additional funding, but reallocated funding from the existing education department budget. There is also $70.3 million over four years for school education support including literacy, mathematics, digital hubs and open online courses ($34.6 million), about $20 million for assessment platforms, and additional money for school improving programs (Good to Great schools, Antibullying collective). This is also partially met by a reallocation of over $29 million from the National School Reform Agreement.

From 1 July 2025, an estimated 68,000 students in essential services areas (including teaching) will receive a newly introduced Commonwealth Prac Payment of $319.50 per week for the duration of their mandatory job placement, which to some extent will help address teacher shortages.

TAFE

The New Energy Apprenticeships and New Energy Skills programs that featured in the previous budget will be expanded. The payments (up to $10,000) will now be available to those undertaking a traditional trade apprenticeship, provided that an element of the apprenticeship relates to clean energy. The Fee-free TAFE program will receive an additional $88.8million, over three years, for 20,000 fee-free TAFE and VET places focused on the housing construction sector.

Universities

This budget aims to implement the first stage of the tertiary reforms presented as a response to the Australian Universities Accord final report. One key figure from this is the aim for 80% of working age Australians by 2050 with a tertiary qualification.

HECS/HELP indexation

The single largest item in this year’s budget for education are the changes to the metric used for the indexation calculation for HELP, VET student loans and Australian Apprenticeship Award loans. From June (and backdated to include the prior year) the calculation will use the lesser of the Consumer Price Index (CPI) or the Wage Price Index (WPI). At current rates, it effectively halves the rate of indexation from the prior year’s spike from 7.1% to 3.2% in 2023 and from 4.7% to around 4% in 2024, and $239.7 million is allocated over the five years from 2024-25.

From 1 July 2025, an estimated 68,000 students in the essential services areas of teaching, nursing and social work will receive a newly introduced Commonwealth Prac Payment of $319.50 per week for the duration of their mandatory job placement. This will allow students to avoid what has been termed ‘placement poverty’ while they complete between 800 and 1,000 hours of compulsory practical placement. It is estimated that this will cost the budget $427 million over 5 years from 2024-25. Other measures include:

• $350.3 million is allocated over four years from January 2026 to expand the Fee-Free Uni Ready Course program. This will fully fund courses that help prepare students for entry to universities.
• $24.6 million is allocated over four years specifically to Charles Darwin university to establish a medical school for the NT. It is expected to fund 40 student positions from January 2026.
• $19.4 million over four years to establish the National Student Ombudsman from 1 February 2025 as a single, national complaints mechanism.
• $18.4 million over four years to introduce the National Higher Education code to respond to gender-based violence.

Under the Australian Universities Accord final report, there are also some changes to what and how universities operate. Details on the full cost of these changes are not yet complete given the status of final consultations.

The government aims to establish the Australian Tertiary Education Commission by July 2025 with responsibilities for delivery of funding, data collection and reporting and what the government refers to as ‘harmonisation’. This cost measure is partially offset by the cessation of the Destination Australia program which funded scholarship positions for domestic and international students, saving $57.2 million over four years.

The Department of education receives $2.1 million over four years to develop and implement regulations around new purpose-built student accommodation supply linked to any increase of international student enrolments over an initial allocation. The intention is for any increase in accommodation be available to both domestic and international students.

Higher education will be required to direct a minimum 40% of Student Services and Amenities fee to student-led organisations from January 2025.

Provided it can pass parliament, the government will amend the Education Services for Overseas Students Act, providing it the power to set limits on enrolments for each education provider, which includes courses and/or locations.

Read the full report here Federal Budget 2024-25 – What does it mean for Education