What does the Budget mean for Education?
The higher education sector is still facing unresolved issues following the Budget.
- An additional $1.2bn over four years, commencing 2017-18 for government and non-government schools. More broadly, total funding for schools is expected to grow by 3.6% per year, with adjustments for changes in enrolment.
- In real (inflation-adjusted) terms, funding for public schools will increase by 11.1% between 2016-17 and 2019-20, and 7% for private schools.
- An additional $118m is expected to be provided over 2016-17 and 2017-18 for school students with a disability.
- Unlike schools, higher education faces funding cuts. In real terms, higher education expenses are expected to decline 2.4%, reflecting the Government’s decision to delay the full implementation of higher education reforms announced in the 2014-15 Budget and Mid-Year Economic and Fiscal Outlook (MYEFO) until January 2018. Expenses between 2016-17 and 2019-20 are expected to decrease 7.7% in real terms, due to the reduction of Commonwealth Grant subsidies from 2018.
- The Government has decided not to proceed with the deregulation of university fees announced in the 2014-15 Budget. However, it has released a paper (Driving Innovation, Fairness and Excellence in Australian Higher Education), which considers a range of options including:
– A 20% cut for bachelor degrees.
– A lower income threshold for repaying Government debt.
– Raising the student payment burden from 40-50%.
– Flexibility around the deregulation of fees for courses considered ‘flagship’.
– Recovering income from deceased estates for those who die with unpaid HECS debt.
- In nominal terms, the Government is expecting cuts of around $2bn stemming from this review, with the bulk of the cuts expected between 2018-19 and 2019-20.