Budget: expect the promises, but no favours
They’ll meet their commitments, but not much more. That’s many higher education commentators’ verdict of the prospects for the sector in next week’s federal budget.
There’s the massive promised tax cuts; there’s the billions earmarked for the Murray-Darling; there’s the frightening inflation figure forcing the government into higher levels of fiscal conservatism. And, presumably, the change of government has prompted lobbyists from just about everywhere to come knocking on the Treasury doors with renewed vigour and hope.
And with financial commitments to the education revolution concentrated at the lower end of the age spectrum, what hope for universities?
“I suspect it will be very dull. Bits and pieces from the election commitments – perhaps research,” said Victoria University institutional strategist Conor King.
The Australian National University’s Professor Bruce Chapman agreed. “My sense is that it would be strange for the budget to come up with significant changes to higher education due to the ongoing review which will be reporting later next year,” he told Campus Review.
“2009 is when I would expect changes.”
But Angus McFarland, president of the National Union of Students, said he hoped the review wouldn’t delay “urgent funding relief”, as well as “symbolic gestures” of the government’s support for the sector.
“The budget will be a real test for the Rudd Government and could be the end of the honeymoon, so to speak, if sectors such as higher education and youth are neglected.”
There were some encouraging signs for the higher education sector – not least the likely inherited surplus. While recent reports have set it at between $15 and $17 billion, there have been predictions as high as $30 billion.
According to Universities Australia (UA), Prime Minister Rudd indicated before he was elected that education would have first call on any higher-than-expected budget surplus. “As financial resources permit, the overarching priority of an incoming Labor government will be education spending,” Rudd told the Australian Financial Review on 19 November last year.
UA is asking for up to $6 billion of the surplus to be put into the Higher Education Endowment Fund (HEEF), plus a separate “HECS fund” to be established through the securitisation of the Higher Education Contribution Scheme. These measures should fit squarely into the government’s fiscal strategy because they’re “anti-inflationary,” UA says.
“Given the predicted surplus, more money in the HEEF is plausible,” said Andrew Norton, research fellow with the Centre for Independent Studies.
“But the signals are that there won’t be much if any new money for 2008-09, and they have the review as a plausible reason for delaying additional money.”
Nevertheless the government has committed to some higher education spending via pre-election commitments to double the number of undergraduate and postgraduate research scholarships, establish Future Fellowships and reduce HECS for maths and science students and graduates.
There are also new nursing and early childhood education places, plus a $355 million commitment to establish 11,000 new Commonwealth supported places over three years – although these are in compensation for the full-fee phase-out.
“So far all Labor looks set to deliver universities is funding uncertainty with its decision to abolish domestic fullfee university places,” said education shadow minister Tony Smith.
Norton was similarly sceptical. “The reduced HECS and the compensation places just squeeze out private investment, leaving no net gain,” he said.
“Other new places add as much or more in costs as they bring in revenue. Scholarships go to students. There is very little for universities in this.”
In fact the compensation was a double whammy for universities, sources told CR. The replacement of one of the few remaining revenue streams with new places – which they end up helping to pay for – will leave them even further out of pocket.
McFarland said universities needed proper compensation for the abolition of the full-fee places “so that the transition to Commonwealthsupported places only is as smooth and expedient as possible. This is an important symbolic move for the government to demonstrate its commitment to restoring the fair go in higher education.”
But the commitments to date don’t appear to address the underlying problem – the long-term gradual under-funding of the sector that has left students languishing below the poverty line, and Australia in the bottom rows of OECD ranking tables.
“What Australia needs more than just extra places funded at the current rates is greater public investment in each student place,” said UA CEO Dr Glenn Withers.
The same thing needs to happen with scholarships, said Council of Australian Postgraduate Associations (CAPA) president Nigel Palmer. “There are broad calls across the sector to improve the rate and conditions for Australian Postgraduate Awards,” he said.
Another area where the ALP was strangely silent in its pre-election commitments, despite a clear ideological difference with the Howard Government, is voluntary student unionism. “We would expect something out of the budget on this,” Palmer said.
“The government has gone through the exercise of consulting broadly on the impacts of VSU. There’s a long list of submissions and recommendations on how to address them.”
Palmer said he believed the consultation process may have revealed the issue as more complex than the government had initially thought. “What we’re looking for is not a magic fix, but a realistic strategy for concrete moves to address the impacts with adequate funding,” he told CR.
McFarland called for transitional funds so that struggling student organisations and services could access short-term start-up grants. “This would only be an interim measure before a more long term funding model was introduced,” he said.
Smith said Labor had “promised the world” to universities before the election. “It will be interesting to see if they actually deliver in this year’s budget,” he said.
“Despite the hype, all Labor has announced for universities so far is yet another review.”
But as well as delivering on election commitments, education minister Julia Gillard promised earlier this year to “keep working with the sector on what else needs to be done.
“I understand their frustration and I think they understand that making up for 11 years of neglect by the Howard- Costello government can’t be done overnight,” she told ABC Radio.
There’s the massive promised tax cuts; there’s the billions earmarked for the Murray-Darling; there’s the frightening inflation figure forcing the government into higher levels of fiscal conservatism. And, presumably, the change of government has prompted lobbyists from just about everywhere to come knocking on the Treasury doors with renewed vigour and hope.
And with financial commitments to the education revolution concentrated at the lower end of the age spectrum, what hope for universities?
“I suspect it will be very dull. Bits and pieces from the election commitments – perhaps research,” said Victoria University institutional strategist Conor King.
The Australian National University’s Professor Bruce Chapman agreed. “My sense is that it would be strange for the budget to come up with significant changes to higher education due to the ongoing review which will be reporting later next year,” he told Campus Review.
“2009 is when I would expect changes.”
But Angus McFarland, president of the National Union of Students, said he hoped the review wouldn’t delay “urgent funding relief”, as well as “symbolic gestures” of the government’s support for the sector.
“The budget will be a real test for the Rudd Government and could be the end of the honeymoon, so to speak, if sectors such as higher education and youth are neglected.”
There were some encouraging signs for the higher education sector – not least the likely inherited surplus. While recent reports have set it at between $15 and $17 billion, there have been predictions as high as $30 billion.
According to Universities Australia (UA), Prime Minister Rudd indicated before he was elected that education would have first call on any higher-than-expected budget surplus. “As financial resources permit, the overarching priority of an incoming Labor government will be education spending,” Rudd told the Australian Financial Review on 19 November last year.
UA is asking for up to $6 billion of the surplus to be put into the Higher Education Endowment Fund (HEEF), plus a separate “HECS fund” to be established through the securitisation of the Higher Education Contribution Scheme. These measures should fit squarely into the government’s fiscal strategy because they’re “anti-inflationary,” UA says.
“Given the predicted surplus, more money in the HEEF is plausible,” said Andrew Norton, research fellow with the Centre for Independent Studies.
“But the signals are that there won’t be much if any new money for 2008-09, and they have the review as a plausible reason for delaying additional money.”
Nevertheless the government has committed to some higher education spending via pre-election commitments to double the number of undergraduate and postgraduate research scholarships, establish Future Fellowships and reduce HECS for maths and science students and graduates.
There are also new nursing and early childhood education places, plus a $355 million commitment to establish 11,000 new Commonwealth supported places over three years – although these are in compensation for the full-fee phase-out.
“So far all Labor looks set to deliver universities is funding uncertainty with its decision to abolish domestic fullfee university places,” said education shadow minister Tony Smith.
Norton was similarly sceptical. “The reduced HECS and the compensation places just squeeze out private investment, leaving no net gain,” he said.
“Other new places add as much or more in costs as they bring in revenue. Scholarships go to students. There is very little for universities in this.”
In fact the compensation was a double whammy for universities, sources told CR. The replacement of one of the few remaining revenue streams with new places – which they end up helping to pay for – will leave them even further out of pocket.
McFarland said universities needed proper compensation for the abolition of the full-fee places “so that the transition to Commonwealthsupported places only is as smooth and expedient as possible. This is an important symbolic move for the government to demonstrate its commitment to restoring the fair go in higher education.”
But the commitments to date don’t appear to address the underlying problem – the long-term gradual under-funding of the sector that has left students languishing below the poverty line, and Australia in the bottom rows of OECD ranking tables.
“What Australia needs more than just extra places funded at the current rates is greater public investment in each student place,” said UA CEO Dr Glenn Withers.
The same thing needs to happen with scholarships, said Council of Australian Postgraduate Associations (CAPA) president Nigel Palmer. “There are broad calls across the sector to improve the rate and conditions for Australian Postgraduate Awards,” he said.
Another area where the ALP was strangely silent in its pre-election commitments, despite a clear ideological difference with the Howard Government, is voluntary student unionism. “We would expect something out of the budget on this,” Palmer said.
“The government has gone through the exercise of consulting broadly on the impacts of VSU. There’s a long list of submissions and recommendations on how to address them.”
Palmer said he believed the consultation process may have revealed the issue as more complex than the government had initially thought. “What we’re looking for is not a magic fix, but a realistic strategy for concrete moves to address the impacts with adequate funding,” he told CR.
McFarland called for transitional funds so that struggling student organisations and services could access short-term start-up grants. “This would only be an interim measure before a more long term funding model was introduced,” he said.
Smith said Labor had “promised the world” to universities before the election. “It will be interesting to see if they actually deliver in this year’s budget,” he said.
“Despite the hype, all Labor has announced for universities so far is yet another review.”
But as well as delivering on election commitments, education minister Julia Gillard promised earlier this year to “keep working with the sector on what else needs to be done.
“I understand their frustration and I think they understand that making up for 11 years of neglect by the Howard- Costello government can’t be done overnight,” she told ABC Radio.