Education, Science and Training
Realising Our Potential
With the right policy settings, Australia’s education system will deliver the workforce that Australia needs for future prosperity. It will be an education system that is responsive to the needs of students and employers. A high quality and responsive education system is vital to increasing skills which, in turn, boost workforce participation and productivity — the key components of an economy’s productive capacity. It will also improve the capacity of individuals to participate in and add value to our society.
This budget includes a $3.5 billion investment in Australia’s education system to improve the quality of education and education outcomes through the Realising Our Potential package. This comprehensive package covers the higher education, vocational education and training, and schools sectors.
In the higher education sector, Realising Our Potential builds on the success of Backing Australia’s Future with an additional $1.7 billion investment over four years. It will give students more opportunity to choose the university education that is right for them. It will allow universities to respond more readily to student choices and employer demands, by giving them more flexibility to change course mixes, student numbers, and specialisations. It will reduce regulation and encourage further diversity and quality improvements in the sector.
Through a significant increase in funding, Realising Our Potential will ensure universities are resourced appropriately to provide the quality of education that Australians demand. This increase in funding will assist universities to make the adjustments that are required to promote flexibility and diversity.
To underpin these changes, the Government will establish a new, perpetual Higher Education Endowment Fund (HEEF) with an initial investment of $5 billion funded from the 2006-07 surplus. This significant investment will broadly double the existing financial investments and endowments accumulated in the university sector. The HEEF will be invested to earn income which will be distributed to individual institutions for capital works and research facilities on an annual basis.
The HEEF will be structured so that it can receive philanthropic donations from the private sector and, if asked, manage individual institutions’ endowments. The HEEF will encourage philanthropic support for universities from individuals and the corporate sector.
It is intended that capital contributions will be made to the HEEF from future budget surpluses to grow, over time, a Fund which will finance the building of first class institutions in the Australian higher education sector.
Realising Our Potential also builds on the Australian Government’s strong support of skills creation in the vocational education and training (VET) sector through a range of initiatives worth $638 million over four years. It will invest $549 million in paying an additional $1000 per annum to a young person doing the first or second year of an apprenticeship in an area of skill shortage. It will provide a $500 voucher to first and second year apprentices in skill-shortage trade to assist with the cost of course fees. Further initiatives will promote flexibility and diversity by encouraging greater links between the VET sector and universities. Choice for students will also be enhanced by the establishment of three new Australian Technical Colleges and fast tracking apprenticeships to recognise competency, not time-serving.
This substantial investment in the higher education and VET sectors will have a better pay-off if students leave the school system with the best education they can receive.
Every parent is entitled to expect that their child will receive a high quality education and develop the core skills necessary to be able to realise their potential, no matter which school they attend. The Australian Government’s aim through the Realising Our Potential package is to ensure a high quality school system for Australia where parents can choose between publicly or privately provided education.
From 2009 Australian Government funding in the next schools funding agreement will be tied to improving quality. In addition, the Government will provide an additional $843 million over four years to improve quality, consistency, teaching and educational attainment in Australian schools. A key initiative will be the provision of tuition vouchers direct to parents to assist students falling behind in literacy and numeracy at a cost of $457 million over four years. These reforms will promote workforce participation and greater productivity over the lifetimes of students by ensuring that they do not fall behind and adversely affect their long-term employment prospects.