4. Future Directions for Higher Education — the Government's response to the Reviews of Australian Higher Education and National Innovation System
The Australian Government is committed to creating a stronger, fairer and more productive nation.
Tomorrow's prosperity depends on Australia being higher skilled, more inclusive and a winner in the global competition for jobs, investment, productivity and prosperity.
Australia having the jobs of tomorrow depends on the quality of education we have today, crucially an outstanding higher education and research sector accessible to an increasing proportion of our people and responsive to a fast moving, internationally competitive knowledge economy.
Recognising this, the Government commissioned a major Review of Australian Higher Education, led by Professor Denise Bradley, and a Review of the National Innovation System chaired by Dr Terry Cutler. These two reviews identified reforms that will deliver on the Government's long term agenda for higher education, research and innovation.
The Government will invest $5.7 billion in higher education and innovation over the next four years and will commit substantial additional resources over the next 10 years.
Vision
Higher education is central to achieving many of the objectives for the nation's future. These include:
- a stronger Australia—boosting Australia's share of the jobs of tomorrow and productivity growth will require a highly skilled workforce that can rapidly adapt to meet future challenges
- a fairer Australia—all Australians will benefit from widespread equitable access to a diverse tertiary education sector that allows each individual to develop and reach their potential. Society as a whole will benefit from the widespread application of cutting edge research
- future challenges—acting now to lay down a 10 year reform agenda for higher education will position Australia to deal with future challenges and take advantage of the new job and other opportunities that will emerge in the years ahead.
The Australian Government's response to the Bradley and Cutler Reviews will also help position Australia from recovery out of the current economic downturn.
The Review of Australian Higher Education affirmed that the reach, quality and performance of a nation's higher education system will be the key determinants of its economic and social progress. To be globally competitive and to secure the jobs of the future, Australia needs an outstanding, internationally competitive higher education system with increased participation and higher attainment levels. Australia also needs a quality higher education system to sustain the international education industry, which is Australia's third largest export industry.
The Bradley Review charted the course ahead and in this Budget the Australian Government is embracing that future vision.
A landmark reform agenda for higher education
The Australian Government is committed to significant reforms to higher education and innovation over the next decade in order to boost national productivity, the nation's share of the jobs of the future and the performance of the sector. These reforms will transform the scale, potential and quality of the nation's universities and open the doors of higher education to a new generation of Australians.
The key reforms include:
- promoting greater diversity and quality by
- allocating student funding to universities on the basis of student demand
- providing significantly greater opportunities for participation in higher education for students from disadvantaged backgrounds through equity initiatives and better targeted student income support
- driving a greater focus on quality and participation through funding tied to achievement
- providing a substantial boost in research funding to better meet the cost of research and enable universities to achieve research excellence against internationally recognised benchmarks
- supporting improved international competitiveness and sustainability by providing improved indexation arrangements for universities
- establishing a new national body to manage regulation and quality assurance
- providing world class infrastructure for universities and VET providers.
Attainment and participation targets
To achieve productivity growth, Australia will need a highly educated workforce with the knowledge, skills and flexibility to contribute to the growth of the knowledge economy and meet its future challenges.
Over the last 20 years, there has been an increase in the rate of students obtaining bachelor's degree level qualifications, primarily due to the Dawkins reforms and the move to mass participation in higher education. The current attainment rate for bachelor's degrees for 25—34 year olds stands at around 32 per cent and, under current policy settings, this is likely to rise only slightly, to around 34 per cent by 2025. This will not meet our future economic needs.
The Government has therefore announced its ambition for growth in higher education attainment, so that by 2025, at least 40 per cent of all 25 to 34 year olds will hold a qualification at the bachelor's degree level or above. The achievement of this target will produce around 217 000 additional graduates by 2025.
In addition, the Government has announced that by 2020, at least 20 per cent of higher education enrolments at the undergraduate level will consist of people from a low SES background. In order to meet the target, an additional 55,000 low SES students would be enrolled in higher education in 2020.
These two targets complement the educational attainment targets set by COAG.
These COAG targets are to halve the proportion of Australians aged 20 to 64 without a qualification at the Certificate III level, and to double the number of higher qualification completions (diplomas and advanced diplomas) by 2020.
The higher education initiatives included in the 2009—10 Budget will provide the funding to achieve these goals. This includes a new student centred funding system for Australian higher education.
Student centred funding system
Until now, opportunities for Australian undergraduate students to study at university have been limited by restrictions on the number of Commonwealth funded places available. This has resulted in too many qualified applicants being turned away and fewer graduates contributing to Australia's economic prosperity and social advancement.
The current system has also created a mismatch between the number of places that individual universities can offer and the demand that exists from potential students. Some universities have too few funded places and others have too many.
The Bradley Review presented a compelling case for change based on the need to increase the number of Australians with qualifications at the bachelor's degree level or above and provide universities with more flexibility to respond to student demand.
The new student centred funding system will result in reduced red tape for universities and less Government interference.
The Australian Government will act in cooperation with universities to support them to provide courses of study that are critical to the needs of students and the economy and are in the broader national interest.
An independent review of the base funding levels for learning and teaching in higher education will be commissioned by the Government to ensure that funding levels remain internationally competitive and appropriate for the sector. It will also examine options for achieving a more rational and consistent sharing of costs between students and across discipline clusters. This review will report in 2011.
Demand driven funding $490.6 million
From 2012, all public universities2 will be funded on the basis of student demand. This Budget provides funding over four years to ensure that a Commonwealth supported place will be funded for all domestic students who are accepted into an undergraduate course at a public university. Universities will not be funded for places that they do not fill.
There will be a transitional period in 2010 and 2011. The current limit on funding for universities3 that enrol more students overall than has been agreed with the Australian Government will be increased from 5 per cent to 10 per cent. The current floor on funding for universities that under enrol will be maintained until the end of 2011.
These transitional initiatives will ensure that universities do not grow too quickly at the expense of providing a quality educational experience for students. By 2012, stronger quality assurance arrangements for higher education will be in place.
Universities will have time to plan and adjust to the new system in the lead up to 2012. Funding for structural adjustment will be available during and after the transitional period.
Funding to support low SES participation
To achieve greater national productivity as well as encourage social inclusion, Australia must break down the barriers that have led to an ongoing under‑representation in higher education of students from low SES backgrounds.
The Australian Government is committed to ensuring that Australians of all backgrounds who have the ability to study at university get a fair opportunity to do so.
Currently students from affluent backgrounds are three times more likely to attend university than students from low SES backgrounds.
In the 2009—10 Budget, funding will be provided to help universities develop partnerships and programs with schools and vocational education and training providers.
Universities will also be offered a clear financial incentive to expand the enrolment of low SES students while ensuring that standards remain high. The evidence shows that low SES students achieve the same high standards at university as other students if given an appropriate opportunity.
Additional funding will be provided as a loading to universities related to the number of low SES students they enrol. This will help universities support disadvantaged students and improve retention and completion rates.
A more accurate measure of low socio economic status will be developed and performance funding will be based, in part, on how effective institutions are in attracting low SES students.
Indigenous Australians are also under represented in our universities and face specific barriers and challenges. Indigenous Australians will benefit from the new focus on low SES students but more needs to be done. In consultation with the Indigenous Higher Education Advisory Council, the Government will support a review of the effectiveness of measures designed to improve the participation of Indigenous students in higher education.
This new focus on low SES students is an important part of the Australian Government's Education Revolution. This is because it will encourage stronger links between schools and universities offer students new experiences and help teachers raise the aspirations of their students. These new programs could include scholarships, mentoring of teachers and students, curriculum and teaching support, or hands on activities by university staff in schools.
This approach complements the Education Revolution measures to improve the quality of schooling, particularly in disadvantaged school communities. It will help create a pathway from school to further education for students who currently get left behind.
Funding to support low SES participation targets $436.9 million
In 2010, the funding to support low SES participation targets will be about 2 per cent of teaching and learning grants, and will increase to about 3 per cent in 2011. By 2012, equity funding will be broadly in line with the recommendation of the Bradley Review to increase it to 4 per cent of teaching and learning grants.
This Budget provides increased funding over four years to deliver a new partnership program worth $108.2 million over four years to link universities with schools, vocational education and training providers, and adult education. This will promote leading practice, increase the aspirations of students and contribute to higher rates of education attainment of low SES, Indigenous, regional and remote students.
This Budget also provides increased funding for a student related loading at a cost of $324.7 million over four years. This loading will be based on the numbers of low SES students enrolled in institutions.
In addition to these initiatives, better targeting of income support, combined with new Student Start Up Scholarships and Relocation Scholarship, will give students in need improved financial assistance to help them pursue higher education studies.
Student income support
Comprehensive reforms are needed to the student income support system.
The Bradley Review identified that between 2001 and 2007, the number of Youth Allowance recipients in higher education who were assessed as dependants had fallen by 23 per cent, and the number of dependants living away from home for study had declined by 34 per cent. Forty‑nine per cent of Youth Allowance recipients were from families with household incomes of more than $80,000 and would therefore be receiving Youth Allowance as independent students.
The review concluded that current income support arrangements for students had failed to adequately support the participation of students from low socio economic backgrounds. It also found that the benefits did not go to the neediest students. As a result, the review recommended urgent action to reform student income support.
In response, the Government is introducing a package of significant reforms designed to achieve its target of 20 per cent of higher education undergraduate enrolments representing students from low SES backgrounds.
Reform of student income support
The cost of these reforms is $3.1 billion over four years. This will be offset by improved targeting of Youth Allowance, ABSTUDY and other measures.
Parental Income Test
From 1 January 2010 the Parental Income Test (PIT) threshold for students applying for Youth Allowance or ABSTUDY will be increased from $32 800 to $42 559 per annum to align with Family Tax Benefit—Part A (FTB). Further the PIT indexation and taper rate arrangements will also be aligned with those applying under FTB.
Age of Independence
The current age of independence for Youth Allowance and ABSTUDY is 25 years. The Bradley Review found that the age of independence was high by international standards.
The Government is introducing a new initiative that reduces the Age of Independence to 22 years. This will be phased in so that the Age of Independence would be reduced to 24 years in 2010, then to 23 years in 2011 and 22 years in 2012.
Workforce Participation Criterion
From 1 January 2010, the workforce participation criteria for independence under Youth Allowance and ABSTUDY will be tightened to target assistance more effectively to students from low income backgrounds. All existing student income support recipients will be 'grandfathered' so that no existing recipient would be disadvantaged by this change.
Personal Income Test
The personal income threshold will be raised from $236 to $400 per fortnight, so that student income support recipients will be able earn up to $400 per fortnight without having their income support payments reduced. In addition, the personal income threshold will now be indexed for the first time.
Masters by Coursework
Eligibility for income support will be extended to students enrolled in all masters by coursework programs. Other eligibility requirements will remain the same as for students enrolled in lower level courses.
Student Start Up Scholarship
A centrepiece of the Government's reforms is a new scholarship—the Student Start Up Scholarship.
Valued at $2254 in 2010, and then indexed, the scholarship is available to all university students receiving income support and those assisted under veterans' schemes. The scholarship replaces the current Commonwealth Education Cost Scholarship (CECs) and all existing CECs students will be 'grandfathered'.
Relocation Scholarship
From 1 January 2010, a new Relocation Scholarship will assist Youth Allowance and ABSTUDY recipients at university. Dependent students who have to live away from the family home for study as well as independent students who are disadvantaged by personal circumstances will be eligible for this scholarship. The Relocation Scholarship will provide $4000 for students in their first year at university and $1000 in each year thereafter. It will be indexed and will replace the Commonwealth Accommodation Scholarship (CAS) for new students. Existing CAS recipients will be 'grandfathered'.
Centrelink will administer both the Student Start Up Scholarship and the Relocation Scholarship, with streamlined delivery to ensure these are paid closer to the time students' university courses commence.
Exempting equity and merit based scholarships from income testing
Scholarships play a key role in encouraging and assisting students from low income backgrounds to pursue higher education. From 1 January 2010, equity and merit based scholarships provided by universities and philanthropic organisations, up to the combined value of the Commonwealth Education Costs Scholarship and the Commonwealth Accommodation Scholarship, will be exempt from means testing.
Scholarships in excess of the capped value will continue to be assessed as income against the existing criteria.
Strengthening research
The 2009—10 Budget, in response to recommendations from both the Bradley and Cutler Reviews, delivers a suite of initiatives designed to address the serious shortfalls in research funding for the indirect costs of research.
In particular, the Government will increase funding of indirect research costs to 50 cents in the dollar.
The Ministerial Statement of the Minister for Innovation, Industry, Science and Research outlines in detail the measures over the next four years that will address the sector's longstanding concerns that cross subsidisation from other sources of income, such as teaching and learning funding, has led to poor outcomes for both research and teaching.
Sustainable Research Excellence in Universities $512 million
This initiative raises the current funding of the indirect cost of research (through Research Infrastructure Block Grants) to ensure that there is a suitable environment within the university sector to conduct world class research.
Joint Research Engagement
Existing funding from the Institutional Grants Scheme will be redirected to a new program, which will give greater emphasis to collaborative research activities beyond those supported by competitive grants.
Australian Postgraduate Award Stipend Increase $51 million
The current Australian Postgraduate Award (APA) stipend is currently below the poverty line. This initiative will increase the student stipend to $22 500 per annum, which will help attract more high quality Higher Degree by Research (HDR) students. This will in turn boost the number of research trained postgraduates to enter the academic labour market.
Collaborative Research Networks $52 million
The establishment of Collaborative Research Networks (CRNs) will encourage institutions—especially those in regional and remote areas that may be particularly impacted by the reforms—to form partnerships with universities with particular research strengths. This will support efficiency in resourcing, mobility of staff and students and enhancement of technological capabilities, as well as increase networking between institutions.
Excellence in Research for Australia $36 million
The Excellence in Research for Australia (ERA) framework will assess the nation's performance across discipline areas and against international benchmarks.
It will provide a solid evidence base for assessing performance and will provide a framework for negotiating performance targets. The ERA framework will also inform the future allocation of research block grants and support the accreditation and development of standards in relation to university research.
Strengthening the system
The nation's investment in higher education—from both the Government and students—needs to keep pace with the increases in costs. This has been highlighted by the universities as a key issue with the current arrangements, unchanged for more than a decade, becoming increasingly inadequate to support the internationally competitive higher education sector Australia needs.
This is particularly the case in relation to salary costs, where Australian universities are competing to attract and retain the best and brightest in the global academic workforce.
Higher education providers have been required to cross subsidise their core activities of teaching and research from other sources of income because the value of the base grants was being eroded year on year. This is not sustainable and has led to deterioration in the quality of outcomes. For example, there is evidence of a decline in the quality of the student experience, as shown in internationally comparable measures of student engagement. The dramatic rise in student to staff ratios from about 15:1 in 1996 to over 20:1 in 2006 is probably a significant contributor to this decline.
The Australian Government has considered carefully the recommendation of the Bradley Review for improved indexation as well as the need to ensure that Government expenditure on higher education is responsible in light of the current economic situation. The Government understands the core importance of improving indexation to achieve its vision in higher education.
The provision of increased indexation will reap significant rewards in terms of quality and participation outcomes. It will provide a valuable support to institutions to invest in the academic workforce. Furthermore, if institutions are assured that the value of their ongoing funding will be maintained they will be more likely to establish sustainable but diverse missions.
Indexation $577.6 million
New indexation arrangements for higher education providers will be comprehensively introduced in 2012. The current minimum wage based arrangements for the salary component of the overall indexation formula will be replaced with an initiative that better reflects professional salary movements.
The new arrangements will still require productivity improvements to contribute to wage increases.
The new indexation arrangements will apply from 2012 to all grants under the Higher Education Support Act 2003 (including research grants), maximum student contribution amounts, the OS HELP maximum loan amount and the FEE HELP borrowing limit. The Safety Net Adjustment (SNA) component, which makes up 75 per cent of the current index, will be replaced with a wage price index (discounted by 10 per cent for productivity improvements) that is comparable to the Labour Price Index (Professional) recommended by the Bradley Review of Australian Higher Education.
Transitional arrangements will be in place in 2011.
Maximum student contribution amounts will be indexed using the new index and higher education providers will also receive funding equivalent in value to the improved indexation on grants, as a transition to the new performance funding approach that will be in place from 2012. The conditional funding for 2011 will be rolled into base funding in 2012.
The Government will also streamline funding arrangements by rolling into base funding the Workplace Reform Program and the Improving the Practical Component of Teacher Education Program from 2010.
Academic workforce
Increased indexation will provide higher education institutions with the funding certainty they need to enable them to tackle a number of significant challenges. These include the ageing of the academic workforce and the increasing difficulty in attracting and retaining high quality academic staff in an intense, globally competitive market.
Australia's academic workforce is getting older. This has been exacerbated by the under representation of academics in their twenties and thirties, who should be replacing those who are retiring.
Over time, the appeal of an academic career has diminished as a result of a number of factors. These include a lack of job security caused by increased casualisation, increasing workloads and lower salaries compared with other sectors. There is also a severe shortage of academics internationally, leading to intense global competition.
The additional funding through indexation, performance funding for improvements in quality and student outcomes, and funding to support students from low SES backgrounds will put institutions in a strong position to invest in their academic workforce.
A quality system to meet the challenges of the future
A central feature of the reform agenda will be an increased focus on quality. This will underpin our vision for Australia to be one of the most highly educated and skilled nations in the world. In a period of expansion, when higher education institutions are attracting students who have not traditionally considered going to university and student choices are linked to funding, institutions will be required to demonstrate that their graduates have the capabilities that are required for successful engagement in today's complex world.
Higher education institutions need to be accountable for the quality of the education they provide. They also need to demonstrate value for money and serve Australia's national interests.
At the moment the regulatory environment for higher education is complex and fractured, with different states and territories all implementing arrangements in varying ways. The new regulatory arrangements will de-clutter and streamline the system, enabling higher education providers to focus on their core business and encouraging them to grow.
The new quality system will hold universities to account for the quality of the education that they provide. At the moment, once an institution is badged a university it can trade on that title in perpetuity. Universities have a highly respected place in our education system and the right to use the title 'university' should recognise consistently high standards in teaching and research.
This Budget ushers in a new era of quality with the establishment of a national body for regulation and quality assurance. The Tertiary Education Quality and Standards Agency (TEQSA) will protect the overall quality of the Australian higher education system. It will accredit providers, evaluate the performance of institutions and programs, encourage best practice, de-clutter current regulatory arrangements and provide greater national consistency.
TEQSA will evaluate the performance of universities and other higher education providers every five years or whenever there is evidence that standards are not being met. If problems are identified, TEQSA will be able to recommend sanctions up to and including withdrawing the right to use the title 'university'.
The challenge now is for the higher education sector to agree on appropriate academic standards and embrace more direct indicators of student achievement.
TEQSA will take the lead in coordinating this work and establishing objective and comparative benchmarks of quality and performance. The agency will collect richer data and monitor performance in areas such as student selection, retention and exit standards, and graduate employment.
A similar approach will be adopted for the vocational education and training sector and will ultimately lead to easier pathways between the two education systems so that they can work in partnership to address Australia's knowledge economy and skill needs.
As Australia moves to a student centred funding system, both domestic and international students must know how our institutions are performing.
The Tertiary Education Quality and Standards Agency (TEQSA) $57 million
This Budget provides funding over four years for this new agency, which will protect the overall quality of the Australian higher education system. It will accredit providers, undertake quality audits, encourage best practice and streamline current regulatory arrangements to enable greater national consistency.
One of the agency's key tasks will be to establish objective and comparative benchmarks of quality and performance.
Performance funding
To ensure that Australia's reputation for quality higher education remains strong, the Australian Government will make a proportion of additional funding dependent on a new quality assurance framework that is based on objective and comparative standards. These standards will be developed in close collaboration with the higher education sector. Individual targets for institutions based on these standards will be developed. This means universities will have a significant incentive to improve their performance in key areas.
The Australian Government also proposes to introduce mission based compacts with each university. Compacts aim to promote excellence and build capacity and international competitiveness in our university sector. They would enhance institutional autonomy, while encouraging greater collaboration and sectoral diversity as well as increased participation in higher education by under‑represented groups.
Compacts will facilitate alignment of institutional activity with national priorities and distribution of performance based funds. They will also represent the opportunity for individual universities to play to their strengths and articulate the unique role they play in the higher education system, the innovation system, and their local regions and communities.
This funding structure mirrors the new funding system the Australian Government has implemented with states and territories through COAG. Rather than bureaucratic red tape and micro managing of inputs, the Australian Government will work in partnership with universities but will define clear and consistent targets for improvement and reform that will trigger reward payments.
Performance funding $206 million
From 2012, the Government will provide additional funding over four years which will be dependent on universities meeting agreed performance targets. From 2012 funding worth 2.5 per cent of current teaching and learning grants will be conditional on universities meeting agreed performance targets relating to the quality of teaching, equity and other measures to be determined by the Government.
Performance funding will create a strong incentive for universities to improve the quality of teaching and learning and lift participation and outcomes for students from under represented groups.
The performance funding initiative recognises that every university has a role to play in improving the quality of teaching in higher education and supporting the Government's attainment and participation ambitions.
In 2010, the Government will work closely with universities and key stakeholders to develop a robust set of performance indicators. The indicators will be based on measures of the quality of teaching and learning, as well as participation and success for under represented groups.
In 2010, universities will be required to negotiate and agree on specific performance targets that are challenging but appropriate for their circumstances and will contribute to system wide aspirations for teaching quality and performance. Targets will be agreed to as part of compact negotiations. Universities that agree to targets will receive a facilitation payment in 2011.
In 2012 universities that have met their targets and agreed to new targets for the subsequent funding period will receive performance funding.
The TEQSA will determine whether universities have met these targets and whether they will receive this funding.
A fair deal for australia's regions
Regional universities and campuses play a significant role in the economic and social fabric of their communities. The Bradley Review pointed to a number of challenges in the provision of higher education in regional and remote Australia.
Sustainable higher education provision that is responsive to the specific needs of regional Australia is essential to Australia's social and economic prosperity. Students who study in regional areas are much more likely to stay in those areas, providing a vital skilled workforce in the regions. Institutions have a critical role to play in local communities and economies and existing universities will be well placed to explore new opportunities presented by these reforms.
New models of educational delivery are likely to grow from partnerships and collaborations between universities, as well as with VET and other adult education providers. Finding sustainable solutions for regional higher education provision will also play an important role in achieving the Australian Government's participation and attainment targets.
A number of initiatives in the 2009—10 Budget will help improve the student experience in regional Australia.
Low SES Funding will be provided to encourage institutions to develop partnerships with schools and vocational education and training providers in their local communities and help increase student aspirations for further study. Significant performance funding and reforms to student income support, in particular the new relocation scholarship, will provide incentives to students from regional and remote Australia to participate in higher education.
Review of Regional Loading
Regional loading provides extra funding under the Commonwealth Grant Scheme to assist higher education providers with regional campuses in meeting the additional costs associated with operating in a regional area. The loading recognises the unique contribution regional campuses make to their local communities and the higher costs faced by providers because of their location, size and history.
The Australian Government is committed to examining the cost of providing quality teaching and research in regional Australia so that a new, more effective basis for funding can be introduced.
Supporting Structural Adjustment
During the transition period to the student demand driven funding system the current funding floor for universities will be maintained, providing institutions with funding certainty. This transition period will also provide an opportunity for institutions to consider their strategic direction and focus their activities and missions to achieve long term sustainability.
A structural adjustment fund will promote a stronger, more diverse higher education sector.
This fund replaces the existing Diversity and Structural Adjustment Fund to support broader operational and capital projects, with funding for capital to be considered through the Education Investment Fund. In particular, the new fund will lay the groundwork for providing more sustainable higher education in regional and outer metropolitan areas.
Structural Adjustment $402 million
This Budget provides funding over four years to support significant structural change across the higher education sector. This could include the creation of new models of higher education institutions and collaborations between higher education and vocational education and training providers.
The total funding of $402 million includes $64 million from the existing Diversity and Structural Adjustment Fund and $200 million for the capital components of structural adjustment to be funded from the Education Investment Fund.
Feasibility Study — Charles Sturt University and Southern Cross University
As part of the Australian Government's approach to encouraging more sustainable, diverse and collaborative education institutions, the Government is supporting a feasibility study to explore how Charles Sturt University and Southern Cross University might come together to improve higher education provision for students and for regional communities. Funding of $2 million from the Diversity and Structural Adjustment Fund has been allocated for the study.
Investing in Infrastructure
World leading infrastructure is critical to world leading teaching, learning and research.
The Education Investment Fund (EIF) has a mandate to support capital expenditure and renewal and refurbishment in universities and vocational institutions, as well as in research facilities and major research institutions.
Infrastructure Funding $3 billion
The 2009—10 Budget will make a massive investment over four years in tertiary education and research infrastructure.
Australia's tertiary education and research sectors will benefit from a $934 million capital injection from the EIF round 2. This is a major component of the Government's Education Revolution.
A further $500 million will be available for EIF round 3 later this year. This will include $200 million for the capital components of structural adjustment to support universities that choose to refocus their activities and missions in response to the new higher education landscape. There will be a particular focus on supporting collaboration between universities and the vocational education and training sector and developing stronger research networks.
The Government is also acting to confront another great challenge: climate change. It is a challenge for our nation, our economy and our environment. The Government will undertake a special $650 million Sustainability Round of the Education Investment Fund, including:
- $400 million for research infrastructure related to the Clean Energy Initiative, and
- $250 million for VET, higher education and research infrastructure related to climate change and sustainability activities.
The funding for vocational education and training providers and higher education and research institutions is an opportunity to support projects that feature sustainable design, energy efficiency and capability for climate change related research. This will transform our tertiary campuses into 21st century environments that will not only play a key role in delivering a sustainable future through teaching and research, but also act as demonstration sites for new and emerging technologies and enable them to be tested at scale.
As part of the Rudd Government's commitment to creating and supporting the jobs of the future, the planned allocation of $2.5 billion into the Education Investment Fund will be allocated to the groundbreaking Clean Energy Initiative.
This new initiative will place Australia at the forefront of the response to climate and drive research in clean energy.
A total of $1.1 billion will also be provided in this Budget for the Super Science Initiative, which will provide funding for large scale nation building projects, allowing Australia to be at the forefront of the global research community.
The $901 million in capital elements of the Super Science Initiative will be funded from EIF, supporting projects across Space Science and Astronomy, Marine and Climate, and Future Industries that will increase capacity in our universities and research organisations. The Super Science Initiative is outlined in more detail in Powering Ideas: An Innovation Agenda for the 21st Century, released by the Minister for Innovation, Industry, Science and Research.
Workforce needs of the future
To ensure that the higher education sector meets the demands of the Australian economy, Skills Australia will provide advice to the Australian Government on the effectiveness of the sector in meeting the broad range of Australia's skill needs. This will complement Skills Australia's existing role in vocational education and training.
In 2005, the student contribution amounts for nursing and teaching were 'frozen' at the existing rates by the previous government to try to stimulate growth in these areas. Student demand has not shown a discernible change since the introduction of the policy but universities have been short changed in resourcing for these areas of study with the Bradley Review finding some universities scaled back activity because of the inadequate funding.
In 2008 the Australian Government announced it would implement its election commitments to encourage more students to study mathematics and science at university. The Government also announced extra university places and incentives for students to study nursing and early childhood education. Consistent with the Government's ongoing interest in supporting critical skills needs, the HECS HELP benefit that now applies to eligible mathematics, science and early childhood education graduates will be extended to nursing and education graduates who take up nursing and education occupations.
Reduction of payments for Higher Education Loan Program (HELP) for nursing and education graduates $83 million
Nursing and teacher education graduates who work in nursing or teaching professions will have their compulsory HELP debt repayments reduced (with a commensurate reduction in the debt balance) by up to $1536 for the 2009—10 income year (indexed in later years). This will apply to people who graduate from second semester 2009 onwards and be available for up to a lifetime maximum of 260 weeks of eligible employment.
The new approach funded in this Budget over four years will encourage nursing and teacher education graduates to take up employment and remain employed as nurses and teachers.
While this measure will increase the student contributions paid by education and nursing students, if they go on to work in the nursing or teaching professions, this additional payment will be more than recouped by the impact of the reduction in HELP repayments for eligible graduates.
For example, a student who starts their education or nursing degree in 2010 will have increased student contributions of around $3500 over a three year degree. If they take out a HECS HELP loan, this will be the extra that they will borrow. When they start working as a teacher or nurse and their income reaches the threshold for making compulsory repayments ($41 595 currently) they will be able to claim the HELP payment reduction. If their income for a full year's work as a teacher or nurse is $50 000, for example, their repayment will be reduced from around $2250 to around $700. For the full period of 260 weeks they can claim, they will save more than $7500.
Increase in the maximum contribution amount for education and nursing units of study $33 million
This Budget provides funding over four years for maximum annual contribution amounts at the Band 1 rate instead of the National Priority Band rate for nursing and education units of study.
This will apply to commencing students from 1 January 2010. Existing students will continue with the current arrangements. The increase in student contributions will provide more funding to enable higher education providers to support and expand their course provision in these areas.
OS HELP
The Bradley Review highlighted the benefits to students and the wider community of Australian students being given the opportunity to undertake some of their study overseas. An overseas study experience can provide Australian students with valuable language skills and cultural understandings and help them develop personal networks that will benefit them as members of the global workforce.
OS HELP loans provide cash payments to eligible undergraduate Commonwealth supported students to assist them in pursuing part of the study towards their Australian higher education qualification overseas.
Removal of loan fee on OS HELP loans $17 million
The Government will remove the loan fee for new OS HELP loans from 1 January 2010 in this Budget.
The 20 per cent fee for OS HELP has been a disincentive for students to apply for loans and has limited the efforts of Australian universities to encourage their students to take up study abroad options.
Sustaining Australia's international education and training
Study in Australia 2010 is a $3.5 million initiative designed to sustain Australia's international education and training sector into the future, particularly given the impact of the global recession.
The Australian international education industry is a critical part of the economy. It is Australia's third largest export industry and contributes $15.5 billion to the nation's economy. Over 500 000 international students study in Australia and offshore.
Study in Australia 2010 supports the Bradley Review's focus on international education and aims to ensure Australia continues to be a leading and appealing destination for international students. This initiative will focus on six priority countries: China, India, South Korea, Indonesia, Malaysia and Thailand.
Study in Australia 2010 provides targeted support for the Australian international education industry in what is an increasingly competitive marketplace, and offers guidance and support to the industry in responding to the global economic recession.
The Prime Minister's Australia Asia Endeavour Awards
The Australian Government responded to the 2020 Summit by committing to deliver a new scholarship scheme: the Prime Minister's Australia Asia Endeavour Awards.
These awards will provide scholarships for the best and brightest university students from Australia and Asia. They will build deep and enduring links with Australia's neighbours, with long term benefits for education, trade and security, as well as enriching all our cultures.
The Prime Minister's Australia Asia Endeavour Awards will also enhance the current Endeavour Awards, the Australian Government's internationally competitive, merit based scholarship program.
Prime Minister's Australia Asia Endeavour Awards $14.9 million
In this Budget the Australian Government is committing $14.9 million over four years to the Prime Minister's Australia Asia Endeavour Awards.
Forty scholarships will be awarded annually to Australian university students, 20 at the undergraduate level and 20 at the postgraduate level. The scholarships will allow Australian students to undertake one year of study in Asia, which can be followed by an internship or work placement also in Asia.
Ten scholarships will also be awarded to the top international Endeavour Postgraduate Awards scholars from Asia each year to study in Australia.
2 The Batchelor Institute of Indigenous Tertiary Education is also a public higher education provider and will be covered by the demand-driven funding system.
3 The Universityof Notre Dame Australia is a private university that has some Commonwealth-supported places. It wil also be covered by the transitional arrangements.
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