The Turnbull Government will seek to drive better outcomes for both students and taxpayers as part of a suite of higher education reforms announced tonight.
One year ago the Turnbull Government committed to consult on a package of reforms that was fair, drove quality and excellence, was financially sustainable and ensured students had the choice and opportunities to succeed. These reforms deliver on that commitment.
The reforms started from a “clean slate” with no fee deregulation, are fundamentally fair and are focused on ensuring Australians who want to study have the support to do so, universities are properly accountable for their public funding, and costs and risks were better shared between taxpayers, students and institutions.
This is a package of reforms that strikes the right balance. This fair package will ensure our record levels of investment in higher education drive better results for students and better value for money for taxpayers.
This is about setting Australian universities up for the future by empowering them to offer students better choices and holding them accountable for improved outcomes.
We’ve put in the time to consult students, academics and policymakers, review the more than 1,000 submissions to our discussion paper and work with a panel of experts guiding the development of this policy.
We’re delivering on our promise to pursue quality and excellence in Australian higher education, ensuring students have the support they need to succeed while also making sure the system is financially sustainable for future generations so students yet to come have the sorts of opportunities this and other generations have had.
These reforms guarantee students will not pay a cent up-front and no longer face deregulation of fees, while universities will no longer face a 20 per cent cut to their funding. Our reforms provide the funding certainty students and the sector have been calling for.
Students from disadvantaged backgrounds attract guaranteed taxpayer support through their universities to help boost their learning experience and chances of completion, with the Higher Education Participation and Partnership program being enshrined as a per student legislated loading.
New performance measures will put students at the centre of learning because retention, completion, student satisfaction and getting a job are central to the mission of our institutions of higher learning. Regional Australians will have more education opportunities in their communities. With changes to enabling sub-bachelor post-graduate arrangements, universities will be encouraged to enrol students in the courses that are right for them rather than solely focus on bachelor courses that do not suit every student.
Global competition in higher education is intense and we must stay ahead of the game. We must also honestly confront budget pressures that rapidly rising contributions to universities have contributed to. The time to act is now to strengthen our world class higher education system and guarantee the financial sustainability of taxpayer subsidised places and our world leading student loans program into the future.
Key elements of the higher education reforms include:
Better support for students – Legislating ongoing support for the $592 million Higher Education Participation and Partnerships Program but better targeting it to students who need it most, sector-wide transparency of admissions standards and entry pathways, supporting the establishment and maintenance of up to eight community-owned regional study hubs to meet the needs of the most remote students, better distributing postgraduate coursework places to institutions where students want to study, extending Commonwealth support to approved sub-bachelor level diploma, advanced diploma and associate degree courses so more students have more pathways to higher education, ensuring no student pays a dollar upfront for their course, and for the first time subsidising work experience in industry units of study.
Greater transparency and accountability – Entry requirements will be made more transparent and universities will be held to account for improving retention, completion and employment outcomes. We will ensure universities are accountable for how they spend public money by making 7.5 per cent of each university’s Commonwealth Grant Scheme funding contingent on performance against key benchmarks. In 2018 this funding will be dependent on participation in admissions transparency reform and cost of education and research transparency initiatives. From 2019, this funding will be dependent on performance metrics such as student outcomes and satisfaction, transparency and financial management with a formula to be developed in consultation with universities. Legislation will require that any funds withheld be reinvested into well performing universities, new equity measures or additional research funding.
A fairer deal for taxpayers – Phasing in increased maximum student contributions by 1.8 per cent each year between 2018 and 2021 cumulating to a 7.5 per cent increase and meaning there is a better balance of the contribution share between students and taxpayers from 42 per cent to 46 per cent for students and 58 per cent to 54 per cent for taxpayers, lowering the starting repayment threshold for loans to $42,000 with a one per cent repayment rate, restricting subsidies to Australian citizens only and certain Special Visa Category Permanent Residents from New Zealand and Humanitarian refugees, and extending a 2.5 per cent efficiency dividend in 2018 and 2019 to universities, recognising that university revenue has grown faster than costs over recent years.
There is strong evidence that we need to get the costs of higher education under control, that universities are capable of making a contribution and that our student loans program must be made more sustainable. For example:
Taxpayer funded student loans stand at more than $52 billion and, without changes to address this situation, around a quarter of that is expected to go unpaid.
Since 2009 taxpayer funding for Commonwealth supported places in higher education has increased by 71 per cent, effectively growing at twice the rate of the economy.
Average funding per domestic student for universities increased by 15 per cent between 2010 and 2015, while over the same period the cost for universities to deliver courses increased by only 9.5 per cent, according to independent analysis from Deloitte.
By rebalancing the share of funding between students and taxpayers and better matching the costs of courses with the money universities receive from the Government, we expect these reforms will save taxpayers $2.8 billion over the forward estimates in underlying cash balance terms.
The Turnbull Government will spend $27.9 billion for Commonwealth supported places, $11.8 billion on research, $592 million for the Higher Education Participation and Partnerships Program and $33.5 billion on student loans over the forward estimates.
These reforms mean we will have a more sustainable rate of growth in taxpayer support that’s accompanied by measures to ensure universities put the interests of students first.
This package ensures Government continues to be the majority funder of higher education average course costs and demonstrates that scare campaigns about prohibitive fees have no validity, with course costs for students increasing by no more than $3,600 over a four year degree, none of which has to be paid up-front.
Australia has a world-leading higher education system that continues to provide employment and income advantages to its graduates. We cannot afford to be complacent and risk jeopardising opportunities for future generations of students who also will want to be able to access student loans that remove all up-front fees from higher education, facilitating their enrolments no matter their background or financial circumstances.
International education is Australia’s third largest export, valued at $22 billion and supporting around 130,000 jobs. We must nurture and grow our reputation for providing quality education to Australians and to the world. We must continue to be a beacon for the best and brightest from around the globe - whether they are PhDs, post docs, academic staff or undergraduate students. We welcome and want to partner with the best in the world.
This is a responsible suite of reforms that are fair, they empower student choice and opportunity and strengthen transparency, accountability and quality. They stand in stark contrast to the brash approach from the Labor Party who, when they were last in Government, announced $6.6 billion worth of cuts to the higher education sector.
This reform package gets the balance of funding between students, universities and taxpayers right, is fundamentally fair and ensures every Australian has the opportunity and support to study.
I urge all of my Parliamentary colleagues to consider the totality of these reforms, which begin to come into effect from 1 January 2018, and to work with us to deliver improved choices, financial sustainability and accountability to Australia's higher education sector.
Full details of the Turnbull Government’s higher education reform package are available at: https://www.education.gov.au/node/14586