Release type: Media Release


The future of Australian universities focuses on achievement


The Hon Dan Tehan MP
Minister for Education

University funding growth will be linked to their ability to produce job-ready graduates.

Graduate employment outcomes will be the most important factor under the performance-based funding model for universities that was finalised today.

The Morrison Government will provide additional funding for universities through the Commonwealth Grant Scheme (CGS) in line with the population growth of the 18-64 year old cohort and performance under the performance-based funding model.

Performance will be assessed across four measures: graduate employment outcomes, student success, student experience, and participation of Indigenous, low socio-economic status, and regional and remote students. Graduate employment outcomes will account for 40 per cent of funding, with the other three measures weighted at 20 per cent each.

Starting in 2020, performance-based funding will determine more than $80 million in CGS funding, growing over following years to 7.5 per cent of CGS for domestic non-medical bachelor level students at public universities.

Minister for Education Dan Tehan thanked the higher education sector, particularly the expert panel chaired by University of Wollongong Vice-Chancellor Professor Paul Wellings CBE, for their leadership in the development of the model.

"Our Government is providing record funding to universities of more than $17 billion this year. This includes access to around $7 billion of funding a year through the Commonwealth Grant Scheme driven by their ability to attract and retain students," Mr Tehan said.

"The performance-based funding model that has been finalised makes an explicit link between funding and one of the key goals of every university: to produce job-ready graduates with the skills to succeed in the modern economy.

"The productivity gains from improving graduate employment outcomes and lifting completion rates are worth an estimated $3.1 billion a year by 2030.

"Importantly, our model is not punitive. Where a university does not meet its performance target it will be supported to improve their performance.

"This uniquely Australian funding model will allow for adjustments to shifting national priorities and changes to the higher education landscape over time.

"We will continue to ensure the model is fit-for-purpose with reviews scheduled in 2020 and 2023."

Professor Wellings said: "The performance-based funding scheme creates a new horizon for growth while placing a spotlight on institutional performance. This new Australian scheme is distinctive as every university will receive support to encourage performance improvement and the sharing of best practice across the whole sector."