Full Fee Deregulation Abandoned, Consultation To Begin
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Full Fee Deregulation Abandoned, Consultation To Begin

Full Fee Deregulation Abandoned, Consultation To Begin

The Federal Government has announced that it will guarantee higher education funding for 2017, but will now undertake further policy consultation with the sector which will not be completed until after the 2 July Federal Election. If re-elected, the Turnbull Government will not be implementing any reform resulting from the consultation until halfway through the next parliament.


Education Minister, Simon Birmingham ruled out full course fee deregulation on Tuesday, taking the air out of Labor’s ‘$100,000 degrees’ fear campaign, based on such a proposal.


Estimates contained in the 2016-17 Budget suggest that the delay in policy implementation will achieve savings of $2 billion over the forward estimates, and cost $596.7 million over the same period.


Mr Birmingham said that the consultation process being undertaken by the Government, is designed to ensure that there is a “reasoned and evidence-driven discussion on higher education reform without full university fee deregulation.”


Any reforms which result from the consultation period, will not commence until halfway through the next parliament.


Screenshot 2016-05-03 19.24.12

Key figures for Higher Education in the 2016-17 Federal Budget


Education Minister, Simon Birmingham said that the government is “committed to reforming the higher education sector to enshrine equitable access, achieve budget sustainability and ensure high quality.”


All savings made in the higher education space will either contribute to budget repair or the funding of policy priorities for the Government.


The move to undertake further consultation appears to be both a transparent attempt to differentiate Prime Minister Turnbull’s approach to higher education policy in the sector from his predecessor, Tony Abbott; and also to diffuse an electoral policy strength of Labor’s.


The Government’s decision to rule out full fee deregulation, may force a shift in Labor’s policy approach, as their current “$100,000 degree” fear campaign is no longer based on potential Government policy. The $100,000 figure was based on the cost of a veterinary science degree, were it not to receive any Commonwealth funding. Currently the taxpayer subsides more than 60 per cent of the actual cost of a veterinary science degree.


The consultation process, undertaken by the Government will run for twelve weeks, concluding on 25 July – over three weeks after the Federal Election. This will give the Government more breathing space to focus on traditional Coalition policy strengths – jobs growth, economic management and infrastructure development.


The political temperature in the higher education space has plummeted this week. It turned, when Treasury revealed a $3.2 billion shortfall in Labor’s proposed tobacco excise revenues over the forward estimates on Monday. Labor’s higher education platform will run at an additional $2.5 billion to what the Government has projected over the forward estimates. This is clearly problematic given that the excise was touted as revenue measure to pay for Labor policies, including higher education.


Labor will almost definitely be forced into making adjustments, especially given the Government’s ruling-out of full fee deregulation and the announcement of sector-wide consultation on Budget Night.


In terms of policies actually contained in the 2016-17 Budget, the taxpayer will provide $12.3 billion for the higher education sector, a 0.9 per cent increase from 2015-16. This will form part of a $49.4 billion spend on higher education and research over the next four years.


New spending measures include: a $12 million increase over the forward estimates for international education, $8.1 million for the Quality Indicators for Learning and Teaching (QILT), $10.1 million for the Tertiary Education Quality and Standards Agency (TEQSA), and $10 million over two years for advertising campaign for Vocational Education and Training (VET) courses.


Savings measures outlined in the Budget include: $152.2 million over the forward estimates from the Higher Education Participation Program (HEPP), $247.2 million from the Industry Skills Fund, and $20.9 million from the ‘Promotion of Excellence Program’ in higher education.

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