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Federal Budget: higher education and skills reform

By Michael Crump | 27 May 2014

A recent Federal Budget announcement saw some major reforms in the Higher Education Sector. Below we’ve provided a breakdown of the major changes in the areas of Skills, Higher Education, Schools and Research:

Changes to the nation's skills packages

The Government is to deliver a new $476 million Industry Skills Fund that will streamline training and better position Australian industry to succeed in a rapidly changing global economy. The new Industry Skills Fund will commence on 1 January 2015 and will deliver close to 200,000 targeted training places and training support services over four years.

The fund will assist small and medium sized businesses to successfully diversify and improve competiveness in a global market.  The fund will be delivered through the new streamlined Single Business Service initiative to make it easier for businesses to deal with Government

The introduction of Trade Support Loans for apprentices to encourage more young people to take up a trade and complete their qualification. From 1 July 2014 the Government will offer loans of up to $20,000 over the life of an apprenticeship. These loans will ease the financial burden and help increase apprenticeship completion rates. Like HELP loans for tertiary students, the loans will be repayable once apprentices are earning a sustainable income.
The investment in the Industry Skills Fund will be offset by savings from the cessation of 10 existing training programmes. Transition arrangements will be put in place for the phase-out of the 10 programmes.

Changes to higher education

Expand the demand driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees, costing $371.5 million over three years;

Extend Commonwealth funding to all students in non-university higher education institutions studying bachelor courses, costing $448.9 million over three years;

Establishment of a new Commonwealth Scholarship scheme to assist students from disadvantaged backgrounds so they don’t miss out; The new Commonwealth Scholarship scheme will be established by universities contributing $1 of every $5 they receive from additional fee revenue. These scholarships will expand opportunities for students from low socio-economic backgrounds, Indigenous students and students from regional Australia.

Removing loan fees for undergraduate students for FEE-HELP and VET FEE-HELP;

Maintain the Higher Education Loans Program (HELP) that sees the taxpayer support students so that they don’t pay tuition fees upfront; students are only required to repay their loan when they are earning a decent wage.

The minimum income threshold at which people have to begin repaying their debt will be lowered by 10 per cent.

The Government will also charge an interest rate on FEE-HELP loans that "reflects the cost of government borrowings". Currently loans are indexed each year to reflect inflation, but this will be replaced by the government bond rate equivalent, which is traditionally higher than inflation.
Deregulation of University fees will allow Universities to set their own tuition fees for the courses they offer.  This could lead to higher university costs for students. Currently the student contribution to a university degree is capped, but the cap on those contributions will be removed from 2016.

Changes to schools

The Government will dump the Gonski school funding plan in 2017-18, saving around $30 billion from the Federal budget.

School chaplaincy program continued at a cost of $243.5 million over five years

Extra research

  • The Government will invest $11 billion over four years in university research and to attract and retain some of the world’s top researchers in Australia.

  • $150 million to continue the National Collaborative Research Infrastructure Strategy (NCRIS).The NCRIS supports major research infrastructure to encourage collaboration between the research sector, industry and government in Australia and internationally to conduct world-class research.

  • $139.5 million allocated to deliver up to 100 new research positions per year under the Future Fellowships Scheme. The scheme provides four-year fellowships to outstanding mid-career researchers, strengthening Australia’s research capacity.
  • $26 million from the Australian Research Council to accelerate research in dementia
  • Providing $42 million for the expansion of the Australian Institute of Tropical Health and Medicine (AITHM) at James Cook University to support new research and training facilities for research in tropical diseases such as dengue fever and elephantitis.
  • Delivering $24 million to support the Antarctic Gateway Partnership as part of the strategy to position Tasmania at the centre of Antarctic research.
  • The 2014-15 Budget also delivers $3.3 million for the continuation of the Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) digitisation programme to preserve important Indigenous cultural items in digital form so they can be used as a research resource to be shared with all Australians and the rest of the world.

For the full details on Education and Skills Budget Reforms:

Department of Industry 
Department of Education

Another great resource detailing the Higher Education Reforms can be found here:

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