Budget 2014-15

The Scan in 2015

 26 December 2015

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On account of other pressing matters in 2015 published editions of The Scan, with a completely refreshed front page heralded to subscribers by an e-newsletter, were down quite a bit – just 21 in 2015 compared to 40 in in 2014. Nevertheless, some 350 items were posted, which is about 8 a week in The Scan’s year, a little down on the 10 items posted a week last year.

Traffic to the Scan website remained strong, down about 20% on last year’s figures. The Scan’s now extensive archive of nearly 3000 posts creates “organic” traffic: over one third of all Scan traffic now flows from search engines and referrals.

Regular readers will have noticed the little ads at the bottom of each page and post. We get paid a teensy weensy amount every time an ad is clicked: over the past three years those ads have contributed $88.02 to Scan coffers.

Most Scan visitors are located in Australia but we do have a small international readership, with visitors from about 100 countries in 2015. This is dominated by visitors from the US (6% of total traffic) who number about double every other country combined, followed by the UK with about 1% of the total.

This year’s top ten reads were heavily skewed towards the “VET crisis” and attempts by authorities (rather belatedly in our view) to stamp out the obvious rorting, particularly in VET FEE-HELP funding, which has been truly scandalous. In fact, the number one post this year on The Scan is also the number one post of all time and by quite a bit. If you enter “rorting” in the search box in the top right hand corner, the archive runs to 5 pages, VET FEE-HELP runs to another 5 pages (obviously with some overlap) and that’s only the start of it. Quite why NSW university offers rated so highly might be explained by the fact that NSW newspapers now provide precious little coverage of the event. The seemingly generous pay arrangements of vice-chancellors certainly attracted reader interest (and good on The Oz for pulling the story together) and academic gongs remains a perennial favourite. However, the weightiest issue of the year in higher education was the late Abbott government’s deregulation package which died ignominiously in the Senate and led to then minister Christopher Pyne’s manic performance as The Fixer in an interview with David Speers on Sky News. 

 

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Careers Australia caught up in enrolment scam

Careers Aust3 March 2015     |     One of Australia’s biggest private training providers is being accused of using salesmen who target disadvantaged areas and enrol poor students with fake entrance exams.   Careers Australia is a market leader in vocational education, with 16 campuses across five states and 14,000 students, and is expanding rapidly by engaging door-to-door salespeople to sign up new students to courses funded by the Federal Government.  Last financial year Careers Australia billed taxpayers for almost $110 million in VET FEE-HELP loans. Former sales broker Chris Chambers confirmed that sales brokers were taking the entrance exams for potential students, and claimed he saw it happen 40 to 50 times.  These literacy language and numeracy tests were to gauge the eligibility of the student to actually complete the course and potentially pay off their VET FEE debt.   Chambers alleged that communities with high welfare dependence like Hobart’s Bridgewater, Gagebrook and Herdsmans Cove were deliberately targeted.

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NSW university offers 2015UAC

20 January 2015     |     As in Victoria, the traditional January main round of university offers in NSW, through the University Admissions Centre (UAC), is decreasing in prominence in the calendar. Offers through the year and direct offers are becoming increasingly the norm. This year, universities have made 46,507 offers through UAC ‘s main round, down 4,307 (- 9%) on last year. But the total number of offers to date is actually up a little, at 76,339, up 1,542 ( + 2%) from last year’s 74,792. So, main round offers through UAC are now about 62% compared to 68% last year and almost 100% four or five years ago.

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Vice chancellor’s salary packages on the rise

Rocket increase

15 June 2015    |      Australia’s highest paid vice-chancellor saw his salary package increase by $120,000 last year to reach $1.3 million, an analysis of annual reports by The Australian shows.  Michael Spence, head of the University of Sydney, topped the list of 37 vice-chancellors, followed by Greg Craven from the Australian Catholic University ($1.2m); Glyn Davis, University of Melbourne ($1.08m); and Peter Coaldrake, Queensland University of Technology ($1.06m). In all, seven vice-chancellors had salary packages over $1m, including two who left or retired.  At the other end of the spectrum, the analysis of 2014 annual reports showed Kerry Cox, the recently retired head of Edith Cowan University, to be the country’s lowest paid vice-chancellor on $540,000.  The analysis shows that the average salary was $835,000. Male vice-chancellors earned, on average, $853,000 while their eight female counterparts earned an average of $769,000.

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Hundreds of Vocation qualifications recalled

22 April 2015 | Private training provider Vocation has been forced to recall more than 1,000 of its qualifications, including hundreds in child care and Vocationaged care, after Victorian regulators found the courses were sub-standard. Almost 200 students who completed a Certificate III in Child Care, 250 students who completed a Certificate III in Aged Care, and 383 students with a double qualification of business studies will have to hand back their qualifications and inform their employers. A total of 832 students, who all studied with Vocation in Melbourne between January until June last year, are affected. This latest audit by the Victorian Registration and Qualification Authority (VRQA) follows an investigation last year which found about 6,000 students had studied sub-standard courses. More than 3,500 qualifications were recalled, and Vocation was forced to repay $19.6 million in state government funding.

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Victorian VET Funding Review announced

Bruce McKenzie15 February 2015    |      The new Victorian Labor government has announced a comprehensive, independent review of the funding of Victoria’s vocational education and training (VET) system, as presaged during the election campaign.   Minister for training and skills Steve Herbert says the VET Funding Review will provide a more sustainable model for public TAFE Institutes and private training providers.  According to Herbert, the former Liberal government left Victoria’s training sector in crisis. Government contributions to public TAFEs fell from $733 million in 2011 to $468 million in 2014, leaving many TAFEs at risk of financial collapse.  At the same time, Herbert says the former government’s constant changes to subsidy rates have caused confusion and made it difficult to make long-term plans for private providers.  These sudden and repeated changes caused financial instability, undermining the ability of both TAFEs and private training providers to support Victoria’s growing industries.

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Higher education reforms referred back to Senate Committee

12 February 2015   |     Labor, the Greens and four independent senators (Senators Xenophon, Lambie, Muir, Rhiannon and Lazarus) have joined Stephen Parkerforces to establish another inquiry into higher education reform, to report by 17 March. The committee will consider alternatives to deregulation, likely future demand for places and implications on student loans, research infrastructure and regional provision. The inquiry will also look to investigate “the appropriateness and accuracy of government -advertising in support of higher education measures” and “other related matters”.   University of Canberra vice-chancellor Stephen Parker expects the legislation will be rejected for a second time by the Senate and wants to encourage a national discussion on alternatives to deregulation. University of Canberra vice-chancellor Parker, a strident opponent of the government package, says that the government’s failure to review any options to deregulation was both a “process failure”  and “a democratic failure because it wasn’t flagged at the last election and it was even denied at the election.”

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Academic gongs Australia Day 2015

Order of Australia226 January 2015     |      Six hundred and thirty five Australians  have been recognised with Orders of Australia on Australia Day 2015, while a further 59 military and 130 meritorious awards were announced. Members of the tertiary education sector featured strongly in the honours list, with 81 awards, particularly in the upper categories.  People associated with the tertiary sector received 4 out of the 5 Companion awards (80%), 16 out of 38 Officer awards were to people associated with the tertiary sector (42%), 46 of 156 Member awards (29.5%), for a 33% of the higher awards.  In the most common category of Medal, only 15 of 434 awards were tertiary sector related people (3.4%). Women continue to be under represented with 33% of all awards, mainly in the Medal category.  Only four of the tertiary sector awards were to people in the VET sector.

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Vic to blitz “dodgy” VET providers

Deloitte2

29 June 2015       |       The Victorian Government is launching a major blitz to crackdown on “dodgy” training providers in order to lift standards in sector.   A review by Deloitte has revealed widespread abuses, including qualifications being issued to students who have no demonstrable skills, inappropriate marketing practices, short course duration, providers claiming government funding for non-existent training delivery and poor oversight of third parties delivering training.  Skills minister Steve Herbert said that since November 2014, the government has had to restore funding eligibility for more than 10,000 students who gained inadequate qualifications, and has found dubious practices in a range of qualification areas.   He said the Government will spend $9 million on auditing, interviewing students, ensuring the paperwork was right and make sure they were getting “high-quality” training.  The priority is to crackdown on providers who are doing short course delivery about which there have been complaints and are suspected of not providing quality training.

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Birmingham releases “synthesis report” on HE reform

Birmingham28 October 2015    |        The Commonwealth government has released a synthesis report of the past seven reviews of higher education over the past 30 years rather than conducting a further  separate review in the wake of its failed higher education reform package.  Education minister Simon Birmingham told the Australian Financial Review’s Higher Education Summit said that the government is under intense time pressures to come up with a new and revitalised higher education reform package after its the package devised by former education minister Christopher Pyne was rejected by the Senate twice, largely due to intense community opposition over the plan to deregulate university fees.   The background paper summarises the findings of each major review of higher education from the 1988 Dawkins White Paper to the 2014 Kemp-Norton Review of the Demand Driven Funding System.

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Labor’s TAFE agenda in QueenslandAnnastacia3

With the Labor Party poised to form a minority government in Queensland, its promise to rescue the TAFE sector will now come into sharper Focus.  Queensland VET student numbers fell 38,000 in 2013.During the election campaign, Labor leader and soon to be premier Annastacia Palaszczuk  (who pronounces her surname as “Pallashay”) made a number of commitments to address the vocational educational and training system.

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Image is everything

6 April 2015

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News Corp photographer Brad Hunter will join Tony Abbott’s media staff later this month, raising concerns that news photographers will gain less direct access to the prime minister.

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Abbott & kid asleep
The kid couldn’t take it any longer

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Universities warned to brace for funding cut

The Australian     |     1 July 2015

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Universities have been warned their funding will be cut by 20% almost immediately, an average of $32 million a university, if the government can get its higher education reform package through the Senate by the end of the year. The legislation,  rejected by the Senate in March, was due to be reintroduced during the budget sittings of Parliament  but has been left to “lie fallow” as education  minister Christopher Pyne presumably cultivates the Senate crossbenchers.  Most informed commentary is that the legislation has little prospects of passing in its present form.   So will the government amend the bill?  Perhaps, but it would be deprived of a double dissolution trigger if government does amend it.  We don’t think a double dissolution is likely – it’s way too complicated and high risk – but holding the legislation back keeps the option open, and Pyne himself  raised the prospect in his negotiations with the crossbenchers in March.

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SecuritisationThe sector has been thrown into turmoil after the federal Department of Education and Training published cluster funding rates for next year that applied the 20% funding cut. Under the government’s reform package, universities are expected to be able to recoup the lost funding by charging higher, deregulated tuition fees.

Vice-chancellors and peak groups were forced to seek clarification from education minister Christopher Pyne and his department last week as to whether the government intended to apply the 20% cut whether the legislation was passed or not.

“The (department) numbers assume a 20% funding cut,” University of Melbourne vice-chancellor Glyn Davis said. “So the whole sector has been ringing each other up asking what it all means.”

Davis said the sector was particularly concerned about the cut after the government withheld payments for two years under a Rudd government “efficiency dividend” for which legislation was never passed.

Universities expect to have that money finally repaid next month.

A 20% funding cut would see large universities such as Sydney and Melbourne hit a reduction in revenues of about $50 million to $60m, but regional and outer metropolitan universities, which are more dependent on teaching grants, would be particularly hard hit.

Davis said he had no idea why the department had published new rates if it had no intention of imposing them if the legislation were not passed.

“We assume it’s part of the game Mr Pyne is playing with the crossbench to try to win support for his legislation,” Professor Davis said.

Mr Pyne was due to reintroduce the legislation to the Senate in the winter sitting session, but he told radio station 2GB last week it would not be put forward until spring.

I’ve deliberately let the higher education reform debate lie fallow for a while because I wanted to give the crossbenchers and the sector some time to pause and think about how they defeated a reform for universities, students and Australia. We will come back in spring and reintroduce the bill because it is too important to let go.

Conor King, executive director of the Innovative Research Universities group, said the legislation had only a slight chance of passing.

“The legislation is not going to pass and if it were to pass it wouldn’t operate from January 1.   The department is working in the government’s hypo­the­tical world and updated the rates (to include the 20% cut).”

A spokesman for Pyne said publication of the funding rates reflected government policy: “2016 payments will be based on the rates in the act as it stands at the time. The government is discussing the practical aspects of implementation with providers.”

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See

Mistakes were made

Failure of the deregulation package and the way ahead

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16 April 2015    |    The failure of the government to carry the Senate on its proposed higher education reforms can be put down to the government’s arrogance and heavy-handedness and what would politely be called its disingenuousness. Parts of the package were not without considerable merit – for example, extending public subsidies to the students of non-university higher education providers is a long overdue fairness measure and extending them generally to sub-degree programs could considerably improve retention rates. But overall, the package was seen to be poorly conceived and fundamentally flawed – certainly in respect of total fee deregulation.

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AUSTRALIA - UNIVERSITY OF TECHNOLOGY SYDNEY PROTEST

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The Scan #167 16 April 2015

Student debt growing rapidly as compliance declines

Game of Loans16 April 2015   |    With student debt ballooning, reform of the FEE-HELP system (HECS) is now a pressing budget issue with the nation’s second biggest financial asset, after the Future Fund, being eroded as one in five debtors renege on their loans. That figure is expected to rise to 25% by 2017. The government will have more than $70 billion in unpaid university student loans on its books in another two years, double the figure owed in 2013-14. According to researchers Richard Highfield and Neil Warren, the loans system is being compromised by successive governments’ commitment to increasing participation in tertiary education while not paying adequate attention to repayment compliance, especially among lower income vocational students who are unlikely to meet the income repayment threshold for years, if ever. The rapid expansion of HELP debt has also been driven by extension of the scheme to vocational students, a move which has been marred by mass-scale rorting by dodgy colleges. It would grow even more rapidly under a deregulated university fee regime…..[ MORE ]…..

Science contributes $145 b to GDP

16 April  2015   |   A report released by Ian Chubb, Australia’s Chief Scientist – The importance of Science & economyadvanced physical and mathematical sciences to the Australian economy – has found that advanced physical and mathematical sciences make a direct contribution to the Australian economy of around $145 billion a year, or about 11% of GDP. When the flow-on impacts of these sciences are included, the report finds the economic benefit expands to about $292 billion a year, or 22% of the nation’s economic activity.Chubb says that for the first time we now have the numbers on the table showing the importance of these sciences to the Australian economy. It is too easy to take the benefits of science and innovation for granted, and this report shows that the knowledge from these disciplines supports and enhances economic activity which benefits all Australians……[ MORE ]…..

V-C salaries take off

Fee increase216 April  2015   |   University heads have been pocketing substantial salary increases while demanding the Senate pass government legislation to allow fee deregulation based on the argument their institutions are cash-strapped. The biggest increase was for Sandra Harding, head of north Queensland’s James Cook University and chairwoman of peak group Universities Australia. Harding’s salary has increased 65 % in just four years — from $559,000 in 2010 to $927,000 last year, including a $79,000 pay increase last year. The highest paid vice-chancellor in Australia is Australian Catholic University’s Greg Craven, who took home a package of about $1.2 million in 2013……[ MORE ]…..

Fines for dodgy operators

16 April 2015    |   Registered Training Organisations (RTOs) breaching standards could be issued Quality2with an immediate fine under the new infringement notice scheme. New laws recently passed in the Senate require anyone, including brokers and other third parties, marketing a vocational education and training (VET) course to clearly identify which RTO is providing the qualification. Assistant Minister for Education and Training, Senator Simon Birmingham, said that up until now the national regulator, the Australian Skills Quality Authority (ASQA) could only write warning letters, or take regulatory action such as cancelling or suspending a provider’s registration. He said he “hoped” the fines would act as a significant deterrent for training providers taking part in unscrupulous practices……[ MORE ]…..

International strategy welcomed

Flags

16 April 2015     |   The draft National Strategy for International Education released by the government in early April has been welcomed by the tertiary sector. The strategy defines three pillars of international education and six achievable goals to underpin Australia continuing to be a destination of choice for students, teachers and researchers. Submissions will be taken on the strategy until 29 May. …..[ MORE ]…..

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Milestones

Ian Jacobs takes over at UNSW

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Professor Ian Jacobs commenced as Vice-Chancellor of the University of New South Wales in February 2015, succeeding Fred Hilmer, who stepped down after eight years in the role.

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Ian JacobsProfessor Jacobs came to Australia from the UK, where he had a distinguished career as a leading researcher in the area of women’s health and cancer and in university leadership. Immediately prior to joining UNSW he was Vice President and Dean at the University of Manchester and Director of the Manchester Academic Health Science Centre, a partnership linking the University with six healthcare organisations involving over 36,000 staff. He was previously at University College London, where he created and led the Institute for Women’s Health, was Research Director of UCL Partners and Dean of the Faculty of Biomedical Sciences.

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Comment & analysis

16 April 2015

Mistakes were made

Failure of the deregulation package and the way ahead

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The failure of the government to carry the Senate on its proposed higher education reforms can be put down to the government’s arrogance and heavy-handedness and what would politely be called its disingenuousness. Parts of the package were not without considerable merit – for example, extending public subsidies to the students of non-university higher education providers is a long overdue fairness measure and extending them generally to sub-degree programs could considerably improve retention rates. But overall, the package was seen to be poorly conceived and fundamentally flawed – certainly in respect of total fee deregulation.

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AUSTRALIA - UNIVERSITY OF TECHNOLOGY SYDNEY PROTEST

Mistakes were made, not the least the mistake of poor judgement by the university sector peak organisations, which came across as unalloyed supporters of the deregulation package: education minister Christopher Pyne was able to trumpet that the package had the support of “40 out of 41 vice-chancellors”, the single dissentient seemingly being Stephen Parker of the University of Canberra. It was never quite that straightforward – Andrew Vann (V-C Charles Sturt University) was, initially at least, as stridently opposed as Parker. At the outset, immediately after the Budget, Universities Australia, for example, called for changes to the package and a careful working through of the detail; and quite a few vice-chancellors expressed concern.

By and large, however, it’s true enough that the key plank of the package – unfettered fee deregulation – had the broad support of the university sector. And, at the end, the various university organisations were pleading with the Senate crossbenchers to pass the package.

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16 April 2015

Who should go to university?

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Conor King of the Innovative Research Universities group fears that in the absence of university fee deregulation, the demand driven-system will be dumped.

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New higher education minister Kim Carr is considering a rethink on the opening up of university places. AAP/Julian Smith
Back to the future?

Who should go to university, only the select or all who want to? It is the question that ran through the 2015 Universities Australia Conference in March. It is lurking behind the contentious funding and fees debate that has wracked higher education for the past year. It is the issue that determines how well higher education supports Australia’s future.

Gary Banks, former Productivity Commissioner, best illustrated the question. He revealed the ambivalence between the economist in him and the romantic academic. The economist argues human capital theory – the importance of each individual developing their education and skills to the optimum to apply in future work and life. The academic worries about the flood of people on campus, too many of whom do not meet the test of bright minds in pursuit of knowledge.

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15 April 2015

The social costs of high university charges

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Photo: Andrew Taylor
Photo: Andrew Taylor

This is an extract from Bruce Chapman’s submission to a Senate Committee inquiry into higher education fee deregulation (February 2015) in which he proposes a “progressive tax” on university funding as a means of constraining fees. He suggests the question of what the “right” price to charge students for public sector university teaching services “is not an argument that can be made easily with reference to economic theory or compelling evidence related to allocative efficiency. It is instead basically an ethical issue.”

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It needs to be asked: Does it matter that students/graduates might end up paying very high prices for higher education in Australia? Why should we be concerned about this possibility when it will still be the case that even with very high price rises, average lifetime graduate incomes will remain far greater than the incomes of non-graduates? This issue has exercised considerably my reaction to the fee deregulation debate since the Budget was brought down in May 2014. Some basic points are as follows.

There is no compelling and accurate answer to the question of how much students should contribute to the costs of running Australian public universities. Including my own research, all attempts to explain and measure the social benefits of university teaching are fraught with problems of inadequate data, less than convincing method and unclear conceptual interpretation.

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Life & stuff

6 April 2015

Image is everything

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News Corp photographer Brad Hunter will join Tony Abbott’s media staff later this month, raising concerns that news photographers will gain less direct access to the prime minister. .

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Abbott & kid asleep
The kid couldn’t take it any longer

Although it has long been a fixture in US politics, the Prime Minister broke new ground when he employed a former press gallery TV cameraman to his staff after the election, a move that frustrated television crews who found themselves forced to rely on footage provided by Mr Abbott’s press office.
It is not uncommon for the weekend television news to have only the Prime Minister’s weekly video message, recorded by his staff and distributed on a Sunday, to use in bulletins.
The videos were also distributed on social media, but it is often still photography that resonates best on the medium.

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Mistakes were made

16 April 2015

Failure of the deregulation package and the way ahead

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The failure of the government to carry the Senate on its proposed higher education reforms can be put down to the government’s arrogance and heavy-handedness and what would politely be called its disingenuousness. Parts of the package were not without considerable merit – for example, extending public subsidies to the students of non-university higher education providers is a long overdue fairness measure and extending them generally to sub-degree programs could considerably improve retention rates. But overall, the package was seen to be poorly conceived and fundamentally flawed – certainly in respect of total fee deregulation.

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AUSTRALIA - UNIVERSITY OF TECHNOLOGY SYDNEY PROTEST

Mistakes were made, not the least the mistake of poor judgement by the university sector peak organisations, which came across as unalloyed supporters of the deregulation package: education minister Christopher Pyne was able to trumpet that the package had the support of “40 out of 41 vice-chancellors”, the single dissentient seemingly being Stephen Parker of the University of Canberra. It was never quite that straightforward – Andrew Vann (V-C Charles Sturt University) was, initially at least, as stridently opposed as Parker. At the outset, immediately after the Budget, Universities Australia, for example, called for changes to the package and a careful working through of the detail; and quite a few vice-chancellors expressed concern.

By and large, however, it’s true enough that the key plank of the package – unfettered fee deregulation – had the broad support of the university sector. And at the end, the various university organisations were pleading with the Senate crossbenchers to pass the package.

Universities are many things, including advocates of the public interest. In this case, they seem to have lost sight of this traditional role and became advocates of their sectional interests. Sector leaders now readily admit that, whatever its initial flaws, the package as it ended up was clearly a dog’s breakfast. It would have provided a short term money fix, at great social cost and to the medium term detriment of the budget. It would have had to been soon revisited and the whole debate about “sustainability”, “fairness” and everything else would start all over again. Yet until the last gasp university leaders continued to broadly support it.

Universities are admittedly between a rock and a hard place. With declining public funding of higher education per student – the Abbott government’s proposed cuts merely continued a process initiated by the previous Labor government – the burden was always going to fall on students to replace lost public funding and provide a “sustainable” funding base for the future. And, more so than any previous government, the Abbott government has been bullying, hectoring and apparently vindictive, although in its next manifestation, it promises to be kinder and more inclusive. Yep.

So, what next?

Education minister Pyne has indicated that there will be some kind of “fix” in the forthcoming budget (12 May) and he will have a third attempt to get a “reform” package through the Senate. Goodness knows what that fix might but there would have to be something around moderating fee proposals to make the package palatable to the crossbenchers.

The Group of Eight appear steadfastly wedded to the modalities of the original package. In its “official response” to the second rejection of the package in March, it said:

For the past three years, the Go8 has consistently stated that the current funding model for Australian Universities is “broken”. It is for this reason that we have just as consistently supported the proposal for the deregulation of higher education fees as the only long term sustainable solution on offer. In the absence of another solution the Go8 continues to maintain that view.

Its concession to navigating such a package through the rocky shoals of the Senate is to propose not another root and branch review (“Higher education is already one of Australia’s most reviewed sectors.”) but “a de-politicised process” of review – what it is now calling a “pause” in the reform process. This would presumably enable calm and mature reflection on the subtlety and implications of various proposals now on offer to placate the market naysayers. However, the Go8 is not enamoured of such proposals. The supremely calm and subtle Glyn Davis (V-C Melbourne University) appeared to be stating the corporate view when he wrote recently that all these proposals rest on the same idea:

….deregulation will be acceptable only if constrained. Whether fees are limited by regulation or held down by complex, subtle mechanisms, universities apparently cannot be trusted with setting prices and must be controlled.

Quite so. The short answer to that would be that if you take the Queen’s shilling, you do the Queen’s bidding.

And, yes, many within the sector and the broader community believe just that: deregulation will be acceptable only if constrained.

One such mechanism proposed by higher education policy gurus Bruce Chapman and Dave Phillips is progressively “taxing” fee increases, so that, for every dollar that a university charges above a set fee threshold, it would lose a proportion of its total government subsidy. This would depend very much on where fee thresholds were set and the amount of subsidy that would be lost for exceeding each threshold. According to Chapman, the question as to whether or not universities should be constrained in their capacity to set fees is essentially an ethical one:

… if it is the case that fee revenues from price deregulation exceed considerably the costs of teaching, it is arguable that this is an improper use of a government instrument; basically put, it can be considered to be unfair. This then promotes a case for considering “excessive” fee increases in a space which economists label “negative externalities”, or, broadly speaking, as costs borne by us all, in this case because of the presence of an unreasonable/unfair use of policy power.

Chapman said that while it makes sense to allow different universities to charge different fees he strongly believed that unfettered fee deregulation is a recipe for disaster:

I’ve always thought it is unreasonable to give these quasi-private institutions because that’s what universities are if they have the power to charge whatever price they like the luxury of HECS, which would make considerable price rises inevitable.

Another alternative is to put a cap, pure and simple, on fees, sufficient to notionally allow some fee variation so-called “managed deregulation” (though experience here and overseas suggests any variation wouldn’t last long) . This is the position consistently argued by Janet Kristjanson, (V-C, Swinburne University of Technology) and latterly taken up by Peter Dawkins (V-C, Victoria University). She has suggested that, instead of totally deregulating fees in one go, the government could start slowly, with a new maximum cap, to reassure Australian students and their parents that fees wouldn’t reach the frightening levels some are predicting. A sensible upper limit on annual fees would take scary numbers like $100,000 off the table, keep potential fee rises within bounds the public may accept, and therefore make progress politically possible.

There’s also clearly the option to not deregulate fees in any material way whatever. A point implied by Stephen Parker is that while universities are obviously constrained by current funding arrangements, that doesn’t make them impecunious or anywhere near it. He says that if the public maintains its current level of contribution and universities work hard to bring down their cost base free up resources through careful planning of the system rather than letting market forces rip, the argument that the continuing sustainability of the sector without fee deregulation is nonsense.

In an indirect way this is supported by Andrew Norton (Director, Higher Education Program, Grattan Institute), who is an advocate of fee deregulation. In Norton’s assessment, even without fee deregulation, there are reforms in the package worth pursuing of themselves, particularly extending the public subsidy to both sub-degree programs and to students at non- university higher education providers. He says that “it would be a great shame if trying to achieve too much meant that we achieved nothing at all.”

He’s particularly concerned that the demand driven system might be dumped, as an alternative to fee deregulation and to contain the burgeoning growth in HECS (FEE-HELP) debt.

Which leads to the opposition. The Greens are implacably opposed to fees, let alone fee deregulation. Labor is not opposed to fees but is opposed to fee deregulation – and after losing office did a remarkable volte face on cuts to higher education which it had proposed when in government. Circumstances obviously change.

There’s serious concern that Labor’s solution might be to reintroduce caps on enrolment. As Conor King of the Innovative Research Universities puts it, Labor’s alternative to fee deregulation might be to dump its signature achievement in higher education while in government:

Labor is now at the point of walking away from one of the few unchallenged policies of the Rudd-Gillard Government and from the essence of the Hawke Government achievement in doubling school retention and expanding universities. It is the Gillard changes that have seen sustained growth in the number of science and technology students, and slowed growth in law students, despite his contrary assertion. Student demand is more attuned to employment potential and apparent future demand than the previous allocation system.

The X Factor in all this is Nick Xenophon – just one voice in the Senate , but undoubtedly the “first among equals” for the crucial cluster of independent senators who have decided the matter (senators Lambie, Muir, Madigan and Lazurus, in addition to Xenophon). He favours the “pause and reflection” period now championed by the Go8, he acknowledges that some degree of fee deregulation is necessary in the absence of additional public funding but he doesn’t support unfettered fee deregulation.

In the absence of further manic and bizarre behaviour by the education minister, that’s probably where it will end up: a “pause” as the options are weighed and, by the end of the year, some form of managed fee deregulation system.

After what transpired through the first two go’s at reform, that would be something of an achievement for the government.

Brendan Sheehan is the editor of The Scan and, among other things, a Senior Fellow of the LH Martin Institute.

The social costs of high university charges

15 April 2015

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Photo: Andrew Taylor
Photo: Andrew Taylor

This is an extract from Bruce Chapman’s submission to a Senate Committee inquiry into higher education fee deregulation (February 2015) in which he proposes a “progressive tax” on university funding as a means of constraining fees.  He suggest sthe question of what the “right” price to charge students for public sector university teaching services  “is not an argument that can be made easily with reference to economic theory or compelling evidence related to allocative efficiency. It is instead basically an ethical issue.”

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It needs to be asked: Does it matter that students/graduates might end up paying very high prices for higher education in Australia? Why should we be concerned about this possibility when it will still be the case that even with very high price rises, average lifetime graduate incomes will remain far greater than the incomes of non-graduates? This issue has exercised considerably my reaction to the fee deregulation debate since the Budget was brought down in May 2014. Some basic points are as follows.

There is no compelling and accurate answer to the question of how much students should contribute to the costs of running Australian public universities. Including my own research, all attempts to explain and measure the social benefits of university teaching are fraught with problems of inadequate data, less than convincing method and unclear conceptual interpretation.

But we do at least know that the private rates of return to higher education investments (the lifetime income advantages held by graduates) are high on average, implying strongly the case for a contribution to teaching costs from graduates. Indeed, this argument was fundamental to the reintroduction of fees in the form of HECS in 1989, and it remains powerful today.

However, I believe the question of what the “right” price to charge students for public sector university teaching services can be clarified with allusion to a principle concerning the role of government. It is not an argument that can be made easily with reference to economic theory or compelling evidence related to allocative efficiency. It is instead basically an ethical issue.

My view is that there is no clear economic justification for public sector universities to be allowed the use of a government instrument, HECS, to raise substantial revenue, in a situation in which this can lead to unjustifiably very high fees. An informed guess is that if Australian universities were to charge the sort of prices that I believe many of them could under the planned fee deregulation, the revenues received would in many cases far exceed the costs of teaching. While there is little doubt that in many cases these sorts of cross-subsidies already occur (particularly from the revenues received from international students), the issue for me concerns the extent to which this can be considered a “proper” use of the HECS instrument.

That is, if it is the case that fee revenues from price deregulation exceed considerably the costs of teaching, it is arguable that this is an improper use of a government instrument; basically put, it can be considered to be unfair. This then promotes a case for considering “excessive” fee increases in a space which economists label “negative externalities”, or, broadly speaking, as costs borne by us all, in this case because of the presence of an unreasonable/unfair use of policy power.

ACPET National Monday Update Edition 599, 13 April 2015

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In Focus

Private VET sector not broken

Australia has  fantastic private VET colleges delivering high quality support to students and great outcomes.

However, we also have a more negative side that the media is shining the spotlight on.

I must ask myself at times like these, is the VET sector actually broken, or does the private sector play a legitimate role?

Let’s go to the data:

  • Private tertiary education injects $5.8 billion per year to the national economy, employ almost 100,000 people and educate 1.4 million students.
  • 1670 of the 4500 private RTOs received government funding in 2013 and enrolled 28% of students.
  • In a sign quality does exist, private providers are the preferred choice for international students, attracting 109,700 overseas visa students studying onshore in 2013. As we often hear bad news reported out of Victoria, here is a fun fact – private VET providers have achieved an 85 per cent market share of international student enrolments in Victoria. Australian Education International Year to Date Data, (December 2014) reveals that Victorian TAFEs achieved 6,887 international student enrolments in 2014 compared to 37,452 enrolments in private institutions
  • VET completion rates are 35.8 percent, yet 87% of graduates and 84% of module completers satisfied
  • 77% of graduates were employed after undertaking training and 80% of those undertaking training for employment related reasons were employed after training
  • In the broader VET sector (government and full fee for service activities) private VET providers are consistently the most preferred supplier of nationally recognised training with 45 per cent of employers choosing them as their main provider.  By contrast only 17 per cent of employers used TAFE as their main provider of nationally recognised training.

So it would not appear to be broken…. Read more

National

This week in National professional development Edition 599, 13 Apr

This week in professional development, we have a range of webinars from Are you ready for audit? through to Good practice – Elements of a quality assessment system. Check out what’s in store for the week: Independent Validation of Assessment – Obligations and Ideas for RTOs Are you ready… Read more

Foundation Skills for RTOs: free professional development in 2015 Edition 599, 13 Apr

Do I really understand the ACSF and CSfW frameworks? How do I apply them in my role? How do I help others in my RTO to apply them? RTO staff come from a wide range of industry backgrounds with varying levels of foundation skills knowledge. The Foundation Skills Frameworks provide common tools… Read more

ACPET WA at CDAA National Conference Edition 599, 13 Apr

I was pleased to have the opportunity to present at the CDAA National Conference at the Pan Pacific Hotel in Perth last week – speaking on one of the more provocative topics on the conference agenda: Dubious Courses from Dodgy Providers: facts vs fiction. Careers practitioners from across Aus… Read more

More updates in your state

For News, PD and events by State and Territory visit Your State.

– See more at: http://www.acpet.edu.au/media/national-monday-update/#sthash.Vnz8P5g3.dpuf

ACPET National Monday Update 23 March 1015

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In Focus

The week that was… Edition 596, 23 Mar

The Higher Education reforms did not pass the Senate. Not a surprise, however it was certainly disappointing for the industry and students studying in non-University Higher Education Providers.

Because a new model for higher education funding is so necessary, more effort is required. It is time for us all to work together the find a solution to the current impasse that is creating uncertainty and risking the quality of Australia’s higher education system.

There are actually many areas of common ground. The reforms are too important to let wither on the vine.

The future of our sector and that of current and future students demands that we find a way…. Read more

National

Last chance – Preparing to lodge a successful application for a VET Training Award Edition 596, 23 Mar

Nominations for the VET Training Awards in your State or Territory have either already oepned or are opening very soon. The vocational education and training (VET) Awards celebrate quality, excellence and innovation in training. They acknowledge and reward both individuals and organisations that ex… Read more

Member webinars – Implementing the ACPET Code of Ethics & Code of Practice for engaging education agents Edition 596, 23 Mar

Last week ACPET launched its revised Code of Ethics and new Code of Practice for Engaging Education Agents and we have developed resources for members to use when conducting a self-assesssment in relation to these. To support members in familiarising themselves with the Codes and in using these res… Read more

This week in National professional development Edition 596, 23 Mar

This week in professional development, we have a range of webinars from RTO financial management through to meeting the standards: getting compliant with LLN. Check out what’s in store for the week: Independent Validation of Assessment – Obligations and Ideas for RTOs An introduction to t… Read more

Foundation Skills for RTOs: free professional development in 2015 Edition 596, 23 Mar

Do I really understand the ACSF and CSfW frameworks? How do I apply them in my role? How do I help others in my RTO to apply them? RTO staff come from a wide range of industry backgrounds with varying levels of foundation skills knowledge. The Foundation Skills Frameworks provide common tools… Read more

Register for AUSTRADE consultations in your city Edition 596, 23 Mar

Austrade invites education and training oprganisations in the international education sector, to develop Australian International Education (AIE) 2025, a long-term market development strategy for the next decade. AIE 2025 aims to maximise the sector’s contribution to Australia’s future… Read more

CISAmbassador Edition 596, 23 Mar

The Council of International Students Australia (CISA) is inviting expressions of interest from international students studying at ELICOS, TAFE/VET or private colleges, to be our CISAmbassadors at your institution. The Ambassador program will see many talented and inspiring international student le… Read more

ACPET member only professional development offer! Edition 596, 23 Mar

Exclusive for ACPET members, for the one-off price of $800 (exc GST), 10 of your staff may access all ACPET webinars from now until the end of June 2015, and also request recordings for those you have missed during the second half of 2014. Please contact Dylan Wolfgramm for further details of this… Read more

ACPET Office for SA & Tasmania on the move. Please change your records! Edition 596, 23 Mar

As from 1 April 2015, the ACPET Office for SA and Tasmania will be moving. Please change your records with the following details: Mailing Address: PO Box 361, MSC Torrens Park, SA 5062 Phone: M 0400 097 332 Email: sa@acpet.edu.au For enquiries please contact: Dr Joy de Leo ACPET Executive… Read more

More updates in your state

For News, PD and events by State and Territory visit Your State.

– See more at: http://www.acpet.edu.au/media/national-monday-update/#sthash.g92B8cpv.dpuf

How to break the higher education impasse

The Conversation   |    9 February  2015

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The fragile consensus within Universities Australia around support for the government’s fee deregulation package has begun to fracture (it was always chimerical), with Victoria University vice-chancellor Peter Dawkins proposing a “third way” between a high degree of regulation and unfettered regulation that combines managed deregulation with a stronger equity package and oversight. Canberra’s Stephen Parker has opposed the package from the get-go, with a number of other vice-chancellors having expressed reservations, including Swinburne vice-chancellor Linda Kristjanson (Swinburne), Jane den Hollander (Deakin) and most recently University of Technology, Sydney, vice-chancellor Attila Brungs. While the government early in the year indicated that passage of the deregulation package would be “front and centre” of its agenda with the resumption of Parliament, after the recent prime ministerial wobble, the government is likely to be more amenable to substantial amendments, including managed deregulation (essentially a fee cap), in order to demonstrate its new found commitment to caring and sharing. Certainly managed deregulation would seem to resonate with independent senator Nick Xenophon’s thinking (who one suspects will be pivotal to brokering some sort of settlement). The question will be what’s dumped from the package, which currently includes extension of subsidies to sub-degree courses and higher education courses at non-university providers.

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Fees pay-here

Higher education reform in Australia has entered a delicate phase. The current impasse must be broken, but any move to do so too quickly carries the risk of an outcome that serves neither students nor universities. Most feared in the sector is the worst of both worlds, a scenario of funding cuts without any fee increases.

The best outcome is not to move to unfettered deregulation, which without safeguards would seriously risk disadvantaging many students. Nor is it a return to a highly regulated system. Instead we should pursue a sensible “third way” that combines managed deregulation with a stronger equity package and oversight.

In a world of tight government budgets and an expanding tertiary sector, the case for higher contributions from students, supported by income-contingent loans, has been convincingly argued. What is important is that, in the process, students get an enhanced education and good returns on their investment.

Unfortunately the form of deregulation proposed in the government’s initial package carried very significant risks. These included:

  • over-pricing and excessive debts
  • greater opportunities for already high-achieving students and inferior opportunities for those who need more support
  • greater opportunities for students from high socioeconomic backgrounds and weaker opportunities for those from lower socioeconomic backgrounds
  • insufficient amounts of extra revenue going into improving teaching and learning and the student experience
  • some waste of public funds due to poor attention to effective transition to the new market system
  • higher education benefiting but vocational education being damaged.

Cross-benchers in the Senate, the opposition, Universities Australia, staff and student representatives have highlighted some of these problems. And these problems are magnified by proposed reductions in government funding.

As a result, the government has started to amend its package and move towards a “third way” that allows for some deregulation, but with more attention to market design and safeguards to ameliorate the above-mentioned risks.

For example, it has dropped a plan to charge higher interest on HECS debts. This restores the idea of Bruce Chapman and his fellow architects of HECS, that income-contingent loans provide some insurance against risk for those investing in their education.

The government has proposed an adjustment fund for institutions with higher proportions of less-well-off students, such as regional universities and the newer metropolitan universities. Its current size looks inadequate, but it is a step in the right direction.

For a revised package to have a chance of getting thought the Senate, it now seems necessary either to build a review process into the package or to establish an oversight body that can recommend further amendments once the system is in place.

Other ideas are in the mix. These include the possibility of fee caps, loan caps or a system whereby universities that increase their prices above a threshold pay a “compensating levy” on their government subsidy. For example, for each dollar charged above the threshold, the university might forgo, say, 30 cents of government subsidy. The revenue from such a scheme could be used to fund system-wide equity scholarships.

This approach would improve equity of access. Other elements could include abandoning cuts to the Higher Education Participation Program (HEPP), which aims to promote the tertiary participation of students from lower socioeconomic backgrounds. Another suggestion is to open up government subsidies to non-university higher education providers in stages. This would also make the transition to the new model smoother.

How and when might we be able to settle on the “third way”? Ideally, it would be sorted out in the next few weeks, despite the current hiatus in Canberra, to commence in 2016. This might be possible with careful consideration and intensive negotiation, as the key ideas, such as those outlined above, have been canvassed in the debate over the last nine months.

An alternative is to agree an interim solution for 2016, then move to the new model in 2017. Even in this case, we would need the model to be known within the next six months to create certainty for current and prospective students.

Without clear knowledge of the future funding regime, our ability to plan with confidence is weakened, and in that scenario everybody loses.

The Conversation

This article by Peter Dawkins (Victoria University) was originally published on The Conversation.

Newcastle quits IRU

The Australian     |      22 December 2014

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Newcastle University has quit the Innovative Research Universities (IRU) group saying it would rather advocate for its own particular interests in light of proposed government funding cuts and fee deregulation. Along with other university groupings and Universities Australia, the IRU has been a vocal advocate for proposed fee deregulation.

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Caroline McMillen, Newcastle’s vice-chancellor, said the university’s research intensiveness in a low socioeconmic region put pressures on her institution that were not necessarily mirrored by the IRU’s other member universities.

The combination of a 20% funding cut and restrictions on possible fee increases due to the socioeconomic make-up of the Newcastle region put particular pressures on Newcastle. The city has a $200 a week lower median wage than Sydney, she said.

Regional universities are a blind spot in the deregulation debate. We are research intensive but we are in a region with low educational attainment, low median wage and greater difficulty to (increase fees) when the commonwealth funding goes down quite so precipitously.

Asked if her position on deregulation was not consistent with the IRU’s, Professor McMillen said:

It’s not that it’s no longer consistent, it’s just different. I know that sounds like semantics, but if you are going to make a commitment to a group you really have to spend the time and energy on it. In the current climate, we felt that the time, energy and commitment was better spend on challenges that directly face our university.

John Dewar, IRU chairman, said that “the IRU will continue to advocate for the needs of universities providing a comprehensive mix of research and education where it is needed: outer metropolitan areas and major regional cities.”
In 2008, Macquarie University quit the IRU but it brought in Charles Darwin University as a new member in 2009.

 

See
Higher education changes a ‘fraud on the electorate’

MYEFO budget measures

ACPET    |     22 December 2014

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australian-dollar-3dThe Mid-year Economic and Fiscal Outlook (MYEFO), released on 15 December, updates the economic and fiscal outlook from the budget in May.  Following is a summary prepared by ACPET of savings and expenditure measures relevant to the education, employment and training sectors.

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The Support for Adult Apprentices payment has been wound up, with loans being offered through the Trade Support Loans scheme as a replacement measure, the new Australian Apprenticeships Support Services will have reduced funding, down $30million over 4 year as a result of “streamlining” activities, Trade Cadetships are losing pretty much all of their funding and TEQSA and HEP are being merged.  More details are below:

Industry Portfolio

  • Support for Adult Australian Apprenticeships — payments to apprentices — cessation

The Government will achieve savings of $66.1 million over three years from 2015 16 by ceasing payments to apprentices under Support for Adult Australian Apprenticeships (SAAA) from 1 July 2015. The SAAA is a component of the Australian Apprenticeships Incentives Programme and provides a wage subsidy payable directly to apprentices earning below the National Minimum Wage or to their employers if the wage is above the National Minimum Wage. The Government will continue to provide SAAA payments to employers.

Financial support to assist apprentices with the costs of undertaking an apprenticeship will be provided under the Trade Support Loans Programme announced in the 2014 15 Budget.

  • Australian Apprenticeships Support Services

The Government will provide $602.0 million over four years, $30.3 million less than previously announced.  These savings will be achieved over four years by streamlining activities under the new contracts

  • ASQA – reduced revenue

The Government has revised earnings by ASQA down by $55 million.

  • Skills for Education and Employment — reduction

The Government will achieve savings of $43.8 million over four years from 2014 15 by reducing the number of training places under the Skills for Education and Employment programme by 3,000 places in 2014 15, 2,700 in 2015 16, 2,010 in 2016 17 and 1,000 in 2017 18. The programme will continue to support over 110,000 places over the four years.

Education Portfolio

  • Higher Education Reform

The revisions announced by Minister Pyne to the Higher Education Reforms have been included, they result in revised net savings of $642.4 million over four years from 2014 15 by:

  • reinstating the Consumer Price Index as the annual indexation applied to Higher Education Loan Programme (HELP) debts;
  • pausing indexation on HELP debts for people who earn below the minimum HELP repayment threshold and have primary care of a child under five years of age;
  • amending the Commonwealth Grant Scheme subsidies for non university higher education providers and for sub bachelor courses delivered by universities;
  • funding an information campaign to better inform students and all Australians about the current higher education system, the funding available to students and to provide prospective students with information to help guide their decision making; and
  • establishing a scholarship fund within the Higher Education Participation Programme (HEPP) with a focus on allocating funding to universities with high proportions of students from low socio economic status backgrounds.

School Chaplaincy Programme

Savings of $240m over 4 years with savings achieved through efficiencies as a result of revised implementation arrangements.

  • National Trade Cadetships

The Government will achieve savings of $43.7 million over four years from 2014 15 by returning uncommitted funding for the National Trade Cadetships programme to the Budget. Funding of $2.8 million over two years will remain to meet existing commitments.

  • TEQSA – HEP Merger

The Tertiary Education Quality and Standards Agency Advisory Council with the Higher Education Standards Panel will be merged.

Employment Portfolio

  • Strengthening the Job Seeker Compliance Framework

The Government will achieve savings of $86.9 million over four years from 2014 15 by strengthening the job seeker compliance framework and making the financial consequences of non compliance more immediate.

This measure will be implemented in two stages:

  • From 1 January 2015, job seekers who fail to attend an appointment with their employment service provider without giving prior notice of a valid reason will have their payment suspended, from when they receive notice of failure to attend, and reinstated (with back pay) only when they attend a rescheduled appointment.
  • From 1 July 2015, job seekers who fail to attend an appointment with their employment service provider will have their payment suspended, as soon as they are notified of their non attendance, and will not receive back pay for the period between their failure to attend and their attendance at a rescheduled appointment.