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You are reading: Five issues for equity from the 2017-18 Australian budget

The National Centre for Student Equity in Higher Education (NCSEHE)

Given the constrained circumstances of Australian government finances, the 2017-18 Federal Budget was positive for equity in higher education, with some qualifications.

These budget announcements come in the wake of previous cuts to the Higher Education Participation and Partnership Program (HEPPP) in the previous budget — its measures, already largely flagged in The Higher Education Reform Package, do signal the future direction of government policy. There are five key issues for equity in higher education from the 2017-18 budget:

A tighter and more financially constrained environment demands a clearer focus for equity

The Commonwealth Government has been in budget deficit for almost a decade since the global financial crisis. In this context, all Commonwealth agency budgets are under pressure and need to justify expenditure.

In the 2017-18 Budget the Government is seeking to save $2.8 billion from higher education over the budget period — increasing course fees, getting students to repay their debts earlier, and instituting a 2.5 per cent ‘efficiency dividend’ on university funding in both 2018 and 2019.

It is not certain how universities will realise the efficiencies; it is possible equity issues might get caught in the crossfire even if they are not targeted directly. Individual institutions will take different approaches which is why equity providers need to speak with one voice at a national level to ensure the importance of equity-related activities in universities is recognised. In financially constrained times, there’s a need to better communicate the case for equity in higher education, through an evidence based approach that illustrates efficiency in public spending and the effectiveness of programs through positive outcomes.

There is an increasing commitment to equity by government — accompanied by a greater and growing focus on efficiency, effectiveness and educational outcomes

In the 2017-18 Budget the Government is moving to provide greater certainty on HEPPP funding; a commitment to funding to promote a sustainable policy of support for equity; and a push for more evidence that public expenditure is efficient and effective.

From 1 January 2018 the government will reform HEPPP into two components: the Access and Participation Fund and the existing National Priorities Pool. The current Participation and Partnership components of HEPPP will be combined to form the Access and Participation Fund, with universities required to allocate a minimum amount of funding to partnerships activities.

Funding from the Access and Participation Fund will be provided in two streams. A legislated loading of $985 (indexed) per low socio economic status (SES) student will be introduced to provide funding that is certain, calibrated to institutional need, and able to help facilitate longer term planning and projects.  A second stream will see performance funding of $13.3 million per year indexed (around 10 per cent of HEPPP funding) for universities that improve their average success rates for low SES and Indigenous students.

The National Priorities Pool will be retained with an allocation of $9.5 million per year, to be indexed annually, and will have a greater focus on rigorous evaluative research and the promotion of collaboration between universities in their outreach activities.

From January 2018, the demand driven funding system will be extended to sub-bachelor and associate degree courses. This measure recognises that short flexible courses can meet many workforce demands and it will allow industry input into curriculum design. In a complementary measure, funding will be provided for work experience in industry units that are credited towards a Commonwealth supported qualification. Both these initiatives will be of particular benefit to equity students, both in terms of their transition into bachelor streams and in increased access to work integration activities. We should not forget the importance of further discussion of the role of enabling and foundation programs in preparing students, particularly those from low SES backgrounds, adequately for higher education study.

The growing focus on efficiency, effectiveness and outcomes will impact on all people engaged in education. The message for the equity sector is the need to collectively work to close the gap between equity policy, research and practice. In future, the evaluation of policies and programs will become more prevalent and set directions.

The cost of university education will be felt more keenly by students

Under measures outlined in The Higher Education Reform Package Students’ share of contribution to fees will increase from 42 to 46 per cent of total course costs, with the average share paid by government falling commensurately from 58 to 54 per cent. The increase in student shares will be phased in through a 1.8 per cent increase each year between 2018 and 2021. On this basis, there will be an increase in fees ranging from $2,000 to $3,600 for a four-year course.

Students will also get hit by paying course costs earlier. From 1 July 2018 students will have to start paying back HELP loans when their income reaches $42,000 a year instead of the current level of just under $55,000 per year.

In the context of outstanding student debt tripling since 2009 to over $52 billion (with a quarter of that not expected to be repaid at all on previous settings), average costs per student rising by an average of 9.5 per cent per year between 2010 and 2015, and funding to universities growing by an annual average of 15 per cent over the same period, the Government has stated the need to make these adjustments to ensure that higher education is financially sustainable.

The concern with these changes is that the combination of rising course fees with earlier and higher paybacks may discourage some students, especially equity students, from choosing to go to university. The Higher Education Reform Package document clearly spells out how graduates are better off than non-graduates (being employed and earning more), there is a need for an increased focus on student finances and graduate outcomes among equity students to ensure the recent gains in equity are extended into the future.

Collaboration and research will become more important and contribute to a more seamless education system

This budget and The Higher Education Reform Package indicate that government is looking for a greater evidence-based approach to public expenditure in higher education, including spending on equity programs, with an emphasis on greater transparency in, and design and delivery of, policies and programs in the future. This will lead to ‘cooperative competition’ between universities as funding will reward collaboration and evidence collection and analysis in determining which programs are effective. This pressure to develop better programs and policies that are evidence-based will lead to a demand for more evidence-based research.

The 2017-18 Budget has commenced this process by linking future funding with outcomes. The new focus on the National Priorities Pool is one example, where there will be a greater focus on rigorous evaluative research and collaboration between universities.

There is still a need for a national narrative on equity as a good investment

While the importance of equity policy in higher education has been recognised in the 2017-18 Budget, there is still a need for conversations on the development of a national narrative for equity in higher education.

Discussion about ‘good debt’ versus ‘bad debt’ was promoted before the budget. ‘Good debt’ is borrowing to finance public investment in infrastructure in physical assets that increase productivity and growth. ‘Bad debt’ is that which funds everyday current expenditure. Equity policy requires universities to meet the challenge of recasting it as an ‘investment’ on behalf of society and one with an economic return.

If the nation is to continue to use terms such as ‘Knowledge Economy’ or ‘Innovation Economy’, it is important to recognise the critical need for investment in the equitable distribution of educational opportunity. Moreover, we have a good story to tell. Investing in equity is an investment in the future. It’s transformational for individuals, its impacts flow on to wider families and communities — and a high-skilled society across the spectrum will be an essential feature of any knowledge economy. It’s a case we still need to promote, through the development of a more cohesive and widely understood national narrative on equity.

With consideration of the forthcoming release of the HEPPP review report, and subsequent meeting of key equity group representatives, the NCSEHE will continue in an advocacy role, working with stakeholders to promote the positive impact of HEPPP initiatives through case study publications informing policy and practice through research.

The Australian Government’s Higher Education Reform Package Overview

Reforms to the HEPPP under the Government’s Higher Education Reform Package. Robert Latta. Branch Manager, Governance, Quality and Access Branch. Higher Education Group. Australian Government Department of Education and Training.