Home World Business Budget 2017: Good and bad in Turnbull government’s measured university changes

Budget 2017: Good and bad in Turnbull government’s measured university changes

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The economics of higher education can be complex for those outside the sector, but the Coalition’s notorious 2014 budget made the politics very simple. And ugly.

There’s no other word for it. That budget was a stinker – an adolescent rush of right-wing hubris featuring full fee deregulation, a massive 20 per cent cut in federal funding, and higher student loans.

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University funding to be cut

The Federal budget is expected to include savage cuts to university funding with student fees to rise and graduates required to pay their loans back quicker.

It invited a fierce backlash cementing a downward trend that eventually rendered Tony Abbott’s leadership untenable and ended Joe Hockey’s parliamentary career. 

Labor railed against deregulation, $100,000 degrees, and the wholesale “Americanisation” of Australia’s proudly accessible university system.

Prime Minister Malcolm Turnbull and Education Minister Simon Birmingham. Prime Minister Malcolm Turnbull and Education Minister Simon Birmingham.  Photo: Andrew Meares

Any assessment of where the Turnbull government lands on higher education will inevitably be viewed through this acrid political haze.

Where Abbott and Hockey and then education minister Christopher Pyne were crazy-brave, Turnbull’s more adroit Education Minister Simon Birmingham – funnily enough an acolyte of Pyne’s – has been the paragon of consultation. Where they were deaf to students, parents, and the institutions themselves, he has tried to be deft.

Has that worked? Yes. And no. It started well when the notion of full fee deregulation was parked, and Birmingham has since been good to his word, abandoning that deregulation and scotching the blunt instrument of a 20 per cent funding cut.

And he has managed the politics better, assuring students that they will not pay a cent more up-front for their courses. 

Then education minister Christopher Pyne with the then prime minister Tony Abbott. Then education minister Christopher Pyne with the then prime minister Tony Abbott. Photo: Alex Ellinghausen

There are also initiatives designed to give regional students better access and more relevant degree and sub-degree options, and there are safety mechanisms for economically disadvantaged students.

So far so good.

But the government remains committed to containing costs – especially in the HELP student loans scheme which has tripled since 2009, reaching $52 billion in outstanding loans.

And while students will not be asked to pay new up-front costs, they will be asked to pay more for their own education. Up to $3600 more in fact, with their burden rising from 42 per cent to 46 per cent, allowing the Commonwealth’s contribution to drop to 54 per cent.

Other details are problematic, such as lowering the loan repayment threshold from $55,000 in annual income to $42,000. How that sits with rumoured measures to aid young people saving for a house will be interesting.

As comparatively measured as these changes are, the febrile nature of the university funding debate mixed with the Coalition’s own history, guarantees that Labor will campaign hard against these changes.

Another Senate stalemate looms.

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