In preelection budgets, governments usually throw money at constituents. The “fraught and fragile global conditions” Treasurer Jim Chalmers signposted in his budget speech highlight a dilemma for the Labor government. Chalmers has to simultaneously provide cost of living relief that people desperately need while not putting enough upward pressure on inflation to trigger further rate rises.
Further, the government has succumbed to a narrative they call, “responsible budget management”, which is delivery of a $9.3 billion surplus but also restraint on government spending. For a Treasurer who labels himself as a reformer, this is an uncomfortable place to be.
In contrast to the conservative rhetoric of the government, the University Accord Final report laid out a bold vision for higher education in Australia which demanded billions in investments to expand tertiary attainment to 80% by 2050. Achieving the target would add an estimated $240 billion to the economy but requires the government to prioritise the tertiary sector to an extent not found in this budget.
The budget does align universities more with the vision of equity laid out in the report with a total of $1.1 billion invested in the sector but misses some easy political victories and the wide nature of the reforms make a lot of the promises underdeveloped.
29 of the 47 University Accord Recommendations are addressed in the budget.
Changes to HECS indexation and the introduction of paid placements are the government’s main pitch to younger voters. Indexing debt using the lowest of wage growth or consumer price index will provide $1,200 of relief to the average borrower and stop the absurd increase 7.1% students suffered last year.
Even if the government did not freeze indexation entirely like the Greens and National Union of Students (NUS) suggested, the government missed other simple reforms. The Accord report recommended an expansion of debt forgiveness and reforming the repayment threshold for lower income borrowers. This budgetary absence especially strange given that debt forgiveness could be targeted for courses like teaching, nursing, and construction where there are the greatest skill shortages. A future made in Australia is based on incentivising students to undertake these degrees.
While the government is investing $27.7 million in streamlining vocational and tertiary education and creating a Managed Growth Funding System for Commonwealth Supported Places that includes equity funding for academic support, targeting student debt more comprehensively seems like an easy way to incentivise more enrolments.
Shockingly, there is no indication in the budget that the Morrison-era Jobs Ready Graduates program is being scrapped. The policy has increased the cost of Arts, Humanities and Law degrees in comparison to STEM courses. Even though the policy has only caused 1.5% of students to change their degrees and would represent a political victory for the Labor government, the government’s cautious approach has caused this Accord recommendation to slip through the cracks.
The extent of the paid placements package has also come under fire from the Greens and student organisations. The $319.50 weekly payment only applies to teaching, nursing, social work and midwifery students and equates to about $8 an hour. Students studying veterinary science, psychology, pharmacy, and physiotherapy will miss out entirely. The governments rationale is that these sectors don’t suffer acute workforce shortages.
The government has promised that this payment would be given on top of other welfare students receive but the payment being ‘means tested’ has casted doubt on how many students will be able to access the payment. Honi understands similar criteria to other income support payments will be used and the student will have to have been working at least 15 hours a week prior to starting their placement to qualify—a high bar for full time students and one not recommended by universities for students undertaking full time study.
To alleviate documentation burdens on students, the governments intention is for universities to administer the payment as opposed to Services Australia.
Placement poverty is unlikely to end, and income support payments have still not reached the Henderson poverty line of $88 a day. Unless placements are paid at least minimum wage, as the NUS has called for, students are still not being paid for the essential work they are doing and may continue deferring or leaving their courses.
The largest measure to boost university attainment is a $350 million investment in so-called fee-free university prep courses which allow students who do not initially meet the requirements for a degree to transition into higher education. These courses are currently taken by 25,000 students and the government expects that to double by 2040. An additional $500 million has been invested in areas like clean energy, construction, manufacturing, and increasing gender parity at university.
In order to make it easier for disadvantaged students to attend university, the government is also rolling out support measures including funding to make campus infrastructure more accessible and create targeted academic tutoring programs for students falling behind. The government clear understands how important solving skills shortages is—these measures will support many students complete their degrees.
Outside of cost-of-living support, the largest change to tertiary education not announced before the budget is a mandate that 40% of SSAF funding is directed to student-led organisations including unions, associations, and guilds. This will impact universities differently with some including the University of Sydney already allocating a larger percentage to student organisations.
The Accord report did not make any specific recommendations about SSAF funding and, as some student organisations have pointed out, the more important question is which student-led initiative the funding goes to. Unions tend to be more focused on student services and societies and council spend more money on activism.
The recent rise of Gaza Solidarity encampments across Australia has also caused a crucial shift in how the government is implementing some Accord recommendations. The Accord argued an inquiry focused on racism experienced by First Nations students was required to ensure a culturally-safe environment.
The government has pledged $1 million for a racism enquiry but the focus has shifted to antisemitism and Islamophobia, reflecting the pressure the government in on from the opposition and media to crack down on the encampments. Honi understands that First Nations students will still be a priority of the enquiry, but the scope has expanded due to recent events.
While the government claims this is the “first stage of a multi-year reform agenda” based on the Accord, much more will need to be done to achieve the equity Chalmers promises in his speech. The proportion of low socio-economic students at university has dropped post-COVID. It remains to be see if this budget will reverse that trend.
Disclaimer: Angus McGregor is currently a member of the Australian Labor Party
