First, a little bit of background.
University funding is a complex system, although currently it’s largely funded through government grants for research and teaching, as well as through student fees supported in part by a government-backed loan scheme.
Commonwealth Supported Places
Teaching grants are allocated to universities through the Commonwealth Grant Scheme, that allocates funds on the basis of the number of full-time equivalent domestic students in Commonwealth Supported Places (CSPs).
For each CSP, a university receives a Commonwealth contribution, and the amount contributed depends on the field of education.
Until 2017, funding was allocated on a demand-based system, which allowed universities to enrol students and then receive funding based on student requirements. However, in December 2017 the federal Coalition government capped funding for bachelor-level places and allocated CSPs to universities on a performance basis.
The Liberal-National Party’s (LNP) significant changes to university funding in 2020, with the Job-Ready Graduates Package, meant that the government increased student contribution amounts towards certain degrees (like law and communications) and decreased it for others (like STEM and nursing), in an attempt to entice students into studying areas of “national priority”.
Once at university, the Higher Education Loan Program (HELP) is available for students in CSPs, so that they do not need to pay any university fees upfront. Students only begin to repay the loan when they start to earn more than a ”repayment threshold” (currently $47,014 and above). These payments are a percentage of their annual earnings that increases as their income does.
The funding for Australian university research and development comes from a variety of sources, including from the federal government. This is mainly done through the National Competitive Grants Program (NCGP) and research block grants.
Block grants are delivered through the Research Training Program and the Research Support Program to help fund the underlying systemic costs of research – like researcher salaries, support for PhD students, and the ongoing costs of laboratories and libraries.
The Coalition’s university funding strategy
Within the current Job-Ready Graduates Package the Coalition has committed to 100,000 extra CSPs over the coming decade. And, in February 2022, it announced a plan to invest $2.2 billion over a 10-year University Research Commercialisation Action Plan, to help research commercialisation and collaboration between universities and industry.
This includes $362 million over five years for the Trailblazer Universities Program to boost research and development and drive commercialisation, $1.6 billion over 10 years for a new competitive funding program, Australia’s Economic Accelerator, and $296 million for 1800 new industry PhDs and 800 new industry fellowships.
The Labor Party’s university funding strategy
The federal Labor Party announced in December 2021 that it plans to invest an additional $481.5 million to deliver up to 20,000 extra university CSPs over 2022 and 2023 under its Future Made in Australia Skills Plan. Places will be prioritised for universities offering more opportunities for under-represented students, such as students in regional, remote, and outer-suburban areas, those who are the first in their family to study at university, and First Nations students.
The ALP also made clear its support to legislate the Australian Economic Accelerator as part of the University Research Commercialisation Action Plan.
Labor has also announced plans to establish an Australian Universities Accord to drive higher education sector reform, and have committed to not blocking funding for research grants recommended by the ARC.
The Greens’ university funding strategy
The Greens want to invest extensively in Australian students’ tertiary education and universities, including; reversing the Job-Ready Graduates Package, abolishing all outstanding student debt, reintroducing free university education, and further increasing university funding per CSP student by 10%.
The Greens have pledged to increase investment in research by boosting university block grant funding by $5.5 billion, would invest an additional $70 million per year in the ARC’s Future Fellowships scheme to support mid-career researchers, and $50 million per year to establish a Secure Work for Researchers fund to help universities and research institutes transition their workers to secure employment.
The Greens are also committed to investing an additional $1.3 billion in key research bodies such as the CSIRO, ARC, and NHMRC, invest $1 billion per year to establish a research translation fund to turn research ideas into applications, and provide $50 million per year to improve diversity in science, research, and development by funding programs that support First Nations peoples, women and LGBTIQA+ people in science.