GRADUATE CONTRIBUTIONS AND THE IMPACTS OF THE FUNDING FREEZE

May 2018

 

In December 2017, the Australian Government announced measures in Mid-Year Economic and Fiscal Outlook to freeze per-student funding to universities at 2017 levels. This would reduce funding to Australian universities by $2.1 billion over the forward estimates.

Analysis by Universities Australia estimates that, even without any growth in commencements, the effect of the freeze will mean thousands of student places will receive no Government funding from 2018 onwards. UA estimates the number of unfunded places will be around 10,000 in 2018, rising to 19,500 in 2019 and 23,000 in 2020.

Against this backdrop, Cadence Economics has been commissioned by UA to investigate the potential impact on both the economy and taxation revenue if fewer university graduates enter the workforce as a result of the funding freeze. Our assessment relies on data from the 2017-18 Budget and MYEFO documents combined with the 2016 Census, and application of Cadence Economics’ in-house Computable General Equilibrium model.

Our analysis models the impact on GDP and tax revenue from the reduction in the productivity of the workforce due to fewer workers having degrees. We do not model the impacts of lower degree attainment on the proportion of people that participate in the labour force.

 

Read the full report here (PDF 131.2KB).