24 April 2017


University funding is complex. As a result, the sector’s true financial position is not always well understood in public discussion. 

This paper examines some common claims and misunderstandings about university funding, and provides more complete and accurate data on the true financial position of Australia’s universities. 

It also confirms that Australia’s universities and students have contributed significantly in recent years – under governments of both political persuasions – to help rein in the Budget deficit.   

Our analysis of the net effect of 89 Budget decisions in higher education and research finds that universities and their students have contributed $3.9 billion to Budget repair since 2011/12. 

Universities and students have already contributed to Budget repair 

Students and universities have contributed around $3.9 billion in net savings between 2011–12 and 2016–17.   

Major cuts already made include (but are not limited to):

• Changes to Student Start-up Scholarship ($1.41 billion)

• Cuts to the Sustainable Research Excellence (SRE) scheme ($648.8 million)

• Removing performance funding for universities ($698.5 million)

• Abolishing the Capital Development Pool ($298 million)

• Cuts to the Higher Education Participation and Partnerships Program ($90.7 million)

The Government has also announced it intends to re-purpose a further $3.7 billion earmarked for university infrastructure in the Education Investment Fund. This has not been included in the savings total in this paper.

(Source: Australian Government, Budget Paper No.2, various years, not including over the forward estimates)

For students already under financial pressure – an issue that Universities Australia will examine in our Student Finances Survey this year – an increase in their debt burden would further exacerbate their financial stress. 

Further cuts to universities would compromise their ability to skill and reskill millions of Australians through their working lives and to deliver the world-leading research we need to create new industries and achieve breakthroughs that improve lives and contribute to our economic strength.

Further cuts in public investment would also put at risk international education—Australia’s third largest export industry—which now contributes a record $22.4 billion to the Australian economy.
Australia’s public universities do not have excessive surpluses to cushion further cuts. 

As not-for-profit organisations, public universities reinvest surplus funds into higher education and research, including capital development. The published surpluses from universities (in compliance with accounting and reporting standards) include funds already committed in subsequent financial years. This is non-discretionary income that comes onto a university’s balance sheet in one financial year but is spent over several years – including on multi-year research and major infrastructure projects. 

Universities and their students have contributed more than their fair share ($3.9 billion over six years) to the task of Budget repair. On that basis, any further proposed cuts are difficult to justify.

For the full report click here (PDF 574.2KB)