In particular, we would like to address comments about university financing made by witnesses at public hearings which the Committee conducted on the Bill on 24 and 25 July 2017.
BASE FUNDING PER PLACE
The Department’s projections of base funding per place over forward estimates – assuming the Bill is passed – emphasise that base funding will be higher in both nominal and real terms over the out years than levels observed in 2009.
The statement misses the point. The Government’s package is primarily a Budget saving measure. It is explicitly and deliberately designed to reduce resourcing per place below current levels. In particular, the Government is proposing to reduce public funding for universities below current levels, which are already the second lowest of all countries in the OECD.
Central to the Government’s package is a significant cut to the Commonwealth Grant Scheme (CGS). By 2021, CGS spending per place will be 10.3 per cent lower in real terms than it is today. Over forward estimates, the Government will cut around $1.9 billion in cash terms – the biggest share of a total of $2.8 billion in cuts to higher education.
The Government’s figures include the proposed increase of 7.5 per cent in student contributions. Even including this fee increase, total resourcing per place will be lower than current levels. This is the effect of the so called ‘efficiency dividend’, which will take $1 billion out of the sector over forward estimates. As a result of the efficiency dividend, the net impact of the proposed changes on resourcing per place will be a permanent reduction by nearly five per cent from 2019 onwards.
If the legislation is passed, we estimate that base funding per student place would drop from around $19,650 in 2017 to $19,370 in 2018, and around $19,100 in 2019 and beyond. This would be a real cut to funding per place over the next four years.