Australia: Budget cut means up to almost 10,000 fewer places for students

17 Jan 2018

Australia’s decision to freeze commonwealth grants funding to universities for two years is likely to force universities to offer fewer places to potential students to cope.

Other means could include cutting funding for programmes to attract students from regional and remote areas as well, The Guardian reported.

Universities Australia chief executive Belinda Robinson said her group’s modelling showed the funding changes which will leave 9,500 student places unfunded were “unsustainable”:

“Universities will be moving resources around, they’ll be looking at other programmes they can perhaps close down, campuses they can close … anything they can do to hold on for 12 months,” Robinson said, as quoted by ABC. “There will be adverse consequences.”

“In the end, short-term Band-Aids won’t be able to stem the bleeding. As government funding recedes, universities will also be under pressure to enrol fewer students in expensive but crucial courses such as nursing, IT, science and engineering,” Robinson said.

“The cuts were announced on December 18 and took effect from January 1,” she said. “Many universities had already made detailed plans by that time on how many places they would offer in 2018.” https://t.co/QhRTipqCSH

— D'Arcy (@mindful_human) January 17, 2018

The relationship between the government and universities have been hostile ever since Canberra announced its biggest reform package this May, which will cut AUD2.8 billion in federal funding from the sector. This was later stalled in the Senate.

However, last November Education Minister Simon Birmingham had hinted that the government was looking into non-legislative measures to make those cuts without needing parliamentary approval.

That came in the form of a two-year freeze in commonwealth grants funding for teaching and learning, unveiled mid-December in the midyear economic and fiscal outlook, according to The Guardian. This means the Australian government will cap the amount it contributes for each student at 2017 levels in the next two years.

Established universities would have to depend more on international students and the higher fees they pay to make up for the cut in funds, global ratings agency Moody’s had warned last week. It’s a move that will lead to “increased volatility”.

Federal Government university budget cut leaves 10,000 places unfunded, Universities Australia says #auspol #education https://t.co/BhHJausHMQ pic.twitter.com/Hy3uQaRIGC

— ABC News (@abcnews) January 16, 2018

“Managing international student load growth will fundamentally change the underlying credit profiles across Australia’s higher education sector,” it said.

“Whilst a structural shift toward higher international student loads will boost operating margins, experience has shown that international student enrolments introduce more volatility.”

Whereas less established institutions and those with “high growth rates” will be the ones “most affected” thanks to their “limited access to diversify revenue sources and have limited capacity to raise additional funds through donations” and less capacity to recruit international students.