The Higher Education Support Amendment (2010 Budget Measures) Bill 2010 amends the Higher Education Support Act 2003 to revise the maximum funding amounts to provide additional funding for the transition to the student centred funding system for higher education student places, adjustments for indexation and changes to reflect 2010-11 Budget decisions.

The Bill provides additional funding for the implementation of the student centred funding system for higher education. The Government adopted the new system in response to the recommendations of the Bradley Review of Australian Higher Education.

Under the student centred funding system the Government will fund a Commonwealth supported place for every eligible undergraduate student accepted into an eligible course at a public university. There is a transitional period in 2010 and 2011 during which the cap on over enrolment for Commonwealth supported places will be lifted from 5 per cent to 10 per cent in funding terms.

In the 2009-10 Budget the Government provided an estimated additional $491 million over four years to fund 80,000 Commonwealth supported places.

Universities have responded quickly to the new arrangements and it is now estimated that there will be an additional 115,000 Commonwealth supported places over the period 2010 to 2013. In the 2010-11 Budget, the Government provided $986 million over four years for additional Commonwealth supported places, and for over enrolments in 2009.

This growth puts Australia in a good position to meet the Government’s higher education attainment ambition that, by 2025, 40 per cent of all 25 to 34 years olds will hold a qualification at bachelor level or above.

This Bill increases the maximum amounts for the Commonwealth Grant Scheme in section 30-5 of the Higher Education Support Act for the calendar years 2010 and 2011 to reflect the additional funding for over enrolments in these two years. 

The Higher Education Support Act no longer has maximum amounts for the Commonwealth Grant Scheme from 2012 onwards as there will be no overall limit on the number of students that Table A higher education providers will be able to enrol. This means the Bill does not provide an update for the additional funding for Commonwealth supported places in the years 2012 and onwards.

The Bill also increases the maximum amounts for section 30-5, section 41-45 and section 46-40 of the Higher Education Support Act for actual indexation. The indexation of higher education grants in this update is still based on the old index for higher education grants which uses the Safety Net Adjustment for 75 per cent of the index.

This will soon change following the introduction of the new index for higher education grants from 2012. From 2012, the Labour Price Index, discounted by 10 per cent, replaces the Safety Net Adjustment component of the Higher Education Grant Index. In 2011, student contributions are indexed at the new rate and the Government will provide facilitation funding of $94 million which is the same value as increased indexation in 2011. These changes to higher education indexation will deliver an estimated $2.6 billion in extra revenue to higher education providers over the period 2011 to 2015, from Government and students.

The Bill changes the maximum amounts in section 41-45 of the Higher Education Support Act for reductions in funding of $18.4 million from the Australian Learning and Teaching Council program and $2.4 million from the Graduate Skills Assessment program across the years of  2010-11 to 2013-14.

The reduction in funding for the Australian Teaching and Learning Council is due to the high level of funding being devoted to the establishment of the Tertiary Education Quality and Standards Agency and the fact that some of this funding will be allocated to the Australian Teaching and Learning Council for its academic standards work.

The Government has provided funding for the Graduate Skills Assessment for 10 years. Participation in the Graduate Skills Assessment is entirely voluntary and students were required to make a co-payment. There has been diminishing interest from the students over time and the Bill reduces maximum funding under section 41-45 of the Higher Education Support Act to reflect this.

The Bill also provides the maximum amounts for the 2014 calendar year for section 41-45 and section 46-40.

This Bill reflects the Government’s continued commitment to an unprecedented investment in our universities through the full funding of the student centred funding system. This commitment will deliver a growing and sustainable higher education system.