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Budget 2007: Greater flexibility for universities.

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Greater flexibility for universities

8 May 2007 BUDB 04/07

The Australian Government is helping Australian universities respond to student demand and employer needs by giving them greater flexibility in their course mixes and student numbers.

The new arrangements, announced in the 2007-08 Budget and costing $211 million over four years, will relax the caps on Commonwealth supported places and domestic full fee paying undergraduate student places.

The Minister for Education, Science and Training, the Hon Julie Bishop MP, said the initiative would lead to a more demand-driven university system.

"With unmet demand for a place at Australian universities at historically low levels, the Government can now ensure students who are able to complete a course will generally not be prevented from going to university by caps on places. Further, universities should be allowed to offer students the mix of courses they want," Minister Bishop said.

"Relaxing the caps on university places will allow universities greater flexibility to change their course mix and student numbers. The reforms will support greater diversity and specialisation in the sector and will encourage the emergence of more world class institutions."

For Commonwealth supported places, universities will be provided with full additional funding for over-enrolments of up to 5%, up from the current discretionary allowance of 1%. There will be no penalties for over-enrolments

above 5% and universities will receive the full amount of student contribution from all students they enrol. The current arrangements which guarantee that there will be no Commonwealth Grant Scheme (CGS) funding penalties for universities which under-enrol by up to 1% will be continued. Funding will automatically reduce for unfilled places beyond the first one per cent. However, a new minimum funding guarantee will mean that there will be no CGS funding reductions for under-enrolments beyond five per cent.

Masters by Coursework qualifications may also be funded under the CGS where it is an entry requirement to a profession or part of a restructure of existing course requirements.

The Government will also remove all caps on the proportion of domestic full fee paying undergraduate places across all disciplines. Universities, however, will still

be required to offer their Commonwealth funded places before offering full-fee places.

The Australian Government will continue to require universities to deliver specified Commonwealth supported places, such as nursing, teaching and medicine.

From 2009, CGS agreements will move to a three-year basis. Institutions that finalise a three-year agreement during 2007 will be able to take advantage of this arrangement from 2008.

"The new three-year terms replace the current one year terms and give Australian universities better scope to plan for the future and also cut down on administrative costs. The agreements will reflect improved requirements for governance, financial accountability, quality and data reporting," Minister Bishop said.

Media Contacts

Minister Bishop?s Office: Tory Vidler 0414 228 727

Dept of Education, Science & Training: Virginia Cook 0412 971 323

Non-media queries: 1300 363 079

Supporting Information

Why is this important?

• This funding will allow universities to adjust their student numbers and course mixes to meet student demand and employer needs.

Who will benefit?

• Higher education providers and students will gain from greater flexibility, increased funding and more university places. o Universities will not be obliged to take advantage of the greater flexibility to offer full-fee paying places.

o Where a university does choose to offer additional full-fee paying places, it will have to have already offered its Commonwealth-funded places. In addition, in courses such as medicine, allied health and nursing, they will need to ensure that they can deliver the required practical elements of the qualification, such as clinical placements for medicine courses. • Prospective students will not have their choices of course and institution

constrained by rigid control of student places or by the lack of flexibility in relation to full-fee paying places. o The additional flexibility to be introduced in the tolerance bands will give universities the capacity to respond to student demand.

o In a small number of nationally significant courses, the Commonwealth will continue to require institutions to provide Commonwealth funded places. These include nursing, teaching, medicine and specific commitments, such as in engineering. This will ensure that in these disciplines there is a guaranteed number of publicly-funded places, regardless of the number of full-fee paying places offered by institutions. For example, the additional 400 new medical school places and 1,000 new higher education nursing places announced by the Commonwealth on 8 April 2006 will be protected.

• All Australians will benefit from an increased national skills base.

What funding is the Government committing to the initiative?

• $211 million over four years, in addition to the $15.5 billion of Commonwealth Grant Scheme funding. • The funding is part of the $1.7 billion additional Higher Education spending in the 2007-08 Budget package, Realising Our Potential.

What have we done in the past?

• In previous years, Commonwealth Grant Scheme funding agreements have run for only one year. • There was a 1% over-enrolment tolerance level instead of the new 5% level. • Universities could be penalised for any Commonwealth supported place

enrolments over 5% of their allocation. • The Australian Government is providing an additional 50,000 Commonwealth-supported places from 2004-2011, through the Backing Australia?s Future programme and subsequent announcements. • The number of domestic fee paying places was restricted to 35% of

Commonwealth funded places in all courses of study except Medicine, where the cap was 25%.

When will the initiative conclude?

• This is an ongoing initiative.