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Could university fee deregulation be blocked, but cuts to higher education passed?

Education Minister Christopher Pyne has hinted there could be a situation where cuts to higher education are passed, but fee deregulation is not, meaning universities are left in the lurch. AAP

Start the way you intend to finish. It is good advice, and few would accuse Education Minister Christopher Pyne of not indicating what he wants the policy settings for higher education to look like in the future. Yet the government’s package of changes and cuts is bold to say the least, and has strong detractors. You have to go a long way before you find people who will voice support for cuts to higher education of the magnitude proposed.

Leader of the Opposition Bill Shorten and ALP Shadow Education Minister Kim Carr have come out in the last few days with their clearest indication yet they are not for turning on the issue of higher education policy. Clive Palmer and the PUP senators have also been more forthright in their opposition. It seems likely that they will reject the government’s first attempt to get the legislation through the Senate.

The virtue or otherwise of the package aside, Pyne is seemingly left with a commitment to find significant savings from the education portfolio. If the government’s rhetoric on the budget bottom line is any indication, this is not a commitment to be ignored.

So what can, and might, happen is a fair question for students and universities alike. Can the government make the cuts without the whole package going through? Despite the pronouncement of some vested interests, there is clear uncertainty about what is likely.

It is unlikely that Government can make widespread cuts in the long term to funding for teaching and learning without legislative change to the Higher Education Support Act.

Out of a total of $414.8 billion in the May budget, 19% is new initiatives funded through Appropriation Bill (No. 1), with a further $8.4 billion to cover administrative support through a second Appropriation Bill (No. 2). This combined 21% of the budget is the annual amount of appropriation the Australian Parliament votes on and which any opposition is unlikely to block following the constitutional crisis of 1975.

Importantly, the remaining majority of government expenditure in the budget is by Special Appropriation (see budget paper four) and automatically approved on an ongoing basis  unless the legislation is changed that enables the funds. The Higher Education Support Act enables a Special Appropriation for universities (about $12.9 billion in 2013-2014, $15.9 billion in 2014-2015) which includes the Commonwealth Grants Scheme and other grants, as well as setting out the rules for HELP.

The Commonwealth Grants Scheme is the largest program of funding for teaching and the amounts the government must pay each year are enshrined by the Higher Education Support Act.

So it will likely require legislative change to make the proposed 20% average cut to the Commonwealth Grants Scheme through establishment of the new funding clusters. However, Pyne can likely reduce (or pause) funding for many of the “other grants” as the legislation gives discretion and in many cases sets a maximum grant amount.

The “other grants” include support such as research block grants, the Research Training Scheme, the Disability Support Program, the Indigenous Support Program, the Structural Adjustment Fund, and the Higher Education Participation and Partnership Program (to be renamed HEPP).

So a worst case scenario for students and universities is not impossible, with significant cuts or pauses in funding for many programs and without any way for universities to make up the short fall.

What students and universities have been lacking for a number of years now is certainty over funding for teaching and research. Universities are public entities, most still substantially funded by public revenue. Both the previous and current government have shown willingness to make deep cuts which force universities into a cycle of trying to readjust (and reduce) their teaching and research offerings.

Continued uncertainty about how higher education is funded is in no one’s interest. Which brings us back to starting the way you intend to finish. Clear articulation from all involved about how to ensure a stable funding base into the future for higher education would help students and all universities, but especially those more reliant on government funding.

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