Universities lose out to private schools in education funding

The universities’ share of the education funding pie is diminishing and being eaten up by private schools.

The universities’ share of government education funding is diminishing even as private schools’ share goes up.

Universities’ share of the commonwealth education budget is being dramatically eaten away, while the share of the pie going to private schools is rising, a key university group has told the Albanese government.

In its 2024-25 federal budget submission, the seven-strong Innovative Research Universities group said its analysis of the 2022 budget papers showed that in the 2016-26 decade, government funding for universities would drop from 28 per cent to 22 per cent of the federal education and training budget.

Over the same period the share of the education and training budget used to fund private schools is set to rise from 32 per cent to 37 per cent. In effect, funding is being removed from universities and transferred to the private school system, and the gap between the two is growing enormously.

To drive home the point, the IRU said that university fees for commonwealth-funded student places could be abolished altogether making universities free if another $6bn a year was injected into university funding. But this amount is less than half of the commonwealth’s annual funding for private schools.

The IRU did its analysis by looking back at actual government spending since 2016, as well as the forward estimates of what future funding will be up until to 2026, assuming no policy changes.

The IRU represents James Cook University, Griffith University, Western Sydney University, the University of Canberra, La Trobe University, Flinders University and Murdoch University.

The IRU said in its submission that it did not support a tax on university revenue to fund new university programs, such as the proposed tax on international student fees, which the government’s Universities Accord review is considering.

IRU universities do not have high levels of non-government revenue such as international student fees or philanthropic donations, which many Group of Eight universities enjoy. Its submission said the level of such non-government income could be taken into account in deciding the distribution of government funding across the university sector in institutional-specific agreements that arise from the government’s Universities Accord review.

The IRU also said that changes to the university fee structure introduced by the Morrison government – which led to about a quarter of students paying $16,323 in annual tuition fees, while another quarter pay only $4445 – were urgently needed.

In a separate 2024-25 budget submission, university umbrella group Universities Australia urged the government to match its $493m funding commitment to provide 180,000 free TAFE places and offer the same amount to provide up to 20,000 free university places in areas of critical skill shortages.

“Fee-free university for disadvantaged students in areas of critical national priority could help attract more people to university who otherwise wouldn’t pursue a degree. This is what the nation needs,” said Universities Australia acting chief executive Renee Hindmarsh.

UA also called for a gradual increase in government-subsidised university places, cost-of-living support for students doing mandatory work experience placements, and more financial support for PhD students.