Coalition gives universities $326m for new places but Labor warns tens of thousands will miss out

The education minister Dan Tehan has patched up his higher education reforms with an extra $326m for new places in 2021, after warnings the package fell well short of surging demand to attend university.

The education minister will announce the funding for “up to 12,000” new places at the Australian Financial Review higher education summit on Wednesday, but has failed to provide detail on how they will be distributed.

This fix comes as a new analysis by Mark Warburton at the University of Melbourne’s Centre for the Study of Higher Education reveals the winners and losers under the Coalition’s package after transitional funding washes out of the system in 2023.

The bill increases fees for some courses, including humanities, to fund fee cuts for other courses such as sciences and an overall cut in the government contribution from 58% to 52%.

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Despite Universities Australia’s call to back the job-ready graduate package to achieve funding certainty, there is still strong backlash among research-intensive universities who fear cuts to their teaching and learning budgets.

Warburton found that six of the Group of Eight universities are set to lose a combined total of nearly $60m a year compared with a continuation of current policy.

The biggest losers were Monash University (-$17m), the University of Queensland (-$14m) and the University of Sydney (-$10.6m).

Regional universities, which gain through 3.5% growth in places, will generally improve their financial position, while the University of Western Australia is also set to gain $10.3m extra revenue.

Revenue to the three South Australian universities is estimated to decline by more than $3m a year, with Flinders University to lose more than $9m but the University of South Australia to gain a little under $8.5m.

On Wednesday, Tehan said the government will provide $326m more funding for new places “in recognition of the challenges faced by the year 12 class of 2020” and Australians “who need to retrain and reskill” to find another job.

“If the Senate passes the job-ready graduates bill there will be up to 30,000 additional university places available next year,” he said.

Tehan also signalled that the government will use next week’s budget to address a looming funding cliff for research, although the sector believes it is likely to bring forward existing funding as a stopgap rather than commit new money.

The Coalition’s claims about the bill have been challenged by higher education expert, Andrew Norton, who argues it applies subsidies to students who already attend university but currently miss out and claims these as “additional” university places.

Norton noted the package reallocates funding from metro universities to regional universities, but concluded that “the commonwealth’s estimate of 2021 places created by [the package] should be revised down to zero at a system level”.

Earlier on Radio National, Tehan said the analysis is at odds with advice from the education department and the higher education sector.

He dodged questions about whether the bill cuts universities’ funding for teaching and learning, explaining instead that it aligns the average cost of teaching a course with the total funding through the government contribution and student fees.

Margaret Gardner, the vice-chancellor of Monash University and chair of the Group of Eight, welcomed the funding for 12,000 extra places but said the package still has “significant flaws”.

Gardner told Radio National universities have 6% less funding on average to teach students. At the Group of Eight this will result in a $46.5m shortfall for teaching and learning.

Gardner said there is “no evidence” hiking humanities fees will lead to students choosing different subjects, and noted the bill cuts the government contribution to engineering and science, sending a “perverse signal” to universities which will have less money for these in-demand disciplines.

She noted 40% of students will pay more for their degrees. Many students will face a higher and “inequitably distributed” debt because while some pay more than 90% of the cost of their degree, others will pay well under half.

Universities Australia welcomed the extra places, and confirmation that the budget will contain the government’s plan for research.

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Labor’s education spokeswoman, Tanya Plibersek, said the addition of $326m was “a humiliating admission from the Liberals that their cruel policies will see tens of thousands of students miss out on a place at university”.

“There has never been a stronger case for the parliament to vote against Scott Morrison’s plan to make it harder and more expensive for Australians to go to uni.”

On Tuesday evening, Pauline Hanson confirmed that the government has secured her two Senate votes with a suite of amendments including greater legislative protection for academic freedom and freedom of speech.

The government is just one Senate vote short of passing the package. Labor, the Greens and Rex Patrick are opposed; while Jacqui Lambie and Centre Alliance are the remaining swing votes.

Centre Alliance’s Rebekha Sharkie is in negotiations to secure more funding for growth in places for South Australian universities.