MYEFO: Mid-year budget trims the sails

Chris Lester CEOThe federal government has responded to Australia’s growing debt and declining growth by slashing spending on several fronts. Announced on Monday 19 December, Treasurer Scott Morrison’s Mid-Year Economic and Fiscal Outlook (MYEFO) contained a mix of mostly bad news for the education and training sectors. Below are some of the highlights. 

(If you want to first remind yourself of the budget announcements made back in May 2015 before reading on, see our previous posts on Federal Government funding and the impact on the K-12 and tertiary sector)

VET loans to be overhauled

Just as university students can apply to the HELP (or HECS) system for a loan which they need only start paying back when they earn a certain amount of money, students studying at TAFE or other vocational institutions, including private colleges, can apply for the revamped VET Student Loan. In October, however, the government released a list of 478 courses that would not be covered under the new scheme, such as acupuncture, energy healing and pilates.

“We want to ensure that the courses that Australian taxpayers are subsidising and that we are encouraging students to study, will optimise employment outcomes,” the Education Minister Simon Birmingham said. “Currently there are far too many courses that are being subsidised that are used simply to boost enrolments, or provide ‘lifestyle’ choices, but don’t lead to work.”

Monday’s MYEFO promises to slash spending further by introducing tougher barriers to entry for course providers, introducing loan caps on courses and having tighter course eligibility criteria. The government expects this combination of measures to save $7 billion over the four years, and $25 billion over the decade.

Industry Skills Fund to go

The Industry Skills Funds (ISF) has also been axed to save another $119 million over four years. A training and support services scheme, the ISF was designed to help micro, small and medium businesses to develop a new range of skills.

Education Investment Fund

The Education Investment Fund (EIF) is also set to close. One of three nation-building funds launched by the Rudd government in 2008, the EIF offered eligible universities, VET providers and research institutions funds for infrastructure projects.

No more Green Army

Tony Abbott’s Green Army is no more. Theoretically designed to give 17 to 24-year-olds practical skills, training and experience in conservation, which might lead to future jobs in the field, the $224.7 million cost of the scheme has mostly been recommitted to Landcare in a deal with the Greens.

Establish a New Centre of Agricultural Excellence

As promised in the lead-up to the federal election, the government will establish a Centre of Agricultural Excellence at the University of New England in Armadale by merging it with the Australian Pesticides and Veterinary Medicines Authority. “Creating Centres of Excellence in Agriculture in regional areas will drive further growth in agricultural productivity, farm production and boost rural exports,” Prime Minister Turnbull said at the time. “This will deliver substantial economic benefits not only to regional Australia but to the national economy and all Australians.”

Boost for SA jobseekers

The government has also set aside $24.8 million for a scholarships scheme in South Australia, where unemployment remains alarmingly high. “From 2017 at least 1200 Enterprise Scholarships of up to $20,000 each will be available for higher education and training places across areas of skills shortages and economic priority (such as naval shipbuilding, advance manufacturing, and medical research),” the MYEFO paper say. “To link study to employment outcomes, scholarships will include up to $3,000 for a four-week paid internship placement.”

Teach for Australia

An increase in funding of $20.5 million to the Teach for Australia (TFA) program will provide 300 new teachers into some of Australia’s most disadvantaged schools. The program provides an accelerated path into teaching for high-achieving graduates, professionals and ­career changers with non-teaching backgrounds, with approximately 45 per cent of participants coming into the program with qualifications in STEM-related fields.

 

Chris Lester is Good Education Group’s Chief Executive Officer and brings to the sector more than two decades of experience in strategic management, business development and financial services. Learn more about Chris.

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