Higher education spending in the 1970s compared to now

According to former PM Malcolm Fraser,

Education is the best and most important investment that this country can make. I am not sure that our governments understand this message adequately. Over the last 20 years, governments have actually withdrawn from the funding of education and much of that has been replaced by dependence upon full fee paying students from overseas.

That might have been true for a while in the 1990s and the first half of the least decade. But not in more recent years, as the slide below shows. Some expansion under the previous planned higher education system, and then a surge from the demand driven system, has seen public funding expand very significantly.

subsidies last 10 years

And what happened when Mr Fraser was Prime Minister, from 1975 to 1983? Spending did go up for a while, but was then reduced. It was a period of stagnation in higher education attainment. Fraser faced significant budgetary constraints, as have most of his successors as PM.

Fraser era spending

Fraser’s government tried to introduce more private funding into higher education. It successfully legislated for an overseas student charge, but was defeated in an attempt to introduce fees for second degrees. His government did not leave a major lasting legacy in this area.

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Fraser also claims that Melbourne University only gets 23% of its income from government. The annual uni finances report tells a rather different story. In 2012 the U of M received 54% of its income in direct Australian government grants, and another 9% in HELP loans financed by the Commonwealth. A further 4% came from other governments.

  1. It would be easier to compare the graphs if they were expressed at the same prices. The first graph is at 2013 prices and the second graph is at 1984-85 prices. My rough estimation is that in the Fraser years spending was about $5.5 billion at 2013 prices – much higher per capita and much much higher per student than the current $6 billion (although I see your second graph includes research, so that is another problem for comparisons).

    • Roger – Sorry, I was quickly using figures at hand. It was the slope of the lines that interested me. I haven’t calculated the latest figures – remarkably, these are not published by the government but Grattan calculates them for the Mapping Australian higher education publication – but in 2011-12 teaching and research funding was about $10.2 billion, or $8.7 billion if we deduct subsidies to the loan scheme.

      The changing concepts and categories over time make comparisons difficult, as arguably loan scheme subsidies are more analagous to student income support, which is excluded from all the data shown above.

      Total funding per government supported student is lower than in the Fraser years, and public funding much lower. The latter refects a decision to spread the money over more people, and the former a political stalemate on fees.

  2. Andrew,

    Good on ya re. the uni reforms.

    Cheers

    Bazza

  3. I heard you on JJJ the other evening. Surprised that you didn’t make the point about whether any given amount of money is more effective if it’s spread thinner over more students or concentrated on a higher subsidy to fewer.

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