The Job-ready-Graduates bill was introduced in the House of Representatives this morning. A couple of points on the funding floor and the social work/mental health deal with the National Party:

Funding floor

One unpleasant surprise in the draft Job-ready Graduates bill of earlier this month was that, with each funding agreement, the minister could reduce a university’s funding without parliamentary scrutiny or approval.

The bill as introduced has a clear fix of this problem – but from 2025: amending section 30-27(3)(b) of the Higher Education Support Act 2003 (HESA 2003). From then, the minister cannot reduce the university’s maximum basic Commonwealth Grant Scheme funding for higher education courses below what it was the previous year.

The problem in the interim is a transition period to the new system, in which reducing each university’s Commonwealth Grant Scheme (CGS) funding is a key policy objective.

The new bill does provide for these new lower amounts from 2021-2024 to be set in a legislative instrument, which would give them parliamentary scrutiny that the current funding agreements lack: amending section 30-27(2). But legally I am not sure that this is stronger than the funding agreements that need to be signed in any case: section 30-1 of the current HESA 2003.

Universities have been promised the same level of base funding as currently over the 2021-2023 period, including money from new equity and industry engagement funds that are partly being financed from reductions in the CGS.

The legislation authorises payment of that transition funding, but does not guarantee it. The same problem exists for the new equity and industry engagement funds. All these programs are financed from the ‘other grants’ provisions of HESA 2003 (division 41). Their funding levels are set annually by the minister.

Indeed, in what seems to be against the intent of existing section 41-50, in the last couple of years the government has abandoned the previous practice of listing funding of each of the other grants in the required legislative instrument, the most important of which currently are the Research Support Program and equity funding.

Instead, the section 41-50 legislative instrument is just a circular reference back to the legislative instrument for the aggregate amount. Effectively, this allows the funding for the various programs to be determined administratively without detailed parliamentary scrutiny.

Social work and mental health

The National Party staged a revolt on $14,500 student contributions for social work and mental health students, which led to a compromise announced earlier this week. At least some of these student will pay $7,950 a year instead, about $1,100 a year more than now.

But the finances of the Tehan reforms rely heavily on big cuts to current funding cluster 3, which includes both social work and psychology. The government could not compromise too far on this without major implications for the rest of the package.

To sidestep this problem, the government has created two new categories of ‘Professional pathway psychology’ and ‘Professional pathway social work’. The legislation includes these in its tables of Commonwealth and student contributions, but it is not clear how these categories will work in practice. This is because the funding system is based on the discipline of the subject, not on the field of the student’s course.

As an example of the issues this creates, Deakin University’s Bachelor of Social Work curriculum includes several subjects that would go into the $14,500 category: Sociology, public policy, Indigenous studies and a general psychology unit. Perhaps all these subjects will be classified at the lower rate, but if so that’s a big change to the funding system.

Another implication of the ‘professional pathway’ category is that it probably means that a student who did a social work subject as part of another degree would pay a per subject rate based on $14,500 rather than $7,950 annual rate.

With the minister in his National Press Club speech stressing that high fees could be avoided by taking cheaper subjects, this could cause considerable confusion.