Date posted: 17/05/2024

Federal Budget 2024-25: Key education measures and advocacy snapshot

The budget’s ambitious response to the Australian Universities Accord includes reforms to improve higher education quality, equity and access.

In brief

  • 80% tertiary education attainment target set.
  • $3B in student debt relief.
  • International student caps to be introduced.

The budget includes the Government's ambitious response to the Australian Universities Accord Final Report - the largest and broadest review of the higher education sector in 15 years.

Chartered Accountants Australia and New Zealand (CA ANZ) made three submissions on the Universities Accord. We also called for higher education reform in our pre-budget submission to boost Australia's productivity, address skills shortages and build the talent pipeline. We are pleased to see many of our recommendations reflected in the budget.

The budget invests $1.1 billion over 5 years from 2023-24 (and an additional $2.7 billion from 2028-29 to 2034-35) for the first stage of reforms to the tertiary education system to deliver a larger, more skilled and productive workforce, while also providing cost of living relief for students, and equity and affordability measures to increase access to university.

Tertiary education attainment target

The Government's aspirational target of 80% of working age people achieving a tertiary qualification by 2050 is commendable.

Both higher education and vocational education and training (VET) will contribute to achieving the target, with $27.7 million allocated to support better student pathways between VET and universities and reduce red-tape for dual sector providers.

CA ANZ welcomes this development as we continue to build the talent pipeline entering the profession through high schools and universities as well as opening new, flexible pathways into the CA Program.

We are also pleased to see the Government intends to set higher education participation targets for students from underrepresented backgrounds, which we have advocated for.

Student debt relief

CA ANZ has advocated for higher education funding and financing reform as a priority and is pleased to see budget measures to improve the way the Higher Education Loan Program (HELP) is calculated.

The Government will cap the HELP indexation rate to be the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023, subject to the passage of legislation. This means the indexation rate is reduced from 7.1 per cent to 3.2 per cent in 2023 and from 4.7 per cent to around 4 per cent in 2024.

The relief will be backdated to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loans that existed on 1 June 2023.

This reform is expected to reduce student debt by $3 billion for more than 3 million Australians. It is a step in the right direction to help build the nation's talent pipeline, address skills shortages and ease cost of living and inflationary pressures for students.

CA ANZ would also like to see the Government reduce the cost of accounting, management and commerce degrees, and recalibrate student and Commonwealth contributions to ensure that the price signals to students and providers are working in the same desired direction.

Demand driven and needs-based funding

From 1 January 2026, demand-driven funding for equity students will be introduced through a new managed growth funding system for Commonwealth supported places, and needs-based funding will be implemented to enable universities to provide tailored academic support for students from low-socioeconomic backgrounds, First Nations students, students with a disability and regional students.

CA ANZ has advocated for demand-driven funding for all and needs-based funding for underrepresented learners. If implemented well, needs-based funding could support increased diversity in the composition of students pursuing higher education, including in accounting.

Implementation of the university funding reforms has been tasked to a new Australian Tertiary Education Commission which is intended to be established by 1 July 2025.

International student caps

The Government's response to the Universities Accord in the budget aims to deliver sustainable growth, quality and integrity to Australia's international education sector through development of a new International Education and Skills Strategic Framework.

On 16 May 2024, legislation was introduced which will enable the Government to set a cap on the maximum number of new international student enrolments education providers can offer over a set period.

If universities want to enrol international students above the cap, they will be required to establish additional student accommodation to reduce pressure on the rental market.

CA ANZ supports strengthening the integrity, quality and sustainability of Australia's international education sector but remains concerned the planned cap on student numbers will exacerbate the critical shortage of accounting and audit professionals already being experienced in Australia and will have a negative flow on effect to businesses, the economy and community.

With the profession facing a rapidly declining graduate pipeline, ongoing shortages, strong future demand and stiff global competition for talent, it is in Australia's interests to provide a destination of choice for international students. Students have choices and will otherwise choose to go elsewhere.

As international education is one of Australia's most valuable exports, and international students are the single largest contributor to temporary migration, the Government must consult carefully and widely on the policy settings and planning needed to ensure the sector's growth is sustainable in terms of its impacts on housing, infrastructure and services.

Student wellbeing and safety

The budget included provision to establish an independent National Student Ombudsman and a National Higher Education Code to prevent and respond to gender-based violence which will commence from 2025. These initiatives to strengthen student wellbeing and safety in universities and other tertiary education institutions form part of the $3.4 billion budget investment in women's safety.

As a TEQSA registered provider of higher education and an organisation committed to preventing gender-based violence, CA ANZ made submissions to the Government's consultations in support of these important initiatives earlier this year.

Return to Federal Budget Coverage

Equipping you with the information and commentary you need to know about the Federal Budget.

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Universities Accord submissions

CA ANZ submissions on Australia's higher education sector review.

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Accountants Daily media

Foreign student cap will exacerbate accountant shortage.

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