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Funding and the Broader Tertiary Sector

This paper reviews the funding dynamics in Higher Education (HE) and Vocational Education and Training (VET) sectors, highlighting disparities, growth trends, and implications for the broader tertiary sector. It addresses the funding gap, private funds, Commonwealth investments, and state funding variations, providing insights for future research and policy considerations.

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Funding and the Broader Tertiary Sector

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  1. Funding and the Broader Tertiary Sector Peter Noonan and Gerald Burke

  2. Purpose: review HE and VET funding • Update 2005 analysis • Compare growth and composition • Note differences in funding arrangements • Identify implications for broader tertiary sector • Identify issues for future CEET work • Note – analysis is preliminary

  3. Background Issues in 2005 CEET paper on VET funding: • Relative decline in VET funding compared to schools and higher education • Faster growth of private funds in HE • Overseas students fees • Domestic fees (including HECS) • Growth in Commonwealth funding outside of Commonwealth State Agreement • States make independent decisions on VET funding alongside Com/State Agreement

  4. Revenue for schools and HE continues to increase at a faster rate than VET($ billionconstant prices, public institutions +)

  5. These is a growing gap between HE and VET operating expenditure

  6. Large and growing private HE funds

  7. Much smaller--though growing--private revenue in TAFE

  8. Not the full picture: expenditure outside of the national VET agreement (not in NCVER VET finance data) • Examples • Employer incentives -- Commonwealth and States • Apprenticeship centres and other Commonwealth programs • Also • Revenue of private RTOs except for public monies for user choice, Skills Vouchers, PPP • Student assistance –Youth Allowance, Abstudy, Austudy • Employer training expenditure that does not go to public RTOS

  9. Projected Commonwealth VET related $bill (NCVER data shows $1,700 billion 2008)

  10. Projected additional Commonwealth funding for HE and Innovation

  11. Funds per student or per hour • HE Commonwealth funding per subsidised student in 2008 was about 10 per cent lower in real terms than in 1996 • Future indexation, funds for low SES students, performance funding - may stem HE decline per student • VET Government recurrent expenditure per hour of publicly funded training fell 8.5% 2003 to 2007 real terms • Future Commonwealth money for VET is largely for infrastructure and extra students

  12. Differences in funding arrangements between VET and HE (examples p.1)

  13. Differences in funding arrangements between VET and HE (examples p.2)

  14. Summary • Funding gap between VET and HE has widened • State funding has fallen in real terms • Commonwealth funding has increased • Extra Commonwealth funding to states without requirements for matching state funding • Commonwealth funding for HE teaching and learning to grow from 2011-12 but static for VET • State funding for VET uncertain -- and likely variations between states

  15. Implications for broader tertiary sector • Extent to which differences in funding arrangements influence student choice particularly if upfront TAFE fees increase • Implications of demand based growth in HE and equity targets: • Cooperation or competition with VET? • Future of articulation arrangements and higher level VET qualifications • Future balance of growth between the sectors: • Potential for major differences to emerge between the states

  16. Future CEET research • Full analysis of financial data including forward estimates • Individual state/territory analysis • Impact of differences in funding arrangements on students and providers • Options for a new funding framework for VET in the context of broader tertiary sector

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