Budget rundown: Intl student woes and clean energy research wins

The Albanese government's third budget released on Tuesday night put cost-of-living relief and the Future Made in Australia manufacturing policy at the forefront.

Many of the budget's funds will go towards Universities Accord reforms, equalling a $1.1bn investment in the first budget post-review, although a significant amount of tertiary education investment will also be delivered through Labor's new in-house manufacturing plan.

International students

Overseas students have been the focus of policy reform and funding in the months leading up to the budget.

A cap on the number of international students a university can enrol per year was announced on Saturday as an additional measure to control the number of migrants entering Australia amid increased rejection rates of international students.

Universities can negotiate a higher number of foreign student enrolments with the education minister of the day if they agree to build dedicated student housing, a measure meant to remove international students from the private housing market, especially in inner-city areas, to improve the rental crisis.

Although the cap has been met with criticism, higher education providers have avoided the possible doubling of the international student visa application fee, which is non-refundable, even if a visa is refused.

The $710 per student fee, which is over double US and New Zealand fees, and four times as expensive as the Canadian fee, rose pre-budget as another element of the crackdown on international students.

On-campus and the Accord

A major Accord-recommended reform ahead of the budget was an overhaul of the student loan repayment system, which will now be indexed to whichever is lower of the consumer price index (CPI) or wage price index (WPI), backdated to June 1 2023.

Eligible teaching, nursing, midwifery and social work students will also be paid for their mandatory work experience.

Reforms outlined in the Action Plan addressing gender-based violence in higher education, an Accord-recommended plan, include a National Student Ombudsman, which will cost $19.4m over four years, and is due to begin its work from February 1, 2025.

The ombudsman is to act as a reporting mechanism for higher education students to escalate complaints regarding the administrative actions of their education providers.

A National Higher Education Code to Prevent and Respond to Gender-based violence will also be funded with $18.7m over four years, and $28.8m from 2028–29 to 2034–35, to be effective from January 1, 2025.

Another Accord measure backed by Tuesday's budget is the compulsory direction of student fees towards student unions and organisations.

A cut of 40 per cent of the services and amenities fees students pay must be put towards on-campus unions, to protect them from fluctuations in funding that would prevent them from providing services or support to students.

The budget paper also states that from 2026, needs-based funding will provide per student funding contributions for under represented students, and the Commonwealth will also provide $350.3m to fully fund university enabling courses and increase pathways for prospective students to university.

Clean energy-focused research and development

Labor's Future Made in Australia policy, which would see manufacturing move to on-shore, has boosted investment into clean energy and engineering research.

Calls for research and development investment to be increased to three per cent of Australia's GDP have a chance of being heard through a review of Australia's current research and development output.

The review would investigate how R&D can support the Future Made in Australia economic plan and foster the transition to net zero and green energy. 

Science and Technology Australia (STA) president Sharath Sriram said this is a strong budget for a future based on science and innovation.

“A review of the R&D system is timely and welcome – it has the potential to better connect the innovation ecosystem to support business, build a thriving economy, and accelerate the development of products and solutions. This can reverse the decline in national investment in R&D," she said.

“The investments through a Future Made in Australia will incentivise business to add more heft to that R&D effort.” 

The investment includes $566m towards Geosciences Australia, which will map Australia's resources and critical minerals, and $1.7bn towards an Innovation Fund, that will support a range of research and manufacturing innovation, mostly for drought and climate change management.

Engineers Australia, the peak body representing an industry with critical worker shortages ahead of the green energy transition, said the Future Made in Australia framework is the first true generational plan to tackle the energy transition head-on.

"This isn't just about going green; it's about making it economically viable on a global scale," chief executive Romilly Madew said.

"Engineers Australia supports Federal Budget funding announcements to accelerate the transition to
net zero through support for solar, hydrogen, critical minerals, and batteries."

Although, the engineer body wants to see Commonwealth practicum payments extended to those studying engineering.

"Given our shortage of engineers, the Government must extend this support to engineering students, too," she said.

"If we truly want a smarter future, we need to make it easier for aspiring engineers to support themselves and their families as they prepare to drive Australia’s progress."

Vocational education and TAFE

A suite of vocational education and training investment was announced on Tuesday night to further address on-shore manufacturing capabilities and housing shortages.

An overall $265.1m over four years will fund financial support for apprentices and their employees – apprentices and employers in priority occupations will receive an extra $2000 and $1000 respectively.

An additional 20,000 fee-free TAFE places will be offered to prospective students looking to fill industry shortages, and any apprentice in clean energy, manufacturing or construction jobs are also eligible for a $10,000 payment as an expansion of the New Energy Apprenticeships Program.

As another measure to fill critical skills shortages, $55.6m will be invested over four years to establish the Building Women’s Careers Program to "drive structural change and broaden the employment opportunities of a Future Made in Australia".

In a bid to address construction and manufacturing worker concerns, the budget has earmarked $1.8m to streamline skills assessment for around 1900 potential migrants from countries with comparable qualifications.

Master Builders Australia chief executive Denita Wawn said the potential migrant worker funding is a good start to supporting the construction workforce.

“We know in the short-term the domestic workforce cannot keep up with demand. Skilled migration represents a vital piece of the puzzle," she said.

“For many migrants, it is simply too hard to have their professional capacity recognised to work in a trade in Australia, and they are instead in roles that present fewer hurdles to obtain.

“The Parkinson Migration Review found skills assessments or qualification recognition can take up to 18 months and cost nearly $10,000; time and money people simply don’t have in this economic climate.

“We would have liked to see more financial support for migrants in Australia to be able to have their skills qualifications recognised or undertake the necessary gaps training to meet Australian standards."

However, peak VET bodies remained concerned that key education issues, such as a lack of digital teaching resources and outdated digital learning infrastructure, are bigger issues causing non-completion rates in apprenticeships and decreasing the quality of VET education, that need to be addressed along with financial incentives to apprentices.

The budget paper says these VET and TAFE investments will provide certainty to the VET sector whilst a review of the apprenticeship incentive system is underway.

Aligning independent skills sector and universities

The Independent Tertiary Education Council Australia (ITECA) has criticised the Treasurer for not delivering more to support students in independent skills training.

"Understandably, a lot of the budget measures are focussed around delivering key recommendations set
out in the Australian Universities Accord final report," ITECA chief executive Troy Williams said.

"With these predominantly being focussed on students with public universities, there isn’t much for students with ITECA members."

An investment of $27.7m over four years from 2024–25 (and $32.8m from 2028–29 to 2034–35) to align regulatory, governance and qualification arrangements between the university and independent skills training sectors has been made, along with a prior commitment to establish an Australian Tertiary Education Commission that will guide higher education policy, direction and funding decisions.

Funds of $350.3m over four years, followed by $1.1bn from 2028–29 to 2034–35, will expand access to fee-free Uni Ready Courses from 1 January, 2025. The courses are a pathway for underrepresented students to enter university.

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