Government amendments to its student places capping bill

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Last week the government made two substantive amendments to its student places capping bill, officially named the Universities Accord (Opening the Doors of Opportunity) Bill 2026. One amendment gave public universities a floor number of Commonwealth supported places. The other restored two limits on ministerial conditions.

This post explains these changes and comments on whether they remedy the underlying defects.

In summary, ATEC will have a floor number of CSPs that it must allocate to each public university, but the problem of automatic cuts for universities with growth places remains. The bill also still lacks a corresponding requirement on the minister to set a CSP ‘total allocation pool’ of places sufficient to cover all public university floor CSPs.

The two restored limits on ministerial conditions are an improvement, but the bill still lacks appropriate mechanisms for adding necessary but limited conditions.

Floors on places

The policy intent, as expressed in the bill’s explanatory memorandum, was always to provide a floor number of CSPs for public universities.

This floor was to be the university’s ‘core student load’.

Using the 2028 allocation year as an example, the bill defines a university’s core student load as the lesser of:

  • Its ‘domestic student profile’ for the immediately preceding year, i.e. its core student load for 2027 plus its additional growth allocation, if any; or
  • The number of CSPs it delivered in the most recent year with verified data, which will be 2026 CSPs verified in April 2027: bill section 30-25(1).

But instead of making the lesser of these figures the floor number of CSPs, under the bill’s original section 30-20 ATEC’s CSP allocation for a university ‘must not exceed’ the lesser of these two numbers. ‘Must not exceed’ clearly implied that the number could be lower.

The amendment changes ‘must not exceed’ to ‘must be equal to’, which creates a floor.

A floor will often mean cuts to domestic student profiles

While the bill now creates a floor number of places it can, and I believe often will, still result in automatic year-on-year cuts to universities’ minimum domestic student profiles. This is due to the historical nature of verified data.

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ATEC’s big test: Meeting demand for higher education in Sydney

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At the AFR higher education conference this week Jason Clare was open to amending his capping student places bill. He subsequently inserted amendments on ministerial conditions and floor numbers of places for public universities.

But the minister remains in denial about the consequences of capping over-enrolments at a low level, to prevent what he calls ‘hunger games’ competition between universities. For universities allocated less than 15,000 Commonwealth supported places the cap is 5% of their total. For larger universities the cap is 750 places, equivalent to 2-3% of their allocation. Above these levels CSPs will be zero-funded, compared to student contribution only funding under the current system.

In response to a journalist’s question about this issue the minister said that ‘if you think that a kid from the western suburbs [of Sydney] is going to design something that makes it harder for kids from the western suburbs to get a chance to go to university, then you’re wrong. This is about doing the opposite.’

But on the available data Sydney is the place where his over-enrolment policy puts higher education opportunities at greatest risk.

ATEC seems to be engaging in bureaucratic manoeuvres to avert this outcome, but as transitional measures in the bill lapse that task will become more difficult.

Sydney over-enrolment

Based on 2025 estimates produced by ATEC (not published but in an appendix to my Senate inquiry submission), Sydney was the only multi-university city where every institution was over-enrolled. In the table below I have added to ATEC’s figures the over-enrolment caps proposed by the government. These caps would not be imposed immediately – more on this below – but if they had been in place for 2025 it would have been disastrous for aspiring Sydney students. It would have cost more than 15,000 places, the equivalent of shutting down a medium size public university (the Sydney universities are all big).

At a national level ACU and Notre Dame, which both have Sydney campuses, had some regulated capacity to take more students. The University of Wollongong also serves parts of Sydney, but it was already over-enrolled in 2025.

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How will the government finance more higher education enrolments?

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The government has grand hopes for additional higher education participation, on the way to 80% tertiary attainment by 2050. But how they will fund enrolment growth is much less clear.

The government is setting itself a double challenge – not just delivering more domestic student places but simultaneously reducing ‘over-enrolments’, student contribution only places with no public subsidy. In a May provider briefing, ATEC put the number of over-enrolled places in 2026 at about 60,000.

On calculations in my Senate inquiry submission I estimated that, on 2025 numbers, maximum over-enrolment capacity under the government’s restrictions would be about 22,500 – on the unlikely assumption that every university could precisely use its full allowance.

With a low over-enrolment cap the government needs at least 37,500 additional fully-funded places just to maintain 2026 enrolments. That would cost taxpayers around $500 million without creating a single additional place.

The government has delayed this expense with transition arrangements for currently over-enrolled universities, but that is the goal they have set themselves.

How many new places has the government promised?

In his second reading speech for the funding reform bill, Jason Clare said that ‘next year there will be 16,000 more places for more students in the system. The year after that there will be another 16,000. The year after that another 16,000. In 2030, this increases to 19,000 additional fully funded Commonwealth supported places.’

While I would not necessarily take this at face value – the minister’s statements don’t always match reality – ‘more places for more students’ implies places over-and-above the conversion of over-enrolment places, although for the many universities that are already over-enrolled it’s hard to do that without also adjusting up their over-enrolment ‘glidepath’.

In the May provider briefing ATEC says it has 37,000 CSPs to allocate in 2027, of which 7,000 are already committed to the nuclear submarine program, regional study hubs and non-Table A providers. That leaves 30,000 places. In the provider briefing they talk about 15,000 to 20,000 of the 30,000 going to convert over-enrolments to fully-funded places. But to align with the minister’s 16,000 ‘more places for more students’ the over-enrolment conversions should be more like 14,000 places.

What do the Budget papers say?

Under the new funding bill, the Commonwealth Grant Scheme will continue funding the Commonwealth contribution component of Commonwealth supported places. Budget projections on the CGS are currently our best guide to future funding.

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Mapping Australian higher education – August 2026 update

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I don’t currently have the capacity for a new edition of Mapping Australian higher education 2023 but I am still updating the data behind the tables and charts. The latest spreadsheet is here.

The main changes since the last update are:

  • 2026 Commonwealth Grant Scheme expenditure
  • 2026 HELP lending
  • 2025 staff data
  • 2025 graduate outcomes
  • 2024 research expenditure
  • Reorganised lists of university lobby groups
  • Ongoing changes in non-university higher education providers – despite the hostile policy environment new providers are still being registered by TEQSA

My Senate inquiry submission on the government’s student places capping bill

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Submissions to the Senate inquiry into the government’s student places capping bill – with the official but misleading title of the Universities Accord (Opening the Doors of Opportunity) Bill 2026 – were due last Friday. The submissions are not yet appearing on the Senate’s website but mine is here. [Update: Submissions are now available.]

It extracts the needed amendments to the bill from my series of explainer posts: on setting the number of Commonwealth supported places, on ATEC’s distributions of CSPs to public universities and to private universities and non-university providers, on capping over-enrolments, on effectively demand driven funding for equity students, on needs based funding, on allocating international student commencements, on ministerial conditions on student places funding, and on ATEC’s options for rewarding and punishing universities.

I will post again on the over-enrolment parts of the bill – in competition with Job-ready Graduates student contributions as the worst domestic student policy idea of the 2020s – but copy in my submission overview as a summary of its key themes:

The Universities Accord (Opening the Doors of Opportunity) Bill does not do what it says on the cover.

The bill’s sole mechanism for increasing enrolments in universities is more efficient use of existing funding.

The bill does not appropriate any new funding for additional student places. As under the current system, the minister will need to work through the government’s internal budget processes to secure that money.

By contrast, the bill has two new features that will reduce how many student places universities can offer.

The most important of these is caps on over-enrolments, on student contribution-only places delivered by universities above their allocated number of student places. If these laws had been in place in 2025, the maximum over-enrolments allowed would have permitted about half of the over-enrolments actually delivered, at the cost of more than 20,000 places across the system.

A planned default allocation of student places to public universities, while intended to reduce unused places, also threatens cuts. To use an example, a university’s default allocation of places for 2029 will be the lower of their places allocated for 2028 or the places actually delivered in 2027. If the university had received additional places for 2028 and respected their over-enrolment limit for 2027 the default position would wipe out some or all of their new 2028 places.

Due to problems with the bill’s drafting it will not achieve some of its other goals. The explanatory memorandum presents the default allocation described above as preventing a university’s allocation going backwards, but this is not what the bill itself guarantees.

The bill’s explanatory memorandum recognises problems with the current definition of low socioeconomic status, but the bill itself inserts a provision that will reduce how many low SES students attract needs based funding.

Another major issue with the bill is excessively broad ministerial discretion. The bill lets the minister impose conditions on receipt of Commonwealth Grant Scheme funds with no restrictions on how this power can be used. For allocations of international student commencements, the bill suspends an existing limit on the minister directing ATEC in respect of specific education providers.

The 2026 early implementation of enrolment restrictions, without statutory authority, shows that the government cannot just be trusted to do the right thing. Clear legal limits are required.

Ends

Ministerial funding conditions on specific universities & providers

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During the 2020s the government has implemented policy using a broad ministerial power to impose conditions on funding agreements. Universities must sign these agreements to receive Commonwealth Grant Scheme funding. I have criticised this use of funding agreements when the conditions subvert the intent of the Higher Education Support Act 2003 and/or avoid parliamentary scrutiny.

A repeat offence example is allocating Commonwealth supported places to specific courses, such as in the 20,000 equity places policy, when this is not supposed to happen unless the course is first ‘designated’ by the minister.

Another example is starting implementation of the equity plan expenditure of unused CGS grants through funding agreements, when this was actually to be financed under the ‘other grants’ provisions of HESA 2003. (Eventually proper legal processes were followed.)

A third example is the ban on early offers using funding agreements. Admissions-related issues are covered by other sections of HESA 2003 and by the Threshold Standards administered by TEQSA. A substantive policy issue like this should have gone via one of these processes that include parliamentary scrutiny.

The scope of ministerial discretionary power should be constrained. Instead, the funding legislation introduced in late June would lift some existing restrictions. It exposes universities and other higher education providers to worse misuse of power. This post explains the proposed changes and suggests remedies.

All legislative references in the following text are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill, the Universities Accord (Opening the Doors of Opportunity) Bill 2026.

Current power to add conditions to funding agreements

Under the current HESA 2003, some conditions of funding are built into the legislation, such as which students are eligible for Commonwealth supported places. These will remain.

On top of the legislated conditions, current section 30-25(2) states that ‘the agreement may specify conditions to which the grants are subject, that are additional to the conditions that apply under Division 36’ [such as CSP eligibility]. This is the legal authority for the examples given above.

Section 30-25(2) has restrictions placed on it.

The minister cannot exclude a course from Commonwealth support using a funding agreement. This must be done under current section 36-15(2), which requires a legislative instrument to be used. This legislative instrument is subject to disallowance by either house of parliament: current section 30-25(2A).

Another restriction is that the conditions cannot relate to industrial relations matters: current section 30-25(2B). This was intended to stop Coalition governments using funding agreements to pursue their IR agendas.

Because funding agreements will no longer exist under the new system current sections 30-25, 30-25(2A) and 30-25(2B) are repealed by the amending bill: item 2, part 1, schedule 1.

Update 20/8/26: The government has amended the bill in the House of Representatives to restore restrictions on excluding courses from funding or adding industrial relations conditions.

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The proposed new funding system, part 6: Private universities and non-university higher education providers

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The funding system I have described parts 1 to 5 of this series of posts applies in full to the higher education providers listed on ‘Table A’ of the Higher Education Support Act 2003. The public universities and the Batchelor Institute of Indigenous Tertiary Education appear on Table A.

This post looks at the situation of other higher education providers. This includes 5 private universities, 8 university colleges and 166 other higher education providers.

Provider registration by TEQSA does not confer any funding entitlements. It is necessary but not sufficient for funding.

No non-Table A provider has any statutory right to Commonwealth supported places. Four of the five private universities are, however, listed on Table B of HESA 2003. This entitles them to research funding and some other government funding but not CSPs. This post describes how non-Table A providers can get CSPs under the new system.

All legislative references in what follows are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill, the  Universities Accord (Opening the Doors of Opportunity) Bill 2026.

Eligibility for Commonwealth supported places

In the new funding system, as now, eligibility for Commonwealth supported places is based on history and politics, not any objective criteria.

The minister, rather than ATEC, will decide whether a provider should be eligible for CSPs. This is done by putting providers on a list in the Commonwealth Grant Scheme Guidelines: new section 30-1(10(a)(ii).

We can see the current policy on adding providers from the 2026 funding agreements. They make reference to CSPs for TAFEs and ‘other high-quality not-for-profit specialist providers’. Five TAFEs have been added since last year. NIDA is also new to the list. The only new not-for-profit is Excelsia University College, although I would not call it a specialist provider, as CSP allocations to teaching, early childhood, social work and counselling courses suggest.

There is no specific power for ATEC to advise on provider additions, but possibly it could do so as incidental to advisory subjects in section 41 of the ATEC Act 2026 including (a) policy settings for higher education and (e) the ‘diversity of the higher education system’.

While eligibility is conferred by the minister ATEC will decide whether or not to allocate CSPs.

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Rewards and penalties under ATEC and the new funding system

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This post in an overview of rewards and penalties available to ATEC as it enforces mission based compact terms and student places allocations.

By the standards of recent higher education regulation the ATEC compliance regime seems relatively weak. This may reflect a trade-off between maximising administrative discretion and creating clear laws to which fines could be attached.

The only automatic penalty universities face under the new system is for enrolling more students than the bureaucrats think they should have.

Rewards – the strange absence of mission funding

Despite the word ‘mission’ in the compact title and reference to university missions in the ATEC Act 2026 nothing in the original ATEC legislation, or the Universities Accord (Opening the Doors of Opportunity) Bill 2026 introduced late last month, gives ATEC any power to support universities in achieving their mission other than by allocating additional Commonwealth supported places.

A mission fund could have provided a balance to homogenising compact targets. But no such fund is planned and no legal provision under which it could be paid is in the current or amending legislation. With no mission funding the compacts are just another compliance exercise.

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The fall and rise of postgraduate Commonwealth supported places

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The Centre for the Study of Higher Education at the University of Melbourne has today published The fall and rise of postgraduate Commonwealth supported places, which I co-authored with Ren-Hao Xu. It is part of our research project on university decision-making under Job-ready Graduates, with other papers here and here.

As the title suggests, the paper shows how domestic postgraduate coursework places became increasingly full-fee before a reversal, so that now, for the first time since the 1990s, most places in public universities are Commonwealth supported. Additional flexibility in the use of CSPs introduced by Job-ready Graduates facilitated this growth.

This change saved postgraduate students significant amounts of money, but the scale of CSP provision looks fragile. We argue that it was partly a byproduct of excess capacity created by weak undergraduate demand in the post-lockdown years. As that demand returns pressure to move CSPs back to undergraduate courses will grow, compounded by tighter controls on CSP numbers in the ATEC era.

Financing domestic postgraduate coursework

With a few niche exceptions, all public university domestic undergraduates are in Commonwealth supported places (CSPs). But domestic postgraduate coursework – graduate certificate through to masters by coursework – has long been a mixed economy, with both Commonwealth supported and full-fee places on offer, sometimes in the same course. Full-fee students can use FEE-HELP to finance their studies.

Until Job-ready Graduates took effect in 2021, postgraduate CSPs were a ‘designated’ category, along with sub-bachelor places. Postgraduate CSPs were allocated to universities by funding cluster (groups of disciplines with the same Commonwealth contribution) in university-government funding agreements.

The spread of designated CSPs across postgraduate courses reflected historical allocations and ad hoc decisions on new places. These ad hoc allocations were not principle free – recurrent justifications included providing places for postgraduate initial professional entry courses and addressing skills shortages – but the cumulative consequences were untidy. University allocations of postgraduate CSPs ranged from dozens to thousands. This created messy local markets. Universities struggled to fill full-fee places when their competitors had CSPs.

Job-ready Graduates abolished specific allocations of postgraduate places, except in medicine. It put postgraduate coursework into a single fund with sub-bachelor and bachelor degree places. The Commonwealth contribution funding each university could receive for these places is their ‘maximum basic grant amount’ (MBGA).

From 2021, universities decided whether to use their CSPs in postgraduate courses. These decisions were not straightforward. A fixed maximum basic grant amount created a potential trade-off with undergraduate places. A second trade-off existed with full-fee postgraduate places, which usually generate significantly more revenue per place than a CSP.

Trends in postgraduate full-fee and Commonwealth supported places

Across the entire sector, including private higher education providers, domestic full-fee postgraduate places are just a majority, at 50.2% of all places.

But looking at public universities only, CSPs became a similarly narrow majority in 2021, the first year of Job-ready Graduates. The CSP share stood at 58% in 2024. The relative shares are back to where they were in the late 1990s, but with CSPs trending up rather than down.

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The proposed new funding system, part 5: What has happened to effectively demand driven funding for equity groups?

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In his second reading speech for the Universities Accord (Opening the Doors of Opportunity) Bill 2026 education minister Jason Clare said that it will ‘help more people from poor families and the regions and the bush to get into university. In simple terms, if you get the marks, and you’ve got what it takes you will get a place.’  Later in the speech, he described the new policy as ‘effectively uncapping the system for these students’.

This is the latest iteration of a concept first announced as ‘effectively demand driven’ funding in the Accord final report and then described by the Department of Education as ‘managed demand driven funding’.

Whatever its name, how this policy would be implemented remained unclear. The policy implies eligibility criteria – ‘if you get the marks’ – that do not exist at the system level. It raised questions about the coherence of the government’s position. Does it make sense to impose tougher caps on enrolments generally while claiming to ‘effectively uncap’ a sub-section of students? Isn’t this just a part-solution to an avoidable problem caused by hard caps?

The silence of the bill

Anyone hoping that the funding bill would provide clarity will be disappointed. There is no uncapping of places for any category of student that isn’t already demand driven. But another feature of the system gives ATEC some flexibility to allocate additional places late in the enrolment period.

A recap on the new system

First a recap on how the new system will work. The first step is for the minister to set a total allocation pool of places, which will cover all coursework places other than medicine and the demand driven programs for Indigenous students.

The second step is for ATEC to allocate those places to universities. This will be a combination of ‘core student load’, a historical figure, and an ‘additional growth allocation’. Together these are the ‘domestic student profile’ of each university.

On top of the domestic student profile universities will have an over-enrolment buffer, of 750 places or 5% of the domestic student profile, whichever is lower. As part of transition measures some universities can have total places exceeding these levels but caps on commencing students.

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