Author: Andrew Norton

The 2026 funding agreements, Part 3: New rules on closing courses

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In the 2026 university funding agreements the rules on closing courses have changed and now require universities to follow additional processes. These changes are presumably a response to course and subject closures at UTS, at Macquarie, the ANU, the University of Canberra, and other institutions.

Confusingly, however, the agreements differ between universities on the timelines to follow.

Which courses are covered?

The basic threshold for a course being covered by the closure rules is that it must be an undergraduate or postgraduate course in which Commonwealth supported places have been used for at least two years. This includes a major within a course.

A course is not considered closed if it is immediately replaced by another course that leads to the same occupation or provides a similar specialised skill.

A course is considered closed, however, if it suspends intake of students for more than one consecutive academic year.

These criteria are unchanged from last year.

Timing of notification

In 2025 universities had to notify the Commonwealth of potential course closures by 31 July and before information on the closure is made public.

In 2026 the 31 July deadline is gone. Presumably it was unrealistic about university decision making timelines.

In what I will call funding agreement variation A, for 2026 notification of actual or potential course closures should occur at the earlier of (i) as soon as reasonably possible before final decisions to close courses are made or (ii) before any information on the potential course closure is made public.

In what I will call funding agreement variation B, for 2026 notification of potential course closures should occur by the earlier of (i) the finalisation of the provider’s Mission Based Compact for the following year (or where a new Mission Based Compact is not being negotiated, the finalisation of annual allocation of domestic student places for the following year), or (ii) one calendar month before any information on the potential course closure is made public.

Variation B is a bold inclusion, as the ‘annual allocation of domestic student places’ refers to a new funding system that requires legislation. As of early February 2026 it had not been introduced into Parliament, much less passed.

For variation B universities, then, the effective current rule is to notify the Commonwealth at least one month prior to making a course closure public. Variation A universities can wait until closer to the date of public disclosure before telling the government, unless they have made a final decision, as they need to inform the government as soon as possible before that decision.

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The 2026 funding agreements, Part 2: Sorting out the medical student policy mess

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Last year the Parliament passed legislation making Commonwealth supported places demand driven for Indigenous students enrolled in medical courses. It sounded good, we need more Indigenous doctors. But as I pointed out, the policy as legislated risked reducing non-Indigenous medical student enrolments without increasing Indigenous medical students enrolments.

The 2026 funding agreements reveal that the Department of Education has been quite inventive in finding a workaround to prevent this perverse outcome. The price, however, is yet more complexity in higher education policy.

The problem

A demand driven funding policy for Indigenous medical students assumes that fixed total funding holds Indigenous enrolments down. Student places are indeed unusually restricted in medicine. Medicine is the only ‘designated’ course, meaning that the government sets a specific number of student places. While designation does not prohibit over-enrolments (i.e. student contribution only places), medicine also has a completions cap. A standard funding agreement clause specifies that a university must not change its medical enrolments in ways that will change annual completions from the capped level.

While medical student numbers are restricted it is not clear that this prevents increased Indigenous enrolments. As I argued in my original post, universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) these schemes are delivering Indigenous enrolments, a source of pride for the medical deans association. 3% of domestic medical students are Indigenous, compared to 2.3% of the overall domestic student population.

The main obstacle to further enrolment increases is unlikely to be funding. It is finding potential students who are not being set up to fail.

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The 2026 funding agreements, Part 1: Public university block grants

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The 2026 higher education funding agreements, the legal basis of Commonwealth Grant Scheme funding, were published recently. This post examines public university funding for ‘higher education courses’.

‘Higher education courses’ has a specific legal meaning. It includes FEE-FREE Uni Ready (enabling) courses and coursework programs other than medicine, except for Indigenous students in bachelor degree courses, who are funded separately. Each public university receives a maximum basic grant amount (MBGA) for higher education courses. This funding is intended to be a flexible block grant. Universities can move money between qualification levels and disciplines, except for medicine.

Policy change

For 2026 the government has changed its policy on setting university MBGAs, as part of a transition to a new funding system under the proposed Australian Tertiary Education Commission. For 2023-2025 Labor retained the Coalition policy of indexing MBGAs to inflation and adding regional-campus-biased increments for population change. This policy led to many universities not using all their MBGA, known as ‘under-enrolment’. Coalition policies to compensate higher education providers for under-enrolment cost taxpayers $844 million between 2020 and 2023.

The government has, sensibly enough, decided not to keep increasing MBGAs for universities that cannot utilise the funds. The new policy, as summarised in the funding agreements, is:

  • For universities that significantly under-enrolled in 2024, the last year with ‘verified’ data, the provider will receive no increase in higher education courses MBGA between 2025 and 2026. Section 30-27(3) of the Higher Education Support Act 2003 prevents the government from lowering a MBGA between years.
  • Universities with enrolments valued at or near their MBGA will receive inflation indexation.
  • Universities with significant over-enrolment ‘may’ also receive a share of an over-enrolment fund.

In a document distributed to universities in 2025, significant over-enrolment was defined as delivering places valued at 5% or more above their MBGA.

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Higher education participation rates at age 19 – a migration data update

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For many years I have published estimates of the domestic higher education participation rate at age 19. That age was chosen as it is the modal age of domestic higher education students.

To calculate a participation rate we need a count of domestic higher education students (Australian or NZ citizen, permanent resident) and a count of the ‘domestic’ population, that is all Australian or NZ citizens and permanent residents. There are significant issues with calculating both numbers – explained in this post from last year.

One of these issues is that the ABS population figures are inflated by temporary migrants. They need to be removed from the count to get a ‘domestic’ population figure. The ABS does not provide a temporary visa/domestic breakdown. As a workaround, my participation time series deducts international 19 year old higher education students from the ABS 19 year old population estimate.

A new methodology

This onshore higher education international students aged 19 correction, however, has several problems: a) the higher education enrolment data does not cover all higher education providers; b) vocational education students are not included; and c) other temporary visa holders in Australia are not included.

These omissions should lead to an under-estimate of the temporary visa population and, after their deduction, an over-estimate of the ‘domestic’ population.

To get a more accurate temporary population figure, I asked the Department of Home Affairs for data on 19 year old temporary visa holders in Australia on 30/06/2024, the date of the ABS population estimate. Some of these visa holders may not satisfy the population count rule – that the person is or will be in Australia for at least 12 months in a 16 month period. However, people with temporary visas who satisfy the 12/16 rule but who were temporarily absent from Australia on 30/06/2024 are omitted from the count.

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My ATEC Senate inquiry submission/legislation analysis

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Submissions for the ATEC bills Senate inquiry are appearing on the inquiry’s website.

My submission turned into a detailed analysis of the two bills, the main one setting up ATEC and another with consequential amendments to the Higher Education Support Act 2003 and the TEQSA Act 2011.

It draws from my seven posts to date on the ATEC bills: on its objectives, on mission based compacts, on student contributions and funding rates, on ATEC’s independence from the government, on the setting of the Threshold Standards, on international student caps, and on ATEC commissioners and their qualifications.

The bills should be rejected

The short version of my view is that neither bill should pass.

Although the full scope of ATEC’s powers won’t be seen without further legislation, the mission based compacts alone, as drafted, give the government/ATEC unprecedented power over universities.

This power is inconsistent with university autonomy and with proper parliamentary control over government officials.

On the available evidence, this power would be used to pursue a narrow instrumentalist view of higher education. Even modest acknowledgements that education has purposes other than economic or equity goals, such as the references to ‘cultural and intellectual life’ in HESA 2003, are conspicuously absent from these bills.

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The Australian Tertiary Education Commission legislation, Part 7, The number of ATEC commissioners and their qualifications

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Under the bill to create the Australian Tertiary Education Commission there will be three ATEC commissioners: a Chief Commissioner, a First Nations Commissioner, and a Commissioner.

The commissioners will have significant administrative and advisory functions requiring expertise on a wide range of topics. I have covered two of these topics in detail in this series on the ATEC legislation, ATEC’s advice on the Threshold Standards that govern all higher education providers and on per student funding rates. Other subjects on which expertise will be needed include the equity groups, education demand, higher education administration, and research.

It’s not clear, however, that the three commissioners envisaged under the ATEC legislation will have expertise across the full range of fields.

Mapping ATEC functions and advisory roles against statutory selection criteria

In the Universities Accord (Australian Tertiary Education Commission) Bill 2025 sections 56 to 59 set out the qualifications for being a commissioner. All three commissioner roles have a general requirement for appropriate skills, knowledge and experience. Section 59 sets out specific required domains of knowledge and experience that they must collectively have. The table below maps these against the responsibilities of ATEC, as indicated across section 3 of the bill (Objects), section 11 (Functions) and section 41 (Advice and recommendations). 

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The Australian Tertiary Education Commission legislation, Part 6, International student caps

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Under legislation to establish the Australian Tertiary Education Commission, introduced into Parliament in November 2025, a function of ATEC is to ‘allocate a maximum number of international student commencements to ESOS registered providers at the direction of the Minister’. This appears as section 11(h) of the Universities Accord (Australian Tertiary Education Commission) Bill 2025.

Does this create a power to cap international student numbers?

The ATEC bill’s explanatory memorandum states that further legislation will set out a framework for how international student commencements will be allocated (p. 8). But does section 11(h) on its own create a power to cap international students independently of this framework?

On its plain meaning I think it does. Section 33(1) of the Acts Interpretation Act 1901 says that: ‘When an Act confers a function or imposes a duty, then the power may be exercised and the functions or duty must be performed from time to time as the occasion requires.’

The minister can, by legislative instrument, create rules ‘necessary or convenient for carrying out or giving effect to this Act’, adding more detail to how the caps would work: section 75(1)(b), Universities Accord (Australian Tertiary Education Commission) Bill 2025.

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Mapping Australian higher education – December 2025 data update

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To prolong the life of Mapping Australian higher education 2023 I have been updating a spreadsheet which contains the data behind the charts and tables.

The December 2025 Mapping data update is here, revised 2/1/2026 due to an error with FEE-FREE Uni Ready funding in the 16/12/2025 release, is here.

Since the last update in March 2025 the changes include the 2024 enrolment data, the 2024 university financial information, and graduate employment outcomes.

Research income has been the most recent significant data release, including research block grant funding for 2026 and the HERDC data used to calculate it, which goes up to 2024. The chart below shows the research-specific income sources 2017-2024.

I will next update the spreadsheet when we have projected 2026 spending on Commonwealth supported places in the first quarter of 2026. I hope by then the 2025 staff data will also be available.

The Australian Tertiary Education Commission legislation, Part 5, ATEC, TEQSA and the Threshold Standards

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Under the legislation to establish the Australian Tertiary Education Commission, introduced into Parliament late last month, ATEC would advise the minister on the Higher Education Threshold Standards. All higher education providers must meet these standards as a condition of registration. The enforcement agency is the Tertiary Education Quality and Standards Agency.

This post compares the current system for setting the Threshold Standards with how this would happen if the ATEC legislation passes unamended.

Current process for setting the Threshold Standards

The Threshold Standards are a legislative instrument – and so disallowable by either the Senate or the House of Representatives – made by the education minister: section 58 of the Tertiary Education Quality and Standards Agency Act 2011. Under the same provision the minister can make other quality-related standards, as part of a Higher Education Standards Framework.

The minister must not make a standard unless a draft has been developed by the Higher Education Standards Panel (discussed shortly): section 58(3)(a) TEQSA Act 2011.

The minister must consult with the state and territory education ministers: section 58(3(b)(i) TEQSA Act 2011.

The minister must consult with the research minister if that is a separate role (not currently): section 58(3(b)(ii) TEQSA Act 2011.

The minister must consult with TEQSA: section 58(3(b)(iii) TEQSA Act 2011.

The minister must have regard to any advice or recommendations given by the Panel or the consultation parties: section 58(4) TEQSA Act 2011.

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The Australian Tertiary Education Commission legislation, Part 4, ATEC’s independence from the government

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The Universities Accord Final Report recommended that ATEC be an ‘independent statutory authority … to enable it to provide robust advice and support evidence-based decision making and planning’ (p. 234). This post explores the relationship between ATEC and the government, as set out in the ATEC bill introduced into Parliament last week.

I should say at the start that unelected bodies with significant powers (‘independent’) are not necessarily good things. Government agencies should work within clear goals and rules established by democratic processes.

But independence can be beneficial in ensuring that government (and the broader public) get honest data – the ABS is a model here. Independent bodies can also help governments avoid the temptation to do things that are politically beneficial in the short run but detrimental in the long run – the RBA is a model here. Both the ABS and the RBA make mistakes, but their overall approach is better than letting the government decide whether or not to release vital data or to set interest rates with public opinion in mind.

All legislative references, unless otherwise specified, are to the Universities Accord (Australian Tertiary Education Commission) Bill 2025.

Administration of mission based compacts

The most important ATEC function will be to administer mission based compacts. As noted in a previous post, the content of mission based compacts will be driven by a ministerial statement of short-term and long-term strategic priorities: section 15. However this is not a legislative instrument: section 15(6). This means that neither the Senate nor the House of Representatives can disallow it. I take this as a democratic negative compared to the current system, under which key spending programs, such as equity and research block grants, have their own legislative instruments.

ATEC must prepare its own statement of strategic priorities: section 43. ATEC must take the minister’s priorities into account when performing its functions: section 15(4). Within the limitations of the new framework, this is appropriate in putting ATEC’s direction under the broad control of a person who can be subject to parliamentary questions, even if the ministerial statement of priorities cannot itself be vetoed. ATEC itself will appear before Senate Estimates.

Importantly, the minister will not give directions to ATEC in relation to decisions ATEC makes or in relation to ‘a higher education provider or a class or classes of higher education providers’: section 71(2)(b) & (c). This compares favourably to the current funding agreement system, under which the minister can effectively determine the content: section 30-25 of the Higher Education Support Act 2003. It is also better than the wide power to cancel course registration for international students, including on the basis of the ‘kind of provider’, which was approved by Parliament with modest improvements the same week the ATEC bill was introduced.

Section 71(2) reduces the risk of ministerial discretion being misused to penalise a university or universities in an arbitratry way.

The strongest guard against the misuse of power, however, is having rule-driven programs. On that the ATEC model would be worse than what we have now.

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