Proposed amendments to the student places capping and needs based funding bill

Jason Clare’s student places capping bill appeared in the Senate several times last week, but there were no votes on substantive amendments. Parliament does not sit again until 12 October.

It is clear, however, that agreement has been reached on amendments that will secure its passage through the Senate. Greens Senator Mehreen Faruqi said in the Senate on Wednesday 16 September that the Greens had ‘secured’ twelve amendments. There are twelve Greens amendments on the bill’s home page, so I will assume that this is the same twelve, although I could be mistaken.

This post summarises the proposed amendments, focusing on the Greens and the Liberals, as both have the numbers to get an amendment through if Labor agrees. The Greens, the Coalition and cross-benchers combined could also pass amendments Labor does not support.

I mostly do not discuss Senator David Pocock’s proposed amendments, because on his own he cannot sway a Senate decision. But he had a high level of intellectual engagement with the bill and proposed sensible changes. He is particularly good on something that the government is particularly bad at – putting rules scrutinised by parliament over ministerial and administrative discretion.

A floor number of places

On the bill’s introduction the explanatory memorandum indicated a floor number of Commonwealth supported places was intended, but this was not reflected in the bill itself.

In the House of Representatives a government amendment created a ‘core student load’ minimum number of places for public universities, although the amendment does not preclude year-on-year reductions in places.

But there was no corresponding requirement that the minister set a ‘total allocation pool’ of Commonwealth supported places sufficient to cover all the minimum ‘core student load’ allocations.

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Tony Burke’s changes to student visa policy – first draft on secondary visa holders

As foreshadowed in recent weeks, Tony Burke has today announced changes to student visa policy. Unfortunately at the moment – about 5.30pm on 17 September – there is little detail other than what has been given to journalists and Burke’s National Press Club address. I will update this post as necessary when more information is available.

The key changes are restrictions on secondary visa holders, for both students and temporary graduate visa holders, and additional limits on changing courses.

It appears that the secondary visa holder changes are prospective and won’t apply to students already in Australia, but this needs cross-checking against more policy detail. In the first draft of this post I will focus on secondary visa holder restrictions.

Summary of secondary student-related visa numbers

I analysed secondary student visa holder numbers earlier this month. Some key points from this analysis:

  • In recent years, annual secondary student visa holder grants have been in the 45,000-49,000 range.
  • Based on age group analysis, 27-28% of them are the children of students (proxy of age 19 years or less).
  • The ‘stock’ of secondary student visa holders present in Australia on a given day is already well off its peak of 84,846 in mid-2024, and was 67,549 on 31 July.
  • The flows and stocks of secondary student visa holders look anomalous. I think this is largely explained by a surge in secondary student visa grants in 2022-23 (77,599). Their primary visa holders have now mostly completed their courses and moved to temporary graduate visas or left the country, so outflows from secondary student visas have exceeded inflows.
  • As a result, as of 31 July secondary temporary graduate visa holders outnumber secondary student visa holders, 73,704 to 67,549.
  • Adult secondary student visa holders are likely to be an important aspect of the economics of coming to Australia for some students, with declared earnings of $1.3 billion in 2022-23. Secondary temporary graduate visa holders earned a similar amount.

New restrictions on secondary student visa holders

In line with recent policymaking preferences, the following groups will be exempt from restrictions on secondary student visa holders: research students, foreign affairs and defence sponsored students, students from the Pacific Islands, Timor-Leste and ASEAN countries. We can track their numbers through the student visa grants data. Over the last decade these visa categories have typically led to 10-11,000 annual secondary student visa grants. There was a spike in 2022-23, which included pent-up demand from the COVID border closure years.

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Pathways to permanent residence for former international students

The Australian government is trying, without much success to date, to reduce the number of long-term temporary migrants. For student-related visa holders – people with student visas, temporary graduate visas, or former international students on bridging visas – this is primarily about reducing inflows of new visa holders and increasing outflows of existing visa holders. Another important element, however, is moving former students to permanent visas.

This post looks at recent trends in former international students achieving permanent residence. It concludes with a discussion of the subclass 482 Skills in Demand visa, which offes a new route to PR.

Permanent visas

My main data source is the Department of Home Affairs Student visa and Temporary Graduate visa program report. It only reports former students transitioning from these visas, and not those with another temporary visa prior to PR. An ABS analysis up to the 2021 Census found that over half the 587,000 former student visa holders with PR had first held three or more temporary visas. This total includes secondary applicants, who made up about a quarter of the total.

The Home Affairs data includes former students moving to visas that are probable sources of PR, which I discuss below. There is no primary/secondary visa holder split. As I showed in an earlier post, secondary visa holders are a significant share of the potential PR population, especially for temporary graduate visa holders.

Since 2022-23 the annual number of former international student visa holders getting PR has increased significantly. Before COVID it was around 20,000 a year, after COVID it was around 31,000 a year. These are primarily work-related visas, with the subclass 190 state or territory Skilled Nominated visa the largest category.

One-step moves from a student visa have become less common. Their share of the total halved from 40% of the total in 2019-20 to 20% in 2024-25. The two-step track – student, temporary graduate visa – to PR has become more common.

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Measuring low SES and higher education policy

Australian higher education policy uses a geographic proxy to measure socioeconomic status. People living in the lowest 25% of areas by the ABS Index of Education and Occupation are deemed ‘low SES’.

The IEO is one of four SES measures devised by the ABS using census results. The other three are the Index of Relative Socio-economic Disadvantage (IRSD), the Index of Relative Socio-economic Advantage and Disadvantage (IRSAD), and the Index of Economic Resources (IER).

During the Senate inquiry into the new funding legislation Greens Senator Mehreen Faruqi, drawing on the University of Sydney’s submission which said it used IRSAD for awarding scholarships, asked witnesses about possible use of IRSAD instead. Senator David Pocock also asked about SES indicators for the ACT, which has few low SES students on the official definition.

I was one of several people to receive a written question on notice on equity definitions. This post draws on my response.

Predicting educational disadvantage

The chart below shows 2021 educational participation rates at age 20 by the four ABS SES indicators. Like the higher education version it uses SA1 areas, which on average contain about 400 people. I used census longitudinal data to capture SES when these students were aged 15 in 2016. This is a more reliable indicator of their formative years than current location, which could reflect a move closer to a university. A weakness of the funding bill currently in the Parliament is that its SES proxy is the student’s current address.

As a predictor of educational participation the IEO is the most powerful of the four. Parental education and occupation indicators show the largest high-low gaps. Young adults in the top decile are 4.2 times as likely to be at university than young adults in the lowest decile. The Index of Economic Resources is the least predictive, with top decile residents 2.3 times as likely to be at university as the lowest decile.

For outreach programs I can see merit in the IEO, to counteract absent university role models and possibly low parental expectations of higher education.

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The coming cuts to student-related secondary temporary visa holders

Last week The Australian reported on apparent forthcoming limits on student secondary visa holders, the partners and children of the primary visa holder students. This has been rumoured for months. Along with long-foreshadowed changes to points-tested permanent visas, restricting secondary visa holders is a major yet-to-be-deployed policy weapon against temporary migration.

This post looks at the characteristics of and trends in student-related secondary visa holders.

Student-related secondary visa population trends

While students rather than temporary graduate visa holders seem to be the main policy target, as the chart below shows the secondary student visa holder population is already trending down, while temporary graduate secondary visa holders are increasing. The overall totals have fluctuated in a narrow range around 140,000 since late 2023.

Student secondary visa grants

As the chart above suggests, the relationship between student and temporary graduate secondary visas has changed over time. The recent temporary graduate takeover partly reflects a prior spike in secondary student visa grants, shown in the chart below. This was part of a high general increase in student-related visa numbers due to pent-up demand and policy incentives I described in an earlier post.

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Government amendments to its student places capping bill

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

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?

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

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

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