Category: Australian Tertiary Education Commission

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

Andrew NortonLeave a comment

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

Andrew NortonLeave a comment

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.

Read More »

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

Andrew NortonLeave a comment

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.

Read More »

Rewards and penalties under ATEC and the new funding system

Andrew Norton2 Comments

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.

Read More »

The fall and rise of postgraduate Commonwealth supported places

Andrew NortonLeave a comment

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.

Read More »

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

Andrew NortonLeave a comment

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.

Read More »

ATEC’s allocation of international student commencements

Andrew NortonLeave a comment

In presentations earlier this year I told audiences that the government will try again to impose provider-level caps on international students. Its 2024 attempt failed due to a surprise Coalition-Green alliance in the Senate. The basis of my statement was ATEC ‘s legislation, which said that it would ‘allocate a maximum number of international student commencements to ESOS registered providers’ (emphasis added).

But for unexplained reasons the government is backing away from tough provider-level international student enrolment limits. The Universities Accord (Opening the Doors of Opportunity) Bill 2026 gives ATEC a role in allocating commencements to higher education providers, but it is something closer to current national planning level allocations for new overseas student commencement (NOSC) than a hard capped system.

The basic process will be that the minister sets a total allocation pool of international student commencements, and ATEC then decides on the distribution between universities and other higher education providers.

As described in detail below, this process has very high levels of ministerial and ATEC discretion, to the point of both being able to reduce allocations after the students have started their courses.

While there should be much better processes than those set in the bill, at least for non-public university providers it is not obviously significantly worse than what we have now.

Legislative references are to the Universities Accord (Australian Tertiary Education Commission) Act 2026 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.

International student allocation pool

As for domestic students in Commonwealth supported places, the minister for education will start by setting a total pool of ‘overseas students that may commence a course of education with ESOS registered higher education providers during a specified period’: new section 46B(1).

What does the minister take into account when setting the international student allocation pool?

Read More »

The proposed new funding system, part 3: Capping over-enrolments

Andrew NortonLeave a comment

The Universities Accord (Opening the Doors of Opportunity) Bill 2026, in itself, does not do what it says in the cover.

Although the minister’s promotional material focuses on new Commonwealth supported places expected over coming years he could have funded those under the current system – albeit imprecisely, as the current system largely allocates in dollars rather than places. The most we can say in favour of the bill and new places is that it will be more obvious whether or not they have been funded.

Where the bill differs most from the current funding system is in reducing places at the university level. In the previous post I explained how a year of under-enrolment could result in a lower allocation of places two years later. In today’s post I describe proposed new restrictions on over-enrolments, students taken above the allocated level.

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.

As with the earlier posts, this is one is dealing with complex legislation so I am happy to receive feedback through comments or direct communication.

The current system

Under the current ‘higher education courses’ grant – all CSP categories other than medicine or Indigenous students in demand driven places – there is a maximum basic grant amount. The value of CSPs delivered in this category is calculated as the Commonwealth contribution rate * the number of student places delivered. If the value of these places exceeds the MBGA the university gets the MBGA but no more: current section 33-5(2). In 2024 nine universities delivered student places worth at least 5% more than their MBGA.

For student contributions, however, there is no cap. The provisions on upfront student contributions and HECS-HELP loans give the Commonwealth no power to intervene on these payments: current sections 93-15 and 96-1 respectively.

The proposed system – capped student contributions

There will be a transitional scheme for currently over-enrolled universities, which I cover below. First I will focus on the long-run system under which universities will get an over-enrolment buffer, for which student contributions are paid, but then be penalised student contribution revenue for places in excess of the buffer.

Read More »

The proposed new funding system, part 2: ATEC allocations of Commonwealth supported places to public universities

Andrew Norton6 Comments

In the previous post, I outlined how the minister would set total numbers of Commonwealth supported student places if the Universities Accord (Opening the Doors of Opportunity) Bill 2026 is passed. This post looks at how the Australian Tertiary Education Commission (ATEC) will allocate CSPs to public universities. ATEC will also allocate places to other higher education providers, discussed in a later post.

To recap on the previous post, ATEC will allocate places from a ‘total allocation pool’ (TAP) determined by the minister. ATEC will not allocate medical places, which the minister will do. ATEC will also not allocate demand driven places, currently Indigenous students in bachelor degrees or medicine.

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.

Feedback is welcome via the comments or direct communication. This is complex legislation and I may misunderstand things. Three revisions to my first post so far.

Total number of Commonwealth supported places per university

The total number of CSPs allocated to a university will be known as their ‘domestic student profile’: new section 30-15(2).

The domestic student profile will have up to two components, the ‘core student load’ and an ‘additional growth allocation’: new section 30-25.

Read More »

The proposed new funding system, part 1: Setting the number of fully-funded Commonwealth supported places

Andrew Norton1 Comment

This post is the first in a series of explainers on how the new Commonwealth supported student funding system will operate if the Universities Accord (Opening the Doors of Opportunity) Bill 2026 is passed.

The series is primarily aimed at policy advisers and people working in university planning offices. I covered the most important issue for the general public and prospective university students in this Conversation article.

This post looks at how the total number of fully-funded Commonwealth supported places will be determined. A fully-funded place is one for which both a Commonwealth and a student contribution is paid. Student contribution only places will be discussed in a later post.

The current system

As a refresher, the current CSP allocation system has three components:

  • Designated courses, where the minister allocates, via university funding agreements, specific number of CSPs. Currently only medicine for non-Indigenous students is designated. The funding formula is the Commonwealth contribution rate * the number of student places delivered or the allocated number of places, whichever is the lower.
  • Demand driven courses, currently only Indigenous students in bachelor degrees or medical courses. The funding formula is the Commonwealth contribution rate * the number of student places delivered. Effectively, universities and students decide on the allocation.
  • A ‘higher education courses’ grant in which each university gets a maximum basic grant amount (MBGA) to cover CSPs not in the previous two categories. The value of CSPs delivered in this category is calculated as the Commonwealth contribution rate * the number of student places delivered. If the value of these places exceeds the MBGA the university gets the MBGA. If the value is below the MBGA in theory the university receives that amount. In practice, in recent years, universities have received the full value of their MBGA via other programs despite not delivering CSPs of the required value.

The proposed reforms

All three of these components will change if the bill passes.

The overall higher education courses category will be allocated in CSPs instead of dollars, with no maximum basic grant amount. Total places will be determined by the minister, allocations to specific providers will be determined by ATEC.

Designated places will become a sub-category of higher education courses, used to allocate/restrict places in specific kinds of courses. While the minister decides which courses are designated, ATEC allocates designated places to providers.

Medicine will move into a new, separate category, still functionally equivalent to designation but allocated by the minister (as now) instead of ATEC.

The existing demand driven categories will be maintained and include a ministerial discretion to add new categories of courses. There will be a new mechanism to cap demand driven places if needed.

Read More »