The 2003 Cabinet papers and Brendan Nelson’s higher education reforms

January 4, 2024August 22, 2025 Andrew Norton3 Comments

In the history of Australian higher education policy Brendan Nelson, the Liberal minister for education from 2001 to 2006, is perhaps under-rated. Several student funding structural changes he legislated 20 years ago are still in place. These include:

Student contributions set by universities up to a legislated maximum and going to universities (previously HECS was a fixed government charge);
A per full-time equivalent student Commonwealth contribution based on subject field of education (previously universities received an overall operating grant, which although informed by an early 1990s costing exercise did not directly tie money paid to discipline-level enrolments);
Commonwealth-university funding agreements as a method of allocating student funding to institutions, which made funding arrangements more transparent (but also turned into a backdoor instrument of policy and regulation that bypasses Parliament);
Through FEE-HELP, extension of student loans to full-fee undergraduates and students in private higher education institutions (the more limited Postgraduate Education Loan Scheme, PELS, was already supporting university full-fee postgraduates).

The 2003 Cabinet papers

The annual National Archives release of 20-year-old Cabinet papers, with the 2003 papers released earlier this week, gives us a look behind the scenes as Nelson’s reform package was developed and debated. Three digitised Cabinet documents record proposals and decisions, but not the Cabinet discussion. Sometimes, however, Cabinet thinking can be inferred from requests for further work and contextual material in the submissions.

This post focuses on changes to income contingent student loans.

The loan scheme that did not make it through Cabinet

The 16 universities signing up to subsidise the nuclear submarine program

November 29, 2023December 1, 2023 Andrew NortonLeave a comment

Sixteen universities have, according to a media release today, been allocated places in 38 STEM-related courses intended to support the AUKUS nuclear submarine program. The government says it is investing $128 million over four years. In reality, however, universities will need to divert resources from other activities to support nuclear submarine training.

The 75% costing methodology

Universities will need to self-finance some AUKUS places due to what the program guidelines call ‘the standard 75 per cent costing methodology’. In the program’s second year its funding for the first year’s continuing students will be 75 per cent of their commencing year allocation, and so on in subsequent years until no money is left.

Some reduced funding to take account of student attrition is reasonable, but 25 per cent is not. Over the 2005 to 2020 period the proportion of domestic commencing bachelor students leaving their university after first year peaked at 18.4 per cent. Nearly half the nuclear submarine places went to Group of Eight universities, which have lower attrition rates than the national average.

The dangers of single point of failure higher education systems

November 16, 2023September 1, 2025 Andrew NortonLeave a comment

When the entire Optus network went down last week – knocking out mobiles, landlines and internet connections – my new paper Job-ready Graduates 2.0: The Universities Accord and centralised control of universities and courses was in the late stages of production. If the Optus incident had happened earlier I might have included more on the risks of the Accord interim report’s proposed Tertiary Education Commission as a single point of failure.

A Tertiary Education Commission’s role in allocating student places

My new report builds on my earlier explainer of the Accord interim report’s proposals for distributing student places, focusing on how this would affect the relationship between higher education and skills needs.

Mapping Australian higher education 2023 – official release

October 19, 2023December 20, 2025 Andrew Norton2 Comments

Update 20/12/2025: More recent data here.

Mapping Australian higher education 2023 is now available from the ANU Centre for Social Research and Methods website.

Update 30/10/2024: There is a later version of Mapping 2023’s data here.

Update 26/10/23: A reader has pointed out that list of FEE-HELP NUHEPs is incomplete. A column of names from the original Excel file was omitted during production. The full list is available here. This list also includes three non-FEE-HELP providers registered by TEQSA since the pdf version was finalised. A corrected version of Mapping with the full list of NUHEPs, as of mid-2023, is here.

If anyone has noticed other errors please let me know.

Should funding be partly based on student characteristics?

August 15, 2023 Andrew Norton3 Comments

Australia’s higher education teaching funding system is primarily based on subjects rather than students. Subjects taken are converted into ‘equivalent full-time student load’ (EFTSL), the amount of study a full-time student does in an academic year. The funding rate per EFTSL varies by field of education, assuming that subject characteristics drive costs.

Various supplementary programs calculate funding on headcount equity students, but with trivial resources compared to the subject-driven funding programs, the Commonwealth Grant Scheme and HELP.

Funding on headcount?

One interesting idea in submissions to the Universities Accord review, especially suggested by regional unive r sities, was to base more funding on the student. For part-time study one EFTSL could be two or more individual students. While their combined classroom time matches one full-time student, a student with 50 per cent of an EFTSL could put similar or even greater demands on other university services as a student at 100 per cent of an EFTSL.

In RUN’s submission they report a member university’s finding that, on average, their part-time students utilised eleven services compared to five for full-time students.

Older students are more likely to enrol part-time (chart below). Given the high rates of upper ATAR students going to university soon after school older first-time students must disproportionately be people with weaker school results. They plausibly have above-average needs for academic support to complete their courses successfully.

How would student places be allocated under the Universities Accord?

August 8, 2023August 12, 2023 Andrew Norton1 Comment

The task of interpreting the Universities Accord interim report is like that of a biblical scholar trying to extract meaning from fragmentary and sometimes contradictory texts. But building on my post on a universal learning entitlement, in this post I try to understand what kind of student places allocative system the report proposes.

Existing and possible Accord allocative systems

All funding systems need methods for determining total resources and then allocating them between institutions, courses and students. The chart below has the three allocative models currently in use – what I call technocratic, block grant, and demand driven – and the Accord model, which on my reading has elements of the technocratic and demand driven models. However these models are in tension with each other – technocracy puts experts in charge while demand driven funding is based on decentralised decision making.

Decision	Technocratic (current system for medical students)	Block grant (current system for most students)	Demand driven (current system for bachelor degree regional Indigenous students with likely extension to all Indigenous students)	Accord model?
Total number of places/dollars for each year (system level)	Government decision	Government decision	University and student decision.	Aggregate outcome of student decisions (especially if universities have less control over who they admit). Or aggregate of Tertiary Education Commission university allocations.
Total number of places /dollars for each university	Government decision	Government decision	University and student decision.	Aggregate of student decisions with full learning entitlement model, possible voucher system. Or as negotiated/allocated by the Tertiary Education Commission.
Total number of places/dollars for each course or discipline	Government decision	University and student decision.	University and student decision.	Target allocations for courses determined by Tertiary Education Commission. Possible caps via aggregate voucher allocations/university-level enrolment caps on low priority courses.
Student-level allocative criteria, such as academic results or equity group status.	Can be a government decision, but for medical students a university and student decision.	University and student decision.	University and student decision.	Possibly a government decision through Tertiary Education Commission/national admission centre. Or keep current system but use targets to push unis to enrol more students, in general and from priority groups.

The Universities Accord universal learning entitlement – how might it work?

August 1, 2023October 10, 2023 Andrew NortonLeave a comment

One Universities Accord interim report suggestion is a ‘universal learning entitlement’. But what would this mean, and how would it differ from what we have now?

The first part of this entitlement is to support Australians in obtaining a tertiary qualification. But it aims to go beyond ‘traditional targets’, such as for higher education or VET, to meet ‘a range of skills and other objectives’.

The interim report defines entitlement funding as ‘an appropriate combination of a public subsidy, a student contribution that would be paid through an income contingent loan … and, for some lifelong learning, an appropriate employer contribution’.

Current limits on higher education enrolments

While no Australian citizen is specifically disqualified from accessing a funded place in higher education, in practice three admissions-related obstacles can stand in their way.

For universities the Accord interim report proposes a more extreme version of Job-Ready Graduates

July 25, 2023July 25, 2023 Andrew Norton6 Comments

The Australian Universities Accord interim report recommends overturning the most controversial Job-ready Graduates policy, using student contribution price signals to guide student course choices.

But overall the Accord interim report and Job-ready Graduates have strong parallels. They both take a utilitarian view of higher education, that its purpose is to provide benefits to others rather than being of any intrinsic value. Universities exist to meet skills needs, find practical uses for research, contribute to their local communities, and promote equity. The main difference is the interim report proposals are, with student contributions the main exception, more extreme and interventionist than Job-ready Graduates.

Substantially reduced university autonomy

Historically universities in Australia and other western countries have operated with a significant degree of autonomy from government. But despite using the word ‘autonomy’ a few times the Accord interim report shows little interest in this idea.

On my count at least 25 interim report proposals would reduce the scope of university-level decision making or are new reporting requirements that set universities up for future regulation. In my list these cover general mission direction, student admissions, the mix of disciplines and courses, curriculum and teaching, use of funds, and accountability.

The decline of the humanities

July 4, 2023July 15, 2025 Andrew Norton4 Comments

A couple of days ago the Sydney Morning Herald published an article on falling enrolments in university humanities subjects, with a focus on history and English.

I’ve converted the data into an index to make it easier to see the trends in fields with different absolute numbers of full-time equivalent enrolments. In the late 2000s and early 2010s the humanities shared in general enrolment growth, but after that went into decline. History’s growth and decline were greater than the humanities in general.

	Gavin Moodie on The 2026 funding agreements, P…
	Justin A Bokor on Mapping Australian higher educ…
	Gavin Moodie on The Australian Tertiary Educat…
	Tom Worthington on The Australian Tertiary Educat…
	Louise Hargreaves on Mapping Australian higher educ…

Andrew Norton

Higher education commentary from Carlton

Category: Higher education finance