2017-2018 Federal Budget Expert Analysis - Education

Key points

  • HECS repayment thresholds to change from 1 July 2018
  • University fees to increase

  • Needs based funding for schools introduced with $18.6 billion increase in funding to 2027

  • $1.5 billion Skilling Australians Fund created for up to 300,000 extra apprenticeships


From 1 July 2018, new HECS repayment thresholds will be introduced. A new minimum threshold of $42,000 with a 1 percent repayment rate will be introduced, and a maximum threshold of $119,882 with a 10 percent repayment rate will be established. In addition to changed repayment thresholds university fees are being increased.

The portion of university fees paid by students through the Higher Education Loan Program (HELP), will increase by 7.5 percent, 1.82% annually over the next four years from 1 January 2018. These fees will increase for all Commonwealth supported students regardless of when they began their studies. This replaces the 20% reduction in Commonwealth Grant Scheme Funding previously announced.

Whilst universities are to have their government funding decreased, school funding will increase. From January 2018, funding for schools will be distributed on a “needs based” methodology. This methodology is based on students from similar schools, with similar needs, receiving similar funding. An increase of $18.6 billion of funding has been announced for schools for the period to 2027 representing an average increase of 4.1% per student across Australia. For some schools that are currently receiving funding above the “Schooling Resource Standard” - the measure to be used by the government for funding need - will either have their payments reduced or frozen. Additionally, a governmental review has been established for “Gonski 2.0” to further the Gonski report, again, chaired by David Gonski.

For vocational education, $1.5 billion over the next four years has been announced for the Skilling Australians Fund. This fund has been established to support the skilling and training of apprentices and trainees for occupations in high demand, occupations with a reliance on skilled migration pathways, industries and sectors of future growth, trade apprenticeships, and apprenticeships and traineeships in regional and rural areas.