The Albanese Labor Government is delivering major structural reforms to help more Australians get a university qualification, as recommended by the Australian Universities Accord.
The Accord is the most significant review of Australia’s tertiary education sector in 15 years, and its recommendations provide a blueprint for reform over the next decade and beyond.
In the May Budget we set out the first stage of our response to the Accord and set a national target of 80 per cent of the workforce having a tertiary qualification by 2050.
In the 2024-25 MYEFO, the Government has committed an additional $2.5 billion over the medium term to establish a new Managed Growth Funding system and introduce Needs-based Funding for universities.
The Government has also committed $54 million over the medium term to establish
the Australian Tertiary Education Commission (ATEC) to drive reform of Australia’s tertiary education sector.
Managed Growth Funding will provide universities with Domestic Student Profiles, giving them greater certainty about the number of Commonwealth supported university places that are fully funded.
This will deliver effectively demand driven funding for students from under-represented backgrounds to help them get to university if they get the marks required to get in.
The new Managed Growth Funding system is expected to deliver an additional 82,000 fully funded Commonwealth supported university places in 2035.
The Government will also provide additional Needs-based Funding for academic and wrap around supports to help students succeed, including scholarships, bursaries, mentoring, and peer learning.
Universities will receive demand driven Needs-based Funding aligned with the number of students they enrol from under-represented backgrounds to deliver this.
Supports will be accessible for any students who need extra help, with universities determining the range of supports available.
The ATEC will provide independent advice to Government on higher education pricing matters, tertiary sector harmonisation and sector performance and will implement enhanced mission-based compacts, new Managed Growth Funding and Needs-based Funding.
This new Managed Growth Funding system will be introduced through a staged implementation approach, with a transition year in 2026 and full commencement from 1 January 2027.
The ATEC will also support the implementation of Needs-based Funding for higher education providers from 1 January 2026, supporting around 140,000 students from under-represented backgrounds in its first year.
Regional funding contributions will support the continued sustainability of regional campuses, benefitting an estimated 150,000 students.
The ATEC will begin operating in an interim capacity from 1 July 2025, and permanently from 1 January 2026, subject to the passage of legislation.
A summary of the Government’s MYEFO response to the Australian Universities Accord can be found here.
Quotes attributable to Minister for Education Jason Clare:
“Under Bob Hawke and Paul Keating, the number of Australians finishing high school jumped from around 40 per cent to almost 80 per cent. That was nation changing. Now we have to take the next step.
“We have set a target that by 2050, 80 per cent of the workforce will have a TAFE qualification or a university degree.
“This will give us the economic firepower we will need in the years ahead.
“To hit that target, we need to break down that invisible barrier that stops a lot of Australians from disadvantaged backgrounds, from the regions and the outer suburbs from getting a crack at uni and succeeding when they get there.
“That requires big structural reform.
“Boosting the number of university places over the next decade will help more to Aussies get to uni, and demand driven Needs-based Funding will help them succeed when they get there.
“We are also establishing an Australian Tertiary Education Commission to help drive this reform.
“These are big reforms that are all part of building a better and a fairer education system.”
