Labor and Greens block $2.3 billion in university cuts

Australia's former Labor prime minister Julia Gillard created a storm of outrage across the university sector last April when she announced that spending on higher education would be slashed by A$2.3 billion, equivalent at the time to a cut of US$2.5 billion.

But this week, with Labor now in opposition and Gillard and many of her colleagues no longer in parliament, the new Labor leader Bill Shorten said the party would not back the conservative government’s plan to adopt the spending cuts.

As University World News reported at the time, Gillard defended the proposed cuts declaring that spending on higher education under the Labor government since 2010 had jumped by 56% and the latest decision was “not a cut in government spending but a slowing in growth”.

Gillard said schools needed the additional money to improve the performance of disadvantaged students, including the indigenous and disabled, especially in public schools which would receive the largest portion of a proposed A$14.5 billion additional spending over the following six years.

But on Tuesday, Shorten said Labor would oppose the government's “cynical” move to impose the A$2.3 billion cut, arguing that it would mean slashing the same amount from the budget for schools. Opposition higher education spokesman Senator Kim Carr said Labor “would not back gutting of our schools plan”.

Although Labor is outnumbered in the House of Representatives, it plans to join with the Greens in the Senate to block the government’s legislation involving university cuts.

Carr said it was not hypocritical of Labor to describe the government as “cynical” for supporting Labor’s proposed cuts, because the Gillard government planned to use the money to pay for six years of its school funding project whereas the new conservative government had only committed to fund four out of the six years.

“Labor will not support the Coalition's cynical move to go ahead with A$2.3 billion in savings from higher education when they have abandoned the six-year plan they were designed to fund,” Carr said.

Belinda Robinson, chief executive of the main higher education lobby group Universities Australia, said vice-chancellors were pleased Labor had reversed its position on the cuts. But she said there was "a way to go until the fate of these cuts is finally determined".

"Reducing the investment in universities is a false economy because of the longer term impact on national productivity and prosperity," Robinson said.

As well as cutting grants to universities, Labor had intended to turn scholarships it was providing to students starting out in university into loans that would be added to their HECS – Higher Education Contribution Scheme – debt.

This was estimated to add an extra A$2,000 a year to the increasing amount each student owed the government.

The federal Education Department revealed that as a result of the planned changes, the total amount owed by Australian students under the HECS scheme would increase from A$26 billion at present to A$42 billion by 2016.