It is ten years since the demand driven system for funding university places was announced. The Government wanted to ensure that all Australians had the opportunity to gain the knowledge and skills in the fields that drive them, as the basis for productive contribution to Australia’s future.

The IRU has consistently supported the policy which lets universities meet demand for higher education from the mix of population growth and increased employment need for graduates. IRU members are important contributors to these outcomes, especially the reduction in inequity of access for students from underrepresented groups.

We need Australians to follow their aspirations and graduate across all disciplines to be ready for the challenges ahead. The intent of the policy was to increase higher education attainment, support growth in key areas for the economy, and to reduce inequities in access by people from backgrounds underrepresented in universities.

Overall, demand driven funding improved outcomes for all three objectives. The following analysis sets out:

  • the increase overall in student enrollments and new graduates;
  • the targeting of increases to health professions and science technology engineering and mathematics (STEM) graduates;
  • the improved outcomes for students from low socio economic backgrounds;
  • the improved outcomes for Aboriginal and Torres Strait Islander students; but
  • lower levels of improvement for students from rural and remote areas.

The analysis is of Australian students enrolled in undergraduate programs, the students subject to demand driven arrangements. All charts and tables refer to this set of students only.

The Government decision to cap university Commonwealth Grant Scheme funding at its 2017 level means that universities will steadily reduce the number of students enrolled to avoid allowing the investment per student to drop below the level needed for quality student learning.

The Government proposals for the university by university funding cap to be indexed to population growth, contingent on meeting performance standards on student experience, graduate outcomes and equity is not a serious mechanism to meet growing demographic demand in the 2020s, let alone the continued steady rise in the proportion of the workforce needing higher level education.

The Government should re-set the higher education funding framework announced at the end of 2017 so that universities can provide needed education outcomes, by removing the cap on Commonwealth Grant Scheme funding for each university.

To address the lower level of improvement for participation for students from regional and remote areas it should create a regional, rural and remote (RRR) program to encourage and reward the enrolment and progress of students from regional, rural and remote areas. The program would parallel the Higher Education Participation and Partnerships Program (HEPPP) and Indigenous Support Program (ISP).

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