Opposition and Greens won’t support legislation to enforce Gillard government’s university ‘efficiency dividend’ cuts, which were part of the Gonski reforms
The Abbott government could be forced to repay hundreds of millions of dollars it has withheld from universities if legislation for an “efficiency dividend” does not pass the Senate by early next year.
Most of the public debate about university funding has focused on the 20% average cut to course subsidies that would coincide with the Coalition’s deregulation of tuition fees from 2016.
But the government has already reduced payments to universities to reflect a separate Labor-initiated efficiency dividend that has not yet been put to a vote in the Senate.
Department of Education officials have justified reductions in 2014 “advance payments” on the basis the Coalition intends to proceed with the legislation. Officials admit the government will have to correct the amounts owed to universities if the bill has not passed by the time of the standard “reconciliation” of payments in the first half of 2015.
The former Gillard government proposed efficiency dividends on university funding of 2% in 2014 and 1.25% in 2015 as part of a plan to fund the Gonski school reforms. It was estimated to raise about $900m over four years.
But when the Abbott government sought to legislate the measure late last year, Labor decided to join with the Greens in opposing it, saying the Coalition had undermined Gonski.
The bill remains “before the Senate” – meaning it is yet to be formally rejected or passed. In the meantime the government has made payments to universities assuming the efficiency dividend will pass.
A spokesman for the education minister, Christopher Pyne, said the government intended to proceed with the legislation. “The Higher Education Support Amendment Bill 2013, which covers commonwealth grant arrangements for 2014 and 2015, remains before the Senate as a monument of Labor’s hypocrisy in not passing their own bill and rectifying the debt and deficit legacy the previous government left behind.”
Labor’s higher education spokesman, Kim Carr, said Labor was “adamant” in its decision to oppose the bill because the government had reneged on school funding.
Carr said the Senate’s decision in July to strike down an associated regulation indicated the will of the upper house was against the higher education cuts.
The government would have to correct any underpayments in the funding reconciliation process in March or April next year, he said.
“The government has claimed that the legislation allows them to withhold the money, legislation-pending. The point is that there comes a time when that cannot be sustained,” Carr said.
“While the government can delay, they can’t in the end refuse to pay [the funds] without a deliberative vote of the Senate.”
The Greens senator Lee Rhiannon said universities were firing staff and shifting to a more casualised workforce and the government was “egging them on by stripping back funding”.
“Despite lacking parliamentary support for his $900m cut to university funding, Mr Pyne has gone ahead and implemented the cuts anyway – hurting universities, students and staff this year,” she said. “It displays a fundamental lack of respect for the democratic process and for the university sector.”
In January this year, after Labor and the Greens opposed the efficiency dividend legislation, Pyne’s office said the government had told universities it was “considering its options” but in the meantime advance payments would be made “without the efficiency dividend yet applied”.
National Tertiary Education Union’s policy and research coordinator, Paul Kniest, said the government needed to explain why it ended up applying the efficiency dividend to advance payments, without seeking to put the legislation to a vote.
He said: “Why has it left universities high and dry, not receiving the money this year?”