2016 Federal Budget Impact

Sarah James reveals the facts about university funding and the internship program proposed by the 2016 Federal Budget

Following Scott Morrison’s delivery of the Federal Budget last week there has been the usual amount of controversy. Phrases such as “$4 an hour” and “$100 000 degrees” have been thrown around. Surprisingly the 2016 Budget was relatively underwhelming, especially in consideration of Joe Hockey’s 2014 monstrosity of a Budget that left the overwhelming majority of the population outraged. The real flaw with the current Budget is the possibility of it being too conservative – with an early election just around the corner on July 2, the Liberal Party really needed to pull out the big guns. To put it simply, the Budget was boring. Only 7 percent of Australians thought they would be better off with this Budget, with 59 per cent believing they will be “about the same.”

Between the Coalition’s last-ditch attempt to boost their popularity in the polls and Labor scare tactics, it’s easy to get confused unless you actively follow politics. What exactly are the facts?

Unfortunately for UON students, universities are one of the losers in this year’s Budget. While it pales in comparison to the 2014 Budget, which proposed that higher education institutions be able to set their own tuition fees, restricting access to many students from low SES backgrounds in the process – the future does not look much brighter. Abandoning plans to completely deregulate university fees, the Coalition still intends on cutting 20 per cent of funding to universities. There is also the possibility of introducing a ‘two-tiered’ fee system. Further, the HECS Repayment Scheme could have students begin repaying their loans once their income reaches $45 000, as opposed to the current $54,126. This could result in hundreds of thousands of graduates being forced to start paying back their HECS debt when not in a financially viable position to do so.

For those undergoing postgraduate study, there is talk of uncapping student numbers and creating a new system for allocated subsidised places.

Even in light of community concerns over the cost of higher education, the Coalition is pushing for universities to create innovative courses which would differentiate between tertiary institutions. These ‘flagship courses’ would be limited to no more than 20 per cent of a university’s cohort, where the fees for these select courses would be deregulated. HECS founder Bruce Chapman had originally proposed this idea. The aim of these courses is to promote specialisation, with Education Minister Simon Birmingham asserting this deregulation would be to promote specialist, innovative courses, as opposed to just jacking up the cost of a standard medicine or law degree. However even with the Australian Competition and Consumer Commission overseeing the set fees, there is the possibility of deterring people from low SES backgrounds from studying these courses due to the expense.

What is important to note is that no substantial changes are occurring immediately, with the Government pushing back major policy decisions until January 2018.

Are we out of the woods yet? Yes. Are we in the clear yet? No.

Youth unemployment is sitting at approximately 12.2 per cent – a disproportionately high number compared to the national rate of 5.7 per cent. This is an issue which obviously needs to be tackled. The Libs are well aware of this. Scott Morrison has even made his catchphrase “jobs and growth”, iterating it a whopping 13 times during his Budget delivery.

So what exactly is their plan to counteract this? Internships. The Coalition have proposed a $750 million package (also known as PaTH) in order to boost employment through offering unemployed people under the age of 25 access to training and internship programs. Once unemployed for a period longer than six months, the person and their jobactive provider will be able to coordinate an internship placement lasting from 4 to 12 weeks, working around 15 to 25 hours per week. Employers will also benefit from partaking in such a scheme, receiving approximately $1000 as an incentive.

Naturally, this glorified ‘work for the dole’ program raises many concerns from young people and experts in the area. There is the possibility of businesses abusing participants in the scheme as cheap labour, continuously putting on interns in order to receive the government subsidy, without actually hiring paid employees. Consequently, the entire point of generating more employment is lost.

According to law professor at the University of Adelaide, Andrew Stewart in the Sydney Morning Herald, the internship program is just a “ramped up version” of the national work experience program introduced in last year’s Budget, but lacking the original safeguards proposed. These include preventing businesses from accepting people for work experience if the business had downsized in the previous year, or if they had proposed to take on a work experience person instead of a paid employee.

Where the facts seem to get jumbled is around this ‘$4 an hour’ figure. In response to undergoing an internship, the Government will pay the individual an additional $200 per fortnight on top of their regular Centrelink payment. This is said to equate to $4 an hour. However, in a society where unpaid internships have come to be expected when trying to gain experience in your field, is this really that big an injustice? Numerous media companies have come under fire in recent years for using interns upwards of 6 weeks without paying them at all.

In response to the Government’s plans, the National Union of Students (NUS) today staged a nationwide protest known as the National Day of Action. This protest was at UON in the Auchmuty Courtyard, and included a BBQ, and speakers from NUSA and the National Tertiary Education Union amongst others. Coordinator of the event and President of NUSA Education Collective Michael Labone believes that firm action is needed in order for student voices to be heard. “The government is cutting 20% of funding from public universities. Our uni claims it’s finances are stretched already, they use SSAF funding on infrastructure already so another cut will make things tough,” said Labone. He further asserts that the PaTH plan is “disgusting.”

With that being said, if the Coalition fails to win the July 2 election, none of this will matter. To ensure your voice is being heard, don’t forget to enroll to vote. The Woman’s Collective will be hosting a three-day Enrol to Vote campaign this week. If you’re interested in learning more, they will be in the Auchmuty Courtyard between 11am and 2pm on Wednesday.

For a general overview of how the Budget will affect you, please visit


Feature Image courtesy of Richard O’Regan

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