$5 bn Higher Education Endowment Fund to Fund University Infrastructure and Enhance the Nation's Research Effort. (May 9, 2007)

    The endowment is expected to yield a dividend of about 6% per annum, i.e. $300 million.

The scheme is expected to grow with further budget injections and the dividends are to fund new university infrastructure and boost Australia's research efforts.

According to The Australian's Steve Lewis:

[The fund is] to be managed by a group called the Guardians of the Future Fund, chaired by former Commonwealth Bank head David Murray.

He said it would invest the money and distribute proceeds on a competitive tender basis, possibly giving priority to universities proposing to match fund money with that from private sources, attracting tax deductibility.

:It will be competitive. We will work out whether we do it on a yearly basis or perhaps on a biennial or triennial basis," he said.

:We will get a group of advisers on university matters, spiced with some financial experts to advise the education minister, who I imagine will discuss it with me and other senior ministers.

"The Government will make the final decision."

Mr Howard said the Government would require universities to spend money wisely and proposals for infrastructure or research would need to be properly costed and assessed as having merit.

Chair of the Go8, Professor Glyn Davis, said the Budget responds to changing patterns of enrolment by allowing a significant improvement in regulatory flexibility.

Professor Davis said the announcement of a $5 billion endowment fund for the sector will provide a permanent revenue stream to allow Australia's universities to maintain and develop their teaching and research facilities.
 

But the Chair of the Go8 cautioned, "Two notable weaknesses in the package, however, are its failure to adjust the indexation of funding to better reflect changes in costs and to address the serious shortfall in research infrastructure funding required to support participation in competitive research schemes.

"Nevertheless, in short, the Go8 welcomes the additional investment and guiding philosophy that underpins the higher education package. Minister Bishop has announced a policy framework with the potential to transform Australia's public universities."
 

The President of the Federation of Australian Scientific and Technological Societies (FASTS), Professor Tom Spurling said, “The increase in operating grants and removal of some of the constraints on universities will lead to a more dynamic sector. FASTS are pleased with the increases to grants for science and mathematics at universities. Mathematics and statistics are significant winners with an increase in the base Commonwealth grants from $5381pa to $8217pa per undergraduate student."

Professor Spurling also noted, “CSIRO’S underlying funding has increased by over $120m for the next 4 years, in addition, it will receive more than $244m for new initiatives.”

And finally, “The big-ticket item of the $5 billion endowment fund, is a responsible use of budget surpluses and will provide a very important source of long-term investment in capital and research infrastructure”.

“There is much detail to be absorbed and worked through, but this budget is a significant and positive step forward for Australia’s education and science sectors."

TFW might add that there can be little doubt that the goading by Labor's opposition leader, Kevin Rudd, and his continued lead in the voter opinion poles has had a significant effect on increased funding for the higher education sector.

If in fact there are continued significant injections of capital into the endowment fund by the federal government together with incentives for the public and the private sector to contribute, Australia could become an outstanding leader in the contribution of its universities to learning and research and the benefits that will flow from the initiative.