Federal Treasurer Jim Chalmers handed down his third budget on Tuesday, saying it was a “budget for every Australian”. It gained key support from student bodies, but it's not all good news.
MOJO News has reviewed the budget with a focus on students and young people aged 18 to 24. So: who are the winners and losers?
Winners:
The Universities Accord:
The Accord is a report tabled to the Federal Government, focused on how to improve the quality of the higher education sector. It has received $1.1 billion worth of funding, which has been welcomed by the National Tertiary Education Union (NTEU).
“The Federal Government has earmarked $1.1 billion in funding over the next five years to implement recommendations from the Universities Accord,” the union said.
The Accord’s recommendations included helping more people from low socio-economic backgrounds to obtain a tertiary qualification.
Anyone with a HECS debt:
Indexation has been hailed as a major issue for students and graduates. Dr Monique Ryan, independent MP for Kooyong, started a petition on her social media that gained more than 250,000 signatures, one of the largest in Australia's history. The petition made the case to change indexation to ease the cost of living for university graduates.
The new system works by calculating indexation using both the Wage Price Index (WPI) and Consumer Price Index (CPI). Whichever is lower will determine the indexation rate for HECS and HELP loans.
“We are capping indexation of student loans to either the Consumer Price Index or the Wage Price Index, whichever is lower,” Chalmers said in his budget speech. "Backdating it to mid‑2023 will cut indexation from last year in half.
"It will wipe $3 billion in student debt for over 3 million Australians and save the average person around $1,200."
Students on placement:
Another issue highlighted in the University Accord is unpaid placements. Students in healthcare and teaching need to undertake unpaid placements in order to obtain their degrees. This has placed extra cost-of-living pressures on students who need to work part time while studying full time.
The budget has announced $427.4 million to tackle this issue: from July 1, 2025, students will have access to $319.50 per fortnight while undertaking a placement to ease cost-of-living pressures.
In a statement to MOJO News, Charles Darwin University (CDU) said it welcomed the Federal Government’s decision to bring paid placements for certain study areas, such as nursing.
CDU said the funding will also benefit regional and remote areas, as it will help northern Australia’s essential worker crisis.
“The benefit of paid placements for regional and remote communities in improving workforce numbers was a key reason that the recommendation was in the university’s submission to the panel developing the University Accord,” CDU stated.
But this payment is limited and Engineers Australia argued that its representatives have missed out on this payment.
"With the new Commonwealth Prac Payment, students in key fields like teaching, midwifery and social work now get $319.50 a week during their practical placements," Engineers Australia chief executive Romilly Madew said in the organisation's budget response.
“Given our shortage of engineers, the government must extend this support to engineering students too,” Madew said.
“If we truly want a smarter future, we need to make it easier for aspiring engineers to support themselves and their families as they prepare to drive Australia’s progress.”
Commonwealth rent assistance:
Students who are renting will also have an $18 increase in their payment of Rent Assistance to ease the cost of living.
Stage three tax cuts:
Students who are working while completing their degree, and earning more than $18,200/year, will have their marginal tax rate reduced from 19 to 16 per cent for the bottom income tax threshold ($18,200–$45,000/year).
For those earning more than $45,000/year, the 32.5 per cent tax bracket will reduce to 30 per cent.
Use this calculator to see how much you will save.
Losers:
Incoming international students:
The budget has outlined a reduction in international student visas, as the number of international students in Australia rose to more than 700,000 in the last financial year.
Universities will cap the number of international student enrolments, based on accommodation availability at university.
In his budget speech, Chalmers said "for too long enrolments have grown without being matched by an increase in student housing supply".
“This puts pressure on prices and rents, especially in our cities and suburbs," Chalmers said.
“If universities want to take more international students, they must build more student accommodation,” he said.
“We will limit how many international students can be enrolled by each university based on a formula, including how much housing they build.”
Services and amenities fee changes:
The budget outlined changes to student services and amenities fees, too. Universities such as Monash will be required to direct 40 per cent of these fees to student organisations from next year.
“Higher education providers will also be required to direct a minimum of 40 per cent of their student services and amenities fee revenue to student-led organisations from July 1 2025,” the budget paper stated.
New targets for tertiary completion:
Chalmers also announced that 80 per cent of the incoming working population by 2050 should complete tertiary study.
“Tonight, we are setting a national target of 8 out of 10 workers achieving a tertiary qualification by 2050 and backing it in with new funding reforms to meet this goal.”
Funding arrangements for this to work have been promised by the government, but this will need to be negotiated with the sector.
“We’re also investing $500 million in skills for priority industries like clean energy, construction and manufacturing, and supporting women to build careers in these fields.
“These landmark reforms will improve the quality, affordability and sustainability of the tertiary education system and drive lasting, transformative change for our students and our economy,” Chalmers said.