The Big Budget Theory

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It is students vs Abbott government this season which is keeping the heat quotient up throughout the Australian winter.

It would be almost miraculous for any country to present a budget which satisfies every citizen and every resident from all walks and all phases of life. Australia isn’t facing anything different in this regard. While the whole of Australia waited with bated breath to see Abbott government’s wisdom in the matters of money, the man himself was walking on the narrow bridge of being tough and being fair.

There has been a massive unrest amongst the university students of Australia after the federal budget revelations this year. The recent budget cuts in the higher education sector hasn’t gone down well with the students group who think that this is the worst decision made by the government especially since it deals with education, which lays the foundation for the future of any country.

They are two sides of a coin and they have two different stories to tell. So what’s the entire hullabaloo about?

How the system worked before federal budget 2014

Broadly speaking there are a range of universities across Australia providing diploma, advanced diploma or associate degree courses, which are supported by the Commonwealth subsidies. This means that students who opt to pursue any of these courses from a university supported by the Commonwealth subsidy just make a contribution towards their course fee. Government pays most of the cost of course and sets the maximum amount of contribution which a student can be charged.

How the system will work after federal budget 2014

The new system will come in effect from 1st Jan 2016, which will remove the maximum contribution amount for students at universities and other higher education institutions. The Commonwealth subsidy paid towards the cost of the course will thus be reduced. This means that the Universities and other higher education institutions will then be able to determine the fees they charge to students supported by the Commonwealth subsidy.

As per the budget the new funding arrangements will affect all Commonwealth supported students who accept an offer of enrolment after 13 May 2014. Changes to Commonwealth subsidies and student contributions do not take effect until 1 January 2016. Students who accept a Commonwealth Supported Place (CSP) on or after 14 May 2014 will be charged under the existing arrangements until 31 December 2015.

Students can still avail the HECS-HELP to defer payment of their student contribution and they will still get Government subsidy to keep the costs of their course down.


In a nutshell students will have to cough up more money for their uni educations and this has enraged the students’ community across the nation who believes that Abbot Government has not been fair with its decision. Nobody likes to pay more money and the students’ group feels that Abbot Government has been selfish in its approach towards them and this step will only discourage those students who wish to pursue higher studies but are financially challenged. All the street protests, slogans and banners are hence directed towards letting Mr. Abbot know that his decision is not welcomed and not being appreciated.

While there’s no denying that financial benefits help students who are brilliant and have the desire to learn more, the growing debt under HECS plan is perhaps indicative of the fact that most of the students who avail this facility aren’t able to repay their loans. In such situations one wonders how these students will now repay their loans which will be potentially higher than the pre-budget times.

While the government argues that the money withdrawn from educational sector will be put to better use for the growth of Australia, Tony Abbott is also emotionally playing with the psyche of people by luring them with his hope of offering tax-cuts in his second term as a PM. In a bid to reduce the debt on government’s balance sheet, Tony Abbott has hit hard where it hurts the most and no matter what he thinks the people of Australia certainly don’t seem to be enjoying this.

It would be interesting to watch how this drama unfolds in the first quarter of the new financial year and whether Australians “understand” the Tony Abbot’s version of the budget or whether his dreams of becoming the Prime Minister of Australia for second term gets nipped in the bud. For now he has transformed the country into a bunch of angry students and disappointed citizens.

By Madhumita Thakur