Performance-Based Funding for the Commonwealth Grant Scheme

For: 

Performance-Based Funding for the Commonwealth Grant Scheme

As part of MYEFO 2017–18, the Australian Government announced that it was capping Commonwealth Grant Scheme (CGS) funding for bachelor-level places at 2017 levels for 2018 and 2019. From 2020, funding for bachelor-level places will grow in line with population growth in the 18‒64 year-old age bracket, contingent on universities meeting specified performance requirements.

Performance‑based funding (PBF) is intended to ensure universities focus sufficient attention on the quality of their teaching and student support to achieve the best possible graduate outcomes.

The expert panel for the PBF scheme, chaired by Professor Paul Wellings CBE, Vice Chancellor of the University of Wollongong, led the consultation with the sector on the design and implementation of this important reform.

On 2 October 2019, the Hon Dan Tehan MP, Minister for Education, announced the final design of the PBF scheme for 2020. The scheme comprises:

  • four core measures (graduate employment outcomes, student experience, student success and equity group participation by Indigenous, low socio‑economic status and regional/remote students)
  • contextualised thresholds for each core measure to account for university contexts and student characteristics
  • an excellence threshold for the measures of graduate employment outcomes and student experience, acknowledging that there are instances where it is statistically impossible for institutions to receive 100 per cent of funding
  • a qualitative submission to account for university contexts
  • a weighting for the measure of graduate employment outcomes at 40 per cent, with the other three measures weighted at 20 per cent each, to reflect government priorities for producing job‑ready graduates and driving productivity growth across the nation
  • an incremental approach to funding allocation for each measure.

In 2020, the amount of PBF (1.36 per cent of CGS funding, in line with population growth), more than $80 million per year, will be added to a university's maximum basic grant amount (MBGA). Universities will continue to be able to access CGS funding of around $7 billion per year without any reference to their performance, and more than $17 billion per year in funding for higher education and research in total.

The Government will continue to ensure the PBF model is fit for purpose, with reviews scheduled in 2020 and 2023.

Qualitative submissions

Universities that do not receive their entire share of PBF for 2020 will be invited to provide qualitative submissions. The department will negotiate conditions with those universities based on their qualitative submissions to ensure that they are supported to improve their performance in the future.

For more information