INDEXATION OF UNIVERSITY GRANTS AT RISK BY WORKCHOICES LEGISLATION
November 9, 2005
The failure of the Commonwealth Government to develop a new indexation system for universities has placed at risk badly needed additional funding. The current indexation system is based on the value of the minimum wage (the safety net increase), as currently determined by the Australian Industrial Relations Commission. What will happen when the new Fair Pay Commission begins its work? Will the safety net increase essentially be equal to the Commonwealth’s preferred wage number? And what might this mean for Universities?
Currently safety net wage adjustments determine 75% of the index applied to university grants each year. If the Commonwealth were to keep future minimum wage increases to lower levels than under the AIRC system, universities, and other Commonwealth social programs, might face further reductions in real Commonwealth funding.
“NTEU calls on the Government to clarify its policy position in relation to indexation, and guarantee that the WorkChoices legislation will not be used to further reduce the real level of Government funding to critical programs such as university teaching and research”, said Dr Carolyn Allport, National President of the NTEU.
“We can estimate what the difference to university funding might have been by looking at the gap between the Commonwealth’s recommendation on the safety net wage adjustments and the final amount determined by the AIRC. Under this modelling, universities would have received $590m less in 2005, had the Government got its way on minimum wage increases”.
“The Minister for Education must now revisit the question of indexation of university funding, and the NTEU calls on him to ensure that any new arrangements provide a realistic reflection of the cost increases faced by universities and guarantee they will not result in a further erosion of the real value of Commonwealth funding for our already under-resourced higher education sector,” Dr Allport concluded.
Information and Comment:
Paul Kniest, Policy and Research Officer: (03) 9254 1910