This proposal consists of five components. It would be announced immediately following the 2019 general election and would have effect from 1 July 2019.

Component 1: University tuition fees

Tuition for Australian citizens commencing undergraduate studies at public universities would be funded by the Commonwealth Government without requiring payments by students. Students who have held a Commonwealth-supported place within the two years prior to 1 July 2019 would still be required to pay for their tuition.

• Students would still be responsible for payment of the student services and amenity fee and the costs of overseas placements. This part of the proposal would not apply to Study Assist Higher Education Loan Program (SA-HELP) loans, and Overseas Study Higher Education Loan Program (OS-HELP) loans will be retained to assist with these costs.

The Commonwealth Grant Scheme (CGS) funding calculation for undergraduate places would be amended to remove the aggregate CGS funding cap so that each additional student results in additional CGS funding for the university. Medical undergraduate places would remain allocated.

Funding per student provided to universities would also increase by 10 per cent under the proposal. This increase is in relation to both the CGS contribution and the portion of funding that, under current policy settings, would be provided as contributions from students.

Component 2: Loan repayment thresholds

The Higher Education Loan Program (HELP), vocational education and training (VET) student loan, Student Start-Up Loan (SSL), ABSTUDY SSL and Trade Support Loan (TSL) repayment thresholds would be increased as specified at Attachment A. These thresholds and the Student Financial Supplement Scheme (SFSS) thresholds would be indexed annually by growth in the median wage.

Component 3: TAFE grants

Grants would be provided to states and territories to cover the costs of tuition at TAFE institutions for courses at the Certificate Level 1 or above, up to a per-hour tuition cost cap. The cap would be set based on the average operating cost per delivery hour for state and territory government VET providers in 2017, indexed by the consumer price index (CPI) to the policy start date, and indexed annually by the CPI thereafter.

The Commonwealth Government would reduce its financial contributions under the National Agreement for Skills and Workforce Development (the National Agreement) by an amount equal to these annual tuition grants (or to zero if tuition grants exceed National Agreement payments).

Grants would be available to all Australian citizens and permanent residents who have not been enrolled in a VET course through a TAFE or any other provider within the two years prior to the proposal’s start date.

VET student loans for students enrolled at eligible courses and institutions outside of the TAFE system would remain unchanged.

Component 4: TAFE state grants program

Fifty per cent of the funding currently committed to the states and territories under the National Agreement would be redirected to states and territories such that:

• states and territories would continue to receive 40 per cent of the current value of their National Agreement payments
• 10 per cent of the National Agreement payments would be allocated based on the formula specified at Attachment B

Component 5: Student support payments

For the following Commonwealth Government student support payments, the maximum single payment rate would increase by $75 a week and the indexation arrangements changed to those used to index the age pension:

• Youth Allowance (Student and Apprentice)
• Austudy
• ABSTUDY (Tertiary).

The personal income test thresholds for single rate recipients of the above payments would also increase by $100 a week.

This component would also extend existing Austudy payments at the new higher rate to all single full time postgraduate students taking any courses without changing the current eligibility criteria.

This component is intended to operate in conjunction with a proposal to increase payment rates for single recipients of other Commonwealth Government transfer payments. Consequently, the proposal is not intended to induce any switching between benefits.