This proposal consists of four components. It would be announced on 1 January 2019 and would have effect from 1 July 2019.

Component 1: University tuition fees

Tuition for commencing undergraduates at public universities who are Australian citizens would be funded by the Commonwealth 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.

• This part of the proposal would not apply to SA‐HELP loans (provided to eligible students to pay for all or part of their student services and amenities fee) and OS‐HELP loans (provided to eligible students enrolled in a Commonwealth‐supported place who undertake some of their study overseas).

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 comprises both the CGS contribution and the portion of funding provided under the baseline through the student contribution.

Component 2: Higher Education Loan Program (HELP) and Vocational Education and Training (VET)
loan repayment

The HELP and VET student loan repayment thresholds would be increased as specified at Attachment A. These thresholds would be indexed annually by the median wage.

Component 3: Technical and Further Education (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 government VET providers in 2017, indexed by the Consumer Price Index (CPI) to the policy start date, and indexed annually at the CPI thereafter.

The Commonwealth would reduce its financial contributions under the National Agreement for Skills and Workforce Development 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: Student support payments

For the following Australian Government student 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 proposal is intended to operate in conjunction with a proposal to increase payment rates for single recipients of other Australian Government transfer payments. Consequently, the proposal is not expected to induce any switching between benefits.