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  • Education Investment Fund doomed by the Budget

    12/05/11

    The Gillard government failed in its 2011-12 Budget to ensure the survival of the Education Investment Fund (EIF), according to Brett Mason, Shadow Minister for Universities and Research.

    “The government is spending $500 million out of the Fund over the next five years to fund the so called ‘regional priority round’, forced upon the government by the rural Independents. But no new money is coming into the fund, except for the interest earned on the ever shrinking capital,” Senator Mason said.

    “There is no commitment in this Budget to replenish the EIF, and consolidate its use in the future on a sustainable basis as an on-going source of infrastructure funding for universities.

    “The Fund that was supposed to provide a perpetual source of funding for university infrastructure will soon dissipate, a victim of Labor’s ‘raid the piggy-bank’ mentality.

    “Upon coming into government, Labor with great fanfare renamed the Coalition’s $6 billion Higher Education Endowment Fund, made it a centrepiece of its ‘nation building package’, and promised to top up the Fund with an extra $5 billion to take the total up to $11 billion.

    “In fact, over the past three and a half years, instead of only spending the accumulated interest and adding money to the capital, the government has raided the Fund in a short-sighed spending spree that left it with only around $2.5 billion in uncommitted funds.

    “When I previously questioned Education Department officials in Senate Estimates, they were forced to admit that the Labor government has not contributed one cent to the fund, breaking their promise to put an extra $5 billion into the fund.

    “Instead, the Labor government continues to draw down on the funds accumulated by the previous Coalition government, turning a perpetual, secure, long-term source of financing for university infrastructure into yet another piggy bank that can be raided at will.

    “This is a short-sighed policy, particularly at a time when the universities sector requires a certain and long-term source of infrastructure funding to help it in the implementation of the Bradley review reforms.

    “Yet this government does not seem to have a plan to finance this expansion it adopted as its policy. Not only the 2011-12 Budget fails to provide for new infrastructure spending, but it also fails to inject any new funds into the EIF. All this on top of the $300 million Capital Development Fund being scrapped earlier this year in a mad rush to find money to pay for the government’s flood package.

    “This is yet another fail mark for the Gillard government in higher education policy.”
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Brett Mason

Shadow Minister for Universities and Research

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