What the sector wants in the Budget

“With the Albanese government set to hand down the 2026/27 Federal Budget on Tuesday, the national dialogue has been dominated by cost‑of‑living pressures, fuel security, housing supply and the government’s push to strengthen economic resilience. Treasurer Jim Chalmers has warned the Australian economy is “hostage to economic turmoil,” pointing to global energy shocks, rising inflation and a national debt approaching $1 trillion. However, the Treasurer has also announced this budget will deliver $64 billion in “reprioritisations” and savings, with key investments for fuel security, productivity and tax reform. The government has already confirmed: $10 billion for fuel security, including a 1‑billion‑litre onshore reserve A new Counter‑Terrorism Online Centre A likely overhaul of capital gains tax and negative gearing A possible one‑off income offset for workers $3.8 billion more for Melbourne’s Suburban Rail Loop East Expanded Medicare Urgent Care Clinics Major NDIS reforms expected to cut $15 billion over four years A decade‑long $53 billion defence funding increase. Last year’s budget offered tax cuts, health spending and fee‑free TAFE places, but no new higher‑education investment. Research funding reform In their pre-budget submissions to government, both the Group of Eight (Go8) and Universities Australia (UA) and said that Australia’s research funding model is no longer viable. “Australia’s university research funding system is broken,” the Go8 submission said, pointing to a widening gap between competitive grants and the indirect costs required to deliver them. On average, $1.19 in indirect costs is needed for every $1 of direct research income, a gap universities have been forced to fill through international student revenue. SERD panel chair Robyn Denholm said “the imperative for change is clear.” Picture: Lyndon Mechielsen/Courier Mail. The Strategic Examination of Research and Development (SERD) final report, released in March, reinforced the urgency . It called for the restoration of Australian Research Council (ARC) and National Health and Medical Research Council (NHMRC) funding, lifting indexation, and the establishment of a national costing framework to determine the true cost of research. “The imperative for change is clear. Future generations of Australians face a substantial reduction in their standard of living unless there are bold, nation changing reforms,” SERD panel chair Robyn Denholm said. The National Tertiary Education Union (NTEU) warned that the system is already buckling. “Australia’s research capacity is being hollowed out by a decade of real decline in competitive grant funding,” NTEU national president Alison Barnes said. “When that funding declines in real terms year after year, we lose researchers, we lose capability, and we lose the ideas that drive prosperity.” The union backed SERD’s call to lift the PhD stipend to $50,000, arguing that “Australia cannot ask its next generation of researchers to live below the poverty line.” For staff, the consequences of underfunding include insecure employment, heavier teaching loads, and shrinking research time. “Universities have been robbing Peter to pay Paul for too long,” Dr Barnes said. “A genuine full-cost-recovery mechanism is essential to breaking this structural dependency and putting both research and teaching on a sustainable footing.” European Union president Ursula von der Leyen stands beside Anthony Albanese during her visit to Canberra. Picture: Christophe Licoppe. In the wake of research funding changes out of the US, a major shift came in March, when Prime Minister Anthony Albanese announced Australia would begin treaty negotiations to associate with Horizon Europe , the world’s largest research fund. If negotiations succeed, Australian researchers could access Horizon Europe calls from early 2027. “Association with Horizon Europe gives Australia a front‑row seat to the world’s biggest breakthroughs. It places our researchers, industries and institutions inside the world’s most influential collaborative R&D ecosystem – where standards are set, breakthroughs are scaled, and global priorities are shaped,” Go8 chief executive Vicki Thomson said. Whether Tuesday’s budget includes funding to support the negotiations remains to be seen. The workforce pipeline UA stressed that Australia’s skills challenge is now a national economic priority. Modelling shows that more than 50 per cent of new jobs between 2025 and 2035 will require a university degree, yet the system is not funded to meet the government’s target of 80 per cent tertiary attainment by 2050. UA argued that the Job‑ready Graduates scheme has “entrenched perverse incentives,” pricing students out of key disciplines and reducing university funding. It called for the highest student fee band to be scrapped and real per‑student funding restored. Without action, UA warned, the government’s ambition to educate one million additional students a year by 2050 will remain out of reach. International education remains a $52 billion export, but the sector is still recovering from visa uncertainty and geopolitical instability. The UA submission supported a “balanced, risk‑based approach” to regulation but said visa settings must remain competitive.

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