2015 Federal Budget: Education and Not-For-Profit insights

After last year’s sweeping changes to the higher education sector in the 2014-15 Budget, the Government has delivered minimal adjustments for the 2015-16 year.


The budget paper assumes the significant changes announced last year (including the deregulation of university fees) will proceed.

FBT Salary Sacrifice cap for entertainment

In a blow to the Not-for-Profit (NFP) sector a $5,000 a cap for salary sacrificed meal entertainment and entertainment facility leasing expenses (meal entertainment benefits) for employees will be introduced from 1 April 2016.

Currently, employees of NFP entities can salary sacrifice meal entertainment benefits with no FBT payable by the employer or a need for reporting.

This FBT concession has been widely utilised in the health sector and to some extent has been factored into employees’ remuneration. This change will put pressure on NFP wages particularly in the hospital sector.

Additionally, the use of meal entertainment benefits will become reportable for FBT purposes. The measure is projected to save $295.0 million over the forward estimates period. 

HELP loan repayments

The Higher Education Loan Programme (HELP) repayment framework will be extended to those individuals who completed their studies in Australia and now reside overseas. From 2016-17, former students residing overseas for a period of six months or more will be liable to pay at the same repayment rates as Australians residing domestically. The affected individuals will now be liable to repay their HELP debt if their worldwide income exceeds the minimum repayment threshold ($53,345 (2014-15)). The arrangement will commence from 1 January 2016 to both new and existing debts. From this date, individuals moving overseas for a period of six months or more will be required to register with the ATO. Those currently residing overseas will have until 1 July 2017 to register.

The measure is tipped to save the Government more than $140 million over the next 10 years.



Targeting non-compliance, the Government has announced a $18.2 million package intended to enhance the compliance regime. This is anticipated to enhance the administrative practices of the program and reduce inappropriate market practices within the vocational education and training sector.


Improving the quality of teachers and teacher education courses

In response to the Teacher Education Ministerial Advisory Group’s report, the Government has pledged to provide $16.9 million over four years from 2015-16 with a key aim to improve the quality of initial teacher education in Australia.

The funding will be used to develop a stronger accreditation process for teacher education courses and improve the assessment framework to ensure all teacher education graduates are classroom ready.


Smaller Government – Education and Training Portfolio

The Government will achieve significant savings through a redesign and termination of a number of programmes administered by the Department of Education and Training.

The following programmes will be redesigned:

  • The industry workforce training programme;
  • The promotion of excellence in learning and teaching higher education programme;
  • Endeavour language teacher fellowships programme; and
  • The national workforce development fund.

The measure also includes savings of $1.6 million over 5 years, by replacing several vocational education and training governance bodies with the Australian Industry and Skills Council. These include the Data and Performance Measurement Principal Committee; the Workforce Development, Supply and Demand Principal Committee; and five bodies identified in the Mid-Year Economic and Fiscal Outlook 2014-15 for abolition.

This measure is part of government reforms aiming to reduce the size and complexity of government.


Cooperative Research Centres – reduced funding

Pending the outcome of a review announced by the Minister of Industry and Science on 16 September 2014, the Government will achieve savings of $26.8 million over the forward estimates by reducing funding for the Cooperative Research Centres programme. The program supported industry-led collaborations between researchers, industry and community who aided in the development technologies, products and services to help solve critical economic, environmental and social challenges facing Australia. The Federal Government will continue to provide the currently budgeted investment of $732.4 million until the outcome of the review is made known.


Funding towards National Collaborative Research infrastructure strategy

As previously announced, the Government will provide $150 million in 2016-17 towards quality research infrastructure through the National Collaborative Research Infrastructure Strategy. This will allow major existing research facilities to deliver maximum benefit to the Australian community.