The Federal Treasurer's 8th May budget speech prominently featured Higher Education spending, including at its core the establishment of the Higher Education Endowment Fund

"as a perpetual fund to generate earnings for capital works and research facilities in our institutions of higher learning."

Together with $5 billion establishment of the HEEF, the $3.5 billion Realising Our Potential package for education, science and training is a centrepiece of this year's Budget, that the government argues represents a substantial increase in spending over seven years ago. Details of the Education, Science and Training portfolio are available from the DEST website.

With funding come conditions: according to Education Minister Julie Bishop in her budget summary, universities are expected to

• equip graduates with the skills needed for the 21st century
• create new knowledge that will underpin Australian innovation and global competitiveness.
• be accessible to eligible students whatever their background
• be accountable to the taxpayers who sustain them, with transparency in their operations
• diversify and specialise to pursue their individual missions , and
• respond to student needs and labour market demands.

And commentators are noting strings attached in the detail of the budget: Professor Simon Marginson has noted that

• the touted revolutionary HEEF will only deliver ~$300 million p.a. to the sector, with highly qualified matched-funding conditions
• the financial position of students, which is the worst it has ever been
• universities that want to access HEEF matching grants will have an incentive to surrender their independent management of their own endowments to the HEEF Board
• the Government is seeking legislative control of university finance from the States, voluntarily or forcibly via its corporations power.

One question for university governors to consider is how the $300 million per annum (conditional) capital infrastructure funding can address the estimated $900 million expenditure required to bring the sector's deferred maintenance costs back within DEST benchmark of 3% of total insured value?

This is just one issue currently being examined by Commonwealth and State governments in the Review of the National Governance Protocols

Universities Australia has prepared a "Federal Budget 2007 Brief" (available online through the UGPD paper database).