Australia’s government has realised a five-year ambition to kill off the country’s future fund for university infrastructure, after legislation to establish a financial lifeline for natural disaster victims passed parliament’s upper house.
The senate approved legislation to close down the Education Investment Fund (EIF), which has bankrolled high-tech research and teaching facilities around the country, and divert its remaining A$3.9 billion (?2.1 billion) into a new Emergency Response Fund.
It was a case of third time lucky for the government, which has attempted to close the EIF on two previous occasions – once to incentivise the states and territories to spend more on their infrastructure, and subsequently to bankroll a national insurance scheme for people with disabilities. Both moves faltered in the face of senate opposition.
However, the sector had anticipated a different outcome this time around, after a senate committee report handed down on 10 October recommended passage of the legislation. Despite expressing “reservations” about the EIF’s closure, the committee’s Labor members had stressed that increased disaster funding was sorely needed.
The representative body for universities said it supported a fund for natural emergencies, but not at the expense of research infrastructure. “The EIF was designed to be an education fund that would finance teaching and research infrastructure to serve the nation in perpetuity – not just today or tomorrow,” said Universities Australia chief executive Catriona Jackson.
“With its de-funding, there is now no other dedicated source of ongoing funding for investment in capital works – new classrooms and research buildings – for universities or [further education].”
Sydney investment banker Phil Clark, who chaired the EIF advisory board until its disbandment in 2014, has been scathing of the fund’s treatment since then. He has said that the government squandered hundreds of millions of dollars of potential earnings by parking the EIF’s assets in a low-yield superannuation fund, as parliamentarians squabbled over the fund’s future.
The EIF emerged from the Higher Education Endowment Fund established in 2007 by then Liberal education minister Julie Bishop and treasurer Peter Costello.
