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 ¨C 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.

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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 ¨C 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 ¨C new classrooms and research buildings ¨C for universities or [further education].¡±

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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.

john.ross@timeshighereducation.com