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In December 2018, the Australian Government commissioned an expert panel to provide advice on implementing performance-based funding to improve university student outcomes in Australia. Through in-depth research and analysis, stakeholder engagement [discussion paper available in VOCEDplus at TD/TNC 137.709], and collaboration, the expert panel has come up with a number of policy recommendations that it proposes for implementation. Australia's performance-based funding scheme aims to: (1) create more accountability for the spending of public money on specific national higher education priorities; (2) promote and develop sound performance assessment of teaching and learning at universities; and (3) create financial incentives to improve specific areas of university performance. This final report presents the expert panel's considerations and recommendations, highlighting major findings from the sector and statistical analyses, and flagging future work for the development of a fit for purpose, fair, robust and feasible performance-based funding scheme.

The following four principles of the scheme offer a meaningful conceptual framework against which the assessment of potential options of the design, measures and thresholds was made: (1) fit for purpose - to promote a high-quality education system; and to provide effective and reasonable incentive to improve universities' performance and student outcomes; (2) fair - to reflect a university's overall performance; and to recognise a university's distinct mission, student characteristics and geographical locations; (3) robust - to be reliable with evidence based on accurate and trusted data; and to be valid using a transparent, clearly defined and rigorous methodology; and (4) feasible - to allow for accurate performance measurement in a cost-effective and timely manner (for both universities and government) for implementation from 2020; and to be simple to implement and administer. The Panel noted the wide support from the sector for starting with a simple and robust model. This has informed the design, measures and thresholds of the scheme, and has underpinned the need for rigorous statistical analysis to validate the model prior to implementation. The Panel proposes a small set of core measures for 2020, in order to implement and administer a simple model and to allow the Government to align the scheme to national priorities of the day.

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