2. The fees for Engineering and IT have decreased because the STEM subjects such as these are high government priority areas and therefore the government is keen to encourage students to enroll in these courses. In contrast, the fees for Economics courses has increased because the government consider this a lower priority area, but also  believes that students completing these courses have reasonably good job prospects and are therefore more likely to be in a better position to pay a greater share.

3. The government justifies it on the basis that it wants to promote the completion of degrees in those courses that are considered high priority, such as STEM subjects which he believes will provide the greatest contribution to Australia’s prosperity in the future. Essentially the reforms are about skilling young Australians for the jobs of the future and in those areas that make sizeable contributions to national welfare.

4. By reducing the cost of courses in the STEM subjects for example should attract more students and therefore lead to an increase in the number of graduates from those faculties. It will therefore help to prevent skills shortages that might otherwise have arisen in the future, helping to maintain/boost productivity, which exerts downward pressure on costs of production, improving supply conditions for businesses and shifting the aggregate supply curve to the right.

5. To the extent that the reforms helped to raise productivity over time, it should lead to an increase in aggregate supply his productivity is enhanced, which in turn helps to reduce prices and inflation, improving Australia’s (international) competitiveness. This will facilitate an increase in aggregate demand over time (i.e. an expansion along the AD curve) and lead to low inflationary (i.e. more sustainable) economic growth. As growth in production takes place it necessarily leads to an increase in the demand for labour, boosting employment and helping to reduce the rate of unemployment towards the full employment (NAIRU) level of approximately 4.25%.

6. To the extent that the higher fees on average discourage students from attending university it actually has the potentially perverse effect of decreasing the quality of human capital, which of course has the reverse effects of those intended. A further unintended consequence is the likely decrease in demand for Australian university education from foreign students, which reduces Australia’s export income and negatively impacts on the current account balance.

7. Personal choice.