Howard places hi-tech at top of list

A A$1 billion (£375 million) loans scheme for 250,000 postgraduate students and 21,000 extra undergraduate places, with priority for science, information technology and telecommunications courses, is at the centre of a A$3 billion education spending commitment by Australian prime minister John Howard.

Mr Howard said it was the largest group of measures ever put together by an Australian government to foster innovation. "We are seeking today to nurture a new generation of young scientific minds capable of achieving great things for their country," Mr Howard said.

Education groups welcomed the package, to be phased in over five years, as a further sign that higher education has become a key issue in this election year.

But they said the package failed to address soaring student:staff ratios or to reduce universities' reliance on revenue from full fee-paying students.

Mr Howard said funding for the Australian Research Council - currently almost A$250 million a year - would be doubled, as would spending on major research facilities. Companies undertaking research and development would receive a 175 per cent tax deduction - up from the current 125 per cent.

The proposed postgraduate loans scheme would function along the same lines as Australia's deferred payment Higher Education Contribution Scheme, the prime minister said. Under Hecs, students must pay a quarter to a half of the cost of their courses but can defer the debt until they graduate when repayments are made through a tax surcharge.

Mr Howard said that the government would establish a series of centres of excellence in information and communications technology and biotechnology at a cost of A$176 million.