Mission-based Compacts and Performance Funding for Universities

In the 2009-10 Budget, the Australian Government announced a comprehensive 10-year reform package for the higher education sector in Transforming Australia’s Higher Education System. Reforms announced included the introduction of a demand driven funding system, significantly improved indexation on grants and the establishment of a new relationship between the Australian Government and each university through the introduction of mission-based Compacts.

Mission-based Compacts are three-year agreements that show how each university’s mission contributes to the Government’s goals for higher education, and include details of major higher education and research funding and performance targets.

Higher education Performance Funding is a key component of the teaching and learning section of Compacts. Performance Funding will provide incentives to universities to improve outcomes for students and achieve national participation objectives.

More details of the Compacts and Performance Funding arrangements, and on the development of new performance measurement instruments, is available in the Advancing Quality in Higher Education initiative.  

Development of Mission-based Compacts

Compacts have now been agreed with higher education institutions.

Performance Funding

Performance Funding has two components – Facilitation Funding and Reward Funding. Facilitation Funding is available from 2011 to universities that agree strategies for achieving the university’s teaching and learning mission and agree to targets. Reward Funding will be available from 2012 to universities that meet two performance targets for the participation of students from low socioeconomic backgrounds and those from an other underrepresented group, as agreed in Mission-based Compacts.

Information sheets on Performance Funding arrangements and measurement instruments are available as part of the Advancing Quality in Higher Education initiative.

Performance Funding Guidelines

Performance Funding – Facilitation Guidelines have been released as Chapter 12 in the Commonwealth Grant Scheme Guidelines of the Higher Education Support Act 2003.

Performance Funding - Reward Funding Guidelines are currently provided for information only. The Reward Funding Guidelines will be formalised upon being inserted as a chapter in the Other Grants Guidelines (Education) of the Higher Education Support Act 2003. The Reward Funding Guidelines reflect the changes to Performance Funding arrangements announced as part of the 2011-12 Mid Year Economic and Fiscal Outlook.

The Performance Funding - Administrative Guidelines, and the Performance Funding - Technical Guidelines provide more information for providers.


The Mission-based Compacts and Performance Funding Guidelines were developed following close consultation with the higher education sector. Further information about these consultations can be found at Stakeholder Consultation page.

For any further questions on Compacts or Performance Funding email: compacts@deewr.gov.au.

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