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2002
THE PARLIAMENT OF THE COMMONWEALTH
OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER
EDUCATION FUNDING AMENDMENT BILL 2002
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for
Education, Science and Training the Hon Dr Brendan Nelson MP)
HIGHER EDUCATION FUNDING AMENDMENT BILL
2002
The Higher Education Funding Act 1988 (HEFA) makes provision for
grants of financial assistance to higher education institutions and other bodies
for higher education purposes, establishes the Higher Education Contribution
Scheme (HECS), the Post-graduate Education Loan Scheme (PELS), the Open Learning
Deferred Payment Scheme and the Bridging for Overseas-trained Professionals
Loan Scheme and makes provision for the repayment of monies lent by the
Commonwealth to students under those schemes.
The Australian Research Council Act 2001 (ARCA) establishes the
Australian Research Council (ARC) as an independent body to administer the
Commonwealth research programmes for which it has responsibility, make
recommendations to the Minister on the allocation of funds within research
programs and to provide advice to the Minister on research matters as requested
by the Minister. Funding is appropriated under section 49 of the
ARCA.
The Higher Education Funding Amendment Bill 2002 (the Bill) will
amend HEFA to:
− extend access to the Post-graduate Education Loan Scheme to Bond
University, Melbourne College of Divinity, Christian Heritage College and Tabor
College (South Australia) as announced in the 2002-03
Budget;
o make various consequential
amendments arising from this measure;
− provide additional funding for
the establishment of a Graduate Diploma in Environment and Planning at the
University of Tasmania and six associated scholarships as announced in the
2002-03 Budget;
− vary the maximum funding levels in Part 2.2 of HEFA
for 2001, 2002, 2003 and 2004 to provide supplementation in accordance with
indexation arrangements and to reflect revised HECS estimates;
− vary
the maximum funding levels in Part 2.2 of HEFA for 2003 and 2004 to permit the
Institute of Advanced Studies at the Australian National University to access
the research schemes of the Australian Research Council and the National Health
and Medical Research Council (Note: there was a corresponding adjustment to the
Budget appropriation for the NHMRC Medical Research Endowment Account) ;
and
− correct a minor drafting error in subsection 23(1C) of HEFA.
The Bill amends the ARCA to:
− vary the annual funding
caps in section 49 of the ARCA for 2003, 2004 and 2005 to provide
supplementation in accordance with indexation arrangements;
− vary the
annual funding caps in section 49 of the ARCA for 2003, 2004 and 2005 to permit
the Institute of Advanced Studies at the Australian National University to
access the research schemes of the Australian Research Council;
and
− insert an additional funding cap in section 49 of the ARCA for
2006 to reflect the current Budget forward estimates and to allow the Minister
to approve projects for funding for up to four years.
In relation to the Higher Education Funding Act 1988, the
Bill:
− increases the overall appropriation by $7 million in 2001
(note: this variation is for accounting purposes in relation to the Higher
Education (HECS) Special Account);
− decreases the overall
appropriation by $5.178 million in 2002;
− increases the overall
appropriation by $74.128 million in 2003; and
− increases the overall
appropriation by $74.998 million in 2004.
In relation to the
Australian Research Council Act 2001, the Bill:
− increases
the funding cap by $16.446 million in 2003;
− increases the funding
cap by $17.453 million in 2004;
− increases the funding cap by $18.670
million in 2005; and
− provides a base funding cap of $524.090 million
in 2006.
Note: the Financial Impact relates to the variation between
this bill and the funding amounts specified in the Higher Education Legislation
Amendment Bill (No.2) 2002 which is currently before Parliament.
HIGHER EDUCATION FUNDING AMENDMENT BILL
2002
Clause 1 - Short title
Provides for the Act to be cited
as the Higher Education Funding Amendment Act 2002.
Clause 2 -
Commencement
Has the effect of providing for the provisions in Part 1
of Schedule 1 and Schedule 2 to this Act to commence on the later of the day on
which this Act receives the Royal Assent or immediately after the commencement
of Part 1 of Schedule 1 to the Higher Education Legislation Amendment Act
(No. 2) 2002, for items 22 and 23 of Part 3 of Schedule 1 to commence
immediately after the commencement of subsection 23(1C) of the Higher
Education Funding Act 1988 and for all other provisions to commence on the
day on which this Act receives the Royal Assent.
Clause 3 - Schedule(s)
Provides that each Act that is
specified in a Schedule is amended or repealed as set out in the applicable
items in the Schedule and that any other item in a Schedule has effect according
to its terms.
Schedule 1 – Amendment of the Higher Education Funding Act 1988
Part 1 – Variation of financial
assistance
Item 1
Since the introduction of the
Higher Education Contribution Scheme (HECS), funding for the operating purposes
and limited operating purposes of higher education institutions has come from a
combination of HECS liabilities and grants approved under sections 15 and 16 of
the Act. Section 17 sets the maximum aggregate funding levels for operating
grants that may be paid to institutions under sections 15 and 16 while Part 4.3
of the Act established the Higher Education (HECS) Reserve and provides for the
application of money in the Account.
Each year the operating needs of
institutions are estimated and funded by a combination of estimated HECS
liabilities during the year and aggregate grants funded within the maximum
amount provided for in section 17 for that year. Actual HECS liabilities for a
year are not available until early in the subsequent year after which an
adjustment is made to the section 17 funding amount for the previous year to
correctly reflect the relative contribution of HECS liabilities to the funding
needs of institutions.
Item 1 amends section 17 to vary the
maximum aggregate funding level for 2001, 2002 and 2003 to reflect revised
Higher Education Contribution Scheme (HECS) liabilities and estimated
liabilities, supplementation consistent with indexation arrangements, transfers
of funding to the Australian Research Council Act 2001 (for 2003 and
2004) and the National Health and Medical Research Council (NHMRC) Budget
appropriation (for 2002, 2003 and 2004) to permit the Institute of Advanced
Studies at the Australian National University to access the research schemes of
the Australian Research Council and the NHMRC. The maximum aggregate funding
level for the year 2004 is to be inserted by the Higher Education Legislation
Amendment Act (No. 2) 2002.
Item 2
Section 20 provides for grants to higher education
institutions for superannuation expenses for staff whose salaries are funded
from grants provided under the Act. Item 2 amends subsection 20(3) to
vary the maximum aggregate grant amount for 2003 and 2004 to reflect
supplementation consistent with indexation arrangements. The maximum aggregate
grant amount for 2004 is to be inserted by the Higher Education Legislation
Amendment Act (No. 2) 2002.
Item 3
Subsection
22A(5) provides for the total amounts which may be approved as expenditure by
way of grants to open learning organisations. Item 3 amends subsection
22A(5) to vary the maximum aggregate grant amount for 2003 and 2004 to reflect
supplementation consistent with indexation arrangements. The maximum aggregate
grant amount for 2004 is to be inserted by the Higher Education Legislation
Amendment Act (No. 2) 2002.
Item 4
Subsection
23C(2) of the Act limits the total funds available for grants that may be
approved under sections 21, 21B, 22, 23, 23A and 23B of the Act for specified
years. Item 4 amends subsection 23C(2) to vary the funding limits for
2003 and 2004 to reflect additional funding for the establishment of a Graduate
Diploma in Environment and Planning at the University of Tasmania and six
associated scholarships as announced in the 2002-03 Budget and to reflect
supplementation consistent with indexation arrangements. The funding limit for
2004 is to be inserted by the Higher Education Legislation Amendment Act (No.
2) 2002.
Item 5
Section 24 of the Act provides
grants in respect of teaching hospitals. Item 5 amends subsection 24(3)
to increase the maximum aggregate grant amount for 2003 and 2004 to reflect
supplementation consistent with indexation arrangements. The maximum aggregate
grant amount for 2004 is to be inserted by the Higher Education Legislation
Amendment Act (No. 2) 2002.
Item 6
Section 27A of
the Act provides for grants to institutions for special capital projects.
Item 6 amends subsection 27A(6) to increase the maximum aggregate grant
amount for 2003 and 2004 to reflect supplementation consistent with indexation
arrangements. The maximum aggregate grant amount for 2004 is to be inserted by
the Higher Education Legislation Amendment Act (No. 2) 2002.
Item 7
Section 27D of the Act allows the Minister to
determine an amount to be available for expenditure by the Commonwealth on the
international marketing and promotion of Australian education and training
services. Item 7 amends subsection 27D(2) to increase the maximum
aggregate funding level for 2003 and 2004 to reflect supplementation consistent
with indexation arrangements. The maximum aggregate funding level for 2004 is to
be inserted by the Higher Education Legislation Amendment Act (No. 2)
2002.
Part 2 – Post-graduate
education loan scheme
This Part makes provision for
post-graduate students enrolled in courses at certain educational institutions
which are not funded under the Higher Education Funding Act 1988 to be
eligible for loans under Chapter 4A. These “eligible unfunded
institutions” are Bond University, Melbourne College of Divinity,
Christian Heritage College and Tabor College (South
Australia).
Items 8-14
Amend the definitions of
appropriate officer, eligible post-graduate student,
eligible post-graduate course of study, institution,
and student in subsection 98A(1) to reflect the extension of the
post-graduate education loan scheme to the eligible unfunded institutions (Bond
University, Melbourne College of Divinity, Christian Heritage College and Tabor
College (South Australia)). Item 11 inserts a definition of
eligible unfunded institution in subsection
98A(1).
Item 15
Has the effect of providing that only
students who undertake an eligible post-graduate course of study at an eligible
unfunded institution on or after 1 January 2003 are eligible for a loan under
the post-graduate education loan scheme.
Item 16
Inserts a new subsection 98A(3A) to modify the
application of the definition of census date in subsection 34(1) as if a
reference in that definition to institution were a reference to institution
within the meaning of Chapter 4A to reflect the amendments made by this
Part.
Item 17
Inserts a new subsection 98AA in Chapter
4A. Subsection 98AA(1) inserts a table listing the four eligible unfunded
institutions. Subsections 98AA(2) and (3) have the effect of providing that the
Minister may make a declaration amending the table of eligible unfunded
institutions in subsection 98AA(1) to remove an institution from the table but
not to add an institution. Subsection 98AA(4) has the effect of providing that
a declaration under subsection 98AA(2) repeals the affected part of the table in
the Act. Subsection 98AA(5) has the effect of providing that, in deciding
whether to make a declaration under subsection 98AA(2), the Minister may have
regard to whether the institution has breached a requirement of Chapter 4A and
such other matters (if any) the Minister considers relevant. This includes any
information given to the Minister about the probity of the institution’s
governance arrangements and/or financial position.
Items 18 and
19
Insert new paragraphs 98E(aa) and (aaa) and 98F(7)(aa) and (aaa)
to reflect the extension of eligibility for loans under Chapter 4A to students
at the unfunded institutions. The items modify the interpretation of references
to institution and appropriate officer when used in relation to provisions in
other parts of the Act dealing with the tax file numbers of students and notices
by institutions.
Item 20
Inserts a new subsection 98JA
in Chapter 4A to provide that an eligible unfunded institution must provide
information about the probity of the institution’s governance arrangements
and/or the institution’s financial position as required by the
Minister.
Item 21
Amends paragraph 110(b) of the Act to
make a determination made by the Minister under proposed subsection 98AA(2) a
disallowable instrument.
Part 3 – Technical
corrections
Item 22
Corrects a drafting
error in paragraph 23(1C)(b) of the Act.
Item
23
Validates any declaration which may have been made under paragraph
23(1C)(b) containing a technical defect as a consequence of the error corrected
by Item 22.
Items 24 and 25
Insert new paragraphs
98Y(aa) and 98Z(7)(aa) in Chapter 4B of the Act (which provides for the Bridging
for overseas-trained professionals loan scheme) to reflect the amendments made
by Part 2 of this Schedule. The items modify the interpretation of references
to institution when used in relation to provisions in other parts of the Act
dealing with the tax file numbers of students and notices by
institutions.
Schedule 2 – Amendment of the Australian
Research Council Act 2001
Items 1 and 2
Have
the effect of adding 2006 to the years to which Division 1 of Part 7 of the Act
applies. Division 1 deals with financial assistance for approved research
programs.
Item 3
Repeals paragraphs 49(c), (d) and (e)
and inserts new paragraphs (c)-(f) to vary the level of financial assistance for
approved research programs for the years 2003, 2004 and 2005 to reflect a
transfer of funding from section 17 of the Higher Education Funding Act
1988 to permit the Institute of Advanced Studies at the Australian
National University to access the research schemes of the Australian Research
Council and to reflect supplementation consistent with indexation arrangements.