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2019 - 2020 - 2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TERTIARY EDUCATION QUALITY AND STANDARDS
AGENCY AMENDMENT (COST RECOVERY) BILL 2021
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Education & Youth,
the Honourable Alan Tudge MP)
Tertiary Education Quality and Standards Agency
Amendment (Cost Recovery) Bill 2021
OUTLINE
The purpose of the Tertiary Education Quality and Standards Agency Amendment (Cost
Recovery) Bill 2021 (Bill) is to amend the Tertiary Education Quality and Standards Agency
Act 2011 (TEQSA Act) to reflect the introduction of the new registered higher education
provider charge under the Tertiary Education Quality and Standards Agency (Charges) Bill
2021 (Charges Bill).
The 2018-19 Budget included a measure providing additional resources and revised cost
recovery arrangements for the Tertiary Education Quality and Standards Agency (TEQSA). It
provided additional resources of $24.3 million over four years to strengthen TEQSA's
regulatory oversight of the higher education sector, meet a significant increase in
applications for registration from prospective providers, and protect Australia's reputation for
high quality higher education. It also included a shift to increased cost recovery for TEQSA's
regulatory activities.
TEQSA's fees for application-based activities are determined by a legislative instrument
made by TEQSA under section 158 of the TEQSA Act. Those fees will increase from
1 January 2022 to reflect the Australian Government's decision to implement increased cost
recovery for TEQSA's regulatory activities. The increased resources for TEQSA's other
regulatory functions will be cost recovered through the new charge, developed in line with
the Australian Government Charging Framework (available from www.finance.gov.au) and
imposed by the Charges Bill.
Under the Charges Bill, the amount of the registered higher education provider charge will
be an amount prescribed by the regulations or worked out in accordance with the manner
prescribed by the regulations. Prior to the introduction of the regulations, TEQSA will seek
stakeholder feedback on a draft Cost Recovery Implementation Statement (available from
www.teqsa.gov.au), consistent with the Australian Government Cost Recovery Guidelines
(available from www.finance.gov.au).
The new sector-wide charge will be phased in over three years commencing on
1 January 2022, when 20 per cent of these costs will be recovered; rising to 50 per cent of
costs on 1 January 2023; and 100 per cent cost recovery from 1 January 2024. The charge
is designed to recover the costs of TEQSA's sector risk monitoring and other regulatory
oversight activities that are not covered by application-based fees.
This Bill will require higher education providers to pay the charge, including any penalties for
late payment. A failure by a higher education provider to pay the charge will constitute a
breach of a condition of registration and may result in enforcement action being taken by
TEQSA. The Bill also provides for TEQSA to make Registered Higher Education Provider
Charge Guidelines to facilitate the administration of the charge.
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FINANCIAL IMPACT STATEMENT
The new charge will be set at a level sufficient to recover the cost of TEQSA's regulatory
activities that are not the subject of its application-based fees. TEQSA estimates the total
cost of these activities to be around $5.7 million annually. The charge will be phased in over
three years. From 1 January 2022, the charge will be set to recover 20 per cent of the total
cost of these activities. From 1 January 2023, the charge will increase to cover 50 per cent
of the total cost. From 1 January 2024 and ongoing, the charge will be set to recover the full
cost of these regulatory activities. The actual amount of the charge for each provider will be
determined each year based on the anticipated cost of TEQSA's regulatory activity for that
year.
The charge will be imposed on all providers on TEQSA's national register at the start of that
year. The amount of the charge payable by each registered provider will be determined in
accordance with a formula set out in regulations made under section 9 of the Charges Bill.
The proposed approach to apportioning the charge will be set out in TEQSA's draft Cost
Recovery Implementation Statement.
LIST OF ABBREVIATIONS
TEQSA Act Tertiary Education Quality and Standards Agency Act 2011
Charges Act Tertiary Education Quality and Standards Agency (Charges) Act 2021
Charges Bill Tertiary Education Quality and Standards Agency (Charges) Bill 2021
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Tertiary Education Quality and Standards Agency Amendment
(Cost Recovery) Bill 2021
The Tertiary Education Quality and Standards Agency Amendment (Cost Recovery) Bill
2021 (Bill) is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
Overview of the Bill
The purpose of the Bill is to amend the Tertiary Education Quality and Standards Agency
Act 2011 (TEQSA Act) to reflect the introduction of the new registered higher education
provider charge under the Tertiary Education Quality and Standards Agency (Charges) Bill
2021 (Charges Bill).
The 2018-19 Budget included a measure providing additional resources and revised cost
recovery arrangements for the Tertiary Education Quality and Standards Agency (TEQSA). It
provided additional resources of $24.3 million over four years to strengthen TEQSA's
regulatory oversight of the higher education sector, meet a significant increase in
applications for registration from prospective providers, and protect Australia's reputation for
high quality higher education. It also included a move to increased cost recovery for
TEQSA's regulatory activities.
TEQSA's fees for application-based activities are determined by a legislative instrument
made by TEQSA under Section 158 of the TEQSA Act. Those fees will increase from
1 January 2022 to reflect the Australian Government's decision to implement increased cost
recovery for TEQSA's regulatory activities. The increased resources for TEQSA's other
regulatory functions will be cost recovered through the new charge, developed in line with
the Australian Government Charging Framework (available from www.finance.gov.au) and
imposed by the Charges Bill.
Under the Charges Bill, the amount of the registered higher education provider charge will
be an amount prescribed by the regulations or worked out in accordance with the manner
prescribed by the regulations. Prior to the introduction of the regulations, TEQSA will seek
stakeholder feedback on a draft Cost Recovery Implementation Statement (available from
www.teqsa.gov.au), consistent with the Australian Government Cost Recovery Guidelines
(available from www.finance.gov.au).
The new sector-wide charge will be phased in over three years commencing on
1 January 2022, when 20 per cent of these costs will be recovered; rising to 50 per cent of
costs on 1 January 2023; and 100 per cent cost recovery from 1 January 2024. The charge
is designed to recover the costs of TEQSA's sector risk monitoring and other regulatory
oversight activities that are not covered by application-based fees.
This Bill will require higher education providers to pay the charge, including any penalties for
late payment. A failure by a higher education provider to pay the charge will constitute a
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breach of a condition of registration and may result in enforcement action being taken by
TEQSA. The Bill also provides for TEQSA to make Registered Higher Education Provider
Charge Guidelines to facilitate the administration of the charge.
The Bill engages with the right to education - Article 13 of the International Covenant on
Economic, Social and Cultural Rights (ICESCR).
Analysis of human rights implications
Right to education
The Bill engages the right to education which is set out in Article 13 of the ICESCR which
recognises the important personal, societal, economic and intellectual benefits of education.
The Bill amends the TEQSA Act to enable TEQSA to levy a new registered higher education
provider charge which will ensure TEQSA's monitoring and compliance functions, to ensure
the high quality and reputation of Australia's higher education system is maintained.
The payment of the higher education provider charge will support TEQSA to carry out its
regulatory and quality assurance roles in the higher education sector. TEQSA's key purpose
is to protect student interests and the reputation of Australia's higher education sector. There
are more than 1.6 million students currently studying higher education in Australia, and prior
to the pandemic, the annual economic benefit to Australia from higher education as an
export was estimated to be over $37 billion. TEQSA's role in ensuring the quality and
reputation of the higher education sector supports and contributes to the right to education.
Conclusion
The Bill is compatible with human rights
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Tertiary Education Quality and Standards Agency
Amendment (Cost Recovery) Bill 2021
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the Act to be the Tertiary Education Quality and Standards Agency
Amendment (Cost Recovery) Act 2021.
Clause 2 - Commencement
The table in subclause 2(1) specifies that the Act will commence on the later of: (a) the start
of the day, of the day after this Act receives the Royal Assent and (b) the commencement of
the Charges Act. Clause 2 further explains that the provisions do not commence at all if the
Charges Act does not commence.
A note provides that the table in clause 2(1) relates only to the provisions of this Act as
originally enacted. It will not be amended to deal with any later amendments of the Act.
Subclause 2(2) provides that any information in column 3 of the table is not part of this Act. It
further provides that information may be inserted in this column, or information in it may be
edited, in any published version of this Act.
Clause 3 - Schedule(s)
Clause 3 provides that any legislation that is specified in a schedule to the Act is amended or
repealed as set out in the applicable items in the schedule concerned and any other item in
a schedule has effect according to its terms.
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Schedule 1 Registered higher education provider charge
Summary
Schedule 1 amends the TEQSA Act to enable TEQSA to collect and administer the
registered higher education provider charge established by the Charges Bill, including by
issuing guidelines that set out a range of administrative details associated with the charge.
Detailed explanation
Tertiary Education Quality and Standards Agency Act 2011
Item 1 - Section 5
This item amends section 5 (Definitions) of the TEQSA Act to insert a definition of
registered higher education provider charge, which means a charge imposed under the
Charges Act.
Item 2 - After section 26B
This item amends the conditions of registration in Division 2 of Part 3 of the TEQSA Act to
add a new section 26C titled Condition - registered higher education provider charge
must be paid.
New subsection 26C(1) will require higher education providers to pay the registered higher
education provider charge, and any penalty for late payment of the registered higher
education provider charge, when they are due and payable. A note explains that the
registered higher education provider charge is imposed by the Charges Act.
A failure by a higher education provider to pay the charge (or late payment penalty) will
constitute a breach of the conditions of registration and may result in enforcement action
being taken under Part 7 of the TEQSA Act.
New subsection 26C(2) provides that certain matters will be provided for in the Registered
Higher Education Provider Charge Guidelines (see further Item 3 below). In particular, the
Guidelines may provide for all or any of the following matters:
the issuing of notices setting out the amount of the registered higher education
provider charge payable by a provider
when the registered higher education provider charge is due and payable
the issuing of notices extending the time for payment of the registered higher
education provider charge
penalties for late payment of the registered higher education provider charge
to whom the registered higher education provider charge and any penalties for late
payment are payable
the refund, remittal or waiver of the registered higher education provider charge or
late payment penalty
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the review of decisions made under the Registered Higher Education Provider
Charge Guidelines in relation to the collection or recovery of the registered higher
education provider charge
any other matters relating to the collection and recovery of the registered higher
education provider charge.
New subsection 26C(3) provides that, if regulations under the Charges Act provide for the
amount of registered higher education provider charge for a year for a registered higher
education provider to be equal to the sum of one or more components, then a reference in
this section to registered higher education provider charge includes a reference to the
amount of such a component.
Item 3 - Section 204 (before table item 1)
Section 204 of the TEQSA Act makes provision for certain Guidelines to be made for the
purposes of the Act. This item amends section 204 to add the Registered Higher Education
Provider Charge Guidelines to the list of Guidelines that may be made under the TEQSA
Act.
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