Commonwealth of Australia Explanatory Memoranda

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VET STUDENT LOANS (VSL TUITION PROTECTION LEVY) BILL 2019

                                  2019




     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                              THE SENATE




        VET STUDENT LOANS (VSL TUITION
          PROTECTION LEVY) BILL 2019




          SUPPLEMENTARY EXPLANATORY MEMORANDUM




  Request for Amendments to be moved on behalf of the Government


(Circulated by authority of the Minister for Employment, Skills, Small and
           Family Business, Senator the Hon Michaelia Cash)
                       AMENDMENTS TO THE
            VET STUDENT LOANS (VSL TUITION
              PROTECTION LEVY) BILL 2019


                                     OUTLINE

These Government amendments to the VET Student Loans (VSL Tuition
Protection Levy) Bill 2019 (the Bill) give further recognition to the stability of the
TAFE sector and their low risk of default. As originally drafted, clause 7 of the Bill
required government owned registered training organisations and TAFE's of each
State and Territory to pay the administrative fee component of the VSL tuition
protection levy (the levy) (but not the risk rated premium component, or the
special tuition protection component). These amendments exclude these
providers from the definition of 'leviable provider' meaning with the consequence
that they will not be required to pay any part of the VSL tuition protection levy.

Specifically, the Government amendments will result in approved course providers
not being required to pay the levy if they are:

      owned by the Commonwealth, a State or a Territory; or

      established under one of the following pieces of legislation:

           o   Technical and Further Education Commission Act 1990 (NSW);
           o   Education and Training Reform Act 2006 (Vic.);
           o   TAFE Queensland Act 2013 (Qld);
           o   Vocational Education and Training Act 1996 (WA);
           o   TAFE SA Act 2012 (SA);
           o   Training and Workforce Development Act 2013 (Tas.);
           o   Canberra Institute of Technology Act 1987 (ACT).
                              FINANCIAL IMPACT
The measure to expand the international TPS to cover VSL students, FEE- HELP
or HECS-HELP students studying at a private education provider or TAFE was
originally expected to generate $3 million over the forward estimates as a result of
the projected revenue collected through the levy system.
The proposed government amendments to the VSL Student Loans (VSL Tuition
Protection Levy) Bill 2019 and the Higher Education Support (HELP Tuition
Protection Levy) Bill 2019 remove TAFEs and government providers from the new
tuition protection arrangements and will reduce levies (revenue) collected under
the measure by $0.6 million per year (reflecting $0.55 million for VSL and $0.05
million for FEE-HELP/HECS-HELP).
The measure to introduce new tuition protection arrangements to cover VET
Student Loans (VSL) students, FEE-HELP or HECS-HELP students studying at a
private education provider will now generate expected revenue of $0.6 million over
the forward estimates.


Impact on underlying cash ($ millions)
Amendments to cover private providers only
                        2019-20      2020-21     2021-22      2022-23     Total
New tuition protection -1.1          -0.4        +1.0         +1.1        +0.6
measures - removal
of TAFEs and
government providers
                    PROPOSED GOVERNMENT AMENDMENTS
The Government proposes the following amendments to the Bill.

Amendment (1) amends the definition of 'leviable provider' so that it does not include a
provider covered by new subclause 5(1A).

Amendment (2) inserts a new subclause 1A into clause 5 of the Bill. This amendment
sets out the approved course providers that are excluded from the amended definition
of 'leviable provider', and as such, are not required to pay any part of the VSL tuition
protection levy. These are registered training organisations that are owned by the
Commonwealth, a State or a Territory, or established to provide vocational education or
training under specified legislation. This legislation specified is the:


         o    Technical and Further Education Commission Act 1990 (NSW);
         o    Education and Training Reform Act 2006 (Vic.);
         o    TAFE Queensland Act 2013 (Qld);
         o    Vocational Education and Training Act 1996 (WA);
         o    TAFE SA Act 2012 (SA);
         o    Training and Workforce Development Act 2013 (Tas.); and
         o    Canberra Institute of Technology Act 1987 (ACT).

Amendments (3) and (4) are consequential amendments to clause 7 of the Bill to
reflect that those providers excluded from the definition of 'leviable provider' are not
required to pay the administrative fee component of the levy.