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Higher Education Funding Amendment Bill (No. 2) 1990
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Parliamentary Research Service Department of the Parliamentary Library
This Digest was prepared for debate ar d should not be taken as a complete guide to the legislation which may reflect amendments.
Higher Education Funding Amendment Bill (No. 2)
1990
Date Inb=oduced: 11 October 1990 House: House of Representatives Portfolio: E,mployment, Education and Training
Purpose The Bill will provide funding for higher education institutions in 1993 and cost supplementation for 1990-92. The Bill will also increase the percentage of income that people are to contribute under the higher education contribution scheme.
Background The Higher Education Funding Act 1988 (the Principal Act), which is best known for introducing the higher education contribution scheme, provides funding for higher education until 1992. Funding s provided on a rolling triennium basis, which means that the level of funding is known for the next three years. The level of funding for 1991 and 1992 are already contained iin the Principal Act and this B II will insert the level for 1993. Prior to the introduction of the Principal Act, funding was on a triennium
basis, with the level of funding for the next three years being determined towards the end of the three year period. The current method of funding provides greater certainty to institutions about their future funding and this allows greater planning. Another feature of education funding is cost
supplementation, where grants are adjusted to cover increased costs.
Expenditure on higher education has been increasing steadily over recent years, which have also seen growth in the number of places available in higher educ:ation. Expenditure in 1988-9 was 32726.4 million (an increase of 4% over the previous year); $3027,2 million in 1989-90 (an increase of 12.4% over the previous year); and is estimated to be $3432.3 million in 1990-91 (a 13.4% increase). A large part of the increased expenditure results from the higher education contribution scheme
(HECS). Payments to the Higher Education Trust Fund, which is financed by HECS contributions, were $225.1 million in 1988-g; $435.3 million in 1989-90; and an estimated $465.1 million in 1990-91 ’ Students contribute approximately 20% of the cost of courses under HECS. Students subject to HEC 5 may either pay the contribution up front or through a surcharge on their tax once they enter the workforce. In the 1990 Budget, the government announced that the rate of contribution through the tax system would be increased from 1 July 1991.
Main Provisions Most of the provisions of the Bill provide for cost supplementation and set the level of funding for 1993. The levels are generally a slight increase on the previous year. The exceptions are: * Grants available to assist Aboriginal participation wilt be increased, for 1991 and 1992 to
approximately $23 million and $23.7 million from the currently proposed level for those years of approximately $13.5 million. Unlike other areas, there is no figure for 1993. * Clause 7 will amend section 20 of the Principal Act which deals with superannuation expenses. The grant for 1990 will be increased from $48.56 million to $104.931 million. In later years, the level of funding will return to the previous levels, with $67.092 million being available in 1993.
l The amount available for the promotion of equal opportunity in 19%3 will be $3.667 million, up from $1.315 million in 1992. * Grants for building projects in 1993 will be $212.453 million, up from $102.261 million in 1992.
Section 4 of the Principal Act, which lists the places that are taken to be institutions, and therefore eligible for funding, will be amended by clause 4. Four new institutions, two each in Victoria and Queensland, will be added to the lii which will also reflect some recent amalgamations of institutiij.
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The maximum level of grants for 1993 will be $2 657.966 million,, up from $2 571,228 million in
1992 (clause 5).
Clause 17 will amend section 63 of the Principal Act to give the Secretary power to remit :I HECS debt in respect of a semester where the application is made within 15 months of the debt being incurred so long as there were special circumstances that prevented the person from completing their course and also prevented the person from making an application within the current three month period.
Clause 18 will amend section 68 of the Principal Act which deals with payment of HECS under the tax scheme. The rates of contribution will be increased with the level of contribution dependins, as it currently does, on the persons income. The new rates will be, with the old rates in brackets): *for incomes up to $28 941 - 2% (1%);
*for incomes up to $40 519 - 3% (2%); *for higher incomes - 4% (3%). These increases will apply from 1 July 1991.
References 1. Budget Paper No. 1 1990-91, p. 3.81
Bilts Digest service ParliiResearohService
1 November 1990
For further irtfomX&ioQ if required, contact the Education and Weffare Group on 06 2772410.
This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
0 Commonweatth of Australia 1990
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Published by the Department of the Parliamentary Library, 1990.
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