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Higher Education Funding Amendment Bill 1991
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Parliamentary Research Service Department of the Parliamentary Library
KS3 Dipst was pepwed for debate and shouid not (be taken as a com@ete guide to the legisat&n which may reMc$ amendments.
Higher Education Funding Amendment Bill 1991
Date Intfoduced: 7 March 1991 House: House of Representatives Portfolio: Higher Education and Employment Services
purpose To provide cost supplementation for 1991-1993 higher education grants to the States and to adjust certain grants.
Background
.,
The Higher Education Funding Act 7988 (the Principal Act), which is best known for introducing the higher education contribution scheme, provides funding for higher education until 1993. Funding is 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 1991-1993 are contained in the Principal Act. Prior to the introduction of the Principal Act, funding was on a triennium basic, 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 education. Expenditure in 1988-89 was $2726.4 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 millioln in 1990-91 (a 13.4%
increase).’ A large part of the increased expenditure results from the ihigher education contribution scheme (HECS). Payments to the Higher Education Trust Fund, which is financed by HECS contributions, were $225.1 million in 1988-89; $435.3 million in 1989-910; and a.n estimated $465 million in 1990-91.* Students contribute approximately 20% of the cost of courses under HECS. Students subject to HECS may either pay the contribution up front or through a surcharge on their tax once they enter the workforce. In the 1990-91 Budget, the Govemmeint announced that the rate of contribution through the tax system would be increased from 1 July 1!391.
Main Provisions Clause 3 will amend the Principal Act as set out in the Schedule to ,the Bill.
Section 17 of the Principal Act, which deals with the maximum level of recurrent grants, will be amended to provide cost supplementation for 1991-93, reflect the transfer of money from the States Grants (TAFE Assktance) Act 7988 to the Principal Act and revised amounts for reimbursement of HECS revenue to the States (note: the reason given for the transfer is to refiect the transfer of certain higher education places from TAFEs to the higher education sector). The effect of the proposed amendments will be to increase the maximum level of grants for 1991 from $2520.739 million to $2567.853 million; for 1992 from $2571.228 to $2619.349 million; and for 1991 $2657.966 million to $2706.961 million.
Section 19 of the Principal Act, which deals with the maximum level of grants for Aboriginal participation projects, will be amended to provide cost supplementation for 1992. The effect of the proposed amendments will be to increase the maximum level of grants for 1!392 from $23.662 million to $24.107 million.
Section 20 of the Principal Act, which deals with the maximum level of grants for superannuation expenses, will be amended to provide cost supplementation for 1991-l 993. The effect of the proposed amendments will be to increase the maximum level of grants for 1991 from $59.050 million to $59.782 million; for 1992 from $67.092 million to $67.923 million; and for 1993 from $67.092 million to $67.923
million.
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Section 21 of the Principal Act, which deals with the maximum level of grants for projects of
national priority, will be amended to provide cost supplementation for 1991-l 993. The effect of the proposed amendments will be to increase the maximum level of grants, for 1991 from $29.948 million to $30.258 million: for 1992 from $30.877 million to $31.260 million; and for 1993 from $31.753 million to $32.146 million.
Section 22 of the Principal Act, which deals with the maximum level of grants for promotion of equality of opportunity, will be amended to provide cost supplementati’on fofr 1992 and 1993. The effect of the proposed amendments will be to increase the maximum level af grants for 1992 from $1.555 million to $1.6 million, and for 1993 from $3.687 million to $3.712 million.
Section 23 of the Principal Act, which deals with the maximum level of grants for special research assistance, will be amended to provide cost supplementation for 1991-l 993, reflect revised cash flow arrangements for the Special Overseas Postgraduate Fund and transfer from 1990 of unexpended money of research programs (note: the reason given for the revised cash flow arrangements is to enable expenditure under the program to be spread over the period 1991 to 1994 so as to allow for a properly structured program). The effect of the proposed iamendments will be to
increase the maximum level of grants for 1991 from $215.268 million to :$216.648 million: for 1992 from $224.710 million to $229.012 million; and for 1993 from $227.195 millilon to $231.326 million.
Section 24 of the Principal Act, which deals with the maximum level of grants for teaching hospitals, will be amended to provide cost supplementation for 1991-l 933. The effect of the proposed amendments will be to increase the maximum level of grants for 1991 from $4.105 million to $4.156 million; for 1992 from $4.105 million to $4.156 million; and for 1993 from $4.105 million to $4.156 million.
Section 26 of the Principal Act, which deals with maximum level of capital grants, will be amended to provide cost supplementation for 1991-f 993. The effect of the proposed amendments will be to increase the maximum level of grants for 1991 from $102.261 milllion
110 $108.514 million: for
1992 from $102.261 to $106.514 million; and for 1993 from $212.453 to $216.708.
References 1. Budget Paper No. 1, 1990-91, p. 3.81. 2. Ibid.
BilkDii!%ViW ParliiResearchSefvice
1XMarch1991
For further information, if required, contact the Education and Welfare Group on 06 2772416.
This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
0 Commonwealth of Australia 1991
Except to the extent of the uses permitted under the Copyright Act 1983, no part of this pubkation may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Pariiientq Library, other than by Members of the Australian Parliament in the course of their official duties.
Published by the Department of the Parliamentary Library, 1991.
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