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Innovation and Education Legislation Amendment Bill 2001

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1998-1999-2000-2001

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

INNOVATION AND EDUCATION LEGISLATION AMENDMENT BILL 2001

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Education, Training and Youth Affairs the Hon Dr David Kemp MP)

 

 



INNOVATION AND EDUCATION LEGISLATION AMENDMENT BILL 2001

 

 

OUTLINE

 

 

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) and the Open Learning Deferred Payment Scheme (OLDPS) and makes provision for the repayment of monies lent by the Commonwealth to students under those schemes.

 

The Australian Research Council Act 2001 establishes the Australian Research Council (ARC) as a body which, among other things, make high quality recommendations to the Minister on the funding of research programs and the administration of such schemes, as well as establishing a funding regime to support research programs.  This funding is appropriated under section 49 of the Act.

 

The funding schemes administered by the ARC support individuals and teams who perform excellent research.  Proposals for funding are competitively assessed through a process of peer review.  The Government, in Backing Australia’s Ability , has announced its commitment to double the funding available for these schemes administered by the ARC over the next five years.

 

The Bill amends the Higher Education Funding Act 1988 to:

 

·         vary the maximum amount of financial assistance payable to higher education institutions for the funding year 2002 to provide additional funding of $45.073 million for higher education project specific research infrastructure;

 

·         vary the maximum amount of financial assistance payable to higher education institutions for the funding year 2002 to provide funding of $25.714 million to establish a new programme to support systemic research infrastructure;

 

·         vary the maximum amount of financial assistance payable to higher education institutions under section 17 and section 23C (a transfer of funding between the sections) in 2001 and 2002 to make provision for the Research Training Scheme;

 

·         vary the maximum amount of financial assistance payable to higher education institutions under Section 17 to provide additional funding of $13.046 million in 2002 (the non-HECS component) for an additional 2000 targeted undergraduate places for higher education institutions listed under Table A of Section 4(1);

 

·         include provisions to allow for an income contingent loan scheme for postgraduate non-research course tuition fees, being the Postgraduate Education Loan Scheme (PELS);

 

·         include provisions to give the Minister discretion to cap the total level of indebtedness an individual can accrue in aggregate under the HECS, OLDPS and PELS;

 

·         allow higher education institutions more flexibility in accepting electronic communications, including a signature from students, and to provide that higher education institutions may issue students with written notices electronically provided that the student has access to the appropriate information technology.

 

The Bill amends the Australian Research Council Act 2001 to:

 

·         vary the maximum amount of financial assistance payable to higher education institutions for the funding year 2002 under paragraph 49(b) to provide additional funding of $18.601 million for research schemes administered by the Australian Research Council as announced in the policy statement Backing Australia’s Ability .

 

The States Grants (Primary and Secondary Education Assistance) Act 2000 introduced changes to targeted programmes from 2001, including replacing special education per capita grants with a single s trategic assistance amount.   The Bill seeks to ensure that non-government schools will not be disadvantaged by this change in funding arrangements.  The Bill also seeks to increase the amount of establishment assistance for new schools in line with current estimates of demand. 

 

The Bill amends the States Grants (Primary and Secondary Education Assistance) Act 2000 to:

·           correct an error in the funding amount provided for non-government school students with disabilities in Schedule 8, Part 2, column 3 for each of the years 2001 to 2004 (the correct per capita amount for each year should have been $561) ;

·           replace the amounts shown in Schedule 8, Part 1, column 2, which details the amount available for ‘Strategic Assistance’ for government and non-government schools for each of the years 2001 to 2004, to ensure independent and non-systemic Catholic schools are not disadvantaged by the introduction of new arrangements for special education per capita funding introduced in the Act; and

·           replace the amounts shown in Schedule 7, column 2, detailing the amount available for ‘Establishment Grants’ for each of the years 2001 to 2004 .  This amendment brings the funding in line with the current estimates of new schools seeking establishment assistance.

 

 

FINANCIAL IMPACT

 

In relation to the Higher Education Funding Act 1988 and the Australian Research Council Act 2001 , the Bill provides for:

 

·         additional funding of $102.434 million in 2002 for additional research funding, research infrastructure funding and targeted university places;

·         a transfer of $14.792 million in 2001 and 2002 from section 17 to section 23C of HEFA for the Research Training Scheme.

 

In relation to the States Grants (Primary and Secondary Education Assistance) Act 2000 , the Bill provides:

 

·         Increased funding of $2.662 million over the program years 2001-2004 for non-government school students with disabilities in Schedule 8, Part 2, column 3 ‘Strategic Assistance’;

·           Increased funding of $190,000 for each of the four years 2001-2004 (a total increase of $760,000) in Schedule 8, Part 1, column 2 for the student outcomes programme; and

·           Increased funding of $9.534 million over the program years 2001-2004 in Schedule 7, column 2 for establishment assistance for new schools.



INNOVATION AND EDUCATION LEGISLATION AMENDMENT BILL 2001

 

NOTES ON CLAUSES

 

 

Clause 1 - Short title

 

Provides for the Act to be cited as the Innovation and Education Legislation Amendment Act 2001 .

 

Clause 2 - Commencement

 

Provides for the Act to commence on the day on which it 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 - Extra funding for research and higher education

 

Part 1 - Extra funding for operating purposes

 

Higher Education Funding Act 1988

 

Item 1

 

Section 17 sets the maximum aggregate funding levels for operating grants that may be paid to higher education institutions under sections 15 and 16 of the Act.  Item 1 amends paragraph 17(m) to vary the maximum aggregate funding level for 2001 to reflect a transfer of funds to subsection 23C(2) to make provision for the Research Training Scheme and amends paragraph 17(n) to vary the maximum aggregate funding levels for 2002 to reflect a transfer of funds to subsection 23C(2) to make provision for the Research Training Scheme and extra funding for additional targeted places.

 

 

Part 2 - Extra funding for other purposes

 

Australian Research Council Act 2001

 

Item 2

 

Section 49 sets out the total research funding limits for each year specified in section 48.  Item 2 amends paragraph 49(b) to vary the maximum aggregate funding level for 2002 to reflect additional funding provided for higher education research.

 

 

Higher Education Funding Act 1988

 

Item 3

 

Subsection 23C(2) limits the total funds available for grants that may be approved under sections 21, 21B, 22, 23, 23A and 23B for various years.  Item 3 amends paragraph 23C(2)(i) to vary the maximum aggregate funding level for 2001 to reflect the transfer of funds from section 17 to make provision for the Research Training Scheme and amends paragraph 23C(2)(j) to vary the maximum aggregate funding level for 2002 to reflect the transfer of funds from section 17 to make provision for the Research Training Scheme and additional funding provided for project specific research infrastructure and systemic research infrastructure.



 

Schedule 2 Extra funding for primary and secondary education

 

 

Part 1 - Extra establishment assistance for new schools

 

States Grants (Primary and Secondary Education Assistance) Act 2000

 

Item 1

 

Replaces the table in Schedule 7 to provide additional establishment assistance for new schools for each of the years 2001 to 2004 to bring funding into line with current estimates of new schools seeking establishment assistance.

 

 

Part 2 - Extra strategic assistance for educationally disadvantaged students

 

States Grants (Primary and Secondary Education Assistance) Act 2000

 

 

Items 2-5

 

Amends the table in Schedule 8, Part 1 to provide additional strategic assistance for educationally disadvantaged students for each of the years 2001 to 2004 to ensure independent and non-systemic Catholic schools are not disadvantaged by the introduction of new arrangements for special education per capita funding.

 

 

Part 3 - Extra funding for students with disabilities

 

Item 6

 

Replaces the table in Schedule 8, Part 2 to provide additional funding for non-government school students with disabilities for each of the years 2001 to 2004, to correct an error in a previous update of funding amounts from 1999 final prices to 2000 final prices.

 



 

Schedule 3 - Post-graduate education loan scheme

 

Higher Education Funding Act 1988

 

Item 1

 

Amends the definition of “year to which this Chapter applies” in section 3 to reflect the introduction of the post-graduate education loan scheme from the year 2002 by item 5.

 

 

Item 2

 

Amends paragraph 60(1)(a) to reflect the introduction of the post-graduate education loan scheme by requiring that money paid to the Commonwealth under proposed Chapter 4A be transferred from the Consolidated Revenue Fund to the Higher Education (HECS) Reserve.

 

 

Items 3 and 4

 

Amend paragraph 61(1)(a) to permit money in the Higher Education (HECS) Reserve to be applied for the purposes of proposed Chapter 4A.

 

 

Item 5

 

Inserts a new Chapter 4A providing for a new post-graduate education loan scheme.

 

 

Chapter 4A - Post-graduate education loan scheme

 

Part 4A.1 - Preliminary

 

(NOTE: proposed section is abbreviated as ps)

 

ps98A Definitions

 

This proposed section inserts a definitions clause which gives particular meanings to words and expressions used in proposed Chapter 4A (unless there is a contrary intention apparent).  Expressions used in proposed Chapter 4A that are defined in Chapter 4 have the same meaning in proposed Chapter 4A (unless a contrary intention is apparent).  Section 37 and subsection 39(2) apply in relation to the expressions semester and standard student load in Chapter 4 as if the references in section 37 and subsection 39(2) to institution were references to institution within the meaning of Chapter 4A.

 

Expressions used in the Income Tax Assessment Act 1936 have the same meaning in proposed Chapter 4A as they have in that Act (unless the contrary intention appears).

 

Student fees paid to an institution by a person other than the student are deemed to be payment to the institution by the student.

 

 

ps98B Eligible student

 

This proposed section specifies the citizenship or residency requirements to qualify as an eligible student for the purposes of proposed Chapter 4A.

 

 

Part 4A.2 - Additional condition of grant of financial assistance

 

ps98C Additional condition

 

This proposed section provides that financial assistance is granted to an institution on the condition that the institution complies with the requirements of proposed Chapter 4A in addition to the conditions specified in any other part of the Act.

 

 

Part 4A.3 - Applications for and grants of PELS loans

 

Division 1 - Application for PELS loan

 

ps98D Making an application for a PELS loan

 

This proposed section provides that a person enrolled in or proposing to enrol in an eligible post-graduate course of study for a semester at an institution may make an application for a post-graduate education loan scheme loan in the form and manner specified in proposed section 98D.  An applicant makes only one application for each course of study.

 

 

ps98E Tax file number of student

 

This proposed section provides that sections 41A, 41B and 42-53 apply in relation to the tax file number of a student in the manner specified in proposed section 98E.

 

 

ps98F Notice by institution

 

This proposed section has the effect of providing that an institution must give each student enrolled in an eligible post-graduate course at the institution who has made an application for a loan under proposed section 98D, a written notice under proposed subsection 98F(1).  Proposed subsections 98F(1)-(6) set out the timing, content and purpose of such a written notice.  Proposed subsection 98F(7) provides that section 55 applies to a subsection 98F(1) notice as if references in that section to student were references to student within the meaning of Chapter 4A, references in subsections 55(1) and (4) to section 54 were references to section 98F and the reference in subsection 55(3) to the liability of the student to pay the contribution were a reference to the liability of the student to pay fees charged by the institution.

 



 

Division 2 - Discharge by Commonwealth of students’ liability for fees

 

ps98G Commonwealth to discharge students’ liabilities

 

This proposed section provides that if an eligible student has made an application under proposed section 98D before the census date for a semester for an eligible post graduate course of study for that semester, is enrolled in that course at the institution and has not paid the full amount of the fees charged by the institution for the course of study being undertaken, the Commonwealth must lend the student the amount of the fees outstanding immediately after the census date and apply the amount so lent in making a payment to the institution in discharge of the student’s liability for the fees outstanding.  Proposed subsection 98G(3) provides that the Commonwealth may advance an institution an amount that is expected to become payable to the institution under proposed section 98G.

 

 

ps98H Commonwealth not liable where person does not have a tax file number

 

This proposed section provides that if an institution receives a notice from the Commissioner of Taxation under subsection 42(3) or (5) (as applied by proposed section 98E) to the effect that a person who has applied for a loan under proposed section 98D does not have, or no longer has, a tax file number and after 28 days the institution has not been notified of a number the institution is satisfied is the person’s tax file number, the Commonwealth is not liable, and is taken never to have been liable, to lend an amount to the person under proposed paragraph 98G(2)(a) or to making a payment to the institution under proposed paragraph 98G(2)(b).

 

Proposed subsection 98H(3) provides that regulations may set out procedures for the institution to notify persons who may be affected by  proposed subsection 98H(2).

 

 

ps98J Institution to provide information to Minister

 

This proposed section provides that an institution must give to the Minister on request such statistical and other information relating to students in relation to eligible post-graduate courses of study as the Minister reasonably requires for the purposes of proposed Part 4A.3, other than information as to the name and address of a student.

 

Part 4A.4 - Miscellaneous

 

ps98K Secrecy

 

The proposed section extends the application of the secrecy provisions of section 78 to proposed Chapter 4A.

 

 

ps98L Annual statement

 

The proposed section imposes an obligation on the chief executive officer of an institution to provide an annual statement of compliance with proposed Chapter 4A requirements on or before 31 December in each year and setting out the particulars of any instances of non-compliance.

 

 

ps98M Electronic communications between students and institutions

 

Proposed subsection 98M(1) inserts an explanatory table and provides that proposed sections 56C, 56D and 56E apply for the purposes of Chapter 4A as if a reference in those sections to a person, thing or provision mentioned in the second column of an item in the table were a reference to a person, thing or provision mentioned in the third column of the table for that item.  Proposed subsection 98M(2) clarifies that proposed section 98M is not intended to otherwise affect the application of proposed sections 56C, 56D and 56E.

 

 

Item 6

 

Amends the heading to Chapter 5A to reflect the introduction of the post-graduate education loan scheme by item 5.

 

 

Item 7

 

Inserts a definition of PELS semester debt in subsection 106H(1).

 

 

Item 8 and 9

 

Amends paragraph (b) of the definition of semester debt in subsection 106H(1) to include a PELS semester debt.

 

 

Item 10

 

Amends subsection 106H(2) to reflect the introduction of the post-graduate education loan scheme by item 5.

 

 

Item 11

 

Amends section 106I by inserting a new paragraph (aa) so that the objects of Part 5A.1 reflect the introduction of the post-graduate education loan scheme by item 5.

 

 

Item 12

 

Inserts a proposed new section 106JA specifying the nature of a PELS semester debt .

 

 

Items 13-16

 

Amend section 106N to include debts incurred under the post-graduate education loan scheme when calculating an accumulated HEC debt.

 

 

Item 17

 

Amends paragraph 106O(1)(b) to provide that debts incurred under the post-graduate education loan scheme are discharged by a person’s subsequent accumulated HEC debt.

 

 

Item 18

 

Inserts a new subsection 106R(4) to require an institution to give such data in its possession relating to students in relation to eligible post-graduate courses of study at the institution as the Commissioner of Taxation reasonably requires for the purposes of Chapter 5A.

 

 

Item 19

 

Amends subparagraph 106Y(2)(e)(i) to include debts incurred under the post-graduate education loan scheme when applying payments made by a person who has not given any directions.

 

 

Items 20 and 21

 

Amends subsections 118(1) and (2) to exclude proposed Chapter 4A (which provides for the establishment of the post-graduate education loan scheme) from appropriations under the Act, but without excluding by implication the application of any existing appropriation in relation to Chapter 4A.

 

 

Item 22

 

A transitional provision which provides that guidelines made under paragraph 42A(1)(b) operate on and after commencement of this Schedule in relation to proposed paragraph 98H(1)(b) as if they had been made under that paragraph and paragraph 42A(1)(b).  This item is not intended to prevent the amendment or repeal of the guidelines.

 



 

Schedule 4 - Limit on student debt to Commonwealth

 

Higher Education Funding Act 1988

 

 

Item 1

 

Amends the definition of institution in section 3 to also exclude proposed Chapter 5B from the meaning given to the term by section 4.

 

 

Item 2

 

Inserts a new Chapter 5B providing for a limit on total student indebtedness to the Commonwealth under the Act.

 

 

Chapter 5B - Limit on student debt to Commonwealth

 

Part 5B.1 - Preliminary

 

(NOTE: proposed section is abbreviated as ps)

 

ps106ZB Definitions

 

Inserts a definitions clause which gives particular meanings to words and expressions used in Chapter 5B (unless there is a contrary intention apparent).  Expressions used in Chapter 5B that are defined in Chapter 4, 4A, 5 or 5A have the same meaning in Chapter 5B (unless a contrary intention is apparent).

 

 

Part 5B.2 - Additional condition of grant of financial assistance

 

ps106ZC Additional condition

 

This proposed section adds compliance with Chapter 5B to the conditions an institution referred to in section 4 must comply with to be eligible for financial assistance under the Act.

 

 

Part 5B.3 - Maximum permitted debt

 

ps106ZD Minister may determine maximum permitted debt

 

This proposed section provides that the Minister may make a determination specifying the maximum permitted debt for the purposes of Chapter 5B.

 



 

Part 5B.4 - Loan limit notices

 

ps106ZE Commissioner to give loan limit notice

 

Proposed subsection 106ZE(1) provides that the Commissioner of Taxation must give a notice, known as the loan limit notice , to a person if the person’s total indebtedness under the Act exceeds the maximum permitted debt determined under proposed section 106ZD.  Proposed subsections 106ZE(2) and (3) specify the form and content of a loan limit notice and that it must be given to the person to whom it relates, while proposed subsection 106ZE(4) provides that, unless the loan limit notice has been cancelled under proposed section 106ZF, the Commissioner must give a copy of the notice to each specified institution or the agency, as applicable.

 

Proposed subsection 106ZE(5) further provides that the Commissioner of Taxation must also give a statement in writing to the person to whom the loan limit notice relates specifying the maximum permitted debt and the person’s total indebtedness under the Act at that time.

 

 

ps106ZF Cancelling loan limit notice

 

This proposed section provides that a person issued with a loan limit notice may ask the Commissioner of Taxation to give a notice, known as the cancellation notice , cancelling the loan limit notice .  The Commissioner must give the cancellation notice to the person if their total indebtedness under the Act no longer exceeds the maximum permitted debt.  Proposed subsection 106ZF(3) sets out the form and content of a cancellation notice .

 

 

ps106ZG Consequences of loan limit notice - no amounts payable by Commonwealth

 

HECS and PELS

Proposed subsections 106ZG(1) and (2) of this proposed section provide that if the Commissioner of Taxation has given a person a loan limit notice in accordance with proposed section 106ZE that relates to that person, the Commonwealth is not liable (and is taken never to have been liable) to lend an amount to the person in relation to a course of study for a semester under subsection 57(3), paragraph 57(3A)(e), subparagraph 57(3B)(b)(i) or proposed paragraph 98G(2)(a); or to make a payment to an institution under subsection 57(2), subsection 57(3), paragraph 57(3A)(e), paragraph 57(3A)(f), subparagraph 57(3B)(b)(ii) or proposed paragraph 98G(2)(b).

 

Proposed subsection 106ZG(3) specifies what constitutes a “course of study for a semester” for the purposes of proposed subsection 106ZG(2). 

 

Open Learning Deferred Payment Scheme

Proposed subsections 106ZG(4) provides that, in relation to a unit of study for a study period covered by proposed subsection 106ZG(5), the Commonwealth is not liable (and is taken never to have been liable) to lend an amount to the person under paragraph 106D(1)(a) or to make a payment to the Open Learning Agency of Australia Pty Ltd under paragraph 106D(1)(b).

 

Proposed subsection 106ZG(5) specifies what constitutes a “unit of study for a study period” for the purposes of proposed subsection 106ZG(4). 

 

Notifying affected persons

Proposed subsection 106ZG(6) provides that the regulations may set out procedures for an institution or the Open Learning Agency of Australia Pty Ltd to notify persons who may be affected by proposed subsections 106ZG(2) or (4).

 

 

Part 5B.5 - Suspension notices

 

ps106ZH Commissioner must give suspension notice

 

This proposed section has the effect of providing that the Commissioner of Taxation must give an institution a written notice (known as a suspension notice ) under proposed subsection 106ZH(1) in relation to a person where a HECS debt has been reported for a student after a loan limit notice has already been issued.  Such an event will only occur where a student changes institution and does not advise their new institution that they have been issued with a loan limit notice .  It is not necessary to issue a suspension notice where a PELS or OLDPS debt is reported as the consequences are different.

 

Proposed subsection 106ZH(3) provides that the Commissioner of Taxation must give a copy of the suspension notice to the person to whom it relates.

 

 

ps106ZJ Consequences of suspension notice - HECS courses

 

This proposed section has the effect of providing that, where a suspension notice has been issued to a student, the institution must dis-enrol the student unless the student makes an up front payment of fees for the entire semester.  The requirement to dis-enrol arises from the requirements of section 41.  In the case of PELS and OLDPS, institutions and the Open Learning Agency of Australia Pty Ltd have discretion on how to treat students who have not paid their fees and were not eligible to take out a loan. 

 

 

Part 5B.5 - Secrecy

 

ps106ZK Secrecy

 

The proposed section extends the application of the secrecy provisions of section 78 to proposed Chapter 5B.

 

 

Item 3

 

Amends paragraph 110(b) to provide that a determination under proposed section 106ZD is a disallowable instrument.

 



 

Schedule 5 - Electronic communications with students

 

Higher Education Funding Act 1988

 

Items 1 and 2

 

Insert definitions for electronic communication and information system in section 3.

 

 

Item 3

 

Inserts proposed new sections 56C, 56D and 56E at the end of Division 2 of Part 4.2, providing for electronic communications between institutions and students.

 

(NOTE: proposed section is abbreviated as ps)

 

ps56C Electronic communications from students to institutions

 

This proposed section enables a student to communicate electronically with institutions for the purposes of HECS where the student uses the information system that the institution has specified.  The information system must meet the guidelines issued by the Minister and the Minister must declare that the information system meets those guidelines.  The guidelines and the Minister’s declaration will be disallowable instruments.  These requirements are in place to ensure that institutions’ information systems meet security, privacy and legal requirements.  Proposed subsection 56C(2) only applies at a time when section 9 of the Electronic Transactions Act 1999 does not apply because of regulations made under that Act.

 

 

ps56D Electronic signature of communications by students

 

This proposed section enables students to use an electronic signature in relation to an approved document for the purposes of HECS, where the student uses a method for identification and document approval that the institution has specified.  The method used must meet the guidelines issued by the Minister and the Minister must declare that the method used meets those guidelines.  The guidelines and the Minister’s declaration will be disallowable instruments.  These requirements are in place to ensure that institutions’ information systems meet security, privacy and legal requirements.  Proposed subsection 56D(2) only applies at a time when section 10 of the Electronic Transactions Act 1999 does not apply because of regulations made under that Act.

 

 

ps56E Electronic communications from institutions to students

 

This proposed section allows institutions to communication electronically with students without specifically seeking student agreement.  Institutions may only communicate with students in this way if the institution provides students with access to the necessary information systems.  There is provision for the Minister to make guidelines setting out the conditions relating to access. 

 



 

Item 4

 

Inserts proposed new section 106CA at the end of Division 1 of Part 5.2, facilitating electronic communications between clients and the Open Learning Agency of Australia Pty Ltd in a similar way in which proposed sections 56C, 56D and 56E facilitate communications between students and institutions.

 

(NOTE: proposed section is abbreviated as ps)

 

ps106CA Electronic communications between clients and Agency

 

Proposed subsection 106CA(1) inserts an explanatory table and provides that proposed sections 56C, 56D and 56E apply for the purposes of Chapter 4 as if a reference in those sections to a person, thing or provision mentioned in the second column of an item in the table were a reference to a person, thing or provision mentioned in the third column of the table for that item.  Proposed subsection 106CA(2) clarifies that proposed section 106CA is not intended to otherwise affect the application of proposed sections 56C, 56D and 56E.

 

 

Item 5

 

Amends paragraph 110(c) to provide that guidelines issued under proposed subsections 56C(6) or 56D(6) are disallowable instruments.