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Higher Education Funding Amendment Bill 2002

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2002

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

HIGHER EDUCATION FUNDING AMENDMENT BILL 2002

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Education, Science and Training the Hon Dr Brendan Nelson MP)

 

 



HIGHER EDUCATION FUNDING AMENDMENT BILL 2002

 

 

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), the Post-graduate Education Loan Scheme (PELS), the Open Learning Deferred Payment Scheme  and the Bridging for Overseas-trained Professionals Loan Scheme and makes provision for the repayment of monies lent by the Commonwealth to students under those schemes.

 

The Australian Research Council Act 2001 (ARCA) establishes the Australian Research Council (ARC) as an independent body to administer the Commonwealth research programmes for which it has responsibility, make recommendations to the Minister on the allocation of funds within research programs and to provide advice to the Minister on research matters as requested by the Minister.  Funding is appropriated under section 49 of the ARCA.

 

The Higher Education Funding Amendment Bill 2002 (the Bill) will amend HEFA to:

 

-   extend access to the Post-graduate Education Loan Scheme to Bond University, Melbourne College of Divinity, Christian Heritage College and Tabor College (South Australia) as announced in the 2002-03 Budget;

o make various consequential amendments arising from this measure;

-   provide additional funding for the establishment of a Graduate Diploma in Environment and Planning at the University of Tasmania and six associated scholarships as announced in the 2002-03 Budget;

-   vary the maximum funding levels in Part 2.2 of HEFA for 2001, 2002, 2003 and 2004 to provide supplementation in accordance with indexation arrangements and to reflect revised HECS estimates;

-   vary the maximum funding levels in Part 2.2 of HEFA for 2003 and 2004 to permit the Institute of Advanced Studies at the Australian National University to access the research schemes of the Australian Research Council and the National Health and Medical Research Council (Note: there was a corresponding adjustment to the Budget appropriation for the NHMRC Medical Research Endowment Account) ; and

-   correct a minor drafting error in subsection 23(1C) of HEFA.

 

The Bill amends the ARCA to:

 

-   vary the annual funding caps in section 49 of the ARCA for 2003, 2004 and 2005 to provide supplementation in accordance with indexation arrangements;

-   vary the annual funding caps in section 49 of the ARCA for 2003, 2004 and 2005 to permit the Institute of Advanced Studies at the Australian National University to access the research schemes of the Australian Research Council; and

-   insert an additional funding cap in section 49 of the ARCA for 2006 to reflect the current Budget forward estimates and to allow the Minister to approve projects for funding for up to four years.

 

 

 

FINANCIAL IMPACT

 

In relation to the Higher Education Funding Act 1988 , the Bill:

 

-   increases the overall appropriation by $7 million in 2001 (note: this variation is for accounting purposes in relation to the Higher Education (HECS) Special Account);

-   decreases the overall appropriation by $5.178 million in 2002;

-   increases the overall appropriation by $74.128 million in 2003; and

-   increases the overall appropriation by $74.998 million in 2004.

 

In relation to the Australian Research Council Act 2001 , the Bill:

 

-   increases the funding cap by $16.446 million in 2003;

-   increases the funding cap by $17.453 million in 2004;

-   increases the funding cap by $18.670 million in 2005; and

-   provides a base funding cap of $524.090 million in 2006.

 

 

Note: the Financial Impact relates to the variation between this bill and the funding amounts specified in the Higher Education Legislation Amendment Bill (No.2) 2002 which is currently before Parliament. 

 



HIGHER EDUCATION FUNDING AMENDMENT BILL 2002

 

NOTES ON CLAUSES

 

 

Clause 1 - Short title

 

Provides for the Act to be cited as the Higher Education Funding Amendment Act 2002 .

 

Clause 2 - Commencement

 

Has the effect of providing for the provisions in Part 1 of Schedule 1 and Schedule 2 to this Act to commence on the later of the day on which this Act receives the Royal Assent or immediately after the commencement of Part 1 of Schedule 1 to the Higher Education Legislation Amendment Act (No. 2) 2002 , for items 22 and 23 of Part 3 of Schedule 1 to commence immediately after the commencement of subsection 23(1C) of the Higher Education Funding Act 1988 and for all other provisions to commence on the day on which this Act 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 - Amendment of the Higher Education Funding Act 1988

 

Part 1 - Variation of financial assistance

 

Item 1

 

Since the introduction of the Higher Education Contribution Scheme (HECS), funding for the operating purposes and limited operating purposes of higher education institutions has come from a combination of HECS liabilities and grants approved under sections 15 and 16 of the Act.  Section 17 sets the maximum aggregate funding levels for operating grants that may be paid to institutions under sections 15 and 16 while Part 4.3 of the Act established the Higher Education (HECS) Reserve and provides for the application of money in the Account.  

 

Each year the operating needs of institutions are estimated and funded by a combination of estimated HECS liabilities during the year and aggregate grants funded within the maximum amount provided for in section 17 for that year.  Actual HECS liabilities for a year are not available until early in the subsequent year after which an adjustment is made to the section 17 funding amount for the previous year to correctly reflect the relative contribution of HECS liabilities to the funding needs of institutions.

 

Item 1 amends section 17 to vary the maximum aggregate funding level for 2001, 2002 and 2003 to reflect revised Higher Education Contribution Scheme (HECS) liabilities and estimated liabilities, supplementation consistent with indexation arrangements , transfers of funding to the Australian Research Council Act 2001 (for 2003 and 2004) and the National Health and Medical Research Council (NHMRC) Budget appropriation (for 2002, 2003 and 2004) to permit the Institute of Advanced Studies at the Australian National University to access the research schemes of the Australian Research Council and the NHMRC.  The maximum aggregate funding level for the year 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 2

 

Section 20 provides for grants to higher education institutions for superannuation expenses for staff whose salaries are funded from grants provided under the Act.  Item 2 amends subsection 20(3) to vary the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements.  The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 3

 

Subsection 22A(5) provides for the total amounts which may be approved as expenditure by way of grants to open learning organisations.  Item 3 amends subsection 22A(5) to vary the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements.  The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 4

 

Subsection 23C(2) of the Act limits the total funds available for grants that may be approved under sections 21, 21B, 22, 23, 23A and 23B of the Act for specified years.  Item 4 amends subsection 23C(2) to vary the funding limits for 2003 and 2004 to reflect additional funding for the establishment of a Graduate Diploma in Environment and Planning at the University of Tasmania and six associated scholarships as announced in the 2002-03 Budget and to reflect supplementation consistent with indexation arrangements.  The funding limit for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 5

 

Section 24 of the Act provides grants in respect of teaching hospitals.  Item 5 amends subsection 24(3) to increase the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 6

 

Section 27A of the Act provides for grants to institutions for special capital projects.  Item 6 amends subsection 27A(6) to increase the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements.  The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 

Item 7

 

Section 27D of the Act allows the Minister to determine an amount to be available for expenditure by the Commonwealth on the international marketing and promotion of Australian education and training services.  Item 7 amends subsection 27D(2) to increase the maximum aggregate funding level for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate funding level for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .

 

 



 

Part 2 - Post-graduate education loan scheme

 

This Part makes provision for post-graduate students enrolled in courses at certain educational institutions which are not funded under the Higher Education Funding Act 1988 to be eligible for loans under Chapter 4A.  These “eligible unfunded institutions” are Bond University, Melbourne College of Divinity, Christian Heritage College and Tabor College (South Australia).

 

 

Items 8-14

 

Amend the definitions of appropriate officer , eligible post-graduate student , eligible post-graduate course of study , institution , and student in subsection 98A(1) to reflect the extension of the post-graduate education loan scheme to the eligible unfunded institutions (Bond University, Melbourne College of Divinity, Christian Heritage College and Tabor College (South Australia)).  Item 11 inserts a definition of eligible unfunded institution in subsection 98A(1).

 

 

Item 15

 

Has the effect of providing that only students who undertake an eligible post-graduate course of study at an eligible unfunded institution on or after 1 January 2003 are eligible for a loan under the post-graduate education loan scheme.

 

 

Item 16

 

Inserts a new subsection 98A(3A) to modify the application of the definition of census date in subsection 34(1) as if a reference in that definition to institution were a reference to institution within the meaning of Chapter 4A to reflect the amendments made by this Part.

 

 

Item 17

 

Inserts a new subsection 98AA in Chapter 4A.  Subsection 98AA(1) inserts a table listing the four eligible unfunded institutions.  Subsections 98AA(2) and (3) have the effect of providing that the Minister may make a declaration amending the table of eligible unfunded institutions in subsection 98AA(1) to remove an institution from the table but not to add an institution.  Subsection 98AA(4) has the effect of providing that a declaration under subsection 98AA(2) repeals the affected part of the table in the Act.  Subsection 98AA(5) has the effect of providing that, in deciding whether to make a declaration under subsection 98AA(2), the Minister may have regard to whether the institution has breached a requirement of Chapter 4A and such other matters (if any) the Minister considers relevant.  This includes any information given to the Minister about the probity of the institution’s governance arrangements and/or financial position.

 

 

Items 18 and 19

 

Insert new paragraphs 98E(aa) and (aaa) and 98F(7)(aa) and (aaa) to reflect the extension of eligibility for loans under Chapter 4A to students at the unfunded institutions.  The items modify the interpretation of references to institution and appropriate officer when used in relation to provisions in other parts of the Act dealing with the tax file numbers of students and notices by institutions.

 

 

Item 20

 

Inserts a new subsection 98JA in Chapter 4A to provide that an eligible unfunded institution must provide information about the probity of the institution’s governance arrangements and/or the institution’s financial position as required by the Minister.

 

 

Item 21

 

Amends paragraph 110(b) of the Act to make a determination made by the Minister under proposed subsection 98AA(2) a disallowable instrument.

 



Part 3 - Technical corrections

 

 

Item 22

 

Corrects a drafting error in paragraph 23(1C)(b) of the Act.

 

 

Item 23

 

Validates any declaration which may have been made under paragraph 23(1C)(b) containing a technical defect as a consequence of the error corrected by Item 22.

 

 

Items 24 and 25

 

Insert new paragraphs 98Y(aa) and 98Z(7)(aa) in Chapter 4B of the Act (which provides for the Bridging for overseas-trained professionals loan scheme) to reflect the amendments made by Part 2 of this Schedule.  The items modify the interpretation of references to institution when used in relation to provisions in other parts of the Act dealing with the tax file numbers of students and notices by institutions.

 

 

 

 



Schedule 2 - Amendment of the Australian Research Council Act 2001

 

 

Items 1 and 2

 

Have the effect of adding 2006 to the years to which Division 1 of Part 7 of the Act applies.  Division 1 deals with financial assistance for approved research programs.

 

 

Item 3

 

Repeals paragraphs 49(c), (d) and (e) and inserts new paragraphs (c)-(f) to vary the level of financial assistance for approved research programs for the years 2003, 2004 and 2005 to reflect a transfer of funding from section 17 of the Higher Education Funding Act 1988 to permit the Institute of Advanced Studies at the Australian National University to access the research schemes of the Australian Research Council and to reflect supplementation consistent with indexation arrangements .