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Wednesday, 4 November 1992
Page: 2625


Mr BALDWIN (Minister for Higher Education and Employment Services) (9.35 p.m.) —I move:

  That the Bill be now read a second time.

The purpose of this Bill is to amend the Higher Education Funding Act 1988 in accordance with agreed triennial funding arrangements, and to reflect changed funding arrangements agreed between the Commonwealth, States and higher education institutions, which will have the effect of increasing the autonomy and flexibility of higher education institutions.

  The present Act provides for Commonwealth higher education funding to be provided to universities through payments made to State governments. In the context of the 1991 review of Commonwealth-State relations, all governments agreed that the funding mechanism for higher education should reflect the reality, that universities are part of a national system of higher education and the Commonwealth has primary responsibility for the public funding of that system.

  There was agreement that direct funding from the Commonwealth to higher education institutions is appropriate to improve the accountability and transparency of the Commonwealth to the electorate. The Bill puts this change into effect. From 1993, higher education institutions will be paid direct by the Commonwealth, and institutions rather than the States will be directly accountable to the Commonwealth for the expenditure of grants.

  To complement these arrangements and to assist in the accountability process, the Bill includes a statement of the Commonwealth's objectives in higher education. The Bill also provides for payment of higher education funds in limited instances to bodies other than higher education institutions where this best meets the objectives of the legislation.

  These new arrangements for direct funding of higher education institutions are accompanied by improved consultative processes so that consideration of State needs and strategies becomes an integral part of the triennial planning cycle. In accordance with these established triennial planning and funding processes, the Bill provides funds for higher education for 1995, the third year of the new funding triennium.

  In total, the Commonwealth has committed $4.7 billion to higher education in 1995. This amount takes into account the Government's decisions which I have just announced to provide, in 1995, some $23.6m for additional student intakes and $274m for capital purposes, as well as the $252m for research programs already committed. Provision is also made within the 1993-95 funding triennium for a $12m increase in research grants funding in 1994.

  As the Government announced in the 1992-93 Budget, from 1994 higher education capital grants are to be incorporated into institutions' general operating grants rather than allocated on a project by project basis. The Bill provides for this decision as well as for the increased resources available in 1993 and 1994 announced in the Budget to address higher education building infrastructure needs. The roll-in of capital funds will provide flexibility, financial stability and continuity for universities in their capital planning. Students should benefit from improved capital facilities as universities are able to manage their resources more effectively.

  The needs of institutions which are growing at extraordinary rates or which are experiencing significant development and need funds, for example, for new campuses are taken into account in a separate fund for special capital projects. This discretionary pool of funds will be available for allocation by the Commonwealth following consultation with the States and institutions.

  The Bill also reflects other Government decisions on higher education funding announced in its 1992 Budget, in particular the decision to support the establishment of a new open learning program in 1993. This program will open the door to tertiary education for many people currently without access through traditional arrangements. The program will have major advantages for people in rural and remote areas as well as for people with work or family commitments or disabilities which make access to on-campus courses difficult. Arrangements for the operation of this program are well under way and are designed to ensure the quality of open learning provision.

  The Bill also provides for an increase in the number of Australian postgraduate research awards available to students annually from 1993, as announced in the Budget. This increase acknowledges that skilled personnel are critical to Australia's research and development efforts and responds to growing demand for awards.

  Some minor changes to the higher education contribution scheme are included in the Bill, in particular the increased discount for up-front payment of HECS to apply from 1993, some additional exemptions from HECS so that student places funded by employers are put on the same footing as State-funded places, and some rationalisation of the scheme to ensure that Australian taxpayers do not have to meet the higher education costs of certain groups of students who may never earn an income in Australia.  The Bill also includes protection for the rights and responsibilities of higher education institutions to make their own decisions, independent of Government interference, on the provision of services and amenities for their students.

  Student organisations, which provide a wide range of services to their members—counselling, sporting, health and careers services, for example—are funded mainly by a services and amenities fee collected from students by institutions on behalf of organisations representing the interests of students generally. In the past, some States have interfered with the rights of institutions to make their own decisions about imposing or collecting these fees. The Bill provides an avenue for the Commonwealth to make up any shortfall in revenue experienced by an institution as a result of a decision of this kind by a State. Consequential amendment of the States Grants (General Purposes) legislation will be required at a later date to ensure that the Commonwealth can subsequently recover this money from a State if necessary.

  The Bill also includes routine cost supplementation for Commonwealth grants to higher education. In total, the Commonwealth is committed to spending some $13.6 billion on higher education over the 1993-95 triennium. This level of funding and the improved funding arrangements put in place represent a major commitment to the enhancement of Australia's higher education system in the interests of present and prospective students and the nation as a whole. I present the explanatory memorandum to this Bill and commend the Bill to the House.

  Debate (on motion by Mr Costello) adjourned.