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Monday, 4 November 1996
Page: 5005


Senator CAMPBELL (Parliamentary Secretary to the Minister for the Environment and Parliamentary Secretary to the Minister for Sport, Territories and Local Government)(4.19 p.m.) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard

Leave granted.

The speeches read as follows—

HIGHER EDUCATION LEGISLATION AMENDMENT BILL 1996

The various provisions of the bill should be seen in the context of the government's commitment to quality, diversity and innovative change in the higher education sector. This bill meets the government's savings tasks in the fairest way, while advancing key objectives for the higher education sector. It also sets the framework on which the sector can build for the future.

A number of amendments in the bill provide supplementation for price movements. This supplementation covers items such as superannuation expenses, teaching hospitals, special capital projects, grants to open learning organisations and certain grants in respect of the year 1998.

The government is committed to strengthening Australia's research and training capacity. To achieve this objective, the bill provides for increased research funding for Australian postgraduate awards and collaborative research of over $39 million and a further $90 million for increases in research infrastructure.

Through this bill, the government is further encouraging the participation of equity groups in higher education by introducing up to 4,000 merit equity scholarships between 1997 and 2000. The scholarships will provide a Higher Education Contribution Scheme (HECS) exemption to recipients, and will be awarded by universities on the basis of merit, consistent with guidelines. The scholarships may only be accessed by members of a nominated equity group.

This initiative is in addition to maintenance of the existing higher education equity program at an annual cost of $5.8 million, providing incentive funding to institutions to achieve improved outcomes for students from equity groups. Further, the government will also maintain the regional disability liaison officer initiative for another year at a cost of $750,000, to co-ordinate the provision of services for students with disabilities.

The bill introduces additional opportunities and choice for Australian students by removing the prohibitions on offering fee-paying places to Australian undergraduate students. This will remove the existing anomaly in the treatment of Australian and overseas students.

This measure will enable Australian students to have a greater chance of obtaining the higher education course of their first preference, freeing up government funded places they would have otherwise accepted with their second or third preference. It will also generate additional income for the universities and will provide an extra incentive for diversity among institutions.

The overwhelming majority of students will continue to contribute to the costs of their education through the HECS alone. The government will not allow institutions to substitute fee-paying places for HECS-only places, nor will they be able to move whole undergraduate courses on to a fee-paying basis.

The number of fee-paying places available to Australian undergraduate students will be limited to twenty five per cent of domestic undergraduate students in any course. If an institution offers fee-paying places while at the same time failing to fill its undergraduate target with HECS-liable students, a financial penalty of $9,000 will apply for each place.

Under current funding arrangements, if universities enrol more than the target number of Australian students, they receive no extra funding even though the Commonwealth receives HECS payments from the students. The government is removing this anomaly.

From 1998, universities will be paid the equivalent of the minimum up-front HECS payment for each HECS-liable undergraduate student enrolled above the target level. This provides some recognition of the costs incurred by institutions which over-enrol. It will also present an opportunity for institutions with low marginal costs to offer additional places to undergraduate students without charging fees.

The bill introduces differential HECS contributions from 1997. This measure strikes a better balance between the public and private funding of higher education. Students will now be required to make a contribution to the cost of their education which is more closely linked to both the actual cost of the course undertaken and the likely future benefits to the individual in terms of increased life-time earnings.

The bill provides that the new HECS charges will apply in three bands: $3,300, $4,700 and $5,500. Each unit of study will be allocated to one of the bands. A student commencing a course in 1997 will have their HECS debt calculated according to the distribution of their units between each of the three bands. The student will be charged at the appropriate band amount for each unit, rather than being charged at the same band for all units.

In introducing the new differential HECS arrangements, the amendments ensure that no existing student will have an unanticipated increase in the cost of their current course. The government will not be increasing the HECS charge or debt levels for existing debtors or for HECS-liable students in their current courses. The new charges will only apply to students commencing a new course after 1 January 1997. The arrangements retain the essential features of HECS and ensure that no qualified student is prevented from entering higher education because of an inability to pay at the time of enrolment.

Consistent with this measure, the bill also enables the open learning agency of Australia to set its fees at a level it considers appropriate. At present, the agency is constrained by its agreement with the Commonwealth to charge for undergraduate units at a fixed price. If this constraint is not lifted, the agency will be required to charge at a level that is below the new differential HECS level, and lower than the level of fees institutions may charge.

Eligible open learning students will continue to be able to defer their charge under the open learning deferred payment scheme. The amount the Commonwealth will lend to the student under the scheme will remain at the level of the current basic charge.

The bill also provides new HECS repayment thresholds, which will mean that individual HECS debtors repay their debt more quickly. The provisions retain seven repayment levels, but set them at lower levels. No student will be required to make HECS repayments until their income reaches the minimum threshold set out in the bill.

The lowering of the minimum threshold to $20,701 means that the current discount for voluntary payment at this income level will be discontinued. The repayment required at this income level will be less than $12 per week. The existing discounts of twenty five per cent for up-front payments and fifteen per cent for voluntary payments of $500 at any time, will remain.

A new section 20a of the act will clarify that advances of operating grants may be made for a broad range of purposes, consistent with ministerial guidelines. Those guidelines will be subject to parliamentary scrutiny and enable advances to be made for redundancy expenses and to assist institutions with the costs associated with restructuring. This amendment is required to clarify an ambiguity with the provisions contained in the Higher Education Funding Amendment Bill (No.1) 1996.

The bill also includes a consequential amendment to the act of the Australian Maritime Council to enable it to charge undergraduate fees on the same basis as other higher education institutions.

This bill reflects the government's commitment to a relevant, high quality education system which is striving for excellence and innovation in teaching and research.

I commend the bill to the Senate.

SOCIAL SECURITY LEGISLATION AMENDMENT BILL (No. 1) 1996

This bill serves to make various non-Budget amendments to social security legislation.

The bill makes amendments to the Social Security Act 1991 to rectify an inequity with the mature age partner provisions. From 1 July 1995, wife pension and mature age partner allowance were phased out. However, those people who had claimed these payments and were qualified for them before that date were "saved" from the effect of the changes. The savings provision did not operate as intended for the mature age partner allowance. For example, when a disability pensioner turns 65 years of age and is automatically transferred to age pension, it was intended that his wife pension partner continue to qualify for wife pension. The Social Security Act did not allow, however, for "saved" mature age partner allowance recipients to continue to receive the mature age partner allowance when their mature age allowance partners are automatically transferred to age pension. This bill makes amendments to rectify this situation.

This bill also makes amendments to continue the effect of savings provisions in clause 54 of Schedule 1A. Clause 54 provides a series of savings provisions which applied to maintain the status quo of various groups of family allowance recipients who were overseas when the family payment regime commenced operation on 1 January 1993. If not for these savings provisions, these people, who formerly received an add-on for dependent children as a component of their pension, would not have been qualified for the new family payment.

However, clause 54 makes reference to "additional family payment", which ceased to exist on 1 January 1996. In the absence of the amendments made by this bill, clause 54 would not operate to provide the correct rate of payment for these people.

Under the Social Security Act, a person's assets may affect payment of their social security pension, benefit or allowance. This bill amends the Social Security Act to ensure that payments of financial assistance from the Mark Fitzpatrick Trust to persons with medically acquired HIV infection and AIDS (and payments to the dependents and carers of such persons) are not taken into account for the purposes of the social security assets test.

Finally the bill amends the Social Security Act to rectify a technical problem with a provision in Pension Rate Calculator A. When the Social Security Act was amended in 1992 to integrate family allowance and family allowance supplement into a new payment (family payment), some inappropriate consequential amendments were made to a provision dealing with how a person's reduction for ordinary income is to be worked out in the situation of a person who is a member of a couple and has a partner receiving a social security or service pension

I commend the bill to the Senate.

Ordered that further consideration of the second reading of these bills be adjourned until the first day of sitting in 1997, in accordance with the order agreed to on 29 November 1994.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.