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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021



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BILLS DIGEST NO. 40, 2021-22 20 JANUARY 2022

Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 Dr Hazel Ferguson Social Policy Section

Contents

Purpose of the Bill ........................................................... 2

Background ..................................................................... 2

Higher education funding ........................................... 2

Provider approval to access to higher education funding ........................................................................ 2

Funding and provider registration .............................. 3

Committee consideration ................................................ 3

Senate Standing Committee for the Selection of Bills .............................................................................. 3

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 3

Policy position of non-government parties/independents...................................................... 3

Position of major interest groups..................................... 3

Financial implications ...................................................... 3

Statement of Compatibility with Human Rights................ 3

Parliamentary Joint Committee on Human Rights ..... 4 Key issues and provisions ................................................ 4

Avondale University .................................................... 4

Grants to translate research into commercial outcomes ..................................................................... 4

Grandfathering honours students under Job-ready Graduates .......................................................... 5

Date introduced: 2 December 2021

House: House of Representatives

Portfolio: Education, Skills and Employment

Commencement: The day after the Act receives the Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at January 2022.

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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 2

Purpose of the Bill The purpose of the Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 (the Bill) is to amend the Higher Education Support Act 2003 (HESA) to:

• add Avondale University (Avondale) to ‘Table B’, which will change the institution’s access to Australian Government funding

• add translating research into commercial outcomes to the range of purposes for which Other Grants to higher education providers can be made and

• extend Job-ready Graduates Package grandfathering arrangements to honours students who commenced, but did not complete, their related undergraduate degree prior to 1 January 2021.

Background

Higher education funding HESA is the Act under which Australian Government support for higher education teaching, and some research, is funded, via:

• the Commonwealth Grant Scheme (CGS), which provides a Commonwealth contribution to course fees to reduce the cost to eligible students, predominantly domestic undergraduates

• the Higher Education Loan Program (HELP), which through various sub-schemes allows eligible students to defer their course costs until their earnings reach a minimum threshold

• the Indigenous Student Success Program, which provides supplementary funding to universities to support Indigenous students through scholarships, tutorial assistance, mentoring, safe cultural spaces and other personal support services and

• various Other Grants made to providers to support specified priorities, such as the Disability Support Program, which provides funding to support students with disabilities, and the Higher Education Superannuation Program, which provides support for certain superannuation expenses.1

Provider approval to access to higher education funding Access to funding under HESA is only available to approved providers, which can be either:

• Table A providers, listed in section 16-15, which are eligible to access all funding programs

• Table B providers, listed in section 16-20, which are eligible to access a limited range of funding programs

• Table C providers, listed in section 16-22, which are explicitly excluded from most funding, but can offer some HELP loans or

• providers approved by the Minister under section 16-25—these are not listed in HESA, but can offer some HELP loans, and are sometimes eligible for other funding programs, subject to Ministerial approval.2

1. ‘Commonwealth Grant Scheme (CGS)’, Department of Education, Skills and Employment (DESE), 26 March 2021; ‘Higher Education Loan Program (HELP)’, DESE, 28 January 2021; ‘Indigenous Student Success Program’, National Indigenous Australians Agency; ‘Higher Education Disability Support Program’, DESE, 26 November 2020; ‘Higher Education Superannuation Program’, DESE, 16 November 2020. A more detailed explanation of higher education funding arrangements is available in Hazel Ferguson, A Guide to Australian Government Funding for Higher Education Learning and Teaching, Research paper series, 2020-21 (Canberra: Parliamentary Library, 2021).

2. HESA funding is only available to higher education providers, defined in section 16-1 as those providers approved under Division 16. Division 16 includes those providers listed in HESA, or those approved by the Minister under section 16-25. A list of approved providers is available from ‘Providers that offer Commonwealth assistance’, DESE, n.d.

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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 3

There are no criteria in the Act for determining if a provider should be listed in Table A, B, or C. However, in practice, Australian universities have historically been listed in Table A or B, while overseas universities have been listed in Table C.

Funding and provider registration The basic requirements for provider approval under HESA are listed in sections 16-25 and 16-27. These include that the body must be registered under the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act) by the national regulator, the Tertiary Education Quality and Standards Agency (TEQSA).3

TEQSA registers all providers of higher education in Australia as either an Australian University, Overseas University, University College, or an Institute of Higher Education, in accordance with standards set out in the Higher Education Standards Framework (Threshold Standards) 2021. These Threshold Standards were made as part of changes to provider categories which were legislated in 2021.4

Committee consideration

Senate Standing Committee for the Selection of Bills At its meeting on 1 December 2021, the Senate Standing Committee for the Scrutiny of Bills deferred consideration of the Bill to its next meeting.5

Senate Standing Committee for the Scrutiny of Bills At the time of writing the Senate Standing Committee for the Scrutiny of Bills had not considered the Bill.6

Policy position of non-government parties/independents At the time of writing, no non-government parties/independents have commented on the Bill.

Position of major interest groups At the time of writing, no major interest groups have commented on the Bill.

Financial implications The Explanatory Memorandum to the Bill describes its financial implications as ‘negligible’.7

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.8

3. HESA, section 16-27. 4. Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Act 2021; ‘Provider Category Standards reform implementation’, Tertiary Education Quality and Standards Agency (TEQSA). 5. Senate Standing Committee for the Selection of Bills, Report, 14, 2021, 2 December 2021: 4. 6. Senate Standing Committee for the Scrutiny of Bills, Index of bills considered by the committee, 2021, 2 December 2021. 7. Explanatory Memorandum, Higher Education Support Amendment (2021 Measures No. 1) Bill 2021, 4. 8. The Statement of Compatibility with Human Rights can be found at pages 5-6 of the Explanatory Memorandum to the Bill.

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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 4

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights had no comment on the Bill.9

Key issues and provisions

Avondale University Avondale is currently approved for funding under section 16-25 of HESA, and is one of a minority of unlisted providers receiving CGS funding for teaching certain courses in the disciplines of teaching and nursing.10

In July 2021, as part of the implementation of the new Threshold Standards, TEQSA registered Avondale, which had previously been a University College, as an Australian University, as it considered it met the new standards for the category.11 As a consequence of this move, Avondale became the only Australian University not listed in either Table A or Table B of HESA.12

There is no automatic mechanism, or entitlement, for a provider registered by TEQSA to be approved for funding under HESA.13 Nor does a change in provider categories have any automatic impact on approval under HESA.

Item 1 of the Bill addresses this by inserting ‘Avondale University’ into Table B in section 16-20.

Listing in Table B does not extend Avondale’s access to all higher education funding programs— that is limited to Table A providers. However, certain key funding, especially certain Other Grants such as Research Block Grants would become available to Avondale as a consequence of this change.14

Grants to translate research into commercial outcomes In the 2020-21 Budget, the Government announced $5.8 million to scope a University Research Commercialisation Scheme.15 This is part of a history of efforts to address Australia’s level of business funding of research and development (R&D) performed by higher education, which is consistently below the OECD average.16 The Department of Education, Skills and Employment (DESE) ran a consultation on university research commercialisation from February to April 2021, and the Trailblazer Universities initiative was subsequently announced on 24 November 2021.17

According to DESE:

9. Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report, 15, 2021, 8 December 2021: 35. 10. DESE, Funding Agreement between the Commonwealth of Australia as Represented by the Minister for Education and Avondale University College Ltd Regarding Funding Under the Higher Education Support Act 2003 in respect of the 2021, 2022 and 2023 grant years (Avondale College Limited 2021-23 CGS Funding Agreement), (Canberra: Funding Agreement,

2 August 2021); ‘Commonwealth Supported Place (CSP) Offers’, Avondale University webpage. 11. ‘Avondale University Limited (formerly Avondale University College Limited): Provider Category Change 1 July 2021’, TEQSA. 12. HESA, sections 16-15 and 16-20. 13. Of the 188 higher education providers currently registered by TEQSA, 152 are approved under HESA. See ‘Search the National

Register’, TEQSA and ‘Providers that offer Commonwealth assistance’, DESE. 14. ‘Research Block Grants’, DESE; A table of funding eligibility by provider type is available in Appendix 1 of Ferguson, A Guide to Australian Government Funding for Higher Education Learning and Teaching. 15. Australian Government, ‘Part 2: Expense Measures’, Budget measures: budget paper no. 2: 2020-21, 79. 16. Hazel Ferguson, ‘Higher education research and teaching’, Budget Review 2020-21, Research paper, 2020-21, (Canberra:

Parliamentary Library, October 2020), 44. 17. ‘University Research Commercialisation’, DESE; Scott Morrison (Prime Minister), Alan Tudge (Minister for Education and Youth), Bridget McKenzie (Minister for Regionalisation, Regional Communications and Regional Education, Minister for

Emergency Management and National Recovery and Resilience), and Melissa Price (Minister for Defence Industry, Minister for Science and Technology), ‘Trailblazer universities to build jobs of the future’, media release, 24 November 2021.

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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 5

The Trailblazer Universities Program responds to feedback to the public consultation on university research commercialisation, which highlighted the importance of strengthening capability at the institutional level. Submissions to the consultation also emphasised key barriers to collaboration and commercialisation, and proposed solutions such as more effective IP arrangements and greater incentives for academics and institutions to translate and commercialise research.18

The initiative is intended to provide funding to selected universities from 1 July 2022 to support collaboration and commercialisation work in line with the National Manufacturing Priorities.19

The most straightforward way to fund such a scheme is through the existing Other Grants provisions in Part 2-3 of HESA. Rather than dealing with specific programs, these provisions list the broad purposes for which grants may be made, and the Other Grants Guidelines (currently the Other Grants Guidelines (Education) 2012 and Other Grants Guidelines (Research) 2017) set out the administrative details of relevant programs.

Currently, the purposes for which Other Grants may be made include grants to support research by, and the research capability of, higher education providers, grants to support the training of research students, and grants to encourage higher education providers to engage with industry.20 However, research commercialisation is not specifically included.

Item 2 inserts ‘grants to assist higher education providers to translate research into commercial outcomes, including through collaboration with industry’ into this table. Proposed item 14 of subsection 41-10(1) will enable grants for translating research into commercial outcomes to be made to Table A providers, Table B providers, and bodies corporate if specified in the Other Grants Guidelines.

Grandfathering honours students under Job-ready Graduates The Job-ready Graduates Package (JRG) was a large package of interacting changes to higher education funding, legislated in late 2020.21 As part of JRG, new Commonwealth and student contribution amounts for a range of study areas commenced on 1 January 2021—while students’ costs for studying in priority fields such as teaching and nursing were reduced, student contributions for other fields such as law and accounting were increased.22

Grandfathering arrangements were included in the package in an effort to ensure continuing students were not disadvantaged by the changes. These arrangements hinge on a definition of grandfathered student which was inserted into the dictionary at Schedule 1 of HESA. The definition specifies a range of circumstances where grandfathering applies.

In some cases, the scope of the definition is straightforward. Students who, for example, were in the first year of a three-year degree in 2020 pay the lower student contribution amount for the remainder of their degree. However, study pathways that involve the completion of one course and commencement of another have proven more challenging. Currently, students who enrolled in an enabling course or Undergraduate Certificate prior to 1 January 2021, and subsequently

18. ‘Trailblazer Universities Program’, DESE, last updated 17 January 2022. 19. ‘Trailblazer Universities Program’, DESE; The National Manufacturing Priorities are: defence, space, food and beverage, medical products, recycling and clean energy, and resources technology and critical minerals technology. See ‘Modern Manufacturing Initiative and National Manufacturing Priorities announced’, Department of Industry, Science, Energy and

Resources, 1 October 2020. 20. HESA, section 41-10. 21. Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Act 2020; ‘Job-

ready Graduates Package’, DESE, last updated 21 December 2021. 22. ‘Improving higher education for students’, DESE, last updated 20 December 2021; Hazel Ferguson, ‘Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020’, Bills Digest, 12, 2020-21,

(Canberra: Parliamentary Library, 2020).

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Higher Education Support Amendment (2021 Measures No. 1) Bill 2021 6

enrol in a higher-level qualification, will pay the grandfathered student contribution amounts. However, honours students will only have access to grandfathering if they completed their earlier undergraduate degree before 1 January 2021.23 This has the effect of excluding people who commenced (but did not complete) an undergraduate degree before 1 January 2021 from continuing into an honours course as a grandfathered student.

Item 3 inserts subparagraph (ia) to the definition of grandfathered student, which would extend the definition to include such students in grandfathering arrangements.

Item 5 specifies that the amendment is to apply from 1 January 2021. As such, any student who has paid a higher student contribution because of being excluded from the grandfathering arrangements will become retrospectively eligible to pay the lower amount.

Item 6 provides that the Minister may, by legislative instrument, make rules prescribing matters of a transitional nature in relation to any of the amendments made by the Bill, including refunds for any payments made before the new grandfathering arrangements come into effect.

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23. Subparagraph (ii) of grandfathered student, HESA, Schedule 1.