WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
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Bill.
CONTENTS
Higher Education Funding Amendment Bill (No. 1)
1997
Date Introduced: 28 May 1997
House: House of Representatives
Portfolio: Employment, Education, Training and
Youth Affairs
Commencement: Royal Assent. However, the measures
will apply from the date referred to in the Main Provisions section
of this Digest.
The major amendment in the Bill will extend the discount
currently available from a student's Higher Education Contribution
Scheme (HECS) debt to include situations where the student has made
a contribution of $500 or more to the cost of their course. Minor
amendments relate to supplementary funding to take account of cost
increases and the situations when the Secretary may waive all or
part of a student's HECS debt.
The higher education system is funded on a calendar year basis
under the provisions of the Higher Education Funding Act
1988 (the Principal Act). This Act also covers the operation
of the Higher Education Contribution Scheme (HECS). According to
the 1997-98 Budget Paper No.1 (p.4-36), funding is legislated for
three forward years. However, the current provisions of the
Principal Act (and those of this Bill) refer only to 1998 and
earlier years, with no allocation for 1999 and 2000. This omission
may be because the Government is awaiting the report of the Higher
Education Review Committee, chaired by Mr Roderick West. The
Committee is due to present its final report in December 1997. The
1996-97 Budget reduced the forward estimates for higher education
operating grants by 1 per cent in 1997, a further 3 per cent in
1998 and a further 1 per cent in 1999. The same budget also stated
that the Government would be prepared to consider specific
proposals from institutions for financial assistance to help
restructure their activities. The 1997-98 Budgetallocated $10.2m in
1997-98 for this purpose. Part 2 of Schedule 1 of this Bill
contains provisions that will enable the Minister to make grants to
institutions for restructuring and rationalising activities. The
1997-98 Budget also abolished the Commonwealth Industry Places
Scheme (CIPS) under which the Commonwealth and students (through
HECS) contributed 60 per cent of the cost of a university place
while the balance was funded by industry. The abolition of the
scheme will hit a number of campuses harder than others, in
particular Charles Sturt University (1076 places), Deakin
University (505 places) and Swinburne University of Technology (528
places). It has been suggested that the restructuring package could
be used to assist these institutions cope with the loss of CIPS.
The 1997-98 Budget also introduced a 25 per cent discount for
partial up-front HECS payments of at least $500. Part 3 of Schedule
1 of this Bill contains provisions which will implement this
decision. The Part also contains measures to facilitate the refund
of payments to those students whose enrolments have been cancelled
because they have not provided a valid tax file number. Part 4 of
Schedule 1 of the Bill provides that part or whole of a person's
HECS debt may be remitted if the person does not complete a course
of study because of circumstances outside their control.
Part 1 of Schedule 1 of the Bill contains provisions relating to
the payment of grants to certain education institutions to
compensate for price increases and other liabilities, such as
superannuation obligations of the various institutions. Of
particular notice is the amount of the grant for open learning
organisations, which peaked at approximately $9.5 million in 1995,
and which was reduced to approximately $400 000 in 1996. The amount
allocated for such institutions in 1998 will be $218 000
(Item 2 of Schedule 1).
Part 2 of Schedule 1 will give the Minister
power to allocate further funding to educational institutions that
may assist restructuring or rationalisation of programs. Proposed
section 19 does not define what will be considered to be a
restructuring or restructure but does require a determination made
to increase funding for such purposes to be in accordance with
guidelines issued by the Minister. Under Item 7 of Schedule 1 such
guidelines are to be instruments that are disallowable by
Parliament.
Item 12 of Part 3 of Schedule 1 will insert a
new subsection 41(1A) into the Principal Act that will provide that
the 25% discount will also apply where the student has paid to the
institution an amount of $500 or more which is less than the 75%
contribution currently necessary for the discount, and the
contribution is made prior to the census date in respect of the
semester. In such cases, the student is also required to request
the Commonwealth to loan the student an amount equal to the
difference between the cost for the course and the amount
contributed, which will insure that the institution receives the
full amount of the assessed cost of the course. The amount owed to
the Commonwealth by the student will then be discounted to provide
the 25% reduction to the student.
Where a students enrolment has been cancelled due to the student
not providing their tax file number when required to do so and the
student has made a contribution to the cost of their course under
proposed subsection 41(1A), proposed sections 56A and 56B, which
will be inserted into the Principal Act by Item 17 of Part
3 of Schedule 1, provide for the refund of the amount
contributed.
Item 18 will amend section 57 of the Principal
Act, which deals with loans by the Commonwealth to students to
discharge their liability to an institution for the cost of their
course, to reflect the reduction in liability to the Commonwealth
as a consequence of proposed subsection 41(1A).
Application: The above amendments will apply to
courses beginning on or after 1 January 1997.
Section 106L of the Principal Act provides the Secretary with a
discretion to remit all or part of a debt where there are special
circumstances. Item 20 will amend the discretion
to provide that special circumstances will exist where the
Secretary is satisfied that the circumstances are beyond the
person's control, they did not have their full impact on the person
until after the census date for their course and the circumstances
made it impracticable for the person to complete their course. The
Secretary may issue guidelines regarding when the Secretary will be
satisfied that these issues exist and if such guidelines are
issued, a decision by the Secretary is to be in accordance with the
guidelines.
Application: The above amendment will apply in
respect of debts incurred on or after 1 January 1998.
Kim Jackson
Chris Field
27 June 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 11 July 1997
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