Bills Digest No. 172 2001-02
Higher Education Funding Amendment Bill
2002
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
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Higher Education Funding Amendment
Bill 2002
Date Introduced:
5 June 2002
House: House of Representatives
Portfolio: Education, Science and
Training
Commencement:
Generally, on Royal
Assent. If this Bill is assented to prior to the commencement of
the Higher Education Legislation Amendment Act (No.2) 2002 (HELA)
then the amendments to insert new levels of financial assistance
for universities and the Australian Research Council will commence
immediately after the HELA Act receives Royal Assent.
Purpose
This Bill amends
the Higher Education Funding Act 1988 and the
Australian Research Council Act 2001 to:
-
- permit students at a number of non-government higher education
institutions to access the Post-graduate Education Loans Scheme
(PELS)
-
- vary funding levels to permit the Institute of Advanced Studies
at the Australian National University to access Australian Research
Council (ARC) grants
-
- provide additional funding relating to a new Graduate Diploma
in Environment and Planning at the University of Tasmania, and
-
- supplement grants for cost increases.
The major sources of Commonwealth funds for
higher education are Part 2.2 of the Higher Education Funding
Act 1988 (the HEFA), which provides grants for universities,
and the Australian Research Council Act 2001 (the ARCA),
which funds the research grant schemes administered by the
Australian Research Council. The HEFA provides maximum global
amounts for broad categories of expenditure on a calendar year
basis. The categories include operating grants (section 17),
superannuation expenses (section 20), research and other special
purposes (section 23), and capital projects (section 27A).
Allocations for individual institutions are the subject of
determinations by the Minister, which are disallowable by
Parliament. Both Acts are amended annually to adjust grants for
movements in prices and to add a year to the triennial funding
provisions.
The Government's higher education programs are
described in annual reports, the most recent being the Higher
Education Report for the 2002 to 2004 Triennium.(2)
Details of the Australian Research Council's programs can be
obtained from their Internet site.(3)
The Commonwealth has provided assistance for
non-government tertiary education institutions since 1974, when it
assumed full financial responsibility for higher education. At that
time there were thirteen non-government teachers colleges, eleven
of which were operated by the Catholic Church. Avondale College (an
institution operated by the Seventh Day Adventist Church at
Cooranbong, NSW) began receiving assistance in 1978.
The introduction of the Unified National System
(UNS) in 1989 brought major changes to funding arrangements for
these institutions. Membership of the system (and access to full
triennial funding) was only available for institutions that had at
least 2000 equivalent full-time students. The remaining Catholic
teachers colleges merged to become the Australian Catholic
University, which qualified as a full member of the system and has
since received Commonwealth grants on the same basis as the State
universities. Avondale College and the Marcus Oldham Farm
Management College (a small institution near Geelong) did not
qualify as UNS members, but continued to receive grants on the
basis of annual contracts for teaching purposes only. Students
undertaking Commonwealth funded courses at these institutions were
also eligible for the Higher Education Contribution Scheme
(HECS).
From 1999 the Commonwealth began funding places
at the Broome campus of the University of Notre Dame on the same
basis as public universities, although funding arrangements for
Avondale and Marcus Oldham remained unchanged. The rationale for
the funding of Notre Dame was the remoteness of the campus, the
lack of alternative providers, and the particular needs that the
campus serves (ie. the Aboriginal student
pop-ulation).(4) From 2000 Commonwealth triennial
funding (and HECS access) was extended to student places for
teacher education at the Fremantle campus of Notre Dame. This was
justified on the basis that the university was providing teachers
for the Catholic school system in WA, a role performed the
Australian Catholic University in the eastern states.(5)
This created an apparent policy inconsistency because Avondale
College, which produces teachers for the Seventh Day Adventist
school system, remained subject to annual contractual funding. Of
course, the accredited teacher education qualifications provided by
any of these institutions can be utilised, like those from the
public universities, in either government or non-government school
systems. The rationale for Notre Dame's special status is thus
somewhat unclear.
The Postgraduate Education Loans Scheme (PELS)
is essentially a modified version of the Higher Education
Contribution Scheme (HECS): the Commonwealth pays the tuition fee
for the student, who then repays the amount through the tax system
when their income reaches certain levels. Once a PELS debt is
incurred, it is treated in the same way as a HECS debt: repayment
rates and income thresholds are the same and no interest is payable
on the debt, although it is indexed on the basis of the Consumer
Price Index. The major differences between the PELS and HECS
are:
-
- the fees payable will not be set by the Commonwealth, as they
are with HECS, so institutions can set their own postgraduate fee
levels. The loans are only available for postgraduate non-research
course tuition fees, and
-
- there is no discount for up-front payments (students who pay
their own HECS contribution on enrolment receive a 25 per cent
discount).
The PELS is currently available to students
attending appropriate courses at all institutions listed in section
4 of the HEFA. This list includes the public higher education
institutions, together with the University of Notre Dame, Avondale
and Marcus Oldham Colleges. The Bill will extend the PELS to Bond
University, the Christian Heritage College, Melbourne College of
Divinity and Tabor College (South Australia). According to the
Ministers' Second Reading Speech, this measure will level the
playing field for competition in fee-paying postgraduate coursework
degrees.(6) If the intent of the legislation is to treat
all non-government higher education providers equally, then it
should be asked why these institutions have been singled out, as
there are other non-government bodies that provide equivalent
courses. A more logical approach would be to make the PELS
available for all postgraduate coursework degrees that are provided
by self-accrediting institutions (ie. universities or their
equivalent), or that are accredited by the appropriate State and
Territory accreditation agencies. Such an extension would have no
impact on Budget expenses because the Department treats loans under
PELS as an asset (see below).
According to the Explanatory Memorandum (the
EM), the Bill will:
-
- increase HEFA grants by $7.0 million for 2001, decrease them by
$5.178 million in 2002, and increase them by $74.128 million in
2003 and $74.998 million in 2004; and
-
- increase the funding cap under the ARCA by $16.446 million for
2003, $17.453 million for 2004, $18.670 million for 2005 and
establish a new funding cap of $524.090 million for
2006.(7)
Note that these figures relate to the variations
between this Bill and the funding amounts contained in the Higher
Education Legislation Amendment Bill (No.2) 2002 that is still
before Parliament. The EM provides no breakdown of these changes.
However, the 2003-04 Budget Papers do provide some indication of
the cost of the some of the measures:
-
- the introduction of a Graduate Diploma in Environment and
Planning at the University of Tasmania will cost a total of $360
000 over three financial years (2002-03 to 2004-05), and
-
- the extension of the PELS will not impact on expenses because
the amount loaned is treated as an asset. It is estimated that some
$18.7 million will be lent to students at the four institutions
over four years.
Section 2 provides for the
commencement of the legislation. These provisions are more
complicated than usual because of the Higher Education Legislation
Amendment Bill (No.2) 2002 that is still before
Parliament.(8) The funding provisions (Schedule
1, Part 1 and Schedule 2) will not
commence until the commencement of the other legislation (or Royal
Assent, if that is later).
Schedule 1 Part 1 substitutes
new funding levels in the HEFA.
Schedule 1 Part 2 (Items 8-16)
amends section 98A of the HEFA to enable the extension of the PELS
to four non-government educational institutions. Item
10 amends the definition of eligible post-graduate course
of study to include courses at the Christian Heritage College and
Tabor College (South Australia) which have been accredited by the
appropriate State or Territory accreditation agencies. Note that
Bond University and the Melbourne College of Divinity are not
included in this provision because they are already
self-accrediting institutions under the terms of the Australian
Qualifications Framework Register of Authorities.
Item 17 inserts a new
section 98AA which creates a new category of institution (
eligible unfunded institutions ) which comprises the four
institutions. The Minister may amend this section by declaration (a
disallowable instrument), but is not permitted to add to the list
of eligible unfunded institutions. This power is to enable the
Minister to remove institutions from the list if they have breached
the requirements of the Act or for some other reason that the
Minister considers relevant.
Schedule 2 substitutes new
funding levels in the ARCA.
-
- Further background on higher education funding policies can be
obtained from the Parliamentary Library brief at: http://www.aph.gov.au/library/intguide/SP/HEfunding.htm
- This report is available at:
http://www.detya.gov.au/highered/he_report/2002_2004/html/default.htm
- See: http://www.arc.gov.au
- Higher Education Report for the 1999 to 2001 Triennium
(March 1999), p. 92
- Higher Education Report for the 2000 to 2002 Triennium
(March 2000), p. 101
- The Hon. Brendan Nelson MP, Second Reading Speech , Higher
Education Funding Amendment Bill 2002, House of Representatives,
Hansard, 5 June 2002, p. 2791.
- p. 2.
- A Bills Digest on this legislation is available at: http://www.aph.gov.au/library/pubs/bd/2001-02/02bd110.htm
Kim Jackson
24 June 2002
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2002
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Published by the Department of the Parliamentary Library,
2002.
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