Bills Digest no. 49 2005–06
Higher Education Legislation Amendment (2005 Measures
No.4) Bill 2005
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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Education Legislation Amendment (2005 Measures No.4) Bill
Date Introduced: 14 September 2005
House: House of
Portfolio: Education, Science and Training
Commencement: Royal Assent
To amend the Higher Education Support Act 2003 (HESA)
- permit the operation of foreign higher education providers in
- improve consumer protection mechanisms for students; and
- make a number of technical amendments as a result of the
commencement of the Legislative Instruments Act 2003 on 1
The HESA provides for the regulation and funding of higher
education in Australia. At present, there are two major categories
of self-accrediting higher education providers(1) listed
in sub-division 16-B of the Act:
- Table A providers (the public universities and two specialist
institutions(2)) which are eligible for the full range
of grants provided by the Commonwealth Government; and
- Table B providers(3) which are eligible for grants
for research and research training, and for assistance under the
Commonwealth Grant Scheme in special
The HESA also allows the Minister to approve a body corporate as
a higher education provider as long as the body is established
under Australian law, has its central management and control in
Australia, and meets a range of other conditions.
The Bill will create a new category of higher education
providers Table C providers. These are overseas higher education
institutions with Australian branches. These providers and their
students are explicitly excluded from the Commonwealth Grant Scheme
and other HESA grants, Commonwealth scholarships and the HECS-HELP
scheme. However, the Australian students of Table C providers will
have access to FEE-HELP and OS-HELP(5) assistance and
the providers will have to adhere to the quality, fairness and
contribution/fee requirements set out in sub-divisions 19-C, 19-D
and 19F of the HESA. They will also have to meet the requirements
of Chapter 4 (which deals with the repayment of HELP loans) as well
as a range of administrative requirements set out in Chapter 5.
Carnegie Mellon University(6) (CMU) is a private US
institution with around 8000 undergraduate and postgraduate
students. Its headquarters are in Pittsburgh, Pennsylvania, with
subsidiary campuses in California and Qatar. CMU consists of seven
colleges and schools: the Carnegie Institute of Technology
(engineering), the College of Fine Arts, the College of Humanities
and Social Sciences, the Mellon College of Science, the David A.
Tepper School of Business, the School of Computer Science and the
H. John Heinz III School of Public Policy and Management.
On 29 October 2004 the State of South Australia and Carnegie
Mellon signed Heads of Agreement expressing their intention to
collaborate in the establishment of a privately-owned university in
Adelaide. The Premier of South Australia, the Hon M.D. Rann, MP,
has described the South Australian Government s objectives as
doubling South Australia's share of overseas
students within 10 years, which would have a major positive
economic impact on our state;
having more of the academic programs that will
help to take advantage of new economic opportunities, for instance,
in the IT industry;
increasing the efficiency of government through
better training of our public servants given the status of Carnegie
Mellon worldwide in the areas of public administration; and
positioning Adelaide to be Australia's leader and
to be known internationally as an education city.
The South Australian Government has committed up to $20 million
over four years to assist with the establishment of the University.
This funding comprises scholarships, start-up grants and
operational support. The University will also be provided with
accommodation in the historic Torrens Building in central
On 4 July 2005 the South Australian Minister for Employment,
Training and Further Education, the Hon. S.W. Key, MP, announced
that in accordance with the National Protocols for Higher Education
Approval Processes and pursuant to South Australia's Training
and Skills Development Act 2003, he had approved CMU s
application to be considered as a university in accordance with the
Act. As a result of this determination, CMU s courses can now be
accredited in Australia and listed on the Australian Qualifications
Framework. This determination was also required for registration on
the Commonwealth Register of Institutions and Courses for Overseas
Students, which will enable CMU to provide courses to overseas
According to a statement released by the Australian Embassy on 5
The university would offer both US and Australian
postgraduate degrees and locally accredited undergraduate degrees
with courses in information technology, public administration and
policy and business management. It was also planned to develop
special niche faculties and an emphasis on public policy and
However, its initial course offerings appear to be restricted to
a number of postgraduate courses. In May 2005 CMU stated that it
hoped to offer its Master of Science in Information Technology and
its Master of Science in Public Policy and Management in early 2006
through the Adelaide branch of its Heinz School of Public Policy
and Management.(9) In May 2005 Flinders University
announced that it was engaged in active discussions with the Heinz
School of Public Policy and Management about collaborative teaching
and research arrangements in public policy and
Criticism of the proposal has centred on the $20 million subsidy
from the South Australian Government and the potential threat to
the three Australian universities in Adelaide.(11)
Senator Stott Despoja has been quoted as stating that introducing
private competitors which can pick off lucrative sections of the
international student market, yet have no obligation to provide
high cost or low demand courses, may further undercut our three
existing universities. (12)
The three South Australian Universities generated $95.6 million
from overseas student fees and $10.9 million from domestic student
fees in 2003 (not including HECS). These sums represented about 12
per cent of their revenue. It is possible that some of this income
will be redirected to Carnegie Mellon.
The economic benefit of overseas students in Australia derives
more from their general living expenses than from their fee
payments. For example, in 2003 total expenditure by overseas
students in Australia was estimated to be $5.1 billion. Of this
amount, $1.7 billion was for higher education fees.(13)
The South Australian Government evidently considers that the
general economic benefit to the community will outweigh any adverse
impact on the fee revenue of local institutions.
Higher education providers (other than Table A providers) must
comply with the tuition assurance requirements if they are to
maintain their approval as providers under the Act. The purpose of
the requirements is to provide:
- Course assurance if a provider is unable to provide a course of
study, then a student must receive credit for any completed units
of study in that course from a second provider; and
- Contribution or tuition fee repayment if a provider is unable
to provide a course of study then the student must be repaid any
contribution or fee amounts that they paid for the undelivered
parts of the course.
If their provider is unable to offer the units in which they are
enrolled, students can choose either the course assurance option or
the contribution/fee repayment option. The tuition assurance
requirements are set out in the Higher Education Provider
The Bill contains a number of provisions to improve the tuition
assurance requirements. Details of these can be found in the
Explanatory Memorandum for the Bill.
Item 1 of Schedule 1 inserts a new section 5-1
which contains a table detailing the application of the Act to
Table C providers.
Item 6 of Schedule 1 inserts a new section
16-22 listing Carnegie Mellon as a Table C provider.
Schedule 2 introduces a number of amendments to strengthen the
tuition assurance requirements.
Schedule 3 contains a number of technical amendments relating to
legislative instruments that result from the commencement of the
Legislative Instruments Act 2003.
- Self-accrediting institutions, such as universities, can issue
their own qualifications. A complete listing of these bodies,
together with a description of the Australian Qualifications
Framework, can be found at http://www.aqf.edu.au
- The two specialist bodies are the Batchelor Institute of
Indigenous Tertiary Education and the Australian Maritime
- There are only three Table B providers: Bond University, the
University of Notre Dame Australia, and the Melbourne College of
- The Commonwealth Grant Scheme (CGS) provides the basic
operating grants for institutions, based upon the number of
Commonwealth supported places in various funding clusters , each of
which has a specific Commonwealth payment per place. Students in
Commonwealth supported places are eligible for assistance under the
HECS-HELP scheme. Table B providers can only receive CGS grants for
places that relate to identified national priorities, such as
increasing the number of nurses or teachers.
- The FEE-HELP and OS-HELP schemes provide loans to Australian
students for tuition fees and overseas study respectively.
- See: http://www.cmu.edu/home/about/about.html,
for more information about the university.
- Premier s Statement to the House of Assembly, 8 November
- US university to open in Australia , Media Release, Embassy of
Australia, Washington, 5 November 2004.
- Press Release, 16 May 2005.
- See: http://www.flinders.edu.au/news/articles/?mr050516,
for the Flinders university media release on the subject.
- See: http://www.flinders.edu.au/stuassoc/Downloads/M7Mellon.pdf,
for a critical press release from the Student Association of
- Carnegie Mellon makes four for SA , Campus Review, 25
May 2005, pp.1,12.
- DEST, Annual Report 2003-04, p.105; DEST, Selected
Higher Education Statistics Finance 2003, Table 1.
- The Guidelines can be obtained from:
26 September 2005
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