Bills Digest No. 137  1998-99 Higher Education Legislation Amendment Bill 1999

Numerical Index | Alphabetical Index

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
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

Higher Education Legislation Amendment Bill 1999

Date Introduced: 11 March 1999

House: House of Representatives

Portfolio: Education, Training and Youth Affairs

Commencement: Royal Assent

Purpose

The Bill amends the Higher Education Funding Act 1988 (HEFA) to:

• make voluntary student unionism a condition of Commonwealth grants to higher education institutions;
• specify how a notice of decision on an application for debt remission under the Higher Education Contribution Scheme (HECS) is to be made;
• repeal provisions relating to the Student Organisations Support Program;
• recognise the University of the Sunshine Coast as a higher education institution for the purposes of funding through the HEFA; and
• make some minor technical amendments.

Background

Voluntary Student Unionism

Recent Commonwealth Legislation

This issue has been before Parliament on many occasions over the last twenty years,(1) most recently with the Higher Education Funding Amendment Bill (No.2) 1996. That Bill sought to amend the HEFA and States Grants legislation to remove provisions relating to the Student Organisations Support Program (SOSP). The SOSP provided financial support to student organisations that had suffered financially as a result of State legislation to prevent the collection of compulsory amenities and services fees(2) by higher education institutions. The resulting expenditure was recovered from the general revenue grants provided to the State that had enacted the legislation. The 1996 Bill did not proceed through the Senate. This Bill also seeks to amend the HEFA and the States Grants (General Purposes) Act 1994 to remove provisions relating to the SOSP.

State Legislation

Two states have enacted legislation on voluntary student unionism. The Western Australian Voluntary Membership of Student Guilds and Associations Act 1994 amended the establishing acts of state universities so as to prohibit them from:

• requiring students to join a student association (or guild) as a condition of enrolment, and
• imposing any fee that was not directly related to a course of study.

The Victorian Tertiary Education (Amendment) Act 1994 also prohibited state higher education institutions from requiring students to belong to a student organisation or pay a compulsory membership fee to such an organisation, but it permitted institutions to collect amenities and services fees. These fees must be used for defined activities of direct benefit to the students at the institution.

The Bill adopts the Western Australian approach.

UK Legislation

In the United Kingdom students are required to join student unions as a condition of enrolment, but they do not have to pay an amenities and services fee. The activities of student organisations are funded from the block grant received by each university. The Thatcher government was urged to take action to prevent compulsory student union membership but decided against it. In 1983 the Education Secretary, Sir Keith Joseph, argued that 'the student union is, mercifully, not the same as an industrial union. What we have in the students' union is automatic membership and automatic access to facilities ... and I do not see how we can therefore make membership voluntary.'(3)

Concern over the use of public money by student unions lead to the enactment of the Education Act 1994 (UK). This legislation required the governing bodies of higher education institutions to ensure that student unions operated in a fair and democratic manner and were accountable for their finances. It also provided that governing bodies must adopt codes of practice in relation to student unions.

Financial Implications

The average compulsory amenities and services fee imposed by state and territory higher education institutions in 1999 is $264. A rough estimate of the revenue generated from these fees is $ 118 million.(4) The precise distribution of these funds is not known, although it is likely that around 15-20 per cent (or approximately $20 million) is spent on student representation with the remainder (or approximately $100 million) on amenities and services.(5)

Following the passage of the Western Australian legislation, union membership decreased to around 25 per cent of students. These students pay voluntary fees of about $75. If these trends were to be followed nationally, the aggregate revenue of campus unions would decline to around $11 million. While this amount might be sufficient to cover the cost of student representative activities, there would be little remaining funds for other services.

It is difficult to generalise about the impact of the Bill on student services and amenities. Some universities may choose to maintain all or part of the subsidies and services from their own revenues. Institutions would not be able to use Commonwealth operating grants for this purpose, because s.3 and ss.18(c) of the HEFA have the effect of limiting such grants to the general teaching and research purposes of the institution. However, universities receive a significant proportion of their operating revenue from non-government sources. In 1997 some 30 per cent of university operating revenue (or $2465 million) was from sources other than Commonwealth and State grants or HECS.

Not all expenditure on student services and amenities is derived from compulsory fees. In 1997 higher education institutions spent $361.5 million on student services. Their total income from fees and charges was $1226.8 million. This amount includes fees from fee-paying postgraduates ($113 million), overseas students ($627 million) and fees for continuing education and non-award courses ($ 80 million).(6)

The President of the Australian Vice-Chancellors' Committee, Professor John Niland has stated that the tight fiscal situation will prevent universities from taking over the funding of those services currently supported by compulsory fees.(7) However, some institutions levy a single fee on overseas students, incorporating the amenities and service fee with tuition fees. In these cases, overseas students are informed that their fee payment will entitle them to a range of student services. Institutions in this category would appear to have an obligation to continue to provide such services.

Regional Campuses

Concerns have been expressed that the abolition of compulsory amenities and services fees could have an adverse impact on regional campuses and communities. The chairman of the Country Mayors' Association has claimed that the move would have disastrous effects because the student services and facilities provided by the fees are widely used by local communities. A survey conducted by the Australian Campus Union Managers' Association is said to have found that:

• 82 per cent of regional campuses provide facilities used by the local community;
• regional student unions provide around 1000 jobs and contribute about $100 million to regional economies.(8)

Examples of community facilities provided by student unions include the only cinema centre in Armidale (built and operated by the local student union) and an aquatic centre in Lismore (one third funded by the union).

Opponents of compulsory amenities and services fees would argue that such facilities represent an inappropriate subsidisation of the local community by the student body. On this view, students who may only be temporary residents in the region should not be compelled to support capital facilities for local residents and that the market (or the local government) should determine what services are available to regional communities.

The National Union of Students

Currently, twenty-five universities are affiliated to the National Union of Students (NUS).(9) Affiliation is consequent upon a majority vote in three-day referenda on the constituent campuses. Affiliated campuses pay a fee to NUS equivalent to $4.80 per Equivalent Full-time Student Unit (EFTSU). Such fees are thus not directly linked to individual contributions by students, but are global amounts dependent upon the notional size of the campuses. It would be most unlikely that campus unions could maintain this level of support for the NUS if their membership and revenue decreased as it has done in Western Australia.

The Commonwealth, Western Australian and Victorian parliaments have all passed legislation limiting or preventing the transfer of funds from compulsory fees to a national organisation of students. The Commonwealth legislation, which related only to the Australian National University and the then Canberra College of Advanced Education, was repealed in 1984.(10) The WA legislation was superseded by the 1994 legislation prohibiting compulsory amenities and services fees. The Victorian Tertiary Education Amendment Act 1994 limits the expenditure of funds from compulsory fees to listed activities of direct benefit to the institution and students concerned.

The Australian Vice-Chancellors' Committee (AVCC)

The AVCC has urged the Government to be cautious in its plans to make student unions voluntary. The President of the AVCC, Professor John Niland has stated:

The AVCC Policy Paper on Student Organisations argues that it is the prerogative of universities to determine the conditions of enrolment, including the imposition of compulsory amenities and services fees.(12)

Arguments for and against Compulsory Student Unionism

Freedom of Association

The principal argument against compulsory student union membership is that it infringes upon the fundamental right to freedom of association. This is the argument used by the WA Government when introducing its legislation on the subject:

Opponents of this view argue that compulsory student union membership does not constitute an infringement of freedom of association and that this has been confirmed in the courts. In Clark v. the University of Melbourne (No. 2) the Full Court of the Supreme Court of Victoria held that the 'essence of the University's powers is that they are powers of self-government affecting only those who choose to become members by enrolment' and that 'they cannot touch anyone who does not voluntarily bring himself within their reach'.(14)

In Harradine v. the University of Adelaide, the Full Court of the Supreme Court of South Australia stated:

The Full Court went on to reject the notion that the requirement to join a student association was the equivalent of compulsory unionism:

Critics of these conclusions could argue that it is irrelevant that an association of students is not the same as an industrial union, as it is the element of compulsion that is offensive. This is not mitigated by the fact that 'membership is an adjunct of enrolment' because students may have little or no practical choice as to where they enrol. Financial and geographical constraints may require them to attend the nearest institution or the subjects they wish to study may be offered at only one local university.

Contributions to Political Causes

Opponents of compulsory student unionism have argued that it is wrong to require a person to pay fees to a union which may in turn, make financial contributions to political campaigns which run contrary to that person's beliefs. This question generated great controversy in the 1970s, when the Australian Union of Students (AUS) advanced a series of hard-line pro-PLO resolutions and organised a speaking tour of PLO students.(17)

Many students were opposed to paying union fees of which a portion went, through affiliation, to help pay for AUS and its campaigns. Such students were threatened with expulsion or non-enrolment by a number of universities. The radicalism of AUS, and the determination of universities to enforce the payment of affiliation fees, led to action by the Western Australian and Commonwealth Governments on the issue.

In 1977 in Victoria, a student challenged Melbourne University on this issue in the courts. The judgement of Kaye, J. in the case of Robert W. Clark v. The University of Melbourne and Others cast doubt on the power of the University to make statutes and regulations governing the levying and collection of fees for purposes other than of an academic nature.(18) The Melbourne University (Amendment) Act 1978 was designed to rectify this situation. The Act provided that the University could make statutes and regulations fees for non-academic services and amenities. However, it also stipulated that moneys raised by the University for the provision of amenities and services were not to be expended by students' representatives' council unless its governing body had been elected in an election at which not less than one-quarter of eligible students voted ss.17(3). Under ss.17(4) it was the duty of the University to ensure that money made available to students' organisations is expended on services and amenities that were of 'direct benefit' to the University.

The Act also stated that 'No person shall be required to be a member of any body or organisation in order to entitle him to be admitted as a student of the University or to graduate' [ss.43(2)].

Some of the responses of those who dispute the view that compulsory student unionism is undemocratic and unfair (in that one is forced to make a financial contribution to policies that one may oppose) are as follows:

• it is the nature of democracy that there are winners and losers, and that the taxes (or fees) of the loser will be spent on the winner's agenda
• there is nothing to prevent one from becoming politically involved in order to change policies one disagrees with, and
• students can choose to attend a university where one can claim conscientious objection to the payment of fees.

It could also be argued that the political and administrative structure sustained by compulsory membership and fees provides one of the few avenues for young people to gain real experience in practical political economy: such matters as the distribution of resources between competing needs, negotiation and compromise, and campaigning for support. Critics of this view would argue that it is not the role of universities to be political nurseries and that it would be more productive if students expressed their political aspirations through community organisations and affairs.

Subsidisation of Services

Even where membership of a student union or guild is voluntary (as in Victoria) students may be required to pay an amenities and services fee. This has been objected to on the grounds that it constitutes a subsidy for services that the student may not wish to utilise. For example, many part-time students may never use the Union or sports facilities, but still have to pay the annual charge. It would not be difficult to issue cards to those who wish to use such services and are willing to pay for them. This would prevent 'free-riders'. It has also been argued that it would be more efficient if services were left to private enterprise, rather than provided by student organisations that may have little managerial and commercial experience.

Against these views, the following arguments have been made:

• the concern over 'subsidies' is selective and self-serving. All students benefit from massive subsidies from the taxpayers (the majority of whom have not had the benefit of a higher education). Students who enrol in Arts, Economics or Law are subsidising those undertaking Dentistry and Medicine through HECS.(19) Thus students who demand 'user-pays' student services should also be demanding the right to pay tuition fees which cover the full cost of their courses - as the same principle is involved.
• There are many campuses where there is no viable alternative to subsidised union amenities and services. Campuses can be located far from shops, and franchises may not be sufficiently profitable (unless subsidised). Many students are willing to provide voluntary assistance under a union system, but this would soon cease if such activity were simply increasing the profits of a private operator.
• The social recreational and cultural life of a campus is dependent upon the operations of student associations. If fees were voluntary, the infrastructure necessary to support these activities would disappear or be degraded.

This argument was expanded by the administrators of WA tertiary institutions as follows:

The response to these points is that if students do not wish to provide their own time or money in support of a service or activity, then it is both paternalistic and authoritarian to compel them to do so. The fact that three-quarters of the student population in WA have chosen not to join the guilds could be taken as a rejection of this view by the students themselves. It might also be argued that if university authorities regard the activities supported by amenities and services fees as necessary and important, then they should fund them from their own revenues.

Institutional Autonomy

It is often argued that institutions should be left to determine their own policies on this subject, and that to legislate to enforce voluntary student unionism is to infringe 'institutional autonomy' or 'academic freedom'.

A response to this argument is that Parliament is ultimately responsible for the policies governing publicly funded statutory institutions, not the administrators of such institutions. In addition, 'freedom of association' is a far more basic and important right than 'institutional autonomy'. 'Academic freedom' is concerned with the right of university staff to organise and define their academic activities; it does not provide a justification for academics to interfere in the lives of their students outside this arena.

It has also been argued that an attempt by the Commonwealth to impose voluntary student unionism would represent an unacceptable extension of central authority over universities. In response, it could be argued that the HEFA system (through the 'education profiles' process)(21) has permitted extensive Commonwealth interference in the internal affairs of universities since 1978.

University of the Sunshine Coast

The University of the Sunshine Coast is located near Buderim, about 100 km north of Brisbane. It has nearly 1200 students undertaking around 20 undergraduate and postgraduate courses. The institution was established by the Queensland Sunshine Coast University College Act 1994. The Act also provided for the College to be affiliated with the Queensland University of Technology (QUT) because Commonwealth policy required that new university developments take place under the aegis of an established institution. Introducing the above legislation, the Queensland Minister for Education, the Hon. P. Kedron, stated:

In the event, a review of the College's status was undertaken in 1998 at the request of the institution itself. The review found that there was no impediment to the institution being recognised as a University in its own right. This was accepted by the Queensland Government which then urged the Commonwealth to act on the recommendation.(23) The Commonwealth Government has now determined that the university is ready to be funded as an independent institution.

Higher education institutions funded through the HEFA for operating purposes fall into two categories:

• Table A institutions which receive grants for general teaching and research purposes, capital and minor building projects and equipment, and
• Table B institutions which receive grants for general teaching purposes, minor building projects and equipment.

These categories had their origin in the establishment of the Unified National System (UNS) in 1989. To become members of the UNS institutions had to have a minimum sustainable student load of at least 2000 equivalent full-time student units (EFTSU). This requirement forced the merger of many smaller institutions. Members of the UNS received the full range of Commonwealth grants and other benefits (Table A institutions), while those who did not meet the criteria were funded for teaching activities only (Table B).(24)

In 1998 the private institution, the University of Notre Dame, was included in Table A. This Bill will place the University of the Sunshine Coast in the same Table.

While it is apparent that in recent years the Commonwealth has relaxed its criteria for full operating funding, it is not yet clear on what basis these determinations are being made. The Government has not yet provided a detailed response to the recommendations of the Review of Higher Education Financing and Policy (the 'West Review') which was completed in April 1998 and it would appear that the institutional requirements for Commonwealth funding are now being determined on a case-by-case approach.

Main Provisions

Item 2 of Schedule 1 inserts the University of the Sunshine Coast in Table A of ss.4(1) of the HEFA.

Item 1 of Schedule 2 inserts a new section 106LA which provides how a notice of decision on an application for debt remission under the Higher Education Contribution Scheme and the Open Learning Deferred Payment Scheme is to be given to the applicant.

Items 1 - 3 of Schedule 4 repeal sections of the HEFA and the States Grants (General Purposes) Act 1994 relating to the SOSP.

Item 4 of Schedule 5 inserts two new paragraphs in s.18(1) of the HEFA. These provide that financial assistance is granted to a higher education institution on the condition that:

• the institution does not require students to become members of an association as a condition of enrolment, and
• the institution does not require students to make a payment as a condition of enrolment in an educational course when that payment is not directly related to that course.

Item 6 of Schedule 5 provides that the conditions in Item 4 will apply for the year 2000 and subsequent years.

Endnotes

1. Senators and Members can obtain a more detailed legislative history of this issue from the author. A Parliamentary Library web page on Voluntary Student Unionism provides access to a number of the documents referred to in this Digest.

2. Amenities and service fees, or general service fees, are used to support student representative activities and structures, student newspapers, subsidised cafeterias, childcare, accommodation, health services and sporting activities and facilities. A complete list of the compulsory union/amenities and services fees payable at Australian universities is available from the author.

3. Christine Gillie, 'Reform of Students' Unions. The Education Bill [HL] 1993-94', House of
Commons Library Research Paper 94/57 (20 April 1994), p.9.

4. The 1999 amenities and services fee for a full-time student at each university (excluding WA institutions) has been multiplied by its 1998 student load for non-overseas students. Student
load (a measure of equivalent full-time students) has been used because institutions generally have lower fees for part-time students.

5. A 1973 survey of expenditure by student organisations conducted by the Universities Commission indicated that student representation constituted 15 per cent of such expenditure. In 1994, when a number of institutions charged separate fees for student representative activities, these fees were (on average) equivalent to 16 per cent of the total amenities fees.

6. Department of Education, Training and Youth Affairs, Selected Higher Education Finance Statistics 1997, (December 1998). Note that in 1997 universities were not able to charge tuition fees for local undergraduates, but they are now permitted to do so.

7. AV-CC Media Release, 'Government Must Avoid Throwing Baby Out With the Bath-Water
on Student Unions', 22 December 1998.

8. Student union plan 'disaster'', Sydney Morning Herald, 8 March 1999.

9. It would appear that twenty-one universities have all their campuses affiliated with the NUS while four have only some of their campuses affiliated. See the NUS website: http://cleo.murdoch.edu.au/nuse/.

10.The provisions were repealed by the Australian National University Amendment Act 1984
and the Canberra College of Advanced Education Amendment Act 1984.

11. AV-CC Media Release, 'Government Must Avoid Throwing Baby Out With the Bath-Water on Student Unions', 22 December 1998.

12. AV-CC, Student Organisations: a Policy Paper.

13. WA Legislative Council. Hansard. 12 Aug. 1993: 2381-2.

14. [1979] VR 73.

15. Unreported Judgement of the Supreme Court of South Australia. No.321 of 1987. Delivered 31 October 1989.

16. Ryan G. et al. Compulsory Student Unions Australia's Forgotten Closed Shop, Australian Institute of Public Policy, 1987, p.52.

17. ibid., pp.39-44.

18. [1978] VR 457.

19. This is because the HECS payment for Arts, Economics and Law is a higher proportion of the actual cost of those courses than is the HECS payment for Medicine and Dentistry. See Department of the Parliamentary Library Research Note No.54, June 1997, Tuition Fees and University Funding, Table 1: Fees, HECS and Costs.

20. 'Compulsory fees basic to the student system', The West Australian, 18 January 1982.

21. Section 14 of the HEFA requires institutions to submit an educational profile describing activities of the institution to the Minister. The approved form of an educational profile is determined by the Minister after consultation with the institution. Under section 18 institutions must spend their operating grants in accordance with their educational profile.

22. Queensland Legislative Assembly, 14 April 1994, p.7550.

23. 'Quin backs full university status', Media Statement, 2 February 1998 (Office of the Queensland Minister for Education).

24. Higher Education A Policy Statement (July 1988), pp.28-9.

Contact Officer and Copyright Details

Kim Jackson
19 March 1999
Bills Digest Service
Information and Research Services

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ISSN 1328-8091
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