BILLS DIGEST NO. 12, 2020–21              3 October 2020

Higher Education Support Amendment (Job-ready Graduates and Supporting Regional and Remote Students) Bill 2020

Dr Hazel Ferguson
Social Policy Section

This Bills Digest replaces the preliminary Bills Digest published on 2 September 2020.

Date introduced: 26 August 2020

House:  House of Representatives

Portfolio: Education, Skills and Employment

Commencement:  Schedule 1, Schedule 2 Part 1, Schedule 3 Part 1, and Schedule 5 Part 2 commence the day after the Act receives Royal Assent.

Schedule 5 Part 1 commences on 1 January 2020.

Schedule 2 Part 2, Schedule 3 Part 2, Schedule 4 Part 1, and Schedule 5 Part 3 commence on 1 January 2021.

Schedule 4 Part 2 commences on 1 January 2022.

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 October 2020.

Purpose of the Bill

The primary purpose of the Higher Education Support Amendment (Job-ready Graduates and Supporting Regional and Remote Students) Bill 2020 (the Bill) is to amend the Higher Education Support Act 2003 (HESA) and the Social Security Act 1991 (the SS Act) to give effect to the elements of the Job Ready Graduates Package (the JRG Package) requiring legislation.[1]

The Bill also proposes to amend the Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 (the Provider Integrity Act) to extend student protection measures currently in place for non-university higher education providers to universities, and amend HESA to add additional provider integrity measures for all providers.

A range of minor administrative and consequential amendments are also included in the Bill. These are not discussed in the Bills Digest.

Structure of the Bill

The Bill consists of five Schedules.

Schedule 1 amends HESA to:

•       change Australian Government funding allocations for Commonwealth supported places (CSPs) in subsidised higher education courses through the Commonwealth Grant Scheme (CGS)

•       introduce grandfathering arrangements for Commonwealth contributions through the CGS, to provide for current students to continue under existing funding arrangements where support for their course is being reduced

•       extend CGS funding to work experience in industry (WEI) units

•       abolish the CGS transitional loading, which is not currently used, and establish a CGS Transition Fund loading in its place

•       provide for demand driven CGS funding for Indigenous people from regional or remote areas studying bachelor or bachelor honours degrees at public universities

•       amend the calculation methodology for CGS funding to require funding for other courses to be capped and

•       amend the definition of ‘designated course’ to remove the requirement that the Minister specifically allocate places in sub-bachelor and non-research postgraduate courses.

Schedule 2 amends HESA to change student contribution amounts for CSPs, and introduce grandfathering arrangements to provide for current students to continue under existing funding arrangements where their student contribution amounts are being increased.

Schedule 3 amends HESA to:

•       require Australian universities to include, in their mission based compacts, strategies for engaging with industry, and for improving equality of opportunity in higher education

•       add ‘engagement with industry and the local community to enable graduates to thrive in the workforce’ to the distinctive purpose of universities contained in the objects of the Act

•       amend the purposes for which ‘other grants’ to higher education providers can be made, to include grants to encourage higher education providers to engage with industry

•       abolish the CGS regional and enabling student loadings

•       extend eligibility for grants to promote equality of opportunity in higher education from public universities to any bodies corporate specified in the Other Grants Guidelines

Schedule 4 amends the Provider Integrity Act to extend that Act’s regulatory framework which currently applies only to non-university higher education providers, to universities. It also amends HESA to:

•       attach additional conditions to students accessing CSPs—a CSP will not be available for students who:

–      are determined by the Secretary not to be genuine students in relation to the unit

–      are not assessed by the provider as being academically suited to the unit

–      have any part of their request for Commonwealth assistance that they are required to complete completed by the provider

–      are attempting to take more than the equivalent of two full-time years of study in a 12 month period, unless exempt by the provider 

–      fail to successfully complete at least 50 per cent of the units in their first full-time (or equivalent) year of study if they are in a bachelor degree or above, or at least 50 per cent of the units in their first full-time (or equivalent) semester of study if they are in a sub-bachelor course, except if special circumstances apply and

•       align certain student loan arrangements with the changes to CSPs and provider integrity provisions.

Schedule 5 amends HESA to reduce the FEE-HELP loan fee from 25 to 20 per cent and amends the SS Act to reduce the waiting period to access Fares Allowance from six to three months.

Background

Australian Government higher education expenditure

The largest higher education funding program in terms of annual Australian Government expenditure, the CGS, has been the subject of repeated efforts to constrain expenditure in recent years.[2]

The CGS is the source of Australian Government subsidies for CSPs in higher education courses.[3] Together, Australian Government funding through the CGS, and student contributions, normally deferred through the Higher Education Loan Program (HELP), using HECS-HELP, make up the total funding a higher education provider receives for each CSP, referred to as base funding.[4] According to the 2011 Higher Education Base Funding Review: Final Report:

The purpose of providing base funding is to ensure that public universities have sufficient resources to maintain the quality of course delivery expected from the Australian higher education system. Base funding to universities provides for the employment of academic staff, and resources (such as administrative support and infrastructure). This enables universities to deliver teaching and learning programs, to engage in scholarship to inform teaching programs, and to provide institutions with a base capability to undertake research, in appropriately resourced facilities.

While base funding serves the broad purpose of resourcing teaching and learning at the higher education level, it also supports publicly funded universities in carrying out their wider role in society. The receipt of base funding strengthens universities’ institutional autonomy and academic freedom, thus enabling them to contribute to society on a range of levels. Activities such as leading public debate, enhancing civic and cultural life and pursuing the systematic expansion of knowledge are important outcomes of the provision of base funding.[5]

The 2009–10 Budget announced the introduction of demand driven higher education funding for domestic bachelor students through the CGS, with the aim of increasing higher education attainment among 25 to 34 year olds to 40 per cent by 2025.[6] In 2009, 34.6 per cent of people aged between 25 and 34 had attained a bachelor degree or higher.[7] Caps on the number of CSPs were gradually lifted in 2010 and 2011, and the demand driven system (DDS) commenced in 2012.[8] From 2010 to 2013, CGS funding grew from approximately $5.0 billion to $6.2 billion, with subsidies for undergraduate students growing from approximately 466,022 in 2010 to 540,700 in 2013.[9]

Following the change in government in 2013, Education Minister Christopher Pyne commissioned a review of the demand driven funding system by Dr David Kemp and Andrew Norton. The Kemp-Norton Review found:

In our judgement the public universities have responded well to the greater freedom conferred by the demand driven system in relation to course offerings, modes of delivery and admissions. Access has improved for students from all categories. Greater competition for student enrolments, and the opportunity for greater responsiveness to student demand, has driven innovation and lifted quality. In light of the benefits of the demand driven system, there is no persuasive case for the reintroduction of caps.

There is evidence that the greater flexibility and responsiveness resulting from the demand driven system has encouraged a better fit between the skill needs of the wider economy and society and those possessed by university graduates, and should therefore contribute to future improvements in productivity.[10]  

In the 2014–15 Budget, while the DDS was retained, far-reaching changes to higher education funding were proposed, including an average 20 per cent cut to funding for subsidised places through the CGS, and the uncapping of undergraduate student fees.[11] The Higher Education and Research Reform Amendment Bill 2014 (the HERRA Bill) was introduced in August 2014 to give effect to the changes. Introducing the HERRA Bill, Minister Pyne pointed to the cost of subsidising degrees as one reason for the proposed changes.[12] The HERRA Bill did not gain the support of the Parliament, and was replaced by the amended Higher Education and Research Reform Bill 2014, which was also unsuccessful.[13] 

In October 2015, Minister Simon Birmingham announced further consultation on the reforms would be undertaken, with remaining measures delayed until 2017.[14] In the 2017–18 Budget, the Government confirmed it would not proceed with the unlegislated measures announced in the 2014–15 Budget, instead proposing (among other things) an efficiency dividend on CGS funding for 2018 and 2019, and increases in student contributions of 7.5 per cent.[15] The Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017 (the HESLA Bill) was introduced to give effect to those measures.[16]

The HESLA Bill did not pass the Parliament, and in December 2017, the Government announced in the Mid-year Economic and Fiscal Outlook 2017–18 (MYEFO) that existing legislative provisions would be used to ‘freeze’ CGS funding at 2017 levels for 2018 and 2019.[17] However, this temporary freeze created a set of unintended consequences:

•       continued indexation of funding for each CSP, without any increase in overall CGS funding, created a disincentive for institutions to maintain enrolment levels over the longer term—a decreasing number of CSPs would be required each year to make up the maximum CGS allocation,[18] in effect reducing the number of equivalent fully funded CSPs annually at the rate of inflation[19]

•       the re-capped system provided no flexibility for institutions in high growth areas, or areas where the Government wanted to prioritise increased attainment, to respond to student demand, leading to one-off special allocations of additional CSPs, particularly in regional areas[20] and

•       while short-term demographic trends meant the funding freeze likely did not immediately cause significant unmet demand at a national level, a projected peak in the 18-year-old population in 2024 led to concerns that young people would struggle to access a CSP, leading to declines in overall attainment levels.[21]

The MYEFO 2017–18 CGS funding freeze for 2018 and 2019 provided for CGS funding growth from 2020, capped at the growth rate in the 18 to 64 years population and contingent on universities achieving performance targets.[22] However, as total funding for each CSP would still be indexed by CPI, and the population is projected to grow more slowly than CPI, this would still see the number of fully-funded CSPs shrink slightly over time.[23]

At the 2019–20 Budget, the CGS remained one of the overall top twenty programs by expenses, and estimated CGS expenditure of $7.2 billion accounted for 73.2 per cent of the $9.9 billion estimated expenditure in the higher education sub-function.[24] At the same time, 40.7 per cent of people aged between 25 and 34 had attained a bachelor degree or higher by May 2019.[25]

Impact of COVID-19

The impact of the pandemic was felt in Australian higher education from early 2020. COVID-19 travel restrictions were announced for travellers from mainland China on 1 February 2020, then for all foreign nationals (excluding Australian permanent residents) from 20 March.[26] Twenty per cent of higher education student visa holders and 19 per cent of postgraduate research student visa holders were outside Australia as at the end of March, the largest proportion of these being from China.[27] 

By April, universities were reporting the effects of declining revenue from overseas student fees, which accounted for 26 per cent or $8.8 billion of university revenue in 2018, the need for additional spending on on-line learning and student support, and domestic fee income and investment losses.[28] The Audit Office of New South Wales Universities 2019 audits report showed ‘overseas student enrolments were 13.8 per cent beneath expectations and domestic student enrolments were 2.4 per cent beneath expectations’.[29]

Universities Australia (UA) initially estimated that COVID-19 could result in revenue decline of between $3 billion and $4.6 billion and put more than 21,000 jobs at risk in Australian universities.[30] UA has since estimated revenue losses from 2020 to 2023 at $16 billion.[31] Other analyses have estimated possible revenue losses to 2023 of a similar magnitude.[32]

On 12 April, Minister Dan Tehan and Minister Michaelia Cash announced the Higher Education Relief Package in response to COVID-19.[33] The major commitment as part of this package was guaranteed CGS funding for 2020, regardless of any enrolment changes.

In May, the Department of Education, Skills and Employment (DESE) reported large increases in the numbers of overseas students deferring study, with 39,954 higher education students deferring their studies on ‘compassionate and compelling grounds’.[34]

The Senate Select Committee on COVID-19 heard on 28 July 2020 that a lack of access to JobKeeper has been a particular challenge for universities in addressing the short-term financial impact of COVID-19.[35] The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 2) 2020 imposed specific limitations on Australian universities (Table A and Table B providers) accessing JobKeeper. The government made amendments to this scheme to enable Table B providers (Australian private universities) to more easily access JobKeeper in the Coronavirus Economic Response Package (Payment and Benefits Amendment Rules (No. 3) 2020. Bond University, the University of Notre Dame Australia, the University of Divinity and Torrens University are the only Table B providers.[36] Commentators have assessed that Bond and Torrens likely qualify for JobKeeper as a result.[37]

In addition to the likely demographic-driven increases to tertiary education demand mentioned above, recession (in this case due to COVID-19) also normally increases education demand as the opportunity cost for study falls relative to worsening employment opportunities.[38] International travel restrictions are also likely to play a role in reducing non-study options for school leavers who might otherwise have taken a gap year to travel. Early reports suggest a substantial increase in university applications for 2021.[39]

The Job Ready Graduates Package

Minister Tehan announced the JRG Package in his Press Club address on 19 June 2020, stating:

Today I announce that we will provide an additional 39,000 university places by 2023 and 100,000 places by 2030.

To do this, we will address the misalignment between the cost of teaching a degree and the revenue that a university receives to teach it.

We will reform the system so that the student contribution and the Commonwealth contribution actually equals the cost of teaching that degree.

This is consistent with the reforms we are undertaking in vocational education and training.

We will also incentivise students to make more job-relevant choices, that lead to more job-ready graduates, by reducing the student contribution in areas of expected employment growth and demand.[40]

The changes were subsequently detailed by DESE in the Job-ready Graduates Discussion Paper (the Discussion Paper) and a series of fact sheets outlining the details of proposed measures. Following a consultation period, changes were then announced in a joint press release from Minister Tehan and Minister Andrew Gee.[41]

The JRG Package, as outlined in the Discussion Paper, primarily focuses on changes to funding programs under HESA, including the CGS, with additional support directed to regional, rural and remote (RRR) education.

The funding changes include reallocating some funding from the CGS, including the regional and enabling loadings, which the JRG Package proposes to abolish.[42] The regional and enabling loadings form part of the CGS, and are intended to help providers offset the additional costs of providing enabling courses, and the disparity in costs and revenue of regional campuses in comparison with major city campuses.[43]

Funding will also come from the following two programs:

•       The Higher Education Participation and Partnerships Program (HEPPP), which is currently the major equity funding program under HESA, funded at approximately $113 million in 2019–20.[44] The HEPPP provides funding for university activities that improve access, retention, and completion rates for people from low socio-economic status (SES) backgrounds to undertake undergraduate courses.[45]

•       The National Institutes, approximately $227 million funding was provided in 2019–20 for activities of national significance to the Australian National University (ANU), the Australian Maritime College (AMC), Batchelor Institute of Indigenous Tertiary Education (BIITE) and the Victorian College of the Arts at the University of Melbourne.[46] The ANU receives the majority of National Institutes funding to support its role providing research capacity in subject areas of national importance.[47]

The Discussion Paper indicates that the reallocated funding will go to:

•       the creation of two new programs:

–      the National Priorities Industry Linkage Fund (NPILF), for ‘engagement with industry, development of industry-relevant course material, optimisation of course mix for local economies, and provision of work-integrated learning opportunities for students’ and

–      the Indigenous, Regional, Low Socio-Economic Status (SES) Attainment Fund (IRLSAF), which will be ‘a consolidation of existing equity programs to streamline administration and finances’

•       a Transition Fund to provide stability of university funding to 2023 by compensating for reduced base CGS amount and the removal of regional and enabling loadings, and

•       additional differentiated growth in the CGS for providers depending on their location, with 3.5 per cent allocated to RRR areas, 2.5 to high growth metropolitan areas, and one per cent to other areas.[48]

The new programs and rates of indexation are not provided for in the Bill directly, but rather will be dealt with in Guidelines (disallowable legislative instruments) made by the Minister under HESA. Schedule 3 of the Bill makes amendments to HESA necessary for the creation of the NPILF and IRLSAF by broadening the Minister’s discretion in the making of grants and removing references to existing regional and enabling loadings. 

A range of other measures are also included in the JRG announcements, including (among other things) a Regional Education Commissioner, research funding for regional universities, and a Tertiary Access Payment for regional students.[49] These measures, as well as the NPILF and IRLSAF, and additional growth in the CGS, are not specified in the Bill.

Committee consideration

Education and Employment Legislation Committee

The Education and Employment Legislation Committee recommended the Bill be passed, but that the Government review the effects of the changes two years after commencement.[50] As detailed below, dissenting reports recommending the Bill not be passed were provided by Senators from the Australian Labor Party and Australian Greens, as well as Independent Senator Rex Patrick.[51]

Further information is available from the inquiry homepage.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills has considered the Bill and had no comment.[52]

Policy position of non-government parties/independents

Labor does not support the Bill. The Labor Senators’ dissenting report, delivered as part of the Education and Employment Legislation Committee inquiry report into the Bill, opposes the Bill and finds that it:

Does not implement the government’s promise of 39,000 new places. These places are unlegislated, rely on ministerial discretion and cannot be delivered at the same time as significant cuts.

Attacks the core research purpose of universities by funding only teaching and removing within the bills funding model the fundamental nexus between teaching and research.

Delivers less money, not more, for ‘job ready’ courses, creating a clear disincentive for universities to expand enrolments in the very areas the government says are a priority.

Dangerously expands Ministerial discretion and locks in cuts and fee increases, while the promised benefits remain unlegislated.

Will create further distress for year 11 and 12 students after an already difficult year.

Includes a fee schedule that will motivate perverse outcomes within universities and is fundamentally inequitable.

Contains fee hikes not backed by any evidence that these pricing signals will motivate changes to university or students choices. Rather, the evidence shows that the bill will result in inequitable levels of student debt, especially for women, while incentivising the above cap enrolment of high fee courses. The very courses the government says it wants to deter students from enrolling in.

Will have a significantly worse impact on women and First Nations people.

Interferes with student progress, by removing government support from students instead of allowing for discretion from universities.

Undermines the quality of university teaching.

Creates risks for regional universities and fails to recognise their higher than average costs and cuts their regional loading.

Would damage the research capabilities of Australian universities with dire consequences for the entire economy.

Will risk the university status of some institutions because of its damage to their research capacity.

Is so deeply flawed it is cannot be repaired with amendments.[53]

The Australian Greens do not support the Bill. The dissenting report from the Australian Greens recommends the Bill not be passed, raising concerns about:

•       the short timeframe allowed for the inquiry

•       the level of objection to the Bill from universities and key organisations

•       flaws in the Bill, including reduced funding for teaching, low likelihood of effectiveness of the proposed funding incentives for priority courses, additional student debt, and shift in the cost of education towards students

•       the disproportionate negative impact on disadvantaged students

•       the lack of guaranteed new places

•       the impact of the Bill on research funding and

•       the fairness of the student protection measures.[54]

Senator Rex Patrick, who was also part of the Committee inquiry, stated in his dissenting report that he would not support the Bill, and that it is ‘bad for students, bad for universities, bad for research, bad for South Australia and bad for Australia’.[55] He concluded:

This bill is a crude and blunt instrument that will likely do much harm to the interests of students and universities at a time when the tertiary education sector is reeling from the effects of the COVID-19 pandemic.

This bill cannot be salvaged. Anyone who thinks so is kidding themselves, or worse, being quite disingenuous. It’s not the case of Minister Tehan sitting the exam again, he’s got to go back and repeat the course.[56]

Senator Jacqui Lambie has since indicated that she will not support the Bill, partly due to:

[t]he discounts that One Nation have negotiated [which] only go to people within enough money to pay upfront in the first place. They make it cheaper for rich families to go to university, and don’t help poor families do the same.[57]

She further stated in relation to the Bill more generally:

Poor kids get a raw deal from this bill.

The only ones who are getting bullied into doing the course that wasn’t their first choice are the kids who are scared off by having to shoulder a massive debt. If money is no object, it doesn’t matter what the price tag is. You’ll study whatever you want to study, even if the ticket price is doubled.[58]

Position of major interest groups

Major interest groups support some features of the Bill, but have raised concerns and pointed to limitations in relation to a number of key measures, as summarised here.

Submissions to the consultation on the draft legislation are available on the DESE website.[59]

Submissions to the Education and Employment Legislation Committee inquiry into the Bill are available from the inquiry homepage.

Overall response to the funding approach in the Bill

A number of key interest groups have urged the Parliament to pass the Bill in order to end the freeze on CGS funding and provide greater funding certainty to the higher education sector. This has been coupled with proposals to amend the Bill to address the significant reservations that interest groups, despite wishing to move forward from the funding freeze, have expressed regarding the funding approach in the Bill.

The Group of Eight (Go8) research intensive universities indicated that the Bill should be passed with amendments to:

•       include indexation, transition funding and funding for the NPILF and the IRLSAF, and growth funding in the primary legislation

•       provide for growth in demand due to COVID-19

•       modify the proposed student contribution amounts to make them more equitable

•       address the conflicting incentives for students and universities in the funding cluster arrangements and

•       remove the student protection measures in Schedule 4.[60]

The Australian Technology Network of Universities made a joint submission with the University of Newcastle and Deakin University, which also recommended the Bill be passed with substantial amendments to:

•       expand demand driven funding to all Aboriginal and Torres Strait Islander people, not just those in RRR areas

•       maintain current regional and enabling loadings in the CGS

•       review the funding rates within 12 months

•       remove the 50 per cent completion rate rule from Schedule 4 of the Bill

•       include the NPILF in the primarily legislation and

•       include CGS indexation in the primary legislation.[61]

The Innovative Research Universities recommended the Bill be supported with amendments to address what it perceived as four key weaknesses:

•       misaligned funding incentives, with overall revenue decreasing in many of the study areas the Bill is seeking to promote, and lack of funding support for university costs not directly attributable to teaching delivery, such as facilities, labs, and equipment, and research

•       historic increases in student charges in an attempt to shape student study choices towards areas of job growth, although previous efforts to predict long-term workforce needs have failed

•       lack of funding for increased demand due to COVID-19 and

•       additional regulation in Schedule 4, without evidence for the need for such measures to be applied to universities.[62]

The Regional Universities Network (RUN) is supportive of the Bill and recommends it be passed, drawing attention to the concessions introduced following consultation on the draft legislation.[63] It particularly supports measures in the JRG Package to provide additional support for regional university campuses, including the 3.5 per cent growth in CSP funding, $5,000 scholarships/Tertiary Access Payment, the IRLSAF, regional research funding, funding for Regional University Centres, and funding for a RRR Education Commissioner.[64] RUN does not raise concerns about these measures not being guaranteed in the Bill in its submission.

RUN further states:

The RUN Group welcomes the proposed formation of a Working Group to determine the future direction of Enabling Loading. It agrees that this underlines the importance of maintaining and expanding enabling programs in the Australian Higher Education sector. At the same time, the preponderance of enabling programs amongst RUN universities is noteworthy. RUN urges that this should be reflected in the allocation of Enabling Load and in the composition of the planned Working Group. These measures will ensure that regional, rural and remote populations are best-served by the expansion of these crucial enabling pathways in their communities.[65]

The National Tertiary Education Union (NTEU) is not supportive of the Bill, and recommends it not be passed.[66] It raises a range of concerns about the funding approach, stating:

The Bill is unbalanced and unfair because it:

•results in an overall increase in student fees of about 10%,

• results in the proportion of students paying highest fees almost doubling from 22% to 41%,

• disproportionately affects Aboriginal and Torres Strait Islander students, women and regional students,

• imposes very different fees on students studying similar degrees – a three-year BA majoring in history would be $43,500, while a three-year BA majoring in English would only be $11,850, and

• cuts fees for highly paid graduates like engineers but more than doubles fees for historians, politics and journalism students.[67]

In terms of the Bill’s impact on the NTEU’s members, it states:

Should this Bill be passed, the direct result will be the under-resourcing of commonwealth supported students by public universities already under substantial financial pressures due to the COVID-19 crisis, with sector losses currently projected to be around $16b over the next 3 years and 21,000 full time equivalent (FTE) job losses. Indeed, while the current financial crisis will almost certainly have an impact on the quality of both teaching and research produced by our universities for years to come; should the Job-ready graduate legislation be passed the detrimental effects of COVID-19 on the sector will be compounded and any hope of recovery further delayed.[68]

Technical concerns about the funding effects of the Bill

Key higher education funding policy experts have raised concerns about the likely funding impact of the Bill, and how many new places can be funded based on the proposed arrangements.

Andrew Norton, Professor in the Practice of Higher Education Policy at the Centre for Social Research and Methods at the Australian National University, argues:

… that for two key objectives, promoting the number of students graduating in fields with strong employment potential, and assisting regional universities, Job-ready Graduates runs a significant risk of producing worse outcomes than current policies (chapters 2 and 5 [of his submission to the Committee inquiry into the Bill]).

For a third key objective, increasing the number of student places, Job-ready Graduates and status quo policies are likely to produce similar aggregate numbers of student places in the next few years. However, Job-ready Graduates may leave fewer places for commencing students in 2021 (chapter 3 [of his submission to the Committee inquiry into the Bill]).[69]

Mark Warburton, former senior education department official and current Honorary Senior Fellow at the LH Martin Institute, part of the Melbourne Centre for the Study of Higher Education, University of Melbourne, has raised a large number of concerns about the Bill, including its:

•       timing and impact during a recession

•       likely exacerbation of difficulties related to COVID-19

•       impact on quality

•       impact on funding for core non-teaching university functions

•       misunderstanding of how student contribution amounts affect student course choice

•       decoupling of course costs from likely future incomes, meaning people who likely have less future capacity to pay will pay more

•       lack of foundation in labour market analysis

•       poor equity outcomes

•       poorly targeted regional assistance

•       reduced transparency and increased Ministerial discretion and

•       lack of certainty about growth in student places.[70]

On the last point, Warburton states:

The claims in Job-ready Graduates and the Bill’s second reading speech that 39,000 student places will be created in 2023 appear inconsistent with the details supplied in the package’s information materials. The funding formula does not appear to generate sufficient funds to increase the number of places consistent with the package’s claims.[71]

Discipline funding changes

A large number of more specialist discipline-based interest groups have raised concerns about the proposed changes to the relative funding model.

As just some examples, the Council for the Humanities, Arts and Social Sciences notes:

…with concern that the HASS [humanities, arts and social science] fields that face the largest fee increases tend to have substantially more women than men enrolled in them. The evidence is that while there may be some shifts at the margins, most women will continue to enrol in these subjects, driven by a passion for their fields of study and recognition of the value of the resulting skills to the community. While the proposed changes are unlikely to improve pathways to employment for graduates, they will certainly burden the next generation with debts that will negatively impact on their future careers and family choices.[72]

Science and Technology Australia (STA) recommends the addition of a science loading clause, to ensure the total per-place funding for science education does not fall.[73] Without this amendment, STA does not recommend the Bill be passed.[74] STA states:

Consultation with the Australian Council of Engineering Deans has also helped STA to understand the proposed reduction of funding could risk the teaching of engineering especially at smaller or regional universities. The impact of the funding changes would also be particularly acute in the ‘heavy engineering’ disciplines – the teaching of which often involves expensive large-scale facilities and infrastructure. This affects fields such as mining engineering, petrochemical engineering, electrical engineering, heavy mechanical engineering and advanced manufacturing.

The Australian Council of Environmental Deans and Directors (who are also STA members) note the impact of this proposed cut to STEM education will be even more acute in the environmental sciences - with a 29% cut to resourcing. They fear it is likely to affect the number of offers in degrees that will lead students into careers in bushfire prevention, recovery and resilience, water management, and managing habitat on farms and in State and National Parks. They also fear it will harm Australia’s baseline research capability in these areas.[75]

The Australasian Consortium of Humanities Research Centres and Australian Research Council (ARC) Laureate Fellows from a wide range of discipline backgrounds raise similar points from a research perspective, the latter identifying the Business Council of Australia and Deloitte Access Economics as supportive of the value of the humanities in the workforce.[76]

The inquiry submission from the Australian Council of Deans of Education (ACDE) is particularly notable, as the proposed student contribution for Education courses would be substantially reduced. The ACDE points to limitations of course fees as an incentive to employment as a teacher, noting that:

Fees are a relatively minor issue when weighed up against the future of work and culture in teaching, especially when we see many jurisdictions in Australia experiencing difficulties in recruiting adequate numbers into teaching together with employers having limited capability to grow and develop the existing workforce. These aspects combined with population growth and regional demands will contribute to a general decline in teacher numbers overall nationally.

In considering this matter, ACDE wishes to remind the EEL Committee of the work initiated by Minister Tehan in late 2018 and a study under the oversight of Mr. Andrew Laming MP through a House of Representatives Parliamentary Committee. The Laming study examined in considerable detail the many barriers and constraints which impact on the status of the teaching profession… A lot of work went into responding to this Committee's work including some 80+ submissions and evidence from several Deans of Education and other sector representatives and teachers (including student teachers).[77] 

The Australian Institute of Physics (AIP) National Executive also argues that even if students are incentivised to enrol through lower course fees, decreased overall funding for science (the student plus Australian Government contributions to each place) will threaten the quality of science degrees.[78] The AIP also questions the reliance of the funding model on teaching-only costing, which, it says, could undermine the traditional teaching-research academic employment model.[79] It recommends for this reason that any reform to teaching funding be considered in relation to research funding.[80]

Equity impacts of the Bill

The Association of Heads of Independent Schools of Australia (AHISA) supports the increase in the number of CSPs proposed in the JRG Package, but raises concerns about the impact of the proposed funding changes on Year 10, 11 and 12 students, whose subject choices leading to particular university studies have already been made, and who are already facing substantial challenges from remote learning and other impacts of COVID-19.[81] These concerns about current school students are also raised in the submission from the National Centre for Student Equity in Higher Education (NCSEHE).[82]

The NCSEHE submission to the inquiry comments on the JRG Package as a whole, including elements that are not in the Bill. The NCSEHE supports the RRR measures, the introduction of flexibility in offering CSPs to students from sub-bachelor to postgraduate, and considers the unreasonable study load measure to be reasonable.[83] However, the NCSEHE raises concerns about possible differential impacts on disadvantaged students from the changes to student contribution amounts, and requirements that students maintain a 50 per cent pass rate.[84]

End Rape on Campus Australia, a not-for-profit working to end sexual assault and harassment within higher education communities, supports the Bill’s use of special circumstances in the provider integrity measures, but does not consider these safeguards sufficient, and raises concerns about the potential impact of the provider integrity measures on students whose study progress is affected by the longer-term impacts of trauma.[85]  

Financial implications

The Explanatory Memorandum to the Bill states that the JRG Package measures provide a saving of $125 million over the forward estimates, and the student protection measures produce savings of $0.5 million in fiscal balance terms and a cost of $0.4 million in underlying cash over the period 2020–21 to 2023–24.[86]

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.[87]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights has considered the Bill, and raised questions about two of its key elements: the increased student contribution amounts for certain disciplines proposed in Schedule 2, and the minimum unit completion rate proposed in Schedule 4.[88]

Student contribution amounts

In relation to the student contribution amounts, the Committee notes Australia’s continuing ‘obligations to progressively introduce free higher education by every appropriate means.’[89] It states that ‘[r]educing the cost of some studies would appear to promote the right to education’, but that increasing the cost of other fields of study at the same time ‘would constitute a retrogressive step in relation to the realisation of the right to education, in that it would move backwards away from the realisation of free higher education for some students…’.[90] The Committee questions the claim made in the statement of compatibility with the human rights that the measure does not directly restrict access to higher education because students are able to defer course costs through HELP, and draws attention to the likely increase in HELP debt among students who enrol in units with increasing student contributions.[91]

In order to assess the compatibility of the proposed student contribution changes with the right to education, the Committee has sought further information from the Minister in relation to:

(a)              evidence demonstrating a pressing and substantial concern which would justify an increase in the cost of some higher education studies;

(b)               evidence indicating that the proposed increases in student contributions for certain courses would not have the effect of deterring future students from undertaking those studies, including students from lower socio-economic backgrounds, or students from regional and remote areas;

(c)               whether, and in what manner, persons who would be impacted by the proposed student contribution increases (in particular, current and future students, and universities) were consulted about the proposed amendments;

(d)               what, if any, alternatives were considered to amending the student contribution amounts in this manner;

(e)               whether the proposed student contribution increases may have the effect of being discriminatory (for example, against students from lower socio-economic backgrounds or women);

(f)               whether an independent review of the proposed measures has been undertaken; and

(g)               what, if any, other safeguards are in place to ensure that the proposed amendments to student contribution amounts, and particularly the proposed increases to some amounts, constitute a proportionate limitation on the right to education for prospective higher education students.[92]

Unit completion rate

In relation to the minimum unit completion rate, the Committee notes that while the proposed measure would not require students to be excluded from courses of study where they do not maintain a 50 per cent pass rate, withdrawing access to CSPs may have the effect of reducing the affordability of study for a large number of students, which would prevent them from accessing higher education.[93] The Committee also raises concerns that this could have a disproportionate impact on students who face particular challenges studying at university, such as students from regional areas.[94]

In order to assess the compatibility of the proposed unit completion rate changes with the right to education, the Committee has sought further information from the Minister in relation to:

(a)              whether there is reasoning or evidence that establishes that the stated objective addresses a pressing or substantial concern or whether the proposed changes are otherwise aimed at achieving a legitimate objective;

(b)               how the measure is rationally connected to (that is, effective to achieve) that objective;

(c)               whether, beyond the existing 'special circumstance' provision in the Higher Education Support Act, any further flexibility would exist under the proposed minimum unit completion rate to treat individual cases differently, to exempt persons from this minimum unit completion rate, or otherwise make concessions for students, either on an individual basis or with respect to student cohorts;

(d)              whether and in what manner, persons who would be impacted by the proposed introduction of a minimum unit completion rate (in particular, current and future students, and universities) were consulted about the proposed amendments;

(e)               what, if any, alternatives were considered to introducing a minimum unit completion rate;

(f)               whether a minimum unit completion rate may have the effect of being discriminatory (for example, against students from lower socioeconomic backgrounds);

(g)               whether an independent review of the proposed measures was undertaken; and

(h)               what, if any, safeguards are in place to ensure that the proposed introduction of a minimum unit completion rate constitutes a proportionate limitation on the right to education (for example, is there a process to consider individual circumstances before financial assistance is removed).[95]

At the time of writing, the Minister’s response had not been received by the Committee.[96]

Key issues and provisions

Schedule 1—the Commonwealth Grant Scheme

To be eligible for CGS funding, a provider must normally be a Table A provider (essentially a public university) and enter into a CGS funding agreement for the relevant funding year.[97] A limited number of other providers also receive CGS funding, predominantly in teaching and nursing.[98]

Schedule 1 of the Bill proposes to make substantial changes to the operation of the CGS in HESA, to:

•       reduce the number of Commonwealth contribution amount funding clusters from eight to four, and reshuffle which courses fall into which cluster

•       alter the Commonwealth contribution amounts for each of the funding clusters

•       include grandfathering arrangements for students enrolled before 1 January 2021, to provide for current students to continue under existing funding arrangements where support for their course is being reduced

•       extend eligibility for CGS funding to work experience in industry (WEI) units

•       abolish the CGS transitional loading, which is not currently used, and establish a Transition Fund loading in its place

•       provide for demand driven CGS funding for Indigenous people from regional or remote areas studying bachelor or bachelor honours degrees at public universities

•       amend the definition of ‘designated course’ to remove the requirement that the Minister specifically allocate places in sub-bachelor and non-research postgraduate courses, allowing providers to decide how many CSPs to allocate to these courses relative to bachelor degrees, within their overall CGS funding envelope

•       change provisions relating to minimum basic grant amounts (MBGA), formalising the end of the demand driven system for most courses.

Funding clusters

The amount of CGS funding for each CSP is determined at unit (or subject) level, according to which funding cluster (or field of education) a unit belongs to.[99] 

Eight funding clusters are currently set out in section 30-15. Item 5 repeals this section. Proposed section 30-15 would see four clusters replace the current eight—this provides the basic structure for funding allocations, but not the specific funding amounts. 

Commonwealth contribution amounts

The amount the Australian Government contributes to the cost of a unit funded through the CGS, is the Commonwealth contribution amount. Amounts are currently set out in section 33-10, and are indexed each year using the Consumer Price Index (CPI). [100] The indexed amounts for each calendar year are published on the DESE website.[101] Item 14 repeals current section 33-10. Proposed section 33-10 includes a table of Commonwealth contribution amounts and a table of grandfathered Commonwealth contribution amounts.

The effect of the proposed Commonwealth contribution amounts is summarised in Table 1 below. Rather than being presented exactly as they are in the Bill, funding clusters have been broken down by discipline to provide a clearer picture of funding level changes. Dollar amounts refer to funding for a full-time place for one year.[102] For example, a full-time Law student studying four units per semester for two semesters per year will attract a Commonwealth contribution of $1,100 for the year, or $137.50 per unit.

CGS funding decreases are proposed in most areas of the humanities and social sciences, as well as in Engineering, Science, Surveying and Environmental studies. CGS funding increases are proposed for most Health fields, Education, and Mathematics, among other areas. Analysis from the Centre for the Study of Higher Education at the University of Melbourne has estimated the overall impact of the proposed change:

University revenue for teaching would be reduced by nearly one billion dollars in 2021 and every year thereafter for the same domestic student load as in 2018 as a result of the funding caps imposed in 2018 and the 2021 funding cluster changes in Job-ready Graduates.[103]

The CGS is just one part of the overall funding an institution receives for each CSP. The amount paid by the student makes up the remainder of the total resourcing. Student contributions are discussed in the next section.  

Table 1: Current and proposed Commonwealth contribution amounts, 2021

Fields

Current Commonwealth contribution amount

Proposed Commonwealth contribution amount

Law

$2,237

$1,100

Accounting

$2,237

$1,100

Administration

$2,237

$1,100

Economics

$2,237

$1,100

Commerce

$2,237

$1,100

Society and Culture not included elsewhere

$6,226

$1,100

English Language, Linguistics and Literature

$6,226

$13,250

Behavioural Science

$11,015

$1,100

Social Studies

$11,015

$1,100

Communications

$13,547

$1,100

Mathematics

$11,015

$13,250

Statistics

$11,015

$13,250

Computing

$11,015

$13,250

Built Environment

$11,015

$13,250

Professional Pathway Psychology

$11,015

$13,250

Professional Pathway Social Work

$11,015

$13,250

Other Health

$11,015

$13,250

Education

$11,462

$13,250

Allied Health

$13,547

$13,250

Clinical Psychology

$13,547

$13,250

Foreign Languages

$13,547

$16,250

Visual and Performing Arts

$13,547

$13,250

Nursing

$15,125

$16,250

Engineering

$19,260

$16,250

Science

$19,260

$16,250

Surveying

$19,260

$16,250

Environmental Studies

$24,446

$16,250

Dentistry

$24,446

$27,000

Medicine

$24,446

$27,000

Veterinary Science

$24,446

$27,000

Agriculture

$24,446

$27,000

Pathology

$24,446

$27,000

Dollar figures are 2021 rates.

Based on DESE, Job-ready Graduates – Higher Education Reform Package, 2020, p. 17; DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

Grandfathering arrangements

According to the definition of grandfathered student inserted at item 35, grandfathering will apply when a student was a Commonwealth supported student in relation to their enrolment prior to 1 January 2021, and they enrol in a unit with a census date on or after 1 January 2021 under one of the following circumstances:

•       they are enrolled in a course that they commenced, but did not complete, before 1 January 2021

•       they completed a course before 1 January 2021, and commence an honours course related to the earlier course on or after 1 January 2021

•       they undertook an enabling course in 2020, and commenced another course on or after 1 January 2021—an enabling course, often referred to as a foundation course, is provided with the purpose of enabling a person to undertake a higher education award, but does not normally lead to a qualification[104] or

•       they undertook an undergraduate certificate in 2020, and commenced an undergraduate degree related to the undergraduate certificate on other after 1 January 2021—the undergraduate certificate is half a full-time year of study (normally four units), and was added to the Australian Qualification Framework in 2020 as part of the COVID-19 higher education relief package.[105] 

The grandfathered Commonwealth contribution amounts are intended to set out in proposed section 33-10 the current Commonwealth contribution amounts, indexed to 2021 levels, for those clusters set to receive a lower Commonwealth contribution under the proposed arrangements, in order to allow continuing students to pay their contributions under the old arrangements.[106] Grandfathered cluster five, which includes Education, Clinical Psychology, English, Mathematics, Statistics, Allied Health, Other Health and Built Environment, appears to diverge from this arrangement somewhat, with a funding level of $13,500, which does not match any of the 2021 indexed funding amounts.

Work experience in industry units

HESA includes specific provisions for units, known as work experience in industry (WEI) units, which are undertaken for the purpose of obtaining work experience relevant to the student’s course, where the learning and performance in the unit is not directed by the provider.[107]

Universities use a range of work integrated learning options to equip students for the workplace. Universities Australia found that in 2017, 451,263 students undertook some form of work-integrated learning, including work placements (43.0%), projects with industry or community groups (23.3%), fieldwork (9.7%), practical simulations of job tasks (12.9%), and other activities (11.2%).[108] Units that include teaching in addition to the work experience are not WEI units.[109]  

Under subsection 33-30(1) of HESA, WEI units do not receive CGS funding. However, in some cases, where learning and performance in a WEI unit is supported by the provider, students may be charged a student contribution amount or tuition fee. [110] Item 16 proposes to amend the wording of subsection 33-30(1) with the effect that the exclusion of WEI units from the CGS would only apply to ineligible work experience units—this is defined at item 35 as a WEI unit where the student is exempt from paying a student contribution for the unit, or, where the unit does not meet requirements specified in the Administration Guidelines made for this purpose. This means units where the student could be charged a student contribution under current arrangements will become eligible for CGS funding.

Total CGS grant amount calculations

Currently, a provider’s total CGS grant amount includes a basic grant amount, and additional regional, medical and enabling student loadings, as well as transitional loading and performance funding amounts, worked out under the Commonwealth Grant Scheme Guidelines 2012 (the CGS Guidelines).[111] The CGS Guidelines currently only make provision for regional, medical and enabling student loadings.

Item 11 proposes to amend subparagraph 33-1(1)(b)(iv) with the effect that the transitional loading would be replaced by a Transitional Fund Loading. The Transition Fund Loading is designed to ensure Table A providers retain their revenue from 2021 to 2023.[112] As calculation methodology details will be in the CGS Guidelines, it is not possible to assess how this would work for the purposes of this Bills Digest.

Basic grant amount calculations

The calculation methodology for the basic grant amount (CGS funding other than any applicable loadings) is set out in HESA.

Currently, a provider’s basic grant amount is determined by two calculations:

•       for non-designated courses of study, comprising undergraduate bachelor degrees except medicine, total funding may be capped in the CGS funding agreement by specifying a maximum basic grant amount (MBGA), but providers are otherwise free to choose the combination of courses in different funding clusters that they offer[113] and

•       for designated courses of study, comprising the remaining courses such as sub-bachelor and non-research postgraduate courses, the Minister allocates CSPs for each course to each institution in the CGS funding agreement—an MBGA for designated courses may also be specified in the funding agreement.[114]

The basic grant amount equals the number of students in CSPs multiplied by the Commonwealth contribution amount for the place, up to the MBGA.[115] If no MBGA is specified, no limit will be applied—this option for the Minister to leave funding uncapped, or impose a MBGA in the funding agreement was used to implement the DDS from 2012 to 2017, as well as to ‘freeze’ the demand driven system from 2018.[116] Item 9 repeals the provisions for specifying MBGAs, which are currently in section 30-27.

Item 13 repeals the provisions for calculating the basic grant amount, which are currently in section 33-5, including those allowing funding to be provided on a demand basis if no MBGA is specified.

Proposed section 33-5, at item 13, sets out calculation methods for total basic grant amounts. For Table A providers, the total basic grant amount will be the sum of amounts for higher education courses, designated higher education courses, and demand driven higher education courses.[117]

The current definition of designated courses of study is repealed at item 34. Proposed section 30-12 at item 4 defines designated higher education course as a course of study in medicine, or a course of study as determined by the Minister by legislative instrument. Sub-bachelor and non-research postgraduate courses are no longer specified in the definition.

Demand driven higher education courses will be bachelor and bachelor honours courses undertaken by Indigenous people from rural and remote areas.[118]

The category of non-designated course is no longer used. Instead, all courses not defined as designated or demand driven will be known as higher education courses, essentially replacing the current category of non-designated courses.[119]

This inclusion of sub-bachelor and non-research postgraduate courses in the definition of higher education courses has the effect of allowing providers to choose how they allocate CSPs from their CGS grant between sub-bachelor, bachelor, and postgraduate courses (other than medicine), as they can currently do between non-medical bachelor courses. However, under proposed section 30-12 at item 4, the Minister still has the option to determine these courses are designated courses in a legislative instrument. Currently, a provider either enrols students in their allocated number of designated CSPs, or forgoes the CGS funding associated with those places. The proposed change will open up the possibility of providers increasing their CSP offerings at any of the included levels of study, at the expense of the others. However, this approach may incentivise a reduction in postgraduate coursework CSPs at Table A providers, because providers are able to enrol postgraduate coursework students on a full-fee basis, while this is not possible for undergraduate students.[120] That is, in an environment with high demand for undergraduate courses, and capped CGS funding, it may make sense for providers to direct the limited number of CGS places they have available to fully-funded undergraduate CSPs, and move to charging postgraduate coursework students full (uncapped) fees.[121]

The funding for each type of course will be the number of students in CSPs multiplied by the Commonwealth contribution amount for the place, accounting for different funding levels for grandfathered students, up to the MBGA.[122] In the absence of a MBGA for designated courses, funding will be only up to the number of places allocated by the Minister.[123] For demand driven courses, if no MBGA is specified, no limit will be applied.[124]  

For providers other than Table A providers, funding will be the number of students in CSPs allocated to the provider, multiplied by the Commonwealth contribution amount for the place, accounting for different funding levels for grandfathered students, up to the MBGA.[125] If no MBGA is specified, the number of places allocated to the provider will provide the funding limit.[126]

Proposed section 30-27, at item 9, would provide that:

•       for Table A providers, the CGS funding agreement must specify a MBGA for higher education courses, and may also specify a MBGA for designated higher education courses and demand driven higher education courses—this formally ends demand driven funding for most higher education courses

•       for Table A providers, for higher education courses, there will be a funding floor for the MBGA, which is to be specified in the CGS Guidelines for 2021 to 2024, and in  later years must not be less than the amount for the preceding year for those courses—this leaves open the possibility of CGS funding for grant years from 2021 to be lower than the 2020 level, for any or all providers, whereas HESA currently provides that for Table A providers, the MBGA for non-designated courses must not be less than for the preceding year[127] 

•       for Table A providers, for designated higher education courses, the Minister will still allocate a specific number of CSPs

•       for providers other than Table A providers, the funding agreement may specify a MBGA, and the amount is to be calculated based on the number of CSPs allocated by the Minister.

The Discussion Paper states that all CGS funding for Table A providers is to be indexed by the consumer price index (CPI) as part of the JRG Package.[128] This will bring the growth in a Table A provider’s overall CGS allocation into line with indexation arrangements for student and Commonwealth contributions, resolving the issue of CSP funding growing more quickly than institutions’ CGS allocation (thus eroding the number of CSPs funded through the CGS slightly each year), as discussed in the background of this Bills Digest. However, the Bill does not make any changes to indexation arrangements. The main effect of the changes in the Bill is to allow for the reduction of a Table A provider’s MBGA from the 2020 level in 2021 to 2024, with the 2024 amount set in the CGS Guidelines and acting as a new base for grants in future years, which could not be reduced below the 2024 amount.

Schedule 2—Student contributions

HESA requires that a domestic undergraduate student, studying at a Table A provider, or other provider receiving CGS funding for the student’s place, must be enrolled in a CSP.[129] A student in a CSP must be required to pay the student contribution amount for a unit, unless they are exempt.[130] Schedule 2 of the Bill proposes to revise the student contribution amount arrangements in HESA to:

•       reconfigure the student contribution funding clusters, replacing the existing three band structure ($6,804, $9,698 and $11,355 in 2021) with a four band structure ($3,950, $7,950, $11,300 and $14,500 in 2021)

•       redistribute courses within these student contribution bands, with the student contribution for some courses rising (humanities, social sciences, and law, for example), falling for others (science, nursing, and teaching, for example) and remaining around the same for medical, dentistry, and veterinary science degrees and

•       provide that grandfathered students (those currently enrolled in courses before 1 January 2021) will have their maximum student contribution be either current or proposed amounts, whichever is lower.   

Current number of commonwealth supported places

Students with CSPs made up 53.0 per cent of the total 1.6 million higher education students enrolled in 2019.[131] In 2019, 852,808 students received CSPs, mostly (86.8 per cent, or 740,168) for bachelor degrees.[132] A total of 34,009 students with CSPs were exempt from paying a student contribution.[133] This is equivalent to 627,545 full-time CSPs, of which 12,949 are exempt from paying a student contribution.[134] 

Maximum student contribution amounts

The amount the student contributes to the cost of the unit, normally deferred through HECS-HELP, is known as the maximum student contribution amount.[135] Although institutions are free to charge below this amount, this is not common practice. The amounts are currently set out in section 93-10, and like the Commonwealth contribution amount are indexed each year using the CPI.[136] Amounts for each calendar year are published with the Commonwealth contribution amounts on the DESE website.[137]

Item 5 repeals section 93-10. Proposed section 93-10 includes a table setting out maximum student contribution amounts for grandfathered and non-grandfathered students.

The effect of the proposed maximum student contribution amounts compared with current contributions, indexed to 2021 amounts, is shown in Table 2 below. Rather than being presented exactly as they are in the Bill, funding clusters have been broken down by discipline to provide a clearer picture of funding level changes. Dollar amounts refer to funding for a full-time place for one year.[138] Law, Accounting, Administration, Economics and Commerce contributions increase from an already high level, while areas where the student contribution is currently set at a lower level, like Communications and Behavioural Science, will see contributions more than double. Education, Foreign Languages, Nursing, and Agriculture will see substantial reductions in student contributions.

The application provisions at Item 9 and Item 10 mean the new contribution amounts would apply to units with a census date on or after 1 January 2021, and the rates would be indexed from 1 January 2022.

Table 2: Current and proposed maximum student contribution amounts, 2021

Fields

Current maximum student contribution amount

Proposed maximum student contribution amount

Law

$11,355

$14,500

Accounting

$11,355

$14,500

Administration

$11,355

$14,500

Economics

$11,355

$14,500

Commerce

$11,355

$14,500

Society and Culture not included elsewhere

$6,804

$14,500

English Language, Linguistics and Literature

$6,804

$3,950

Behavioural Science

$6,804

$14,500

Social Studies

$6,804

$14,500

Communications

$6,804

$14,500

Mathematics

$9,698

$3,950

Statistics

$9,698

$3,950

Computing

$9,698

$7,950

Built Environment

$9,698

$7,950

Professional Pathway Psychology

$6,804

$7,950

Professional Pathway Social Work

$6,804

$7,950

Other Health

$9,698

$7,950

Education

$6,804

$3,950

Allied Health

$9,698

$7,950

Clinical Psychology

$6,804

$3,950

Foreign Languages

$6,804

$3,950

Visual and Performing Arts

$6,804

$7,950

Nursing

$6,804

$3,950

Engineering

$9,698

$7,950

Science

$9,698

$7,950

Surveying

$9,698

$7,950

Environmental Studies

$9,698

$7,950

Dentistry

$11,355

$11,300

Medicine

$11,355

$11,300

Veterinary Science

$11,355

$11,300

Agriculture

$9,698

$3,950

Pathology

$9,698

$7,950

Dollar figures are 2021 rates.

Based on DESE, Job-ready Graduates – Higher Education Reform Package, 2020, p. 17; DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

Grandfathering arrangements

The grandfathered maximum student contribution amounts in the table at proposed section 93-10 are either the current or proposed amounts, whichever is lower. These will apply if the student is a grandfathered student. As outlined in the previous section, grandfathering arrangements will apply when a student who was in a CSP prior to 1 January 2021 enrols in a unit with a census date on or after 1 January 2021 in the same course, a related bachelor honours course, or a course following an enabling course or related undergraduate certificate.[139] No end date is specified for these arrangements.

Item 11 repeals item 3 of Schedule 5 of the Higher Education Support Amendment (2009 Budget Measures) Act 2009, which provides for grandfathered maximum student contribution amounts for students who started an Education or Nursing course before 1 January 2010. The Explanatory Memorandum states that these students currently pay a student contribution of up to $4,085, which means ending their grandfathered rates in favour of the proposed arrangements will reduce their student contribution amount.[140]

The effect of the proposed student contribution amounts on course costs

Course costs

Exact course costs depend on individual student study choices. Students may select subjects across a number of different funding clusters over the course of a degree. For example, a person studying an Economics degree may take units of Mathematics which will be charged according to the unit funding cluster, rather than as Economics. Course costs also vary by course length, which can vary by institution and level of study.[141]

However, the proposed changes to student contribution amounts are likely to result in significant changes to course costs for students studying units predominantly from the funding clusters with large changes in student contribution amounts. For example, a three year Bachelor of Communications could increase from approximately $20,412 to $43,500, while a three year Bachelor of Science could decrease from approximately $29,094 to $23,850, and a three year Bachelor of Nursing could decrease from approximately $20,412 to $11,850.[142] Course costs are higher in fields such as Law and Engineering, where the average length of a degree is four years rather than three. People who study at universities where a generalist undergraduate degree is normally followed by a professional postgraduate degree will also incur larger course costs.[143] For example, a three year Bachelor of Arts followed by the three year Juris Doctor (assuming both are Commonwealth supported) could, under the proposed arrangements, cost around $87,000.

HELP repayments

The majority of students in CSPs defer their course costs through HECS-HELP.[144] The proposed changes will have no immediate impact on a borrower’s HELP repayments, which are based on a repayment rate set according to annual income.[145]

However, decreased course costs will (all else being equal) reduce repayment times for people studying in areas such as Nursing, while increased course costs in areas such as Communications will increase repayment times.[146] The latest data from the Australian Taxation Office (ATO) shows average time to repay a HELP debt reached 9.2 years in 2018–19 and average amount of outstanding debt reached $22,425.[147] These figures have been increasing since HELP was introduced.[148] Despite this, the exact effect of the proposed changes on HELP repayment times is highly dependent on longer-term economic conditions, especially wages growth. Graduate outcomes are discussed further in the next section.

Those studying for longer periods of time, in higher cost courses, or returning to complete additional qualifications, may also come close to the HELP loan limit imposed under section 128-20 of HESA. In 2020, the limit is $152,700 for students studying eligible medicine, dentistry, veterinary science and aviation courses, and $106,319 for all other courses.[149] The limit is renewable, meaning repayments will allow a person to access HELP until they reach the limit again.[150] ATO data shows larger debts near the limit are currently relatively rare, with 22,514 people owing $100,000 or above, out of a total of almost three million people with outstanding HELP debt.[151]

The effect of course costs on student choice

Minister Tehan expects the funding changes in relation to student contributions to provide an incentive for students to choose courses in areas of anticipated jobs growth.  

We are also encouraging students to tailor their studies to learn the skills that will be in demand in areas of future jobs growth. That means breaking down the traditional degree 'silos' by choosing units of study across disciplines and introducing a price signal to students by making degrees cheaper in areas of expected job growth.[152]

The history of Australian higher education funding policy provides little evidence that students are widely sensitive to price signals.[153] By removing the up-front cost barriers to enrolment and making repayments contingent on the borrower’s capacity to repay the debt, income contingent student loans of the kind in place in Australia since 1989 make students less responsive to course fee levels.[154] There is some evidence that students are responsive to relative cost changes, but this is limited—that is, it appears students will change study preferences in response to relative price changes if they are unsure about whether, or what to study, or if there is a relative change between like disciplines.

Some studies have found people from lower SES backgrounds, and older students, appear more responsive to price in making study choices, but this is a lower-order consideration compared with more immediate cost of living pressures.[155]

Previous examples of national priority fields of study, which provide a historical parallel to changing relative costs, provide mixed evidence.[156] When lower student contributions for Education and Nursing were in place from 2005 to 2009, they appear to have had little impact on enrolments.[157] However, commencing bachelor students in Natural and Physical Sciences increased 13.6 per cent from 2008 to 2009, compared to the overall increase in commencing domestic students of 9.7 per cent, following the 2008–09 Budget measures to encourage enrolments in Mathematics and Science.[158] Despite this, the subsequent increase of fees for science degrees in 2014 had a negligible impact on the trajectory of enrolments, leading to speculation that the marketing drive surrounding the 2008–09 Mathematics and Science budget measures were more consequential than the actual fee reductions.[159]

Can students’ field of study choice protect against poor employment outcomes?

In 2019, the longitudinal study of graduate outcomes from Australian higher education noted that graduate outcomes had still not completely recovered from the impacts of the Global Financial Crisis (GFC). Since the GFC:  

…it has taken graduates longer to successfully establish themselves in their careers. In 2016, 72.6 per cent of graduates who completed both the Graduate Outcomes Survey (GOS) and Graduate Outcomes Survey (Longitudinal) (GOS-L) were in full-time employment, four months after completing their course. However, three years later in 2019, the proportion of the same cohort of graduates in full-time employment had risen to 90.1 per cent which represents an increase of 17.5 percentage points from 2016-2019 compared to the difference of 22.1 percentage points from 2015- 2018.[160]

The Productivity Commission has also found that graduates after 2008 were consistently accepting employment in ‘lower-scored occupations’ than previous graduate cohorts, which the Commission attributed as a major cause of the fall in the incomes of young persons between 2001 and 2018.[161]

Treasury research has modelled the career effects of labour market conditions at entry, finding:

A one percentage point rise in the youth unemployment rate at graduation is associated with wages that are 1½ per cent lower initially, but are still around ¾ per cent lower five years later. Worker wages then catch up over the ensuing years to be about the same as other workers after 10 years.[162]

These effects are explained by a range of factors, including the need for younger workers to find well-matched jobs early in their career, inability to protect themselves by remaining in existing jobs during financial downturns, greater likelihood of newer hires losing work, greater reliance of young workers on younger more vulnerable firms, and signalling effects of lack of past employment history.[163] These conclusions are supported by Australian and international research literature.[164]

The Productivity Commission notes that the COVID-19 pandemic may accelerate the trend toward employment in lower-scored occupations:

Policies such as wage subsidies may maintain some employment, but most likely at the lower-scored end of the occupation ladder. While accepting a low-scored occupation is significantly less scarring than remaining in long-term unemployment, it still has negative effects. And higher-educated young people may continue to push less-educated ones ‘off the ladder’.[165]

While certain study options do appear to provide some protection, with 96.6 per cent of graduates from Medicine in full-time employment four months after completing their course in 2017, there is little difference in outcomes between generalist science and generalist humanities and social science degrees.[166] The 2020 report of medium-term graduate outcomes found of those available for employment in 2017, 61.9 per cent of humanities, culture and social sciences graduates and 61.6 per cent of science and mathematics graduates were in full-time employment four months after completing their course.[167] Three years later, in 2020, full-time employment had risen to 87.0 per cent for humanities, culture and social sciences graduates, and 87.1 per cent for science and mathematics graduates.[168]

The Report of the Review of Senior Secondary Pathways into Work, Further Education and Training, provided to the Council of Australian Governments (COAG) Education Council under the National School Reform Agreement, picks up on these post-GFC and COVID-19 effects, as well as the broader shifts in the nature of work, emphasising the need for study pathways that equip young people to be adaptable lifelong learners:

Australian workers are already spending less time on routine and manual tasks and more time on complex activities that require a high degree of creative thinking, decision-making, problem-solving, interpretation of information, and personal interaction. Current estimates show that 96 per cent of Australian jobs require time management and organisational skills, 97 per cent require customer service skills, 70 per cent require verbal communication skills, and 87 per cent require digital literacy skills.

…

Given the considerable uncertainty around the changing world of education, training and work, it is clear that students will need to be able to apply their knowledge in unknown and evolving circumstances. They will be required to navigate increasingly complex pathways and unclear futures. Young people will need a broad base of skills, values and knowledge to become successful lifelong learners.[169]

Total per-place funding effects

In addition to the uncertainties discussed above in relation to incentivising student enrolment behaviour, and the likely limited effectiveness of shifting enrolments towards particular fields of study in order to improve employment outcomes, complications could also arise in relation to provider responses to the Bill, which, in some cases, are likely to operate in opposition to intended student responses because of the effects of total per-place funding (the combination of student and Commonwealth contributions).

The MGBA is sometimes conceptualised as a ‘cap’ on the number of CSPs. However, in practice, the number of places varies substantially depending on the courses that the provider offers. This means that $1 million of CGS funding supports different numbers of students depending on the funding cluster mix of the provider’s enrolments. $1 million of CGS funding, for instance, currently supports 447 places in Business or Law courses, but only 41 in Agriculture.[170] The changes to Commonwealth contribution amounts proposed in the Bill would widen this imbalance, with 909 places per $1 million in Law, Business, Economics and Humanities courses, but only 37 places per $1 million for Agriculture courses.[171]

For the provider, each CSP also attracts the associated student contribution. As shown in Table 3 below, a number of disciplines highlighted as in demand by the JRG Package will see an overall reduction in total per-place funding available to providers due to the combination of the student and Commonwealth contributions. That is, the reduced student contributions designed to incentivise enrolments are not coupled with increases in Commonwealth contributions to sufficiently make up for the loss of student contribution funding. For example, the combined funding levels for Mathematics, one of the fields with a reduced student contribution, would see a decline in total resourcing of 17 per cent. In contrast, fields with relatively high student contributions and low Commonwealth contributions such as Law, Accounting, and Economics will still see an increase in total per-place funding received by providers, even though relatively little of the total funding will be provided by the Commonwealth contribution through the CGS. 

Table 3: Current and proposed total resourcing, 2021

Fields

Proposed total resourcing

Current total resourcing

Per cent change

Law

$15,600

$13,592

14.8%

Accounting

$15,600

$13,592

14.8%

Administration

$15,600

$13,592

14.8%

Economics

$15,600

$13,592

14.8%

Commerce

$15,600

$13,592

14.8%

Society and Culture not included elsewhere

$15,600

$13,030

19.7%

English Language, Linguistics and Literature

$17,200

$13,030

32.0%

Behavioural Science

$15,600

$17,819

-12.5%

Social Studies

$15,600

$17,819

-12.5%

Communications

$15,600

$20,351

-23.3%

Mathematics

$17,200

$20,713

-17.0%

Statistics

$17,200

$20,713

-17.0%

Computing

$21,200

$20,713

2.4%

Built Environment

$21,200

$20,713

2.4%

Professional Pathway Psychology

$21,200

$17,819

19.0%

Professional Pathway Social Work

$21,200

$17,819

19.0%

Other Health

$21,200

$20,713

2.4%

Education

$17,200

$18,266

-5.8%

Allied Health

$21,200

$23,245

-8.8%

Clinical Psychology

$17,200

$20,351

-15.5%

Foreign Languages

$20,200

$20,351

-0.7%

Visual and Performing Arts

$21,200

$20,351

4.2%

Nursing

$20,200

$21,929

-7.9%

Engineering

$24,200

$28,958

-16.4%

Science

$24,200

$28,958

-16.4%

Surveying

$24,200

$28,958

-16.4%

Environmental Studies

$24,200

$34,144

-29.1%

Dentistry

$38,300

$35,801

7.0%

Medicine

$38,300

$35,801

7.0%

Veterinary Science

$38,300

$35,801

7.0%

Agriculture

$30,950

$34,144

-9.4%

Pathology

$34,950

$34,144

2.4%

Dollar figures are 2021 rates. Based on DESE, Job-ready Graduates – Higher Education Reform Package, 2020, p. 17; DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

These total per-place funding effects will present providers with a number of choices about how best to allocate their total CGS funding under the arrangements proposed in the Bill.

Key issue—total per-place funding incentivises enrolments in higher student contribution courses

For courses receiving higher Commonwealth contributions (English, Foreign Languages, and Agriculture, for example), universities would need to dedicate a greater percentage of their MGBA to these courses just to maintain existing places numbers. For subject areas that have higher Commonwealth funding but decreased total resourcing due to a fall in the student contribution (such as Education, Allied Health and Nursing), this would need to be done despite decreased revenue for the university for this commitment of a finite resource (CGS funding).

For courses receiving lower Commonwealth contributions, particularly ones with growing overall funding due to higher student contributions (Law, Business, Humanities), each dollar of CGS invested would generate up to approximately $13 of student contributions, as opposed to up to approximately $5 dollars currently.

Professor Michael Brooks, Interim Vice Chancellor of the University of Adelaide touched on this problem of Cluster 1 subjects being worth more on a revenue basis in his evidence to the Senate inquiry into the Bill:

Let's suppose a university is one science student below its quota, its cap. Then adding one science student takes it up to its cap. A university could instead add 15 humanities students to take it up to the cap. Now the science student is going to net you $24,000 or $25,000. Fifteen humanities students will net you around $235,000. There's the potential for universities to be driven by that factor…[172]

Universities seeking to maintain or expand their teaching revenue and maximise teaching profits in order to cross subsidise research with decreased total CSG funding and limited access to the international student market are then incentivised to decrease the number of places they offer for courses which the Bill seeks to promote, and expand their offerings for courses that the Bill does not seek to promote. The alignment and misalignment of funding incentives in the Bill are summarised in Table 4 below.

Table 4: Aligned and misaligned demand and supply incentives in the Bill

Aligned—positive incentives for both students and providers (lower student contribution, higher funding rate)

Aligned—negative incentives for both students and providers (higher student contribution, lower funding rate)

Misaligned—negative incentives for students, positive for providers (higher student contribution, higher funding rate)

Misaligned—positive incentives for students, negative for providers (lower student contribution, lower funding rate)

English Language, Linguistics and Literature

Social Studies

Law

Allied Health

Computing

Communications

Accounting

Nursing

Other Health

Behavioural Science

Administration

Engineering

Built Environment

Economics

Science

Pathology

Commerce

Agriculture

Dentistry

Society and Culture not included elsewhere

Environmental Studies

Medicine

Behavioural Science

Mathematics

Veterinary Science

Social Studies

Education

Visual and Performing Arts

Clinical Psychology

Professional pathway psychology

Surveying

Professional pathway social work

Statistics

Foreign Languages

Based on DESE, Job-ready Graduates – Higher Education Reform Package, 2020, p. 17; DESE, ‘Funding Clusters and Indexed Rates’, DESE website, adapted from A Norton, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 53], 4 September 2020, p. 10.  

Key issue—over-enrolments

Fields with a relatively high student contribution and low Commonwealth contribution could also act as an incentive to over-enrolment (that is, enrolling students in CSPs above the available CGS funding) where providers forego the Commonwealth contribution in order to access the relatively large student contribution.

There is no legal requirement for universities to only offer ‘fully funded’ student places that the university is paid both a Commonwealth and a student contribution for. Except for designated courses, universities may take additional students on a student contribution only basis.

In 2018, there were an estimated 13,264 over enrolments in Table A universities, or around 2.2 per cent of the total courses delivered.[173]

Over-enrolling courses becomes rational for universities if the cost of delivering that course to that student becomes marginally lower than the student contribution for that course. As a result, Andrew Norton has noted that there may be a substantial increase in over-enrolments in precisely the fields that the Bill nominally intends to discourage.[174] Mark Warburton in his evidence to the Senate Inquiry noted:

I agree completely with the point that Universities may choose to seek to run new cluster 1 subjects purely on the student contribution. In fact if someone came to me and asked me ‘what would we do in the new world’ I would say that you are probably best to do that.[175]

Warburton did note that such cluster 1 over-enrolments may be used to conserve CGS funding for more Commonwealth contribution intensive courses.[176]

This option may be particularly appealing to universities that are more exposed to the fall in international student fee revenue,[177] and have far more applicants than places.[178] Australian Catholic University Vice-Chancellor Greg Craven expressed concern that this would lead to ‘elite universities’ ‘cannibalising the domestic enrolments of other universities’ and in doing so leave other universities ‘with gaping holes in their enrolments and budgets’.[179]

Cost of delivery

The total per-place funding in the JRG Package is adapted from teaching and scholarship cost information from providers captured in the Transparency in Higher Education Expenditure exercise.[180] As the latest report of this exercise identifies, this work is limited by provider data collection, reliance on average unit teaching costs, which vary within fields by provider and level of study, and an inability to capture the effects of high quality teaching on cost.[181] 

There is no objective or perfect method to determine how much a higher education student should pay for their course, and how much the Australian Government should contribute. The current arrangements are the outcome of a history of efforts, since course fees were reintroduced in the form of the Higher Education Contribution Scheme (HECS) in 1989, to balance the cost of provision at system level with a student’s capacity to pay from likely future earnings.[182]

Although it is not clear that history necessarily provides a better basis for costing than the Transparency in Higher Education Expenditure data, even acknowledging the limitations of the exercise, the implications of the per-place funding arrangements proposed in the Bill are potentially very significant. While the base funding review, cited at the beginning of this Bills Digest, emphasised the dual role of Commonwealth and student contributions in funding both direct teaching costs and supporting the broader role of universities in maintaining research and infrastructure investment, the Transparency in Higher Education Expenditure exercise separates teaching and scholarship from research and capital investment.[183] The latest report suggests around 10 per cent of teaching funding is currently spent on non-teaching functions (including, but not limited to, research) although this varies considerably between institutions.[184] This means the cost of delivery model adopted by the Bill is likely to have effects beyond course provision, because it reduces the amount of general university funds that would ordinarily go to other functions.[185]

Schedule 3—Other Grants

Non-CGS grants made to higher education providers under HESA (other than those related to student support, such as student loans and scholarships) are provided under Other Grants provisions set out in Part 2-3. Other Grants can be made for a wide range of purposes, such as promoting equity of opportunity in higher education, fostering collaboration and reform, and to support capital development.[186]

The programs funded under the Other Grants provisions are not specified in HESA. Instead, the Other Grants Guidelines are used as required to set out the administrative details of relevant programs.[187] This often means higher education funding programs can be implemented using the Other Grants provisions, without the need to amend HESA.[188]

The Minister, by legislative instrument, determines the maximum amount available for Other Grants for each year, as well as the maximum grant amounts for each of the purposes set out in section 41-10.[189] Importantly, while HESA provides that the Minister may make grants under these provisions, funding can be reduced or ceased using these determinations.

In keeping with the existing approach in HESA, very little of the detail relating to changes to Other Grants included in the JRG Package has been included in the Bill.

The schedule instead proposes to amend HESA to:

•       alter the requirement of university mission based compacts, to require providers to include a statement of a provider’s strategies of engaging with industry, and a statement of the provider’s strategy for improving equality of opportunity in higher education

•       remove references to regional and enabling loading within HESA, as these programs are intended to be replaced by the IRLSAF

•       extend eligibility of grants to improve equality of opportunity to prescribed entities that are not Table A providers

•       add ‘the engagement with industry and the local community to enable graduates to thrive in the workforce’ as one of the objects of HESA and the ‘distinctive purpose’ of universities and

•       add ‘grants to encourage higher education providers to engage with industry’ as an additional class of Other Grant.

Adding equality of opportunity and engagement with industry to the mission based compacts

Item 1 proposes to amend the provisions related to mission based compacts currently at section 19-110, to add that a mission based compact must include a statement of the provider’s strategies for engaging with industry, and a statement of the provider’s strategy for improving equality of opportunity in higher education. The application provision at item 2 provides that this requirement will apply from 2021.

Currently, Table A and Table B providers must enter into mission based compacts as a condition of receiving any grant under HESA.[190] The mission based compact must include a statement of the provider’s mission, as well as specific strategies for learning and teaching, undertaking research, research training, and innovation.[191]

Cessation of the regional loading and enabling loading

Currently, the total CGS grant payable to the provider for a year is worked out by adding various loadings to the basic grant amount. The loadings include the amount of any regional loading, and any enabling loading worked out under the Commonwealth Grant Scheme Guidelines for the provider for that year.[192]

The CGS funding agreement may currently specify:

•       the maximum number of Commonwealth supported places provided by the provider which can have a regional loading in the grant years[193]

•       the maximum amount of regional loading that will be payable to the provider, under the Commonwealth Grant Scheme Guidelines, in the grant years[194]

•       the maximum number of Commonwealth supported places provided by the provider which can have an enabling loading in the grant years[195] and

•       the maximum amount of enabling loading that will be payable to the provider, under the Commonwealth Grant Scheme Guidelines, in the grant years.[196]

Item 4 removes the current references to the regional loading at paragraphs 30-25(3)(b) and (d) and the enabling loading at paragraphs 30-25(3)(ca) and (da), with the effect that the CGS funding agreement is no longer to include either loading.

Item 5 removes the current reference to the regional loading at paragraph 33-1(1)(b)(i) and the enabling loading at paragraph 33-1(1)(b)(iii) with the effect that the CGS grant allocations will no longer include either loading.

New programs included in the JRG Package

According to the JRG Package discussion paper, the cessation of the regional and enabling loading, as well as the relevant element of National Institutes funding and the HEPPP will go towards the creation of the NPILF and IRLSAF.[197] The Bill does not create these programs. As outlined in the sections below, it confirms the legislative basis for their creation through the Other Grants Guidelines. The amendments proposed in Schedule 3 would provide for the NPILF to be funded under the new ‘grants to engage with industry’ provisions, while the IRLSAF would be funded through the existing ‘grants to promote equality of opportunity’ provisions, with proposed amendments extending these grants to non-Table A providers. This is consistent with the existing Other Grants provisions in HESA. It provides discretion for the Minister to design and fund (or not fund) the new programs through subordinate legislation.

Available information about how the new programs will function

The IRLSAF will initially function as an expanded HEPPP to support RRR students and Indigenous students in addition to those from low SES backgrounds.[198] As a completely new program, the design of the NPILF is currently being considered through a consultation process.   

The National Priorities and Industry Linkage Fund Consultation paper, which outlines possible arrangements for the NPILF, was released on 30 September 2020. The process for the NPILF proposed in the paper involves an annual plan which will form part of the university’s mission based compact.[199] The plan will be developed by the university, and will identify 12 indicators to be used to demonstrate engagement with the NPILF.[200] Nine of these will be required to be distributed across the priority areas of WIL (work integrated learning), STEM+ (science, technology, engineering and mathematics, plus Allied Health, and Architecture and Building), and industry partnerships.[201] The remaining three indicators will be chosen by the university to reflect their mission.[202]

The university will report against each indicator and DESE will review the report, and ‘any issues may be built in to the following year plan.’[203] This outcome will not be reported, but DESE will publicly report on examples of NPILF activity annually, to ‘be used as a communication tool to incentivise and guide greater industry engagement.’[204] The proposed arrangements would not require NPILF funding to be spent on NPILF activities, but an assessment finding that nine or fewer indicators have been met would result in an amount of funding being withheld in the following year.[205]

Grants to promote equality of opportunity—the framework for the IRLSAF

Currently, the table at subsection 41-10(1) of HESA allows ‘grants to promote equality of opportunity in higher education’ (predominantly the HEPPP under current arrangements, although this would likely be the IRLSAF if the JRG Package is implemented) to be paid to Table A providers.

Item 6 proposes to amend the table, with the effect that eligibility for grants to promote equality of opportunity in higher education would change from only extending to Table A providers, to also include bodies corporate specified in the Other Grants Guidelines for the purpose of the item.

The Explanatory Memorandum states:

This is a transitional amendment to ensure that providers, that are not Table A providers and that currently have the regional loading and enabling loading applied to their CGS grant amounts under Part 2-2 of HESA, can receive grants under the IRLSAF for the transition period from 2021 to the end of 2023. The transitional arrangements for the IRLSAF will be implemented through changes to the Other Grants Guidelines.[206]

However the proposed section is not limited to just these purposes, and is not a transitional provision. It would give the Minister an ongoing wide discretion to be able to provide grants to entities that are not Table A providers, so long as these Grants are made for the purpose of promoting equality of opportunity in higher education. This may give the Minister more flexibility in the design of the IRLSAF then for current equity grants under this subsection.

Grants to engage with industry—the framework for the NPILF

Item 3 proposes to add ‘the engagement with industry and the local community to enable graduates to thrive in the workforce’ to paragraph 2-1(b), the part of the objects of HESA which sets out the ‘distinctive purposes of universities’.[207] These ‘distinctive purposes’ currently include:

•       the education of persons, enabling them to take a leadership role in the intellectual, cultural, economic and social development of their communities

•       the creation and advancement of knowledge and

•       the application of knowledge and discoveries to the betterment of communities in Australia and internationally.

Item 7 proposes to add an item to the table of other grants at section 41-10. The new item would provide for grants to encourage higher education providers to engage with industry, with eligibility extended only to Table A providers.

Disallowance of the Other Grants Guidelines

The Bill proposes to delegate substantial discretion to the Minister in the design, implementation, and funding of the NPILF and IRSLAF grant schemes.

The Guidelines giving effect to these funds are disallowable legislative instruments, and either House of Parliament may disallow a legislative instrument or a provision of a legislative instrument. A notice of a motion to disallow a legislative instrument may only be given within 15 sitting days[208] of the legislative instrument first being tabled in that House. An instrument is then taken to be disallowed if the House resolves, pursuant to that notice, to disallow the instrument. The instrument is also taken to be disallowed if at the end of 15 sitting days, the notice of the motion remains before the House.[209]

Once disallowed, a legislative instrument the ‘same in substance’ may not be made until six months after disallowance, unless the relevant house of parliament resolves to consent to the remaking.[210]

Disallowance then forms a method to veto, rather than to practically amend either the NPILF or IRLSAF. Parliament’s ability to have input on the design of Guidelines is substantially more limited than that of primary legislation as a result.

Schedule 4—provider integrity measures

The amendments proposed in Schedule 4 are not part of the JRG Package and can be understood separately from the rest of the Bill. In general, it seeks to:

•       extend the regulatory regime for non-university higher education providers within the Provider Integrity Act to all higher education providers

•       provide additional circumstances in which a person is not a Commonwealth supported student, namely:

–      when the Secretary determines that a person is not a genuine student

–      when a student has not been assessed by the higher education provider as academically suited to undertake the unit

–      if a student is doing a study load of over two equivalent full time student loads (EFTSL), and the higher education provider has not determined that this will not impose an unreasonable study load on the person

–      when the provider completed any part of the request for Commonwealth assistance that the student is required to complete

–      if a student has previously failed 50 per cent or more of their units, and special circumstances do not apply and

•       align certain student loan arrangements with these changes to CSPs and provider integrity provisions.

Extending elements of the Provider Integrity Act to universities

Item 1 proposes to add further application provisions to Part 2 of Schedule 3 of the Provider Integrity Act, with the effect of extending a number of that Act’s amendments to HESA to all higher education providers approved under HESA. Currently, the relevant provisions only apply to non-university higher education providers.[211]

The provisions being extended to all providers are that:

•       any requirements prescribed in the Higher Education Provider Guidelines for annual financial statements may make different provision in relation to different kinds of providers, circumstances, or other matter[212]

•       in determining whether a higher education provider is financially viable, and likely to remain so, the Minister must have regard to the provider’s annual financial statement and any matters prescribed in the Higher Education Provider Guidelines[213]

•       higher education providers must not represent HELP loans as not being a loan, or not needing to be repaid (a civil penalty of 240 penalty units ($53,280) is imposed for contravention of this provision)[214]

•       a higher education provider must not complete any part of the request for Commonwealth assistance that the student is required to complete (a civil penalty of 120 penalty units is imposed for contravention of this provision)[215]

•       students must be assessed as academically suited, in accordance with any requirements in the Higher Education Provider Guidelines, before a provider enrols them in a unit of study (a civil penalty of 120 penalty units is imposed for contravention of this provision)[216]—as Andrew Norton has written, it is unclear how this would work in practice, as universities generally assess a student’s academic suitability before admitting them to a course of study, rather than prior to the commencement of each unit[217]

•       providers must cooperate with investigators from DESE or the Tertiary Education Quality and Standards Agency (TEQSA) performing functions or exercising powers under HESA[218]

•       providers must keep records and publish information in accordance with requirements specified in the Higher Education Provider Guidelines (a civil penalty of 60 penalty units is imposed for contravention)[219]

•       providers must cooperate with an auditing body during the course of an audit under section 19-80 (a civil penalty of 60 penalty units is imposed for contravention of this provision)

•       providers must comply with a compliance notice issued under section 19-82, which is used by the Minister to issue a written notice when a higher education provider is not complying with requirements under HESA, or any of the Guidelines made under HESA (set out at section 238-10), or a condition on their approval as a higher education provider (a civil penalty of 60 penalty units is imposed for contravention of this provision)

•       providers must ensure a student is a genuine student and academically suited, before providing them with access to FEE-HELP[220]

•       providers cannot offer FEE-HELP to a student if they complete any part of the request for Commonwealth assistance that the student is required to complete, or if doing so would exceed a limit on FEE-HELP imposed on the borrower[221]

•       providers must, or if they are not able to do so the Secretary may, re-credit a person’s FEE-HELP balance, for a unit of study if:

–      the Secretary (currently of DESE) is satisfied that they are not a genuine student for that unit[222]

–      the provider completed any part of the request for Commonwealth assistance for that unit that the student is required to complete[223]

–      the Secretary is satisfied that the person was not entitled to receive FEE-HELP assistance for that unit with that provider[224]

–      the person has not been assessed as academically suited to undertake the unit concerned[225] and

•       providers must comply with requirements set out in the Higher Education Provider Guidelines, in relation to withdrawal from units of study, including requirements that fees must not be charged for withdrawal, requirements related to re-enrolment after withdrawal, and requirements in relation to the processes for dealing with withdrawal (a civil penalty of 120 penalty units is imposed for contravention of this provision).[226]

A number of civil penalties introduced by the Provider Integrity Act are also being extended to universities. These are penalties of 60 penalty units each (equivalent to $13,320 at the time of writing) for a provider’s failure to:

•       comply with its grievance and review procedures under section 19-45

•       give the Minister statistical and other information requested in writing under section 19-70

•       inform the Minister of any event affecting the provider or a related body corporate of the provider that may significantly affect the provider’s capacity to meet the conditions of grants under Chapter 2 (which covers all the HESA grants to providers, including the CGS and other grants) or the quality and accountability requirements[227]

•       inform the Minister of events affecting accreditation[228]

•       inform the Minister of events significantly affecting TEQSA registration[229]

•       provide a schedule of student contribution amounts for places and tuition fees, and/or an updated schedule where relevant, in accordance with section 19-95

•       publish a census date for a unit by the date specified in the Administration Guidelines and the equivalent full time student load (EFTSL) value of the unit in accordance with the Administration Guidelines[230]

•       in cases where the census date or EFTSL value of the unit is varied, ensure this is done only with the written approval of the Minister, and in accordance with timing and any other requirements specified in the Administration Guidelines[231] and

•       comply with a requirement under subsection 174-5(1) in relation to electronic provision of information or documents between students and providers.

These provisions were introduced in 2017 as a safeguard against unscrupulous providers from the vocational education and training (VET) sector entering higher education.[232] In 2017, the Assistant Minister for Vocational Education and Skills, Karen Andrews, explained:

These reforms will only apply to bodies approved as higher education providers under section 16-25 of the Higher Education Support Act 2003, that is, non-university higher education providers. For practical purposes, this excludes universities operating in Australia. This reflects the fact that these measures are directed at reducing the risks to students and taxpayers associated with providers seeking to transition operations and/or students to the higher education sector following our reforms to VET student loan arrangements.[233]

The Explanatory Memorandum to the Bill explains that these provisions are being extended to universities on the basis of consistency across the higher education sector—it does not appear that there have been any specific instances of unscrupulous provider behaviour from universities of the kind that prompted the original provisions.[234]

Assessing if a student is genuine and academically suited

Items 11 and 13 propose to amend HESA in relation to when a person can be a Commonwealth supported student (that is, when they can receive a CSP), in line with the provisions of the Provider Integrity Act outlined above. Since a student must be Commonwealth supported in order to defer their course fees using HECS-HELP, these restrictions will also apply to HECS-HELP access.[235]

Currently, a person is only excluded from being a Commonwealth supported student if they fail to meet the citizenship or residency requirements, their unit is not eligible for a CSP, or if they advise they do not wish to be a Commonwealth supported student.[236]

Proposed subsections 36-5(5), (6) and (7) at item 11 would add that a person cannot be a Commonwealth supported student if the Secretary determines that they are not a genuine student in relation to the unit, in accordance with any matters specified in the Higher Education Provider Guidelines.

Paragraph 104-1(1)(ab) currently requires a person to be a genuine student in order to access FEE-HELP, which is used by full fee-paying students (that is, those who do not have a CSP). Item 25 repeals this paragraph. Subsection 104-1(1A) also currently provides that in determining whether a student is a genuine student for the purposes of FEE-HELP eligibility, regard may be had to any matters specified in the Higher Education Provider Guidelines. Item 26 repeals this subsection and replaces it with arrangements in the same terms as proposed for Commonwealth supported students at item 11.[237]

Chapter 9 of the Higher Education Provider Guidelines provides that the following matters may be considered in determining if a student is genuine:

•       the student’s engagement with the course

•       whether the student has been provided with information about the requirements for the course, and the cost and duration of the course

•       whether the student has satisfied course requirements for the course or participation in assessment activities for the course

•       if the course is online, the number of occasions on which the student has logged in to the course

•       whether the student has provided up-to-date contact details that enable the department to contact them to verify their enrolment and

•       if the student is enrolled in another course, if the number of enrolments and associated course loads would make successful completion impossible or highly improbable.

Proposed paragraph 36-10(1)(ba) at item 13 would prevent a person from being a Commonwealth supported student if they have not been assessed by the provider as being academically suited to undertake the unit.

Unlike the genuine student provisions, there is no definition of academic suitability in HESA or subordinate legislation that can be used to judge how this might work. Under the Tertiary Education Quality and Standards Agency Act 2011 (the TEQSA Act), providers must meet requirements set out in the Higher Education Standards Framework (Threshold Standards) 2015 as a condition of being registered to provide higher education. The Threshold Standards require that: 

Admissions policies, requirements and procedures are documented, are applied fairly and consistently, and are designed to ensure that admitted students have the academic preparation and proficiency in English needed to participate in their intended study, and no known limitations that would be expected to impede their progression and completion.[238]

All providers approved to receive funding under HESA are registered under the TEQSA Act.[239] Andrew Norton has raised the possibility that these course-level admission standards may be sufficient to meet the new unit-level suitability requirements, if the student is admitted on reasonable grounds and makes satisfactory progress in the course.[240] Universities already have internal processes in place to deal with students failing to make satisfactory academic progress (repeated subject failure).[241]

Provider interference with the request for Commonwealth assistance

Also in line with the provisions of the Provider Integrity Act outlined above, proposed subsection 36-15(5) at item 15 would prevent a person from being a Commonwealth supported student if the provider has completed any part of the request for Commonwealth assistance that the person is required to complete, in relation to the unit or study, or course of study of which the unit forms part.

Unreasonable study load

Item 14 adds to the limitations in relation to Commonwealth supported students. Proposed section 36-12 would prevent a student from being Commonwealth supported in a unit if they are attempting to take more than the equivalent of two full-time years of study in a 12 month period. This only applies to study eligible for HECS-HELP or FEE-HELP, which would mean VET courses, and any courses not covered by the student loans system, would not be included. In practical terms, it is also unlikely that a provider could consider student load at other higher education providers. Proposed subsection 36-12(2) also allows the provider to determine that the student can be Commonwealth supported regardless, if the new unit will not impose an unreasonable study load on the person. 

In relation to full-fee-paying students, item 27 adds provisions in the same terms for FEE-HELP students in proposed section 104-1AA. Item 28 inserts proposed section 104-12, which would provide that the Secretary may act in place of the provider, if the provider is unable to, for the purposes of determining if the unit will not impose an unreasonable study load on a FEE-HELP student.

Re-crediting a person’s HELP balance

Items 22, 23 and 30 deal with issues related to re-crediting a person’s HELP balance. Currently, under certain circumstances, HESA allows for a person’s HELP debt to be forgiven. The main basis for such arrangements is ‘special circumstances’, which is when a student is unable to complete the requirements of a unit due to circumstances that are beyond their control, do not make their full impact known until after the census date for the unit, and make it impracticable to complete the requirements of the unit during the relevant period.[242]

The proposed provisions in the Bill would add to these arrangements: 

•       proposed section 96-5 at item 22 provides that if a person’s HELP balance is re-credited an amount of HECS-HELP, the provider must repay the amount to the Commonwealth unless the re-crediting was due to a student’s successful application for consideration of special circumstances—such arrangements are already in place for FEE-HELP[243]    

•       proposed section 96-10 at item 22 provides that if the student’s HELP balance is re-credited with an amount of HECS-HELP, the student does not need to pay that amount—equivalent  provisions are made in relation to FEE-HELP by proposed section 110-10 at item 30

•       proposed section 97-45 at item 23 provides that if the provider completes any part of the request for Commonwealth assistance that the person is required to complete, the provider must re-credit the person’s HELP balance with the relevant amount of HECS-HELP assistance—as detailed above, the provider’s completion of the request for Commonwealth assistance would render the student ineligible for Commonwealth assistance, and therefore HECS-HELP, for that unit and

•       proposed section 97-50 at item 23 would require a provider to re-credit a person’s HELP balance if the provider or Secretary is satisfied that the person was not entitled to receive HECS-HELP assistance for the unit—proposed subsection 97-50(2) provides that the Secretary may re-credit the balance if the provider is unable to do so.

Failure to complete previous units

Item 40 adds a further limitation to when a person can be a Commonwealth supported student.

Proposed section 36-13 would require a provider not to advise a person that they are a Commonwealth supported student if they do not successfully complete at least 50 per cent of the units they enrol in:

•       for bachelor degree or higher courses, this will be determined once the student has undertaken eight or more units (usually the equivalent of a full-time year of study) with the provider as part of that course and

•       for other courses, the success rate will be determined once the student has undertaken four or more units of study with the provider as part of a course of study.

Leaving aside provider’s own admissions processes and assessment of academic suitability, this leaves open bachelor degree and higher students to continue accessing CSPs (and, consequently, HECS-HELP) after a 50 per cent failure rate if they switch to a different course with the same or a different provider, but appears to only allow sub-bachelor students to retain access if they switch to a different provider. There is no time limit imposed on the application of these arrangements, which could limit options for students wishing to re-enter higher education after an initial unsuccessful attempt.   

Proposed subsection 36-13(2) allows units not completed by the student, and units dealt with under special circumstances provisions, to be excluded from calculations for the purposes of determining the number of units the student has not successfully completed. 

These provisions would apply from 1 January 2022, unlike the other parts of Schedule 4, which would commence on 1 January 2021.

Ultimately, there may be more straightforward approaches that could be implemented to suit the higher education sector, where university providers in particular already have well-developed policies and programs in relation to course admission, progression, and quality, as a consequence of TEQSA regulation.[244]

Schedule 5—other amendments

Schedule 5 contains two significant changes. The FEE-HELP loan fee change builds on an announcement in the Higher Education Relief Package in response to the COVID-19 pandemic, and the Fares Allowance change is part of the JRG Package.

Reducing the FEE-HELP loan fee

Item 16 proposes to reduce the FEE-HELP loan fee from 25 to 20 per cent. Currently, under subsection 137-10(2) of HESA, a loan fee of 25 per cent applies when a person uses FEE-HELP  to pay course fees for an undergraduate degree at a non-university higher education provider or an Australian branch of an overseas university. As part of the Higher Education Relief Package in response to the COVID-19 pandemic, the 25 per cent loan fee does not apply to units of study with a census date between 1 April 2020 and 30 September 2020.[245]

This change will bring the FEE-HELP loan fee into line with the 20 per cent VET Student Loans (VSL) loan fee.[246] FEE-HELP and VSL are the only student loans that attract loan fees. No loan fee applies to HECS-HELP, which is used by students with a CSP.

Reducing the waiting period for Fares Allowance

Item 17 proposes to amend paragraph 1061ZAAB(c)(i) of the SS Act with the effect of reducing the waiting period to access Fares Allowance from six to three months.

Fares Allowance is paid to eligible tertiary education students receiving Youth Allowance, Austudy, or the Pensioner Education Supplement, who live away from home for the purposes of study.[247]

For students not undertaking distance education, Fares Allowance can be paid for journeys:

•       from the student’s permanent home to the educational institution at the start of the course

•       from the educational institution to the student’s home when they have finished or discontinued the course or

•       a return journey between the educational institution and the student’s home during the study year, but only after they have been in receipt of a qualifying payment (such as Youth Allowance) for a total period of six months.[248]

In a full year of study, the cost of two trips home using the cheapest practical mode of travel may be paid.[249] However, the requirement for a six-month period in receipt of the qualifying payment acts as a waiting period that must be served before a student can access Fares Allowance.

The proposed change is one of a number of rural, regional and remote education measures announced in the JRG Package (most of which are not in the Bill) which are part of the Government’s response to the 2019 National Regional, Rural and Remote Tertiary Education Strategy (the Strategy).[250] The Strategy recommended changing arrangements for Fares Allowance to enable Year 12 students to visit prospective tertiary campuses, and enable students who have relocated to return home during their first mid-year study break.[251] The current six month waiting period is longer than a usual semester, meaning new students are part-way through their second semester of study before they meet the criteria to access Fares Allowance. For example, in 2020, the Australian National University’s first semester ran for just over three months, from 24 February to 5 June, and second semester ran from 27 July to 30 October.[252] As such, proposed paragraph 1061ZAAB(c)(i) is in line with allowing access to Fares Allowance for the purposes of traveling home in a student’s first mid-year study break. The Bill does not propose any changes to address the issue of Year 12 students visiting prospective campuses.

The application provision at item 18 means this change will apply from 1 January 2021.

Concluding comments

The main effect of the Bill is to shift the balance of Australian Government and student contributions to higher education base funding, and in doing so, resolve deadlock that has characterised higher education funding policy since 2014. However, it is not clear that the Bill will achieve its aims in terms of incentivising enrolment in particular courses, increasing university delivery of priority courses, or improving employment outcomes for students.

Expert policy analysis has also suggested that the funding arrangements proposed in the Bill may not result in extra CSPs for 2021 over current arrangements, and may also erode the ability of universities to fund other core activities such as infrastructure and research.

The Bill has raised a large number of concerns from key interest groups, with most recommending at least some amendments to provide greater certainty of funding growth if the Bill is to be passed. While the JRG Package overall does commit to increase the number of CSPs available, and funding a number of new investments, particularly in regional areas, these commitments are not guaranteed in the Bill. 

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[1].              These changes were initially announced in Education Minister Dan Tehan’s Press Club address on 19 June 2020. See D Tehan, Job-ready graduates, speech, 19 June 2020. The changes were subsequently detailed by the Department of Education, Skills and Employment (DESE) in the Job-ready Graduates Discussion Paper and a series of fact sheets outlining the details of proposed measures. Following a consultation period, changes were then announced in a joint press release from Minister Tehan and Andrew Gee, Minister for Decentralisation and Regional Education. See D Tehan and A Gee, Job-ready graduates legislation, joint media release, 25 August 2020. 

[2].              H Ferguson and M Harrington, ‘Education and training’, Budget review 2019–20, Research paper series, Parliamentary Library, Canberra, April 2019, pp. 32–37.

[3].              Department of Education, Skills and Employment (DESE), ‘Commonwealth Grant Scheme (CGS)’, DESE website, last modified 31 July 2020.

[4].              J Lomax-Smith, L Watson and E Webster, Higher education base funding review: final report, [Department of Education, Employment and Workplace Relations] (DEEWR), [Canberra], October 2011, p. 2.

[5].              Ibid.

[6].              DEEWR, Transforming Australia’s higher education system, DEEWR, Canberra, 2009, p. 12. This announcement was in response to D Bradley, Review of Australian higher education: final report, DEEWR, Canberra, December 2008.

[7].              Australian Bureau of Statistics (ABS), Education and Work, Australia, May 2019, ABC, Canberra, 13 November 2019—see Table 26 Highest non-school qualification: Bachelor Degree level or above, Persons aged 20-64 years – 2004 to 2019.

[8].              D Kemp and A Norton, Review of the demand driven funding system: final report, [Department of Education], [Canberra], 2014. 

[9].              Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.6: Education, Employment and Workplace Relations Portfolio, 2010, Outcome 3, p. 88; Australian Government, Portfolio budget statements 2013–14: budget related paper no. 1.12; Industry, Innovation: Climate Change, Science, Research and Tertiary Education Portfolio, 2013, pp. 85 and 87. Expenditure also includes funding for 30,194 postgraduate course work students and 11,165 medical students in 2010 and 36,900 postgraduate course work students, 13,100 medical students, and 9,600 students in enabling places in 2013.

[10].              Kemp and Norton, Review of the demand driven funding system report, op. cit., p. iii.

[11].              Australian Government, ‘Higher Education’, Budget 2014–15, 13 May 2014.

[12].              C Pyne, ‘Second reading speech: Higher Education and Research Reform Amendment Bill 2014’, House of Representatives, Debates, 28 August 2014, p. 8897. 

[13].              While major funding changes announced in the 2014–15 Budget were ultimately not legislated, some of the measures have been implemented. The Budget Savings (Omnibus) Act 2016 gave effect to three higher education reform announcements (a lower Higher Education Loan Program (HELP) repayment threshold and rate, replacement of the Higher Education Grants Index (HEGI) with the Consumer Price Index (CPI) for the purpose of HESA grants, and discontinuation of the HECS-HELP benefit, which reduced the HECS-HELP payable for graduates from certain fields if they took up work in specified locations or occupations).

[14].              S Birmingham (Minister for Education and Training), The challenge of world-class higher education: opening keynote address: Times Higher Education (THE) world academic summit: University of Melbourne, speech, 1 October 2015. 

[15].              Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2017–18, pp. 77–78 and 83–84. 

[16].              For further information see C Ey, Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017, Bills digest, 121, 2016–17, Parliamentary Library, Canberra, 2017.

[17].              S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2017–18, pp. 143–4.

[18].              A Norton, ‘Will the number of Commonwealth supported student places fall?’, Andrew Norton: Higher Education Commentary From Carlton blog, 27 August 2019.

[19].              ‘Equivalent’ as providers are generally able to utilise their CGS funding to offer any distribution of CSPs between different funding clusters. If a provider commits to maintain the distribution of CGS funding between courses it offers, this will result in the number of CSPs falling. However providers may over-enrol students in courses, or shift CGS funding from high Commonwealth contribution courses (such as Science) to lower Commonwealth contribution courses (such as Economics) to maintain or increase total CSP numbers. Both of these options may be further incentivised under the measures proposed in the Bill, as discussed later in this Bills Digest.

[20].              See summary in H Ferguson, ‘Tertiary education’, Budget review 2018–19, Research paper series, Parliamentary Library, Canberra, May 2018, pp. 15–18; Australian Government, Budget measures: budget paper no. 2: 2018–19, pp. 89 and  94–95.

[21].              H Ferguson, ‘Tertiary education—where to for reform?’, Briefing book: key issues for the 46th Parliament, Parliamentary Library, Canberra, July 2019; A Norton, ‘Enrolments flatlining: Australian unis’ financial strife in three charts’, The Conversation, 7 November 2019; D Tehan, Speech to the AFR Higher Education Summit, Brisbane, speech, 27 August 2019.

[22].              Morrison and Cormann, Mid-year economic and fiscal outlook 2017–18, pp. 143–4.

[23].              DESE, Job-ready Graduates: higher education reform package 2020, [19 June 2020], p. 12. Please note the discussion paper has been updated a number of times since it was first released. The page references and information provided here refer to the version last modified 20 August 2020. Arrangements to implement performance funding progressed in 2018 and 2019, but CGS payments for 2020 were subsequently guaranteed for all higher education institutions as part of the Higher Education Relief Package in response to the COVID-19 pandemic (discussed in more detail below). See DESE, ‘Performance-based funding for the Commonwealth Grant Scheme’, DESE website, 19 December 2018; ‘COVID-19 means that universities should not be held to performance funding targets’, Andrew Norton, blog, 1 April 2020; DESE, ‘Higher Education Relief Package - frequently asked questions’, DESE website, last modified 30 September 2020.

[24].              Australian Government, Budget strategy and outlook: budget paper no. 1: 2019–20, 2 April 2019, pp. 5-10 and 5-17.

[25].              ABS, 6227.0 - Education and Work, Australia, May 2019, 13 November 2019—see Table 26 Highest non-school qualification: Bachelor Degree level or above, Persons aged 20-64 years – 2004 to 2019.

[26].              S Morrison (Prime Minister), M Payne (Minister for Foreign Affairs), P Dutton (Minister for Home Affairs) and G Hunt (Minister for Health), Updated travel advice to protect Australians from the novel coronavirus, joint media release, 1 February 2020; S Morrison (Prime Minister), M Payne (Minister for Foreign Affairs) and P Dutton (Minister for Home Affairs), Border restrictions, joint media release, 19 March 2020.

[27].              DESE, Student visa holders in and outside Australia in 2020, research snapshot, DESE, April 2020.

[28].              DESE, 2018 Higher Education Providers Finance Table, 13 March 2020; I Marshman and F Larkins, Modelling individual Australian universities resilience in managing overseas student revenue losses from the COVID-19 pandemic, Centre for the Study of Higher Education, University of Melbourne, 28 May 2020; G Croucher and W Locke, A post-coronavirus pandemic world: some possible trends and their implications for Australian higher education, Melbourne CSHE Discussion Paper, May 2020; Tertiary education Quality and Standards Agency (TEQSA), ‘Coronavirus (COVID-19) – latest regulatory advice’, TEQSA website, last updated 28 September 2020; The Study in Australia website summarises responses from Australian universities at Australian education provider COVID-19 response information.

[29].              Audit Office of New South Wales, Universities 2019 audits, financial audit, 4 June 2020, p. 1. 

[30].              Universities Australia (UA), Uni viability crucial to national recovery, media release, 7 April 2020.

[31].              UA, COVID-19 to cost universities $16 billion by 2023, media release, 3 June 2020; UA, Submission to the Senate Select Committee on COVID-19, [Submission no. 275], May 2020, p. 4. 

[32].              See for example: The Mitchell Institute, University sector faces losing up to $19 billion due to COVID-19, media release, 17 April 2020; I Marshman and F Larkins, ‘Normality at Australian universities unlikely to return before 2024 with accumulated losses of at least $13-15 billion’, Campus Morning Mail, 16 April 2020.

[33].              DESE, ‘Higher education relief package - Frequently Asked Questions’, DESE website, last modified 30 September 2020.

[34].              DESE, Update on enrolment deferments in 2020, research snapshot, DESE, July 2020.

[35].              C Jackson, Senate Select Committee on COVID-19, Official committee Hansard, 28 July 2020, pp. 22–23.

[36].              HESA, section 16-20.  Table C providers and foreign providers not registered under HESA have never been excluded from Jobkeeper, see C Duffy ‘New York University Sydney campus given JobKeeper payments but Australian public universities miss out’ ABC News, 18 September 2020.

[37].              See A Norton, ‘The university JobKeeper rules change again, with Bond and Torrens universities to benefit’, Andrew Norton Higher Education Commentary From Carlton, blog, 25 May 2020. 

[38].              A Norton, ‘Will the COVID-19 recession increase school-leaver applications for higher education?’ Andrew Norton Higher Education Commentary From Carlton, blog, 23 March 2020.

[39].              R Bolton, ‘Universities will have to turn thousands away’, The Australian Financial Review, 15 June 2020, p.1.

[40].              See D Tehan, Job-ready graduates, speech, 19 June 2020, p. 3.

[41].              See D Tehan and A Gee, Job-ready Graduates legislation, joint media release, 25 August 2020. 

[42].              DESE, Job-ready Graduates: higher education reform package 2020, op. cit., p. 25.

[43].              Commonwealth Grant Scheme Guidelines 2012.

[44].              Australian Government, Portfolio budget statements 2019–20: budget related paper no. 1.5: Education and Training Portfolio, p. 45.

[45].              DESE, ‘Higher Education Participation and Partnerships Program (HEPPP)’, DESE website;

[46].              Australian Government, Portfolio budget statements 2019–20: budget related paper no. 1.5: Education and Training Portfolio, p. 45; DESE, ‘National Institutes’, DESE website.

[47].              Australian National University (ANU), ‘National Institutes Grant’, ANU website; DESE, ‘National Institutes Funding’, HEIMS Online.

[48].              DESE, Job-ready Graduates, op. cit., pp. 24–25; Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 20.

[49].              DESE, ‘More opportunities for regional students’, DESE website.

[50].              Senate Education and Employment Legislation Committee, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, The Senate, September 2020, p. 44. 

[51].              Ibid., pp. 45–88.

[52].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 11, 2 September 2020, p. 16. 

[53].              Senate Education and Employment Legislation Committee, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, op. cit., pp. 80–81. 

[54].              Ibid., pp. 83–85.

[55].              Ibid., p. 87.

[56].              Ibid., p. 88.

[57].              J Lambie, Uni Bill deserves to fail: Lambie, media release, 30 September 2020.

[58].              Ibid.

[59].              DESE, ‘Job-ready Graduates Package — draft legislation submissions’, DESE website.

[60].              Group of Eight, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 55], 10 September 2020, p. 2.

[61].              Australian Technology Network of Universities, University of Newcastle and Deakin University, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 64], 10 September 2020, p. 1.

[62].              Innovative Research Universities, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 103], 10 September 2020, pp. 2–3.

[63].              Regional Universities Network, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 77], n.d.

[64].              Ibid.

[65].              Ibid., p. 3.

[66].              National Tertiary Education Union, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 58], 4 September 2020, p. 34.

[67].              Ibid.

[68].              Ibid., p. 2.

[69].              Andrew Norton, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 53], n.d., p. 2.

[70].              Mark Warburton, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 25], 7 September 2020, pp. 2–4.

[71].              Ibid., p. 4.

[72].              Council for the Humanities, Arts and Social Sciences, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 15], 4 September 2020, p. 2.

[73].              Science and Technology Australia, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 97], 10 September 2020, p. 3.

[74].              Ibid.

[75].              Ibid., p. 4.

[76].              Australasian Consortium of Humanities Research Centres, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 2], 4 September 2020, p. 2; ARC Laureate Fellows, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 49], 16 July 2020, p. 1.

[77].              Australian Council of Deans of Education (ACDE), Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 35], n.d., p. 1.

[78].              Australian Institute of Physics (AIP) National Executive, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 33], 8 September 2020, p. 1.

[79].              Ibid., pp. 1–2.

[80].              Ibid.

[81].              Association of Heads of Independent Schools of Australia (AHISA), Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 31], 9 September 2020.

[82].              National Centre for Student Equity in Higher Education (NCSEHE), Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 22], 8 September 2020, p. 10.

[83].              Ibid., pp. 11–12 and 15.

[84].              Ibid., pp. 9–10 and 12.

[85].              End Rape on Campus Australia, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 32], 9 September 2020.

[86].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 6.

[87].              The Statement of Compatibility with Human Rights can be found at page 7 of the Explanatory Memorandum to the Bill.

[88].              Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 11, 2020, 24 September 2020, pp. 48–59. 

[89].              Ibid., p. 49.

[90].              Ibid., pp. 49–50. 

[91].              Ibid., p. 51.

[92].              Ibid., pp. 52–53.

[93].              Ibid., p. 54.

[94].              Ibid.

[95].              Ibid., pp. 57–59.

[96].              Parliamentary Joint Committee on Human Rights, ‘Ministerial responses’, Australian Parliament, Canberra.

[97].              HESA, subparagraph 30-1(1)(a)(ii). Eligibility for funding under HESA is based on the following categories: bodies listed in Table A in section 16-15 are universities founded under or recognised by legislation—generally referred to as public universities, these institutions are eligible for all HESA funding programs; bodies listed in Table B in section 16-20 are universities that have been independently founded in Australia; bodies listed in Table C in section 16-22 are overseas-founded universities that operate in Australia; other approved providers under section 16-25. HESA does not specify requirements for an institution to be added to Tables A, B or C. These categories relate to funding only. Different provider categories are used by the Tertiary Education Quality and Standards Agency (TEQSA) as part of provider registration under the Tertiary Education Quality and Standards Agency Act 2011.

[98].              Other approved providers are eligible for CGS funding for national priorities specified in the Commonwealth Grant Scheme Guidelines 2012. National priorities are defined in section 30-20 of HESA, as outcomes that relate to the provision of higher education that are specified as a national priority in the Commonwealth Grant Scheme Guidelines. Currently, the Commonwealth Grant Scheme Guidelines 2012 (the CGS Guidelines) specify teaching and nursing courses; courses in natural and physical sciences, information technology, health, education and society and culture at the University of Notre Dame; any course of study undertaken by Indigenous students at the University of Notre Dame; and, under the Commonwealth Grant Scheme Guidelines Amendment (No. 1) 2020, in 2020 only, retraining and upskilling courses in education, nursing, psychology, English, mathematical sciences, languages, agriculture, allied health, other health, counselling, information technology, architecture and building, science, engineering and related technologies, medical science, environmental studies.

[99].              HESA, sections 30-15, 33-10, 33-35 and 93-10. 

[100].              HESA, section 33-10 and Part 5-6. 

[101].              DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

[102].              Proposed section 33-10 and HESA, section 33-30.

[103].              M Warburton, Unravelling the Tehan vision for higher education, Centre for the Study of Higher Education, University of Melbourne, August 2020, p. 1. 

[104].              Schedule 1; DESE, ‘Courses of study’, Higher Education Administrative Information for Providers, March 2020.

[105].              DESE, ‘Higher education relief package - Frequently Asked Questions’, DESE website; Addendum No.3 to AQF Second Edition January 2013.

[106].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, pp. 30–31.

[107].              Schedule 1.

[108].              Universities Australia, Career Ready Graduates, February 2019, pp. 5 and 9.

[109].              DESE, ‘Work experience in industry units’, Higher Education Administrative Information for Providers, March 2020.

[110].              Ibid.

[111].              HESA, section 33-1.

[112].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 20.

[113].              HESA, sections 30-10, 30-25 and 30-27. Non-designated courses of study are defined in Schedule 1 of HESA as courses of study other than designated courses of study. See the footnote below.

[114].              HESA, sections 30-10, 30-25 and 30-27. Designated courses of study are defined in section 30-12 of HESA as non-research postgraduate courses, medicine courses, and courses specified by legislative instrument. The Higher Education (Designated Courses of Study) Specification 2020 includes enabling courses and courses of study leading to a diploma, advanced diploma, associate degree, or undergraduate certificate (otherwise known as sub-bachelor courses).

[115].              HESA, section 33-5.

[116].              Ibid; Australian Government, Mid-Year Economic and Fiscal Outlook (MYEFO) 2017–18, p. 143; DESE, ‘Performance-Based Funding for the Commonwealth Grant Scheme’, DESE website.

[117].              Proposed subsection 33-5(1).

[118].              Item 33 defines a demand driven higher education course as a course of study that is undertaken by an eligible Indigenous person for the course of study with a Table A provider, and leads to a bachelor or bachelor honours degree, and is not a designated higher education course. According to the definition of eligible Indigenous person at item 35, an Indigenous person is eligible if, when they first enrol in the course, their permanent residential address is in a regional or remote area. Item 35 also gives Indigenous person the same meaning as in the Indigenous Education (Targeted Assistance) Act 2000.  Item 40 defines regional area as an area that is classified as inner regional Australia, or outer regional Australia, under the Australian Bureau of Statistics (ABS) Remoteness structure, and remote area, as an area that is classified as remote under that same structure. ABS Remoteness Structure is currently defined in the dictionary at Schedule 1 as the Australian Statistical Geography Standard (ASGS): Volume 5—Remoteness Structure, July 2016 published by the Australian Statistician, as amended from time to time, or most recent replacement of that document.

[119].              Higher education course is defined at item 35 as a course of study other than a designated or demand driven higher education course. 

[120].              HESA, subsection 36-30(1).

[121].              Providers can receive substantially lower revenue for CSP holding students compared to full-fee paying students in certain courses. For example, under the 2020 funding cluster rates, a CSP holding Juris Doctor (JD, coursework postgraduate law degree) student has an identical unit funding profile to an undergraduate law student. Assuming both students only take Law units, annual resourcing to the provider for the CSP is $13,353. See DESE, Allocation of units of study to funding clusters and student contribution bands according to field of education codes 2020, DESE, 18 June 2019. In contrast, the annual full fee price of a JD at the University of Melbourne for 2020 was $41,088, $38,600 at La Trobe University, and $39,360 at RMIT. In other courses, such as high Commonwealth contribution courses in STEM, the gap between CSP and full-fee courses is substantially more minor, and in some cases may be lower than the CSP resourcing. See A Norton and I Cherastidtham, University fees: what students pay in deregulated markets, Grattan Institute, Melbourne, August 2015, pp. 29–31.

[122].              Proposed subsections 33-5(2), 33-5(3) and 33-5(5).

[123].              Proposed subsection 33-5(4).

[124].              Proposed subsection 33-5(6).

[125].              Proposed subsection 33-5(7).

[126].              Proposed subsection 33-5(8).

[127].              HESA, subsection 30-27(3).

[128].              DESE, Job-ready graduates: higher education reform package 2020, op. cit., pp. 10 and 12.

[129].              HESA, section 36-30 and 36-10. Under section 36-10, New Zealand citizens and permanent visa holders who will be resident in Australia for the duration of the unit also meet the citizenship and residency requirements to receive a CSP. Some limited exceptions apply under section 36-15, for example if the student is studying at an overseas campus. 

[130].              HESA, section 169-15. Under section 169-20, exemptions can be set out in the Administration Guidelines made for the purpose (currently the Administration Guidelines 2012) or specified by the Minister in a determination.

[131].              DESE, ‘2019 Section 5 Liability status categories’, Higher Education student statistics, Table 5.5, 8 September 2020 and Parliamentary Library calculations. 

[132].              Ibid.

[133].              Ibid.

[134].              Ibid., Table 5.1.

[135].              DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

[136].              HESA, section 93-10 and Part 5-6

[137].              DESE, ‘Funding Clusters and Indexed Rates’, DESE website.

[138].              Proposed section 33-10 and HESA, section 33-30.

[139].              A definition of grandfathered student is inserted to the dictionary at Schedule 1 of HESA by Item 35 of Schedule 1 to the Bill.

[140].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 42.

[141].              See, for examples: Australian Government and the Tertiary Admission Centres, Course Seeker website.

[142].              Even assuming all units studied are in the relevant funding cluster, course costs will not be precisely as outlined here, due to the effects of indexation on student contribution amounts, which will increase slightly each year from 2022.

[143].              For example, see University of Melbourne, ‘What is the Melbourne Model?’, University of Melbourne website.

[144].              In 2018, the equivalent of only 59,306 full-time students paid their student contributions up-front, compared with 553,137 who deferred all or part through HECS. DESE, ‘2018 Section 5 Liability status categories’, Higher Education student statistics, Table 5.1, 28 October 2019.

[145].              Australian Taxation Office (ATO), ‘Study and training loan repayment thresholds and rates’, ATO website.

[146].              This assumes no changes to HELP repayment rates and thresholds, and that a person does not make any voluntary payments, or have any HELP debt remitted.

[147].              H Ferguson, ‘Updated Higher Education Loan Program (HELP) debt statistics—2018–19’, FlagPost, Parliamentary Library blog, 30 October 2019.

[148].              Ibid.

[149].              DESE, ‘HELP loans’, StudyAssist website.

[150].              Ibid.

[151].              Ferguson, ‘Updated Higher Education Loan Program (HELP) debt statistics—2018–19’, op. cit.

[152].              D Tehan, ‘Second reading speech: Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020’, House of Representatives, Debates, 26 August 2012, p. 5573.  

[153].              This history is detailed in C Ey, The Higher Education Loan Program (HELP) and related loans: a chronology, Research paper, 2017–18, Parliamentary Library, Canberra, 28 March 2018. Early studies on this topic are summarised in L Andrews, Does HECS deter? factors affecting university participation by low SES groups, Department of Education, Training and Youth Affairs, August 1999. Subsequent studies include B Chapman and C Ryan, Income-contingent financing of student charges for higher education: assessing the Australian innovation, Discussion paper, 449, Centre for Economic Policy Research, Australian National University, May 2002.  

[154].              B Chapman, Submission to the Senate Standing Committee on Education and Employment, Inquiry into the Higher Education and Research Reform Amendment Bill 2014, 20 February 2015.

[155].              Most recently Deloitte Access Economics, The impact of changes to student contribution levels and repayment thresholds on the demand for higher education, report prepared for the Department of Education, Employment and Workplace Relations (DEEWR), 2011. However, there is a long history of this research, including Higher Education Council (HEC), Sixth Report to the National Board of Employment, Education and Training on the operation of section 14 of the Higher Education Funding Act 1988 and the Higher Education Contribution Scheme, HEC, March 1992; HEC, Seventh Report to the National Board of Employment, Education and Training on the operation of section 14 of the Higher Education Funding Act 1988 and the Higher Education Contribution Scheme, HEC, May 1993; P Aungles, I Buchanan, T Karmel and M MacLachlan, HECS and opportunities in higher education: a paper investigating the impact of the Higher Education Contributions Scheme (HECS) on the higher education system, Department of Education, Science and Training, August 2003.  

[156].              A Norton, Graduate winners: assessing the public and private benefits of higher education, Grattan Institute, Melbourne, 2012, p. 77.

[157].              Ibid.; Deloitte Access Economics, The impact of changes to student contribution levels and repayment thresholds on the demand for higher education, op. cit.

[158].              DEEWR, Undergraduate applications, offers and acceptances 2010, DEEWR, Canberra, 2011, p. 2; J Gillard, Increasing university applications and students show strong interest in higher education, media release, 9 September 2009; DESE, Higher Education Statistics via uCube, accessed 25 June 2020.

[159].              A Norton, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 53], 4 September 2020, pp. 6–7.

[160].              Social Research Centre, 2019 graduate outcomes survey – longitudinal, DESE, October 2019, p. 1.

[161].              Productivity Commission (PC), Why did young people’s incomes decline?, PC, Canberra, July 2020, p. 5.

[162].              D Andrews, N Deutscher, J Hambur and D Hansell, The career effects of labour market conditions at entry, Treasury working paper, 2020-01, The Treasury, Canberra, June 2020, p. 12.

[163].              Ibid., p. 4.

[164].              Summarised in J Borland, Scarring effects: a review of Australian and international literature, August 2020, pp. 6–7.

[165].              PC, Why did young people’s incomes decline?, op. cit., p. 9.

[166].              Social Research Centre, 2020 graduate outcomes survey – longitudinal, DESE, October 2019, pp. 7–8.

[167].              Ibid.

[168].              Ibid.

[169].              P Shergold, Looking to the future: report of the review of senior secondary pathways into work, further education and training, Education Council, Canberra, June 2020, pp. 27–28.

[170].              A Norton, Submission, op. cit., pp. 10–11.

[171].              Ibid.

[172].              Senate Education, Employment and Workplace Relations Legislation Committee, Inquiry into the Higher Education Support Amendment (Job Ready Graduates and Supporting Regional and Remote Students) Bill 2020, Official committee Hansard, 17 September 2020, p. 68.

[173].              See A Norton, Submission to Senate Education and Employment Legislation Committee, Inquiry into Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 [Provisions], [Submission no. 53], 4 September 2020, pp. 15–16.

[174].              Ibid.

[175].              Senate Education, Employment and Workplace Relations Legislation Committee, Inquiry into the Higher Education Support Amendment (Job Ready Graduates and Supporting Regional and Remote Students) Bill 2020, Official committee Hansard, 17 September 2020, p. 26.

[176].              Ibid.

[177].              See B Birrell and K Betts The crisis in the overseas student industry: how should government respond?’, Australian Population Research Institute, Research report, June 2020, p. 2. Notably, Group of Eight also have the highest median international student fees, which drives the revenue gap more than numbers of students: Norton and Cherastidtham, University fees, op. cit.

[178].              In 2018, Group of Eight Universities received the largest share of applications (22.3%), while also having the lowest offer rate (74.7%) through the Tertiary Admission Centres (TACs): DET, ‘Undergraduate applications, offers and acceptances 2018’, DET, Canberra, 2018, pp. 15 and 21.

[179].              G Craven, ‘Break in supply chain feeds uni Hunger Games’, The Australian, 5 September 2020, p. 13.

[180].              The proposed cluster funding amounts do not completely align with the Transparency in Higher Education Expenditure analysis. See M Warburton, Unravelling the Tehan vision for higher education, Centre for the Study of Higher Education, University of Melbourne, August 2020, p. 22. Deloitte Access Economics, Transparency in higher education expenditure, DET, Canberra, January 2019.

[181].              Deloitte Access Economics, Transparency in higher education expenditure, op. cit., pp. 52–54.

[182].              This history is set out in C Ey, The Higher Education Loan Program (HELP) and related loans: a chronology, Research paper series, 2017–18, Parliamentary Library, Canberra, 28 March 2018.

[183].              Ibid., pp. 54–56.

[184].              Deloitte Access Economics, Transparency in higher education expenditure, report prepared for the Department of Education, November 2019, p. xiii.

[185].              The university research effects are discussed in H Ferguson, Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Bill 2020, Bills digest, 14, 2020–21, Parliamentary Library, Canberra, 2020.

[186].              HESA, section 41-10.

[187].              Section 41-15 of HESA provides that the Other Grants Guidelines (currently the Higher Education Support Act 2003 - Other Grants Guidelines (Education) 2012 and Other Grants Guidelines (Research) 2017) may specify one or more programs under which grants for particular purposes specified in the table in subsection 41-10(1) are to be paid. Under section 41-30, the amount of the grant is either as per the method specified in the Other Grants Guidelines, or if this does not apply, the amount is determined in writing by the Minister.

[188].              Funding allocations for each program by year at institution level are available from DESE, ‘Determinations search’, HEIMS Online.

[189].              Under subsection 41-45(1B) of HESA, the Minister must, by legislative instrument (currently the Higher Education Support (Maximum Payments for Other Grants) Determination 2019) determine the total payments for the year. Under section 41-50 of HESA, the Minister must, by legislative instrument, cause a list to be prepared setting out the maximum amounts of all grants which may be paid in the following year for the purposes specified in the table in section 41-10 (currently the List of Maximum Grant Amounts under Division 41 for 2020)—in recent years this determination has provided a circular reference back to amounts being determined under section 41-45, rather than a list of dollar amounts for each purpose.

[190].              HESA, subsection 19-110(1).

[191].              HESA, subsection 19-110(3).

[192].              HESA, subparagraphs 33-1(1)(b)(i) and 33-1(1)(b)(iii).

[193].              HESA, paragraph 30-25(3)(b).

[194].              Paragraph 30-25(3)(d).

[195].              Paragraph 30-25(3)(ca).

[196].              Paragraph 30-25(3)(da).

[197].              DESE, Job-ready graduates: higher education reform package 2020, op. cit., p. 25.

[198].              Ibid., p. 32.

[199].              DESE, National priorities and industry linkage fund: consultation paper, DESE, [30 September 2020], p. 14.

[200].              Ibid.

[201].              Ibid., pp. 15–19.

[202].              Ibid., p. 14.

[203].              Ibid.

[204].              Ibid.

[205].              Ibid., pp. 18–19.

[206].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 44.

[207].              Proposed subparagraph 2-1(b)(iv).

[208].              As the standard Parliamentary Sitting week is four days, this is in practice just short of four standard sitting weeks. Particularly around budget estimates, the Houses may not sit at the same time, producing different timeframes for disallowance in the Senate compared to the House of Representatives. This in practice can lead to substantially longer timeframes than the section may intuitively indicate.

[209].              Legislation Act 2003 (Cth) section 42(2).

[210].              Legislation Act 2003 (Cth) section 48.

[211].              Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017, Part 2 of Schedule 3; proposed item 45. Non-university higher education providers are those approved under section 16-25 of HESA, while universities are at sections 16-15, 16-20 and 16-22.

[212].              HESA, section 19-10.

[213].              HESA, section 19-12.

[214].              HESA, section 19-36. Penalties are expressed in penalty units to facilitate adjustment across the Act from time to time. A penalty unit is currently equal to $222, according to the Crimes Act 1914 and the Notice of Indexation of the Penalty Unit Amount.

[215].              HESA, section 19-36E. A request for Commonwealth assistance is defined in subsection 36-40(3) of HESA as an application, in a form prescribed by the Minister, for assistance under HESA for a unit that forms part of a course of study with a higher education provider—essentially it is the student’s application for enrolment in a CSP, and/or a HELP loan. For more detailed information see DESE, ‘Request for Commonwealth assistance forms’, Higher Education Administrative Information for Providers, March 2020.

[216].              HESA, section 19-42.

[217].              A Norton, ‘Checking that students are on track to pass – the government’s proposal’, Andrew Norton: Higher Education Commentary From Carlton blog, 13 August 2020.

[218].              HESA, section 19-71.

[219].              HESA, sections 19-72 and 19-73.

[220].              HESA, section 104-1. 

[221].              HESA, section 104-1. Currently, under section 16-60 of HESA, the Minister may impose, as a condition of approval as a higher education provider, a limit on the total number of students entitled to FEE-HELP assistance with the provider for a specified period and/or the total amount of FEE-HELP assistance payable to the provider for a specified period.

[222].              HESA, section 104-43.

[223].              HESA, section 104-44.

[224].              Ibid.

[225].              Ibid.

[226].              HESA, section 169-17.

[227].              HESA, section 19-78.

[228].              HESA, section 19-77.

[229].              HESA, section 19-78.

[230].              HESA, section 169-25.

[231].              Ibid.

[232].              More information about the background to these measures is available in H Ferguson, Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017, Bills digest, 5, 2017–18, Parliamentary Library, Canberra, 2017.

[233].              K Andrews, ‘Second reading speech: Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017’, House of Representatives, Debates, 1 June 2017, p. 6022.

[234].              Explanatory Memorandum, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, p. 47.

[235].              HESA, paragraph 90-1(c).

[236].              HESA, section 36-5, 36-10 and 36-15.

[237].              Proposed subsections 104-1(1AA), (1AB) and (1AC).

[238].              Higher Education Standards Framework (Threshold Standards) 2015, Standard 1.1.

[239].              HESA, section 16-27.

[240].              A Norton, ‘Checking that students are on track to pass – the government’s proposal’, Andrew Norton: Higher Education Commentary From Carlton blog, 13 August 2019.

[241].              Ibid.

[242].              HESA, sections 36-21, 97-30 and 104-30. Further detail is available from DESE, ‘Re-crediting, remission and repayment’, Higher Education Administrative Information for Providers, March 2020.

[243].              HESA, section 110-5.

[244].              A Norton, ‘Uni student failure rate is a worry, but the government response is too heavy-handed’, The Conversation, 18 August 2020.

[245].              H Ferguson, ‘Education Legislation Amendment (2020 Measures No. 1) Bill 2020’, FlagPost, Parliamentary Library blog, 16 June 2020; DESE, ‘Higher education relief package - Frequently Asked Questions’, DESE website.

[246].              VET Student Loans Act 2016, section 23BA(2).

[247].              Social Security Act 1991, subsection 1061ZAAA(1); DSS, ‘3.8.9.10 Eligibility for FAA’, Social security guide, DSS website, last reviewed 11 November 2019. 

[248].              Social Security Act 1991, section 1061ZAAB.

[249].              DSS, ‘1.1.F.95 Fares allowance (YA, Austudy)’, Social security guide, DSS website, last reviewed 21 September 2020.

[250].              DESE, ‘National Regional, Rural and Remote Education Strategy’, DESE website. The Strategy builds on the Independent Review into Regional, Rural and Remote Education (IRRRRE). See J Halsey, Independent review into regional, rural and remote education: final report, report prepared for the Department of Education and Training (DET), Canberra, January 2018.

[251].              D Napthine, National Regional, Rural and Remote Tertiary Education Strategy: final report, DET, Canberra, 2019, p. 63.

[252].              Australian National University (ANU), ‘University calendar 2020’, ANU website.