On 28 August 2014 the Hon. Christopher Pyne, MP, introduced the Higher
Education and Research Reform Amendment Bill 2014 (the bill) in the House of Representatives.
On 4 September 2014 the Senate referred the provisions of the bill to the
Senate Education and Employment Legislation Committee (the committee) for
inquiry and report by 28 October 2014.
Conduct of the inquiry
Details of the inquiry were made available on the committee's website.
The committee also contacted a number of organisations inviting submissions to
the inquiry. Submissions were received from 164 individuals and organisations, as
detailed in Appendix 1.
Public hearings were held in Canberra on 23 September and 8–9 October,
Brisbane on 7 October and Melbourne on 10 October. Witness lists for the
hearings are available in Appendix 2.
Purpose and overview of the bill
The bill seeks to reform higher education in Australia by deregulating
fees and extending funding to higher education qualifications below the
bachelor degree level, as well as to private universities and non-university
higher education providers. It is a reform package which aims to empower people
through choice, and drive creativity and innovation in our higher education
system by removing the stifling effects of excessive government control.
It is the government's view that, if enacted, the proposed legislation
...spread opportunity to more students, including disadvantaged
and rural and regional students, equip Australian universities to face the
challenges for the 21st century and ensure Australia is not left
behind by intensifying global competition and new technologies.
The bill is divided into ten schedules. Their objectives are set out
Schedule 1: Deregulation, expansion
of demand driven system and other measures
Schedule 1 of the bill would remove provisions for maximum student
contribution amounts from 1 January 2016.
Currently, under section 93-10 of the Higher Education Support Act
2003 (HESA), the government specifies the maximum student contribution that
a higher education provider can charge Commonwealth supported students for a
unit of study in a particular funding cluster.
Schedule 1 of the bill would instead allow higher education providers to set
fee levels as appropriate. The intent of this deregulation measure is to
facilitate the development of price competition in the higher education market.
Schedule 1 also extends the demand driven funding system to diploma,
advanced diploma and associate degree courses. It further extends the demand
driven system to accredited bachelor and sub-bachelor courses at private
universities and non-university higher education providers. This is intended to
ensure students are treated equitably irrespective of the institution with
which they choose to enrol.
Other key measures contained in this schedule include those seeking to
streamline student eligibility requirements for Commonwealth assistance. Currently,
eligible students can either access HECS-HELP or FEE-HELP depending on whether
or not they are a Commonwealth supported student or a fee-paying student. The
bill would remove the differences in the treatment of students by rationalising
the HELP scheme into one, single loan scheme to be known as 'HECS-HELP.'
Schedule 2: New Commonwealth
Schedule 2 of the bill would require all providers with an equivalent
student load of 500 full-time Commonwealth supported students annually to
establish a new Commonwealth Scholarship Scheme. Providers would be obliged to
direct up to 20 per cent of additional revenue that they receive from the
deregulation of student contributions to the scheme.
The funds would be used to provide tailored, individualised support to
disadvantaged students through scholarships.
Schedule 3: Indexation of HELP
Schedule 3 would change the HELP indexation rate from the current
Consumer Price Index (CPI) to the Treasury 10 year bond rate from 1 January
2016, up to a maximum of six per cent per annum, better reflecting the
government's borrowing costs to fund these loans.
The change to the indexation would apply to both existing and new loans.
Schedule 4: Minimum repayment
income for HELP debts
Schedule 4 would establish a new minimum HELP repayment threshold of $50
637 from the 2016–17 income year.
A person will only be required to make repayments of their HELP debt when their
income exceeds this amount. A two per cent repayment rate will apply to those
with incomes above this new threshold and up to the current base threshold, $56
264 in 2016–17.
Schedule 5: Research funding and
Schedule 5 provides for increased funding of $139.5 million over four
years to support research under the Future Fellowship scheme. It would allow
universities to introduce a commensurate student contribution for Research
Training Scheme (RTS) students from 2016, which could be deferred through HELP.
There would be two categorisations of RTS courses:
High cost courses, including science, engineering, medical
studies, pharmacy, dentistry, veterinary studies, human movement and
Low cost courses, consisting of all other fields of study.
Whether a course is categorised as 'high' or 'low' cost would be
determined by legislative instrument.
Schedule 5 also amends the Australian Research Council Act 2001 (ARC) to
allow additional investment in research through the Future Fellowships scheme,
apply indexation and add an additional forward estimate amount.
Schedule 6: VET FEE-HELP loan fees
Schedule 6 would remove lifetime limits on VET FEE-HELP loans students
can currently access, as well as the 20 per cent loan fee in place for all full
fee paying students receiving VET FEE-HELP. The measures are intended to
enhance access to approved courses, as well as to improve affordability.
Schedule 7: HECS-HELP benefit
Schedule 7 seeks to discontinue the HECS-HELP benefit from 1 July 2015.
The benefit was introduced as part of the 2008–09 Budget and sought to
encourage graduates to seek employment in early childhood education in regional
areas, as well as science, mathematics, teaching and nursing-related
occupations. The bill's explanatory memorandum explains that HECS-HELP take-up
has remained low, and that the benefit has not been effective in achieving its
Schedule 8: Indexation of amounts
Schedule 8 would change how grants and regulated student contribution
amounts are indexed, with the Higher Education Grants Index (HEGI) being
replaced with the Consumer Price Index (CPI) from 1 January 2016.
Schedule 9: University name change
Schedule 9 provides for the name of the University of Ballarat to be
changed to 'Federation University Australia'.
Schedule 10: New Zealand citizens
Schedule 10 seeks to extend eligibility for HELP assistance by amending
citizenship or residency requirements for certain New Zealand citizens who are
Special Category Visa holders. The measures would take effect from 1 January
Human rights implications
The bill engages the following human rights, including the right to
education, the right to social security and an adequate standard of living, the
right to privacy and rights to equality and non-discrimination.
The bill's explanatory memorandum states that the proposed legislation
is compatible with human rights and freedoms recognised or declared in the international
instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Financial Impact Statement
The government estimates the proposed reforms would contribute savings
estimated at $3.9 billion in fiscal balance terms over the forward estimates,
that is, from 2014–15 to 2016–17. Since most of the measures contained in the
bill would not take effect until 1 January 2016, they would not have
a financial impact until that financial year.
The committee thanks those individuals and organisations who contributed
to this inquiry by preparing written submissions and giving evidence at
Notes on References
References in this report to the Hansard for the public hearings
are to the Proof Hansard. Please note that page numbers may vary between
the proof and official transcripts.
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