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