Introductory Info
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.
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.