Introductory Info
Date introduced: 9 March 2023
House: House of Representatives
Portfolio: Education
Commencement: The day after Royal Assent.
Purpose of
the Bill
The purpose of the Education
Legislation Amendment (Startup Year and Other Measures) Bill 2023 (the
Bill) is to:
- amend
the Higher
Education Support Act 2003 (HESA) to create a new loan, SY-HELP,
which is designed to support students participating in accelerator program
courses, as part of the Higher Education Loan Program (HELP)
- amend
the Social
Security Act 1991 (the SS Act), the Social Security
(Administration) Act 1999 (the SS Admin Act) and the Student Assistance
Act 1973 (the SA Act) to allow students participating in
accelerator program courses who are entitled to SY-HELP assistance to
potentially qualify for student social security payments
- amend
the Australian
Research Council Act 2001 (the ARC Act) to update funding caps
for approved research programs, applying indexation to existing amounts and adding
a new funding cap for the financial year beginning in July 2025
- amend
HESA to include Avondale University as a Table B provider.
Structure
of the Bill
The Bill has 3 Schedules:
- Schedule
1 creates SY-HELP and amends social security legislation to include
participation in accelerator courses for eligibility for student payments
- Schedule
2 updates the funding caps in the ARC Act
- Schedule
3 adds Avondale University as a provider under HESA.
Background
The Australian Government provides income contingent loans
to students studying approved higher education courses under its Higher Education Loan Program
(HELP).[1]
There are currently 4 types of HELP loans, with eligibility for each
depending on what the loan is to be used for, and students’ residency and
citizenship status. The 4 types of loans are:
This Bill introduces a fifth type of loan, Startup
Year or SY-HELP, to support eligible students to participate in accelerator
programs run by higher education providers.
SY-HELP
As part of its 2022
election policy on education, the Australian Labor Party (Labor) committed
to introduce a Startup Year program. The program would potentially create up to
2,000 new firms through providing income contingent loans to 2,000 final year
students and recent graduates to support their participation in accelerator
programs (p. 3). The Bill seeks to implement that program.
Consultation
On 29 September 2022, Minister for Education
Jason Clare and Minister for Industry and Science Ed Husic announced
a consultation process to develop the proposed program. A consultation
paper was released as part of this process, with submissions in response to
the paper closing on 15 November 2022 (p. 1). The Department of Education
also conducted a student
survey to seek the views of current students and recent graduates on the
proposed design.
Neither the outcomes of the survey nor submissions to the
consultation have been published on the relevant departmental websites, although
several groups have published their submissions on their own websites—see under
‘Position of major interest groups’ below.
According to the consultation
paper, the intention of the program is to ‘enable students to participate
in university accelerator programs, with a view of commercialising good ideas
and injecting new business dynamism into our economy’ (p. 1). The expectation
is that this initiative will increase the pool of entrepreneurs and help drive
innovation through increased links between universities and the startup
community (p. 1). The consultation paper, citing Universities
Australia, states that there are already more than 100 startup hubs in
Australian universities (p. 3).
Under the proposal, a new category of HELP loan is to be
created, which is ‘tailored to participation in university accelerators and
incubators’ (p. 1). Loans would be available up to the maximum
student contribution for Funding cluster 4 (Medicine, Dentistry or Veterinary
Science), which is $11,800 for 2023.
Several of the responses to the consultation paper
expressed concerns about the proposed program as outlined below (see under
‘Position of major interest groups’). These included the lack of detail about:
- the
criteria for the inclusion of eligible programs
- how
students would be selected
- how
the allocation of 2,000 places would be distributed
- what
the funding could be spent on.
Most identified submissions therefore supported the option
in the consultation paper to have an initial pilot program (p. 10) to test some
of these aspects, prior to full implementation. It appears that the Government
has not taken that approach.
In the joint media
release announcing the introduction of the Bill, Ministers Clare and Husic
stated that the program will also support under-represented groups, such as
female entrepreneurs, Indigenous Australians, people with disability, and
community-based startups working on regional and rural issues. However, most of
the details highlighted in consultation responses and in relation to access and
equity are not included in the proposed legislation but are to be included in
proposed ‘SY-HELP Guidelines’.
Concerns have also been raised
about the program further increasing HELP debts, and whether
a separate HELP scheme is needed.
Committee
consideration
At the time of writing this Bills
Digest, the Bill had not been referred by the Senate Standing Committee for the
Selection of Bills to Committee for inquiry and report.
Similarly, the Senate Standing
Committee for the Scrutiny of Bills has not reported on the contents of the
Bill.
Position of major interest groups
The Universities
Australia submission
to the consultation paper supported the policy intent of the Startup Year program,
but raised a number of concerns about the proposed scheme. In particular, it
noted a lack of clarity around the purpose and the outcomes of the program and argued
that there needed to be an appropriate ‘value proposition’ for students to be
prepared to take on additional HELP debt, particularly given the high
proportion of startups that fail. It stated that:
A program where a business failure is expected but where the
lessons learnt through failing builds a student’s experience for the next
startup they launch, is a valuable addition to the education landscape (p. 2).
The submission also stated that the funding would not be
sufficient to cover the costs of delivering an accelerator program. Universities
Australia suggested that an expert group be established to further develop the
program and clarify its aims and value to students.
Similarly, in its submission
to the consultation paper, the Group
of Eight stated that it was ‘highly supportive of the aims’ of the
initiative. However, it suggested that given the complexity of the initiative
and lack of clarity concerning key elements of the design, that it should
initially proceed as a pilot (Recommendation 3).
The Australian Technology
Network (ATN) group of universities suggested,
among other recommendations, that funding should be given directly to students,
not to universities, to enable them ‘direct access to their own capital and
ability to direct their own expenditure’ (p. 3). Noting the Government’s focus
on supporting students from diverse backgrounds, the ATN also highlighted the
need to ensure that student debt was not an actual or perceived barrier to
participation (p. 3).
The Regional
Universities Network also expressed
concern about the ‘value proposition’ for both students and regional
institutions (p. 8). It supported the option to commence with a pilot, but
asked that more than one regionally-based accelerator be included (p. 15).
There has been limited response from industry groups. Cooperative
Research Australia supported
the program in principle, but, in relation to a first-year pilot phase, cautioned
that building entrepreneurial skills takes time and it would be important to
adjust expected results to the limited timeframe (p. 10). The Australian
Information Industry Association expressed its support in June 2021 when
the policy was first announced.
Financial
implications
Schedule 1
The Explanatory
Memorandum notes that the establishment of SY-HELP is expected to result in
a net expense of $15.4 million over 4 years from 2022–23 (p. 2). This funding
was included in the October
2022–23 Budget, which also noted that it is
expected to cost $2.8 million ongoing (p. 95).
Schedule 2
The amendments to the ARC Act update the special
appropriation funding cap for financial years 2022–23 to 2024–25 to include
indexation adjustments and add a further year of funding for financial year
2025–26. According to the Explanatory
Memorandum, this results in an additional appropriation of $1.0 billion for
the financial years 2022–23 to 2025–26 (p. 2). Details are provided in Table 1
below.
Table 1: Proposed, current and difference in ARC Act funding amounts to 2025-26
|
|
2022–23 |
2023–24 |
2024–25 |
2025–26 |
| Proposed |
$831,594,000 |
$851,414,000 |
$871,694,000 |
$893,036,000 |
| Current |
$815,288,000 |
$812,207,000 |
$811,169,000 |
0 |
| Difference |
+$16,306,000 |
+$39,207,000 |
+$60,525,000 |
+$893,036,000 |
Source: Explanatory
Memorandum, Education Legislation Amendment (Startup Year and Other
Measures) Bill 2023, 3.
Schedule 3
The Explanatory
Memorandum states that the addition of Avondale University as a provider
under HESA does not have any financial implications as it will be ‘accommodated
within existing program allocations’ (p. 3).
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.[2]
Parliamentary Joint Committee on Human Rights
At the time of writing this Bills Digest, the
Parliamentary Joint Committee on Human Rights has not commented on the Bill.
Key issues
and provisions
Schedule 1 of the Bill establishes SY-HELP as new type
of HELP loan for students undertaking accelerator programs at Australian universities
and university colleges. This section primarily focusses on the provisions in
the Bill introduced under item 25, which sets out the operation of SY‑HELP
assistance. A number of the Bill’s provisions are consequential amendments to
incorporate the new loan into HESA and are not discussed here.
Establishing
SY-HELP assistance
Chapter 3 of HESA provides for 4 kinds of
assistance to students: HECS-HELP, FEE-HELP, OS-HELP and SA-HELP, and sets out
provisions for their operation. Item 25 of the Bill inserts proposed
Part 3-7—SY-HELP assistance at the end of Chapter 3, to provide for SY-HELP
as a fifth kind of assistance. New Part 3-7 sets out the operation of SY-HELP,
and includes provisions for establishing SY-HELP assistance, SY-HELP
Guidelines, eligibility requirements for SY-HELP assistance, how SY-HELP
assistance amounts are worked out, how SY-HELP debts are incurred and paid, and
conditions for the reversal of SY-HELP assistance.
SY-HELP
Guidelines
As noted above, a number of the details for the Startup
Year program are to be included in guidelines. Existing section 238-10 of the HESA
empowers the Minister to make Guidelines by legislative instrument for matters
set out in table form in that section. Item 65 of Schedule 1 to the Bill
amends the table to include a reference to SY-HELP guidelines.
Proposed section 128A-5 states that the provisions
in Part 3-7 may indicate when a particular matter will be dealt with by the SY-HELP
Guidelines. As outlined in the Explanatory
Memorandum, and consistent with other types of HELP assistance, matters to
be further specified in the SY-HELP Guidelines will include:
- how
students are to be selected[3]
- a registration
process for eligible accelerator program courses
- limits
for SY-HELP places and mechanisms for how places will be allocated
- core
capabilities the courses are expected to provide (pp. 1–2).
Entitlement
to SY-HELP assistance
Under proposed section 128B-1, a student is
entitled to SY-HELP assistance for an accelerator program course in which they
are enrolled if they meet citizenship or residency requirements under proposed
section 128B-30, and if they:
- are
in the final year of undergraduate study: proposed subparagraph 128B-1(1)(b)(i)
- are
enrolled in a postgraduate course of study: proposed subparagraph
128B-1(1)(b)(ii) or
- were
awarded a qualification at Bachelor Degree level or above (level 7, 8, 9, or 10
in the Australian
Qualifications Framework), no more than 3 years before starting the course:
proposed subparagraph 128B-1(1)(b)(iii).
Proposed paragraph 128B-1(1)(c)
limits students to 2 amounts of SY-HELP assistance in total (disregarding any
amounts of assistance reversed under proposed Division 128E).
The citizenship and residency requirements for SY-HELP are
the same as those for HECS-HELP and other loans—for instance, proposed
section 128B-30 is in near equivalent terms to existing section 90-5 which
sets out the citizenship and residency requirements under Part 3-2 of HESA in
relation to HECS-HELP assistance.
Other administrative aspects of eligibility are specified
under proposed section 128B-1(1). However, entitlement to SY-HELP is
subject to certain rules about when there will be limited entitlement or no
entitlement.
Proposed section 128B-5 of HESA provides that
if a student is undertaking two or more accelerator program courses at the same
time, the student is limited to SY-HELP for only one of those courses. Proposed
subsection 128B-5(2) allows the student to elect, in writing, the course for
which SY-HELP would apply. Where the student enrolled in the courses at different
times, SY‑HELP applies to the course in which the student first enrolled.
Proposed sections 128B-10, 128B-15, and 128B-20 of HESA
provide that a student has no entitlement to SY-HELP for an accelerator program
course if they are determined to be ‘not a genuine student’, if they are undertaking
an unreasonable study load, or for an accelerator course undertaken at an
overseas campus respectively.
What is an
accelerator program course?
One of the concerns raised by stakeholders in their
consultation responses was a lack of clarity around the aims of the Startup
Year program, with a number of submissions arguing for the need for the program
to have an educational focus, rather than aiming to create new startup firms
(see for example, Universities Australia’s submission,
p. 6).
The educational and skills development aspect of accelerator
program courses, as well as other features and requirements, are set out in proposed
section 128B-25. Under proposed subsection 128B-25(1) an accelerator
program course is ‘a structured and integrated program of education and
mentoring’, designed to develop a person’s ‘skills, capabilities and
connections for the purposes of startup businesses’.
Such courses are required to lead to the award of a
qualification accredited by the higher education provider, have an EFTSL value
of at least 0.5 EFTSL and not more than one EFTSL, and meet other requirements
as set out in the SY-HELP Guidelines: proposed subsection 128C-25(2).[4]
Selecting
students to receive SY-HELP assistance
Media releases announcing
the Startup Year program stated that it would provide up to 2,000 SY‑HELP
loans each year, and would support under-represented cohorts. Proposed
section 128B‑35 of HESA provides for the SY-HELP Guidelines to
set out the principles and procedures that higher education providers must
follow in selecting people to receive SY-HELP assistance and requires decisions
made by higher education providers to be made in accordance with the SY-HELP
Guidelines. Proposed subsection 128B-35(3) enables SY-HELP Guidelines to
allocate the number of students higher education providers may select for
SY-HELP assistance, and how such allocations are determined. At the time of
writing this Bills Digest draft SY-HELP Guidelines were not available for
scrutiny. That being the case, there is a lack of detail about how higher
education providers will select the relevant students. However, item 4
of Schedule 1 to the Bill repeals and replaces subsection 19-35(5) of HESA
to require a higher education provider that receives a payment on account of
amounts of SY-HELP to have open, fair and transparent procedures that, in the
provider’s reasonable view, are based on merit for making decisions about:
- the
selection of persons to enrol in an accelerator program course
- the
selection of students for receipt of SY-HELP assistance in relation to that
course and
- the
treatment of students undertaking that accelerator program course.
Proposed subsection 19-35(6) replaces the repealed
subsection 19-35(5) and clarifies that higher education providers’ merit-based
decision making processes do not prevent them from taking into account educational
disadvantages a student has experienced.
Amount of SY-HELP
assistance
The amount of SY-HELP assistance which a student is
entitled to is the difference between the course fee and the sum of any upfront
payments a student makes for the course: proposed section 128C-1.[5]
Students can pay their contribution upfront rather than taking out a loan (see
also section 93-15 of HESA in relation to HECS-HELP). An upfront payment
is the full or partial payment of the accelerator program course fee (other
than the payment of SY-HELP assistance under proposed Part 3-7) made on or
before the census date for the course: proposed section 128C-5.
Maximum fee
Proposed section 128C-10 of HESA provides
for the maximum accelerator program course fee. For a course with an EFTSL
value of 1, fees must not exceed the maximum student contribution amount
specified in section 93-10 of HESA for a place in a unit of study in
Medicine, Dentistry or Veterinary Science for a non-grandfathered student (item
4 in the table). The Study
Assist website lists the 2023 funding clusters and their maximum student
contribution amounts. In 2023, the maximum student contribution amount per
EFTSL for Medicine, Dentistry or Veterinary Science (funding
cluster 4) is $11,800. As such, with students eligible for 2 amounts of SY-HELP
assistance in total, based on current rates, students could incur a SY-HELP
debt of up to $23,600.
The Explanatory
Memorandum states that SY-HELP loans will not be included in HELP loan
limit (p. 1). The HELP loan
limit is specified in existing section 128-20 of HESA. It imposes a
cap on the amount a student can borrow towards tuition fees. For 2023, the HELP
loan limit for most students is $113,028. There is a higher limit of $162,336
in 2023 for students studying medicine, dentistry and veterinary science
courses leading to initial registration, or eligible aviation courses.
Payment arrangements for SY-HELP are the same as for other
HELP loans (except OS-HELP) in that assistance amounts are paid to the provider
on behalf of the student: proposed section 128D-1.
Reversal of
SY-HELP assistance
Proposed Division 128E in Part 3-7 of HESA provides
for the reversal of loans in some circumstances. Circumstances include:
- unanticipated
personal circumstances causing the student to withdraw from the course: proposed
section 128E-5
- where
a tax file number has not been provided: proposed section 128E-20[6]
and
- where
no assessment has been made as to whether the person is academically suited: proposed
section 128E-35.
These essentially mirror the conditions for HECS-HELP recrediting
under Division 97 in Part 3-2 of HESA.
Division 206 of HESA deals with decisions that are
subject to review. Reviewable decisions relating to SY-HELP are inserted into
the table in existing section 206-1 by item 63. Reviewable decisions
include those relating to the student not being a genuine student (proposed table
item 2AAA) and that undertaking the accelerator program will impose an unreasonable
study load (proposed table item 2AAB).
Student
payments
Part 2 of Schedule 1 to the Bill adds SY-HELP and
accelerator program courses into social security legislation—the SS Act,
SS Admin Act and the SA Act—to enable students participating in
accelerator program courses who are entitled to SY-HELP assistance to potentially
qualify for student payments.
Part 2.11 of Chapter 2 of the SS Act sets out the qualifications
for Youth Allowance. The general rule, stated in section 540, is that a person
is qualified for a youth allowance in respect of a period if, amongst other
things, throughout the period the person is undertaking full-time study of a
type specified in section 541B.
Item 78 inserts proposed paragraph 541B(1)(ca)
into the SS Act so that a person who is undertaking an accelerator
program course or a combined course including an accelerator course, for which the
person is entitled to SY-HELP assistance is undertaking full time study for the
purposes of deciding whether the person qualifies for youth allowance. The Explanatory
Memorandum states that the intention of this provision is that a student
may only qualify for youth allowance while undertaking an accelerator course if
they are entitled to SY-HELP under HESA (p. 25). It further notes that:
If a student has received youth allowance on the basis of
being entitled to SY‑HELP assistance for an accelerator program course,
and then it is later determined under HESA that the student was not so
entitled, this may result in the student losing qualification for youth
allowance, and a debt may arise (p. 25).
Other provisions
Australian
Research Council
One of the objects of the ARC Act is to provide for
the funding of research programs.[7]
Schedule 2 to the Bill amends Division 1 of Part 7 of the ARC Act to specify
the annual funding caps for approved research programs. Section 48 of the ARC
Act lists years to which the Division applies. Item 1 in Schedule 2
to the Bill inserts proposed paragraph 48(2)(v) to add the financial
year starting on 1 July 2025 to the list. Items 2–4 amend the funding
amounts in paragraphs 49(w), (x) and (y), lifting the annual caps on funding to
reflect indexation for financial years starting on 1 July of 2022,
2023 and 2024 respectively. Item 5 inserts proposed paragraph 49(z)
to provide the funding cap for the financial year starting on 1 July 2025—being
$893,036,000.
Avondale
University
Schedule 3 to the Bill adds Avondale University to
the list of Table B providers in existing section 16-20 of HESA. Item
2 specifies that the amendment has effect from 1 January 2024 in
relation to the making of grants.
According to the Bills
Digest prepared for the Higher Education Support Amendment (2021 Measures
No. 1) Bill 2021[8]
in which this measure was previously contained:
Listing in Table B does not extend Avondale’s access to all
higher education funding programs— that is limited to Table A providers.
However, certain key funding, especially certain Other Grants such as Research Block Grants
would become available to Avondale as a consequence of this change (p. 4).