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1997
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
HIGHER
EDUCATION FUNDING AMENDMENT BILL (No.1) 1997
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Employment, Education, Training and Youth
Affairs, Senator the Hon Amanda Vanstone)
88519 Cat. No. 96
7729 1 ISBN 0644 502703
HIGHER EDUCATION FUNDING AMENDMENT BILL
(No.1) 1997
OUTLINE
The Higher Education Funding Act 1988
The Higher
Education Funding Act 1988 (the Act) makes provision for grants of financial
assistance to higher education institutions and other bodies for higher
education purposes, establishes the Higher Education Contribution Scheme (HECS)
and the Open Learning Deferred Payment Scheme (OLDPS) and makes provision for
the repayment of monies lent by the Commonwealth to students under those
Schemes.
The Higher Education Funding Amendment Bill (No.1)
1997
The Higher Education Funding Amendment Bill (No.1) 1997 amends
the Act to:
• vary the maximum aggregate
amount of financial assistance which may be granted to higher education
institutions for superannuation expenditure for the 1998 funding
year;
• vary the maximum aggregate amount of
financial assistance which may be granted to open learning organisations for the
1998 funding year;
• vary the limit on total
funds available to higher education institutions for certain grants under the
Act in respect of the 1998 funding
year;
• vary the maximum aggregate amount of
financial assistance which may be granted to higher education institutions in
respect of their teaching hospitals for the 1998 funding
year;
• vary the maximum aggregate amount
which may be granted to higher education institutions for approved special
capital projects for the 1998 funding
year;
• introduce the Rationalisation and
Restructuring Programme to allow the Minister to provide grants to higher
education institutions to assist with the rationalisation and restructuring
activities of the institution;
• introduce a
25 per cent discount for partial up-front payments of $500 or more under the
HECS; and
• streamline the arrangements for
students applying for remission of HECS debts.
FINANCIAL IMPACT
The Bill provides an increase of $9.658m in 1998 on the current legislated
amounts.
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 sets out the short title
of the proposed Act.
Clause 2 - Commencement
Clause
2 provides for the commencement of the proposed Act on the day it receives
the Royal Assent.
Clause 3 - Schedule(s)
Clause 3
amends the Higher Education Funding Act 1988 in accordance with the items
in the Schedules to the Bill.
SCHEDULE 1 - AMENDMENT OF THE HIGHER EDUCATION FUNDING ACT 1988
Part 1 - Amendments relating to grants to
institutions
Higher Education Funding Act
1988
The Higher Education Funding Act 1988 provides for
the funding of certain institutions of higher education and associated bodies,
and for related purposes.
Item 1 - Paragraph 20(3)(j)
Section 20 provides for grants to higher education institutions for
superannuation expenses for staff whose salaries are funded from grants provided
under the Act. Item 1 amends the maximum aggregate grant amount for
1998. The variation is required to reflect supplementation for price
movements.
Item 2 - Paragraph 22A(5)(f)
Paragraph 22A(5)
of the Act provides for the total amounts which may be approved as expenditure
by way of grants to open learning organisations. Item 2 amends
subsection 22A(5) to vary the amount for 1998 to reflect supplementation for
price movements.
Item 3 - Paragraph 23C(2)(e)
Subsection
23C(2) of the Act provides for a limit on total funds available for certain
grants for specified years. Item 3 amends subsection 23C(2) to vary the
amount for 1998 to reflect supplementation for price movements.
Item
4 - Paragraphs 24(3)(j)
Section 24 of the Act provides for grants in
respect of teaching hospitals. Item 4 amends the maximum aggregate
amount which may be granted to institutions for 1998 to reflect supplementation
for price movements.
Item 5 - Paragraphs 27A(6)(e)
Section
27A of the Act provides for grants for special capital projects. Item 5
amends subsection 27A(6) to vary the maximum aggregate amount which may be
granted to institutions for 1998 to reflect supplementation for price
movements.
Part 2 - Amendments relating to restructuring and
rationalisation programmes
Item 6 - After section 18
Item 6 inserts a provision to give effect to the
Restructuring and Rationalisation Programme. This provision will enable the
Minister to make special grants to higher education institutions for
rationalisation and restructuring activities. The item will allow conditions to
be applied to grants under the Programme and requires grants to be made in
accordance with guidelines issued by the Minister. The guidelines will set out
the criteria and procedures to be used in assessing which rationalisation and
restructuring activities at institutions should be supported.
Item 7 -
Paragraph 110(c)
Item 7 has the effect of providing for the
guidelines for the Restructuring and Rationalisation Programme issued by the
Minister to be disallowable instruments.
Part 3 - Amendments to extend
the circumstances in which students receive a 25% discount on course
contributions
Item 8 - Subparagraph
18(1)(c)(ii)
Item 8 is a consequential amendment required as a
result of introducing a measure to provide students with a 25% discount for
partial up-front payments of their Higher Education Contribution Scheme (HECS)
contribution, if the payment made is $500 or more, as outlined in Item
12.
Item 9 - Subparagraph 41(1)(b)(i)
Item 9 is
a consequential amendment required as a result of Item 12.
Item
10 - Subparagraph 41(1)(b)(i)
Item 10 is a consequential
amendment required as a result of Item 12.
Item 11 - After
paragraph 41(1)(b)
Item 11 is a consequential amendment
required as a result of Item 12.
Item 12 - After subsection
41(1)
Item 12 adds a new subsection 41(1A) to provide students
with a 25% discount for partial up-front payment of their HECS contribution, if
the payment made is $500 or more. The item extends the present circumstances in
which students will receive a 25% discount on their HECS contribution.
Presently, students receive a 25% discount if they choose to pay their
full HECS contribution for a semester before the census date (an up-front
payment). Currently students may make partial up-front payments, but do not
receive a discount for doing so.
Section 41 sets out the
requirements for a student enrolling for or undertaking a course. Item 12
provides that a student, who chooses to make a partial up-front payment and
to receive the 25% discount, must make the payment to the institution prior to
the census date for a semester. It also requires the student to request that
the Commonwealth lend that amount of the deferred payment to the institution on
the student’s behalf, making the student liable to make repayments on the
outstanding amount of the student’s HECS liability.
The item also
sets out the formula to be used in calculating the 25% discount for partial
up-front HECS payments, and has the effect of providing that any resulting cents
shall be rounded to the nearest dollar.
Item 13 - Paragraph
41A(1)(a)
Item 13 is a consequential amendment required as a
result of Item 12.
Item 14 - Paragraph
41B(1)(a)
Item 14 is a consequential amendment required as a
result of Item 12.
Item 15 - Subparagraph
54(1)(d)(ii)
Item 15 is a consequential amendment required as
a result of Item 12.
Item 16 - Section 56
Item
16 is a consequential amendment required as a result of Item
12.
Item 17 - At the end of Division 2 of Part
4.2
Item 17 inserts new sections 56A and 56B to ensure that an
institution will refund to the student any up-front partial HECS payment made,
if the student’s enrolment is subsequently cancelled as a result of
failure to provide the institution with a tax file number or failure to obtain a
tax file number.
Item 18 - After subsection 57(3)
Item
18 inserts a new subsection setting out the obligation on the Commonwealth
to discharge a student’s liability to pay a contribution to an institution
in respect of a semester (their HECS liability), after a student makes a partial
up-front payment as described in Item 12. This item has the effect of
providing that the Commonwealth must lend to the student the remaining component
of the student’s HECS liability and to pay an amount to the institution in
discharge of that liability as well as the amount of the discount provided to
the student. This item sets out the formula for calculating the amount that
shall be paid to the institution on the student’s behalf, and has the
effect of providing that any cents shall be rounded to the nearest
dollar.
Item 19 - Application
Item 19 specifies that
the 25% discount for partial up-front HECS payments shall apply to payments made
for a course of study in a semester that commences on or after 1 January
1998.
Part 4 - Amendments relating to remission of student
debt
Item 20 - Subsections 106L(1), (2) and (3)
Item
20 sets out streamlined arrangements applying to remission of a student debt
under the HECS or the Open Learning Deferred Payment Scheme (OLDPS). The item
removes the current two-tier application process and includes special
circumstances in which the Secretary to the Department may remit a
student’s debt. A person with a student debt will now have a set twelve
month period from the date of withdrawal from studies in which to apply for
remission.
New subsection 106L(3A) allows the Secretary to the Department
to issue guidelines in relation to the Secretary’s discretion to remit
either a HEC semester debt or an OL study period debt (a student debt) and where
such guidelines are issued, provides that the Secretary’s decision must be
made in accordance with those guidelines.
New subsection 106L(3B)
specifies that a person’s withdrawal day can be either the date of
withdrawal from a HECS semester or OLDPS study period, or the last day of the
semester or study period for a person who did not withdraw.
Item 21 -
Paragraph 110(c)
Item 21 has the effect of providing for the
guidelines made by the Secretary to the Department under subsection 106L(3A) to
be disallowable instruments.
Item 22 - Application
Item
22 has the effect of providing that the new, streamlined arrangements for
remission of debts under HECS or OLDPS will apply to units of study commenced on
or after 1 January 1998.