Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Schedule 1 - Amendment of the Higher Education Funding Act 1988
Part 1 - Variation of financial assistance
Since the introduction of the Higher Education Contribution Scheme (HECS), funding for the operating purposes and limited operating purposes of higher education institutions has come from a combination of HECS liabilities and grants approved under sections 15 and 16 of the Act. Section 17 sets the maximum aggregate funding levels for operating grants that may be paid to institutions under sections 15 and 16 while Part 4.3 of the Act established the Higher Education (HECS) Reserve and provides for the application of money in the Account.
Each year the operating needs of institutions are estimated and funded by a combination of estimated HECS liabilities during the year and aggregate grants funded within the maximum amount provided for in section 17 for that year. Actual HECS liabilities for a year are not available until early in the subsequent year after which an adjustment is made to the section 17 funding amount for the previous year to correctly reflect the relative contribution of HECS liabilities to the funding needs of institutions.
Item 1 amends section 17 to vary the maximum aggregate funding level for 2001, 2002 and 2003 to reflect revised Higher Education Contribution Scheme (HECS) liabilities and estimated liabilities, supplementation consistent with indexation arrangements, transfers of funding to the Australian Research Council Act 2001 (for 2003 and 2004) and the National Health and Medical Research Council (NHMRC) Budget appropriation (for 2002, 2003 and 2004) to permit the Institute of Advanced Studies at the Australian National University to access the research schemes of the Australian Research Council and the NHMRC. The maximum aggregate funding level for the year 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
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 2 amends subsection 20(3) to vary the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Subsection 22A(5) provides for the total amounts which may be approved as expenditure by way of grants to open learning organisations. Item 3 amends subsection 22A(5) to vary the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Subsection 23C(2) of the Act limits the total funds available for grants that may be approved under sections 21, 21B, 22, 23, 23A and 23B of the Act for specified years. Item 4 amends subsection 23C(2) to vary the funding limits for 2003 and 2004 to reflect additional funding for the establishment of a Graduate Diploma in Environment and Planning at the University of Tasmania and six associated scholarships as announced in the 2002-03 Budget and to reflect supplementation consistent with indexation arrangements. The funding limit for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Section 24 of the Act provides grants in respect of teaching hospitals. Item 5 amends subsection 24(3) to increase the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Section 27A of the Act provides for grants to institutions for special capital projects. Item 6 amends subsection 27A(6) to increase the maximum aggregate grant amount for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate grant amount for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Section 27D of the Act allows the Minister to determine an amount to be available for expenditure by the Commonwealth on the international marketing and promotion of Australian education and training services. Item 7 amends subsection 27D(2) to increase the maximum aggregate funding level for 2003 and 2004 to reflect supplementation consistent with indexation arrangements. The maximum aggregate funding level for 2004 is to be inserted by the Higher Education Legislation Amendment Act (No. 2) 2002 .
Part 2 - Post-graduate education loan scheme
This Part makes provision for post-graduate students enrolled in courses at certain educational institutions which are not funded under the Higher Education Funding Act 1988 to be eligible for loans under Chapter 4A. These eligible unfunded institutions are Bond University, Melbourne College of Divinity, Christian Heritage College and Tabor College (South Australia).
Amend the definitions of appropriate officer , eligible post-graduate student , eligible post-graduate course of study , institution , and student in subsection 98A(1) to reflect the extension of the post-graduate education loan scheme to the eligible unfunded institutions (Bond University, Melbourne College of Divinity, Christian Heritage College and Tabor College (South Australia)). Item 11 inserts a definition of eligible unfunded institution in subsection 98A(1).
Has the effect of providing that only students who undertake an eligible post-graduate course of study at an eligible unfunded institution on or after 1 January 2003 are eligible for a loan under the post-graduate education loan scheme.
Inserts a new subsection 98A(3A) to modify the application of the definition of census date in subsection 34(1) as if a reference in that definition to institution were a reference to institution within the meaning of Chapter 4A to reflect the amendments made by this Part.
Inserts a new subsection 98AA in Chapter 4A. Subsection 98AA(1) inserts a table listing the four eligible unfunded institutions. Subsections 98AA(2) and (3) have the effect of providing that the Minister may make a declaration amending the table of eligible unfunded institutions in subsection 98AA(1) to remove an institution from the table but not to add an institution. Subsection 98AA(4) has the effect of providing that a declaration under subsection 98AA(2) repeals the affected part of the table in the Act. Subsection 98AA(5) has the effect of providing that, in deciding whether to make a declaration under subsection 98AA(2), the Minister may have regard to whether the institution has breached a requirement of Chapter 4A and such other matters (if any) the Minister considers relevant. This includes any information given to the Minister about the probity of the institution's governance arrangements and/or financial position.
Insert new paragraphs 98E(aa) and (aaa) and 98F(7)(aa) and (aaa) to reflect the extension of eligibility for loans under Chapter 4A to students at the unfunded institutions. The items modify the interpretation of references to institution and appropriate officer when used in relation to provisions in other parts of the Act dealing with the tax file numbers of students and notices by institutions.
Inserts a new subsection 98JA in Chapter 4A to provide that an eligible unfunded institution must provide information about the probity of the institution's governance arrangements and/or the institution's financial position as required by the Minister.
Amends paragraph 110(b) of the Act to make a determination made by the Minister under proposed subsection 98AA(2) a disallowable instrument.
Part 3 - Technical corrections
Corrects a drafting error in paragraph 23(1C)(b) of the Act.
Validates any declaration which may have been made under paragraph 23(1C)(b) containing a technical defect as a consequence of the error corrected by Item 22.
Insert new paragraphs 98Y(aa) and 98Z(7)(aa) in Chapter 4B of the Act (which provides for the Bridging for overseas-trained professionals loan scheme) to reflect the amendments made by Part 2 of this Schedule. The items modify the interpretation of references to institution when used in relation to provisions in other parts of the Act dealing with the tax file numbers of students and notices by institutions.