House of Representatives

Replacement Explanatory Memorandum

(Circulated by authority of the Minister for Education, Training and Youth Affairs, the Honourable Dr David Kemp MP)

Outline

The Higher Education Funding Act 1988 (HEFA) 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 make provision for the repayment of monies lent by the Commonwealth to students under those schemes.

The Bill amends HEFA to:

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vary the maximum amount of financial assistance payable to higher education institutions for the funding year 2001 to reflect annual adjustment for price movements in respect of operating grants, superannuation expenditure, open learning organisations, teaching hospitals, special capital projects and certain grants;

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set the maximum amount of financial assistance payable to higher education institutions for the funding year 2002 for the first time in respect of operating grants, superannuation expenditure, open learning organisations, teaching hospitals, special capital projects and certain grants;

•

vary the maximum funding amounts for university operating grants for funding years 1999, 2000 and 2001 to reflect revised Higher Education Contribution Scheme estimates;

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vary the maximum funding amounts for certain grants (under s.23C) for funding years 1999, 2000, 2001 and 2002 to reflect the re-allocation of unspent funds from 1999;

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provide additional funding of $1.446m in 2001 and $2.891m in 2002 for 100 new university places a year for medical students on bonded scholarships as announced in the 2000-01 Budget;

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provide additional funding of $3.9m in each of 2001 and 2002 for the Research Infrastructure Equipment and Facilities Scheme as announced in the 2000-01 Budget;

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provide additional funding of $12.81m in 2002 for the Strategic Partnerships with Industry - Research and Training Scheme as announced in the 2000-01 Budget;

•

reflect the name change of Batchelor College to the Batchelor Institute of Indigenous Tertiary Education;

•

amend the definition of year to which this Act applies.

Financial impact

The Bill:

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provides base funding of $4036.43m in 2002;

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makes technical adjustments on the basis of revised HECS estimates;

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re-allocates $17.589m from 1999 to subsequent funding years;

•

provides additional funding of $74.314m in 2001.

Notes on clauses

Clause 1 - Short Title

Clause 1 provides for this Act to be cited as the Higher Education Funding Amendment Act (No. 1) 2000

Clause 2 - Commencement

Clause 2 provides for this Act to commence on the day on which it receives the Royal Assent.

Clause 3 - Schedule(s)

Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in the applicable Schedule.

Schedule 1

Part 1 - Aggregate funding levels

Items 1-4

Section 17 sets the maximum aggregate funding levels for operating grants that may be paid to higher education institutions under sections 15 and 16 of the Act. Items 1-3 amend subsections 17(k), (l), and (m), respectively, to vary the maximum aggregate funding level for 1999, 2000 and 2001 to reflect revised Higher Education Contribution Scheme (HECS) estimates. The amendment of subsection 17 (m) also reflects supplementation for price movements. Item 4 inserts new subsection 17(n) to set the maximum aggregate funding level for 2002. The amendments include funding for additional medical student places.

Items 5 and 6

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 5 amends paragraph 20(3)(m) to increase the maximum aggregate grant amount for the year 2001 to reflect price movements. Item 6 inserts a provision to set the maximum aggregate grant amount for 2002.

Items 7 and 8

Subsection 22A(5) provides for the total amounts that may be approved as expenditure by way of grants to open learning organisations. Item 7 amends paragraph 22A(5)(i) to increase the maximum aggregate grant amount for 2001 to reflect supplementation for price movements. Item 8 sets the total amount that may be approved for 2002.

Items 9-12

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. Items 9, 10, 11, and 12 amend paragraphs 23C(2)(g), (h), and (i), and insert paragraph 23C(2)(j), respectively, to vary the funding limits for 1999, 2000, 2001 and 2002 to reflect the re-allocation of unspent funds from 1999; to increase the funding limit for the year 2001 to reflect supplementation for price movements, and to insert the funding limit for the year 2002. The funding for 2001 and 2002 increases the level of funding for the RIEF scheme from 2001. The funding for 2002 includes an increase in ongoing funding levels for the Strategic Partnerships with Industry-Research and Training Scheme.

Items 13 and 14

Section 24 of the Act provides grants in respect of teaching hospitals. Item 13 amends paragraph 24(3)(m) to increase the maximum aggregate grant amount for 2001 to reflect supplementation for price movements. Item 14 inserts a provision to set the maximum aggregate grant amount for 2002.

Items 15 and 16

Section 27A of the Act provides for grants to institutions for special capital projects. Item 15 amends paragraph 27A(6)(h) to increase the maximum aggregate grant amount for 2001 to reflect supplementation for price movements. Item 16 inserts a provision to set the maximum aggregate grant amount for 2002.

Items 17 and 18

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 17 amends paragraph 27D(2)(d) to increase the maximum aggregate grant amount for 2001 to reflect supplementation for price movements. Item 18 inserts a provision to set the maximum aggregate funding level for 2002.

Part 2 - Other amendments

Item 19

Section 3 includes a definition of the phrase year to which this Chapter applies. Paragraph (b) of this definition is amended annually to insert the next calendar year in the definition. Item 19 amends the paragraph by removing specified years after 1989 from the paragraph and referring the definition to the funding years in section 17.

Item 20

Substitutes Batchelor Institute of Indigenous Tertiary Education for Batchelor College in Table A of subsection 4(1).