House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Education and Youth, the Hon Alan Tudge MP)

OUTLINE

Schedule 1 of the Education Legisation Amendment (2021 Measures No. 1) Bill 2021 (the Bill) amends the Australian Research Council Act 2001 (the ARC Act) to apply current indexation rates to existing appropriation amounts and insert a new funding cap for the financial year commencing 1 July 2023.

The Bill supports the financial assistance for approved research programs administered by the Australian Research Council (ARC). These programs fund the high-quality research needed to grow knowledge and innovation for the benefit of the Australian community.

The Bill will amend the ARC Act to enable continued financial assistance to be provided for approved research programs administered by the ARC. The ARC supports the highest quality fundamental and applied research and research training through funding schemes under the National Competitive Grants Programs (NCGP). NCGP comprises of two programs-Discovery and Linkage. Funding awarded under the NCGP:

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is allocated on the basis of a competitive peer review process involving national and international assessors; and

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supports research across all disciplines (with the exception of health and medical research).

The ARC Act provides a maximum cap for financial assistance for approved research programs.

The amendments are essential as the ARC Act is the legislative basis that supports the financial operations of the ARC research programs through special appropriation mechanisms which must occur each financial year. Specifically the Bill will alter three existing financial year funding figures for current indexation (for the financial years starting on 1 July 2020, 1 July 2021 and 1 July 2022) and extend the forward estimate period to include the financial year starting on 1 July 2023, resulting in an additional appropriation of $855.0 million for the period of 1 July 2020 to 30 June 2024.

The amendments only impact the administered special appropriation; they do not alter the substance of the ARC Act.

Schedule 2 of the Bill amends the Higher Education Support Act 2003 (HESA) to give effect to a 2020-21 MYEFO measure to re-categorise the University of Notre Dame Australia (UNDA) as a Table A provider from 2021.

The amendments will ensure all non-medical domestic undergraduate students at UNDA have access to a Commonwealth supported place, including future students and current full-fee paying students (provided they meet all other eligibility criteria in HESA), and will ensure that UNDA is eligible to receive Commonwealth contribution amounts under Part 2-2 of HESA in relation to these students.

The amendments will also give UNDA access to new funding arrangements provided to Table A providers under the Job-ready Graduates reforms. This includes funding from the National Priorities Industry Linkage Fund to support enhanced engagement with universities and industry, and demand-driven funding to support all Aboriginal and Torres Strait Islander students from regional and remote communities to go to university.

Schedule 2 of the Bill also makes a minor amendment to subsection 30-10(1) of HESA to correct a typographical error.

FINANCIAL IMPACT STATEMENT

Schedule 1 of the Bill updates the special appropriation funding cap administered by the ARC to include indexation adjustments and an additional forward estimate for existing schemes within the NCGP. Indexation adjustments and adding the next year of the forward estimate are part of the standard budget process and are administrative in nature.

The Bill will alter three existing financial year funding figures for indexation and extend the forward estimate period to include the financial year starting on 1 July 2023, resulting in an additional appropriation of $855.0 million for the period of 1 July 2020 to 30 June 2024.

Schedule 2 of the Bill gives effect to a 2020-21 MYEFO measure which will cost $27.2 million over four years from 2020-21 and $133.3 million over ten years to 2029-30.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

The Education Legislation Amendment (2021 Measures No. 1) Bill 2021 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

Schedule 1 of the Bill amends the Australian Research Council Act 2001 (the ARC Act) applying current indexation rates to existing appropriation amounts and inserting a new funding cap for the financial year commencing 1 July 2023.

The amendments in Schedule 1 seek to increase the general financial support available to the research programs that the ARC administers.

The amendments only impact on administered special appropriations; they do not alter the substance of the ARC Act.

Schedule 2 of the Bill amends the Higher Education Support Act 2003 (HESA) to give effect to a 2020-21 MYEFO measure to re-categorise the University of Notre Dame Australia (UNDA) as a Table A provider from 2021.

The amendments will ensure all non-medical domestic undergraduate students at UNDA have access to a Commonwealth supported place, including future students and current full-fee paying students (provided they meet all other eligibility criteria in HESA), and will ensure that UNDA is eligible to receive Commonwealth contribution amounts under Part 2-2 of HESA in relation to these students.

The amendments will also give UNDA access to new funding arrangements provided to Table A providers under the Job-ready Graduates reforms. This includes funding from the National Priorities Industry Linkage Fund to support enhanced engagement with universities and industry, and demand-driven funding to support all Aboriginal and Torres Strait Islander students from regional and remote communities to go to university.

Schedule 2 of the Bill also makes a minor amendment to subsection 30-10(1) of HESA to correct a typographical error.

Analysis of human rights implications

Schedule 1 of the Bill amends the ARC Act by applying indexation against appropriations for existing ARC research programs and including an additional figure for the last year of the forward Budget estimates (for the financial year starting on 1 July 2023). As a result, Schedule 1 does not have any human rights implications.

Right to education

Schedule 2 of the Bill engages the right to education contained in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). Article 13(2)(c) of the ICESCR provides that 'higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education.'

The amendments improve access to education for non-medical domestic undergraduate students at UNDA, by making all of these students eligible to be Commonwealth supported students (provided they also meet the other eligibility criteria in HESA). This means these students will pay lower tuition fees based on the maximum student contribution amounts set out in HESA. As such, the Bill assists these students to access higher education by lowering the price of their courses, reducing barriers to their study and ensuring they have less debt when they graduate.

Conclusion

The Bill is compatible with human rights as it supports the right to education.

Notes on Clauses

Clause 1 - Short title

This clause provides for the Act to be the Education Legislation Amendment (2021 Measures No. 1) Act 2021.

Clause 2 - Commencement

The table in subclause 2(1) sets out when the Act will commence. The table provides that the whole of this Act will commence the day after the Act receives the Royal Assent.

Subclause 2(2) provides that information in column 3 of the table at subclause 2(1) is not part of the Act and information may be inserted into column 3 or information in it may be edited in any published version of the Act.

Clause 3 - Schedules

This clause provides that any legislation that is specified in a schedule is amended or repealed as set out in the applicable items in the schedule and that any other item in a schedule has effect according to its terms.

Schedule 1 - Research amendments

Summary

This Schedule amends the Australian Research Council Act 2001 (the ARC Act) to apply current indexation rates to existing appropriation amounts and insert a new funding cap for the financial year commencing on 1 July 2023.

Detailed explanation

Australian Research Council Act 2001

Item 1 - At the end of subsection 48(2)

Division 1 of Part 7 of the ARC Act provides for financial assistance for approved research programs. Section 48 sets out the years to which this Division applies.

Item 1 inserts a new paragraph into subsection 48(2), the effect of which is to provide that Division 1 of Part 7 also applies to the financial year starting on 1 July 2023.

Items 2 to 5 - Section 49

Section 49 of the ARC Act specifies the annual funding caps for the purposes of Division 1 of Part 7 (financial assistance for approved research programs).

Currently, paragraphs 49(u) to (w) provide that the annual funding caps for the financial years starting on 1 July 2020, 1 July 2021 and 1 July 2022 is $786,212,000.

Item 2 increases the annual funding cap for the financial year starting on 1 July 2020 to $803,409,000.

Item 3 increases the annual funding cap for the financial year starting on 1 July 2021 to $804,411,000.

Item 4 increases the annual funding cap for the financial year starting on 1 July 2022 to $804,442,000.

Item 5 inserts a new paragraph (x) into section 49 to specify that, for the financial year starting on 1 July 2023, the annual funding cap is $801,410,000.

Schedule 2 - Education amendments

Summary

This Schedule amends the Higher Education Support Act 2003 (HESA) to give effect to a 2020-21 MYEFO measure to re-categorise the University of Notre Dame Australia (UNDA) as a Table A provider from 2021.

The amendments will ensure all non-medical domestic undergraduate students at UNDA have access to a Commonwealth supported place, including future students and current full-fee paying students (provided they meet all other eligibility criteria in HESA), and will ensure that UNDA is eligible to receive Commonwealth contribution amounts under Part 2-2 of HESA in relation to these students.

The amendments will also give UNDA access to new funding arrangements provided to Table A providers under the Job-ready Graduates reforms. This includes funding from the National Priorities Industry Linkage Fund to support enhanced engagement with universities and industry, and demand-driven funding to support all Aboriginal and Torres Strait Islander students from regional and remote communities to go to university.

Schedule 2 of the Bill also makes a minor amendment to HESA to correct a typographical error.

Detailed explanation

Higher Education Support Act 2003

Item 1 - Subsection 16-15(1) (table)

This item adds the University of Notre Dame Australia to the list of Table A providers in subsection 16-15(1) of HESA.

Item 2 - Subsection 16-20(1) (table)

This item removes the University of Notre Dame Australia from the list of Table B providers in subsection 16-20(1) of HESA.

Item 3 - Subsection 16-20(1) (table)

This item replaces the phrase "Commonwealth support places" with "Commonwealth supported places" in subsection 30-10(1) of HESA to correct a typographical error.

Item 4 - Application, saving and transitional provisions

This item sets out the application, saving and transitional provisions that will apply to the re-categorisation of UNDA as a Table A provider under HESA.

Subitem (1) provides that Parts 2-2 and 2-4 of HESA apply on and after the commencement of item 4 of Schedule 2 to UNDA, in relation to the calendar year 2021, as if it continued to be a Table B provider.

This is a transitional arrangement and means that UNDA will not be treated as a Table A provider for the purposes of receiving Commonwealth Grant Scheme (CGS) funding under Part 2-2 of HESA until 2022. This approach is necessary to assist in the administration of UNDA's CGS funding agreement, noting that the amendments in items 1 and 2 of Schedule 2 will commence partway through the 2021 grant year.

However, to give effect to the MYEFO decision to transition UNDA's eligible students to Commonwealth supported places from Semester 1 2021, the Government intends to amend the Commonwealth Grant Scheme Guidelines 2020 in early 2021 to ensure that UNDA will receive CGS funding as a Table B provider for all of its non-medical domestic undergraduate students in 2021, and that these students will be able to access Commonwealth supported places in 2021. This means that UNDA will receive the same amount of CGS funding, as a Table B provider, for its students in 2021 that it would have received as a Table A provider.

Subitem (1) also ensures that the validity of any grants made to UNDA in its capacity as a Table B provider under Part 2-4 (Commonwealth scholarships) of HESA in 2021 is not affected by the changes made by items 1 and 2 of Schedule 2.

Subitem (2) provides that the amendments made by Schedule 2 do not affect the validity of a grant to UNDA approved under Part 2-2A or 2-3 of HESA before the commencement of item 4 of Schedule 2.

This subitem ensures that the validity of any grants made to UNDA, in its capacity as a Table B provider, under Part 2-2A (Indigenous student assistance grants) and Part 2-3 (Other grants) of HESA prior to commencement of the Bill is not affected by the re-categorisation of UNDA as a Table A provider.

Subitem (3) provides that, if, immediately before the commencement of item 4 of Schedule 2, UNDA was providing a unit of study, and, at any time, there is a FEE-HELP debt under subsection 137-10(1) of HESA in relation to that unit, then:

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if the census date for the unit of study was before the commencement of item 4 of Schedule 2-paragraph 137-10(2)(a) of HESA applies in relation to the debt; and

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if the census date for the unit of study is on or after the commencement of item 4 of Schedule 2-paragraph 137-10(2)(b) or (c) of HESA apply in relation to the debt (as the case requires).

Subsection 137-10(2) of HESA sets out the circumstances in which the FEE-HELP loan fee applies to students receiving FEE-HELP assistance under HESA. Under paragraph 137-10(2)(a), students receiving FEE-HELP assistance for a unit of study provided by a Table B provider do not pay the loan fee (which is currently zero but will be 20 per cent of the student's loan from 1 July 2021). Under paragraph 137-10(2)(b), undergraduate students receiving FEE-HELP assistance for a unit of study not provided by a Table B provider will pay the loan fee of 20 per cent from 1 July 2021. Under paragraph 137-10(2)(c), all other students not covered by paragraphs (a) and (b) (e.g. postgraduate students receiving FEE-HELP assistance) do not pay the loan fee.

The purpose of subitem 3 is to clarify that paragraph 137-10(2)(a) will continue to apply to units of study that UNDA was providing prior to commencement of item 4 of Schedule 2, but have not been completed prior to commencement, as long as the census dates for these units are before that commencement. This means that students studying these units will not have to pay the FEE-HELP loan fee.

For units of study that UNDA was providing prior to commencement of item 4 of Schedule 2 that have not been completed and have census dates after that commencement, paragraphs 137-10(2)(b) or (c) will apply to those units. This means that undergraduate students receiving FEE-HELP assistance studying these units will pay the FEE-HELP loan fee of 20 per cent from 1 July 2021, but all other students (e.g. postgraduate students at UNDA receiving FEE-HELP assistance) will not pay the loan fee.