House of Representatives

Explanatory Memorandum

Circulated by authority of the Minister for Education the Honourable Julia Gillard MP

OUTLINE

The Bill will amend the Higher Education Support Act 2003 (HESA) to revise the maximum funding amounts in:

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section 30-5 for the Commonwealth Grant Scheme;

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section 41-45 for Other Grants; and

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section 46-40 for Commonwealth Scholarships

to reflect supplementation for indexation increases, Budget decisions and other technical adjustments for the years 2009 to 2012 and add maximum grant amounts for the year 2012.

These amendments provide for increased funding for the following measures announced in the 2008-2009 Budget:

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for additional Commonwealth supported places in early childhood education and nursing;

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to compensate higher education providers for the reduction in the maximum annual student contribution amount for certain students undertaking mathematics, statistics and science units of study;

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for additional Commonwealth supported places and transitional assistance for the phasing out of full fee paying domestic undergraduate places at Table A providers;

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for the expansion of Commonwealth scholarships including the doubling of the number of undergraduate scholarships from 44,000 to 88,000 by 2012 and the doubling of the total number of Australian Postgraduate Award (APA) holders to nearly 10,000 by 2012;

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for capital infrastructure, additional Commonwealth supported places and clinical outreach funding for the establishment of the James Cook University Dental School; and

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for capital infrastructure and additional Commonwealth supported places in medicine, nursing and education at the University of Notre Dame Australia.

Schedule 1 of the Bill will amend several sections of and include new provisions in HESA to implement the 2008-2009 Budget measure to provide for a reduction in compulsory Higher Education Loan Program (HELP) repayments and, in certain cases where repayments are not required, a reduction in HELP debt for eligible persons, in the form of a new HECS-HELP benefit. The detailed arrangements for the HECS-HELP benefit will be specified in HECS-HELP Benefit Guidelines to be made under HESA. People will apply to the Commissioner of Taxation for the HECS-HELP benefit in accordance with the guidelines. The Guidelines will implement the Budget measures to provide 'remissions' of HELP debts for certain mathematics and science graduates and early childhood education teachers.

The Bill will amend sections 30-10, 30-25 and 33-5 of HESA to provide for a transitional loading under the Commonwealth Grant Scheme to provide higher education providers with funding for the reduction in revenue due to the lower maximum student contribution amount for mathematics, statistics and science units of study. Transitional loading may also be provided to assist with the costs of replacing full fee paying places with Commonwealth supported places (over and above the funding for those places under the Commonwealth Grant Scheme).

The Bill will amend section 36-30 of HESA to provide that commencing undergraduate domestic students at public universities may not be enrolled on a full fee paying basis from 2009 with certain exceptions. It will become a condition of receiving a grant under the Commonwealth Grant Scheme for Table A providers that a provider may enrol an eligible person only as a Commonwealth supported student on or after 1 January 2009 except where:

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HESA already specifies that the person cannot be Commonwealth supported; or

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the person commenced with the provider the undergraduate course of study of which the unit forms a part before 1 January 2009. A person is taken to have commenced the undergraduate course of study before 1 January 2009 if they transfer to it on or after 1 January 2009 from a course at the same level with the same provider that they commenced before 1 January 2009 and have not completed the requirements of the course from which they have transferred; or

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the provider has made an offer to enrol the person in a fee paying place in a course of study to commence in 2008 and the person accepts that offer but, with the higher education provider's approval, does not commence the course until a later year; or

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the person commenced the undergraduate course of study of which the unit forms part as an overseas student.

The Bill will also amend subsection 93-10(1) of HESA to provide for a reduction in the maximum annual student contribution amount for mathematics, statistics and science units of study to the same amount as for education and nursing units of study (the 'national priorities' student contribution band) for students commencing a course of study from 1 January 2009 and students who transfer from a course of study that was not in the natural and physical sciences to a course of study which is in the natural and physical sciences.

The Bill will enable higher education providers to charge 'continuing' students the existing maximum student contribution amount for mathematics, statistics and science units of study (that is, the maximum annual student contribution amount for existing students will be that currently specified in Section 93-10 of HESA, indexed in accordance with Division 198).

FINANCIAL IMPACT

In relation to the Higher Education Support Act 2003, the Bill:

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increases the overall appropriation by $2,259,982,000 for the period 1 January 2008 to 31 December 2012 (excluding HELP).

The estimated financial impact of these measures on HELP over the forward estimates period (2008-09 - 2011-12) is -$26.050 million on the fiscal balance, resourcing amounts to $4.198 million and underlying cash is -$33.252 million.