Senate

Revised Explanatory Memorandum

(Circulated by authority of the Minister for Education, the Honourable Dan Tehan MP)

OUTLINE

The Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Bill 2020 ( the Bill ) proposes to amend the Tertiary Education Quality and Standards Agency Act 2011 ( TEQSA Act ) to:

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give effect to the Commonwealth Government's decision to implement the recommendations arising from the Review of the Higher Education Provider Category Standards ( PCS Review );

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give effect to an outstanding recommendation from the Review of the impact of the TEQSA Act on the higher education sector ( Impact Review ), to refer to the Threshold Standards as a single unified framework; and

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improve regulation of Australia's higher education sector through a small number of other measures, including to ensure student records can be appropriately handled following a provider ceasing to operate and to protect the term 'university' as it appears in Australian internet domain names.

The Bill also proposes to amend the Higher Education Support Act 2003 ( HESA ) to:

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replace references to 'Indigenous students' with 'Indigenous persons' to provide clarity around the scope of 'Indigenous Student Assistance Grants'.

The 2017?18 Budget included a measure to undertake a review of the Higher Education Provider Category Standards, which are part of a legislative instrument, the Higher Education Standards Framework (Threshold Standards) 2015 ( the Threshold Standards ). The PCS Review, undertaken by Emeritus Professor Peter Coaldrake AO in 2018-19, recommended amendments to the Provider Category Standards to ensure they support the Government's goals for a diverse and high-quality higher education sector that meets the needs of students, employers, higher education providers and the wider community, with category standards that are fit for purpose for the future.

At the Minister's request, and as required by Section 58 of the TEQSA Act, the Higher Education Standards Panel ( the Panel ), which advises the Commonwealth Minister for Education on changes to the Higher Education Standards Framework and on higher education quality and regulatory matters, proposed amendments to the Threshold Standards to give effect to the PCS Review recommendations. To accommodate these proposed amendments to the Threshold Standards, complementary amendments are also proposed to be made to the TEQSA Act by this Bill to ensure that the Threshold Standards can be made as proposed. Should this Bill be enacted, new Threshold Standards, in the form proposed by the Panel, will therefore be made by legislative instrument, with both the legislative instrument and relevant provisions of the Bill to come into effect on the same date, to be fixed by proclamation.

In particular, the measures in Schedule 1 of the Bill will:

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amend a small number of references to provider category types, to reflect the new provider category names. References to ''a provider category that permits the use of the word "university"' will be replaced with references to either the 'Australian University' or 'Overseas University' provider category, to account for the introduction of the new 'University College' category for high quality, high-performing non-university providers (which will be permitted to use the term 'university' in their name);

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enable TEQSA to make a determination setting out factors it will take into consideration when assessing the quality of research under new university research benchmarks; and

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clarify references to the type of self-accrediting authority for 'Australian University' category providers (as required to give effect to the introduction in the Threshold Standards of a subset of the 'Australian University' category of universities that have a 'specialised focus', and which do not have full self-accrediting authority).

The Impact Review was conducted by Deloitte Access Economics in 2016-17, in accordance with section 203 of the TEQSA Act, which required that, before 1 January 2016, the Minister commence a review of the impact of the TEQSA Act on the higher education sector. The majority of amendments required to respond to this review were made through the Tertiary Education Quality and Standards Agency Amendment Act 2019. The outstanding recommendation, which was deferred until after completion of the PCS Review, proposed reframing references to the Threshold Standards in the TEQSA Act as a single unified framework, instead of four distinct types of Threshold Standards. This amendment will enable the structure of the Threshold Standards instrument to be simplified, making it clearer to read and use.

Other measures to improve higher education regulation given effect by the Bill will:

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include reference to the Australian Qualifications Framework qualification type 'undergraduate certificate' in the definition of 'higher education award';

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allow TEQSA to extend the period of a provider's registration or course accreditation more than once, which will help TEQSA manage its regulatory workload better and provide low-risk providers with additional flexibility;

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allow merits review of a decision by TEQSA not to change a provider's category;

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provide TEQSA with the legislative authority to assume control of higher education student records from a registered higher education provider in the event the provider ceases operations (and to allow students and providers to request access):

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This measure is part of the Government's Job-ready Graduates package, and will help current and former higher education students obtain access to their academic records in the event that a registered higher education provider ceases to operate;

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The measure will provide TEQSA with similar legislative powers to those conferred on the Australian Skills Quality Authority (ASQA) in sections 211 to 214 of the National Vocational Education and Training Regulator Act 2011, which require registered training organisations to provide ASQA with a copy of their student records within 30 days of ceasing operation.

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protect use of the word 'university' in Australian internet domain names, by requiring consent of the Minister to use a domain name containing the word 'university' or words or expressions that have the same or similar meaning.

The amendments in Schedule 2 of the Bill will replace references to 'Indigenous student' with 'Indigenous person' in Part 2-2A of HESA to ensure that providers can use Indigenous student assistance grants to assist prospective Indigenous students as well as existing students.

Overall, the amendments are intended to help clarify and streamline the regulatory framework for the benefit of higher education providers, students and potential students.

Senate Scrutiny of Bills Committee

In Scrutiny Digest No. 13 of 2020, the Senate Scrutiny of Bills Committee requested the Minister's advice about the appropriateness of leaving significant matters, such as the standards making up the Higher Education Standards Framework, and matters relating to how the quality of research undertaken by higher education providers will be assessed, to delegated legislation.

In Scrutiny Digest No. 16 of 2020 the Committee requested that key information provided by the Minister to the Committee be included in the Explanatory Memorandum to the Bill. That information is as follows.

Should the Threshold Standards remain as a standalone legislative instrument or be incorporated into the TEQSA Act?

The Higher Education Standards Framework should remain in delegated legislation rather than be incorporated into the TEQSA Act.

The process that is mandated by the TEQSA Act to make or amend the Threshold Standards is multi-layered. Section 58 of the TEQSA Act requires that the Minister must not make a standard unless:

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a draft of the standard has been developed by the Panel

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the Minister has consulted with each of the following about the draft:

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the Council consisting of the Ministers for the Commonwealth and each State and Territory responsible for higher education (i.e. the Education Council)

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if the Minister is not also the Research Minister (i.e. the Minister responsible for the Australian Research Council Act 2001) - the Research Minister, and

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TEQSA

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the Minister has had regard to the draft developed by the Panel, and any advice or recommendations received from the Panel or those other parties.

This process is time consuming but delivers a very important outcome - engagement with and ownership of the standards by higher education stakeholders, including the providers that are subject to regulation against the standards, and by all jurisdictions in the Federation, which have tacitly but not formally delegated administration of higher education policy and funding arrangements to the Commonwealth.

In addition to these process constraints, the requirements for appointing members of the Panel, set out in subsection 167(2) of the TEQSA Act ensure that, collectively, the Panel's membership has broad knowledge and expertise in both university and non-university higher education delivery and standards development and has regard to the perspectives of different states and territories, students and provider staff. Subsection 168(2) of the TEQSA Act also specifies that "the Panel must consult interested parties when performing its functions". This means that the expert advisory body with responsibility for developing any draft new or amended standards is itself broadly representative of sector perspectives and must directly engage with those impacted by its work before providing advice to government. This ensures the Panel can give the Government of the day unvarnished independent advice on the best approach. Indeed, the Panel's advice has been relied on repeatedly by the Government not just to guide proposed changes to the Threshold Standards but other matters critical to assuring the quality of Australian higher education.

The primary function for the Threshold Standards is to provide a basis for TEQSA as the independent national regulator to assure the quality of higher education delivery. These are not the funding rules, which are set out in HESA, but, rather, reflect the shared understanding and agreement of higher education providers and other relevant stakeholders as to what 'quality' means in higher education delivery.

The process and stakeholder input required to amend or create new standards is set out in the TEQSA Act. But while primary legislation can appropriately constrain a delegated legislation-making process, it would be unusual to similarly constrain the power of Parliament to make changes if the Threshold Standards were incorporated directly within the TEQSA Act. This could put at risk the acceptance, ownership and effective consent of those being regulated to the terms on which their operation is permitted.

Quality standards in any field of endeavour are inevitably dynamic and need constant monitoring, review and occasional updating to reflect new learnings, shared experience and evolving good practice. The Committee noted that the Threshold Standards have only been amended twice since their creation in 2011. The context and nature of these amendments needs to be acknowledged, however. As noted in Bills Digest No. 14, 2020-21, the initial (2011) Threshold Standards were created out of the National Protocols for Higher Education Approval Processes, agreed by the Commonwealth and state and territory higher education ministers in 2000 and revised in 2007. The changes made since their creation involved minor technical amendments to fix some anomalies in 2013 and a complete rewrite of the entire instrument in 2015, apart from the Provider Category Standards - consideration of which were deferred to a subsequent separate review.

The 2015 Threshold Standards instrument delivered a more streamlined and integrated standards framework that removed a significant amount of duplication and reflected current practice of higher education delivery. It followed an intensive review by the Panel over nearly three years, that involved wide consultation with the higher education sector and other stakeholders, including state and territory governments, including 230 written submissions over the entire period. This review set a high benchmark for future Panel activity. The instrument came into effect from January 2017 and involved significant adjustment by the higher education sector to understand the different approach, and by TEQSA to completely revise its guidance and support materials. The last three years has seen the new standards bedded down. This includes through providers gradually adopting them as a framework for their internal management and governance which, if pursued in this way, offers the promise of significant reductions in administrative burden associated with regulatory assessments.

Now the Provider Category Standards and criteria for awarding self-accrediting authority have also been comprehensively reviewed by an independent reviewer, with further scrutiny and consultation by the Panel - both of which engaged widely with stakeholders. Professor Coaldrake held a large number of both open and targeted stakeholder meetings and received 67 written submissions to his review. In developing its advice, the Panel held a stakeholder forum with around 250 attendees in November 2019, a webcast and various other stakeholder meetings, received over 40 written responses to a February 2020 consultation paper and consulted extensively with TEQSA. In a very real sense, the PCS review is the final part of the initial strategic review.

It is not the case that the Standards lack dynamism or change. Far from it. The combination of the initial Panel and subsequent PCS reviews will have seen the Threshold Standards comprehensively analysed and rewritten to reflect contemporary best practice. The capacity for that level of sector input to, ownership and acceptance of the content of the standards would be compromised were they to be set in stone by incorporation into primary legislation.

Should updated research requirements for Australian University category providers proposed by the PCS Review be included in the Threshold Standards or written into the TEQSA Act?

It is appropriate that the updated research requirements for the Australian University provider category recommended by the PCS Review remain part of the Threshold Standards and not be separately written into the TEQSA Act.

Recommendation 5 of the PCS Review report states:

"Along with teaching, the undertaking of research is, and should remain, a defining feature of what it means to be a university in Australia; a threshold benchmark of quality and quantity of research should be included in the Higher Education Provider Category Standards. This threshold benchmark for research quality should be augmented over time."

Professor Coaldrake proposed that by 2030, universities should be expected to undertake research "at or above world standard" in at least three or 50 per cent of the broad fields of education it delivers, whichever is greater. Until that level of performance is required, there should be a lower benchmark of at least three or 30 per cent of the broad fields of education the university delivers, whichever is greater.

The Australian Government's response to the review, while recognising that research benchmarks are ideally set at a world-class standard, notes that such benchmarks "must also recognise work of national standing in Australia-specific fields such as Australian studies and Australian literature."

While the specific measures for research quality recommended by the PCS Review and Australian Government response are newly defined, the issue they address is not new and has been a core element of the Threshold Standards from their creation in 2011. Both the 2011 and 2015 Threshold Standards instruments specified that the undertaking of research is a fundamental requirement for university status. They outline that an Australian University category provider must, among other things undertake:

"research that leads to the creation of new knowledge and original creative endeavour at least in those (at least three) broad fields of study in which Masters Degrees (Research) and Doctoral Degrees (Research) are offered."

Similar research requirements apply in both the Australian University College and Australian University of Specialisation categories but with progressively lower numbers of fields of study specified.

Over several years, however, TEQSA has identified that the lack of an explicit indication as to the quality of research activity required for registration as a university makes the assessment of whether new applicants or existing providers meet these standards difficult. Currently these judgments are left to TEQSA with no formal guidance as to the approach it should take.

In effect, TEQSA has had to develop its own policy on this, which is outlined in some detail in its application guide for registration in a university category, including:

"whether the quality and quantity of research being undertaken meets the expectations of the national and international academic community for an Australian university. In assessing the quality of research, TEQSA will have regard to the assessment model used by the Australian Research Council for the most current Excellence in Research for Australia evaluation, including for the quality of research outputs."

In its submission to the PCS Review, TEQSA recommended that:

"Requirements for research included in any future university category should include indications of the quantity and quality of research required, and provide support for TEQSA to undertake benchmarking against comparable providers registered in university categories."

The new benchmarks seek to clarify this measurement by setting principles-based thresholds that can be judged using readily available metrics such as the Excellence in Research for Australia assessments conducted by the Australian Research Council. This approach is not dissimilar from the approach TEQSA has articulated in its application guide. If a provider is not currently included in such an assessment framework - e.g. a new applicant for university status - they would need to offer other evidence of a robust and quality research program, exactly as occurs now, drawing on measures such as published and peer-reviewed research papers, etc. Providers will have the added benefit, though, of a clearly articulated benchmark to work towards.

Rather than imposing a new requirement, the research benchmarks clarify the existing requirement. Professor Coaldrake is explicit about this in his final report of the PCS Review, noting:

"The research criteria have been revised to provide more guidance and scope for TEQSA regulation including setting requirements for quality and quantity of research."

The benchmarks proposed by Professor Coaldrake are relatively modest, especially in the first ten years of operation. On the basis of publicly available Excellence in Research for Australia assessments alone, it is not anticipated that any public university would have difficulty achieving the initial benchmark of research in at least three or 30 per cent of the broad fields of education the university delivers, whichever is greater. No university has indicated that it fears it will not meet the proposed benchmarks. In its advice to the Minister on implementing the PCS Review recommendations, the Panel suggested giving effect to Professor Coaldrake's "2030" timeframe for the higher threshold as "within ten years after entry to the 'Australian University' category", which would apply a full ten year transition period to existing providers moving to assessment under the revised Threshold Standards as well as to providers entering the category for the first time in the future.

It should also be noted these benchmarks are about quality rather than quantity or volume. There is nothing inherent in the benchmarks that would disadvantage a smaller institution. The "research of national standing" benchmark ensures that smaller research programs that focus on issues that respond to important community and national needs but may not be able to be compared with world standard will also be acknowledged, respected and valued.

As a threshold of quality to be achieved, these benchmarks belong most appropriately in the Threshold Standards along with the other defined threshold quality measures across the full range of institutional activity necessary to deliver higher education. It would also be inappropriate to specify this one threshold in the TEQSA Act, while leaving other threshold measures in a legislative instrument - especially considering the related measure in the current Threshold Standards is contained in the legislative instrument. The same arguments articulated above about the need for sector-engaged development and implementation apply here too. Moving this threshold into the TEQSA Act would reduce the sector's 'ownership' and capacity to influence should it be the subject of future reconsideration.

If the Threshold Standards and research requirements remain in a legislative instrument, should the TEQSA Act contain high level guidance on their content?

It is not necessary to incorporate specific guidance on the content of the Threshold Standards in the TEQSA Act. The process mandated by the TEQSA Act to amend the Threshold Standards means that they cannot change without significant scrutiny by higher education stakeholders, the expert advice of the Higher Education Standards Panel and TEQSA, input from state and territory governments and finally the opportunity for Parliamentary review. As ably demonstrated by the change process currently underway, this means that precedents and consensus play a very significant role in guiding the evolution or replacement of content within the Threshold Standards, to the point that any guidance overlayed by provisions of the TEQSA Act could be seen as stifling the opportunity for reform and innovation. Indeed, amendments in the Bill respond to advice from the Panel and independent review findings that even the very high level guidance previously embedded in the TEQSA Act was unhelpful and should be removed.

The 2011 TEQSA Act effectively included high level guidance on the content of both the 'threshold' and 'other' standards by naming four different types of threshold standards and three types of additional standards. These were:

Threshold standards

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the Provider Registration Standards;

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the Provider Category Standards;

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the Provider Course Accreditation Standards; and

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the Qualification Standards.

Other standards

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the Teaching and Learning Standards;

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the Information Standards; and

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the Research Standards.

Even this broad guidance as to the content of the standards proved unhelpful, however. A significant problem found with this approach was that the initial Threshold Standards, being transaction focused and based around different types of regulatory assessments, inevitably led to a great deal of duplication of content within the different types of threshold standards. Many quality issues relevant to provider registration, for example, are also relevant to course accreditation but were restated in those original standards.

Only the Threshold Standards were ever made. No effort was made to create Teaching and Learning Standards, Information Standards or Research Standards. In fact, the initial Threshold Standards included their own content relating to teaching and learning, information and research. So much so, that specialised standards in those areas were unnecessary and would only have increased the level of duplication across statutes.

Perceptions change over time and the 2012-14 review by the inaugural Higher Education Standards Panel proposed moving to a more integrated standards framework against seven activity domains that largely removed duplication. This new approach is reflected in the 2015 legislative instrument and represented a significant change in approach.

The 2017 Review of the Impact of the TEQSA Act on the Higher Education Sector, undertaken by Deloitte Access Economics, agreed that the different types of standards should be removed from the TEQSA Act to better facilitate adoption of the integrated standards framework recommended by the Panel. Three types of non-threshold standards - Teaching and Learning Standards, Information Standards and Research Standards - were removed in 2019 through the Tertiary Education Quality and Standards Agency Amendment Act 2019. The current Bill will remove the four types of Threshold Standards specified - Provider Registration Standards, Provider Category Standards, Provider Course Accreditation Standards and Qualification Standards, leaving just one overarching category of "Threshold Standards". Provision for a minister to make "other standards against which the quality of higher education can be assessed" if desired, at section 58(1)(h), is retained, however. This could include, for example, where the Government wished to describe aspirational standards that recognised quality delivery in a particular area that are above the minimum threshold required for registration.

The experience, so far, with the Higher Education Standards Framework suggests that - at least for these standards - even high level guidance on content can present a barrier to innovation. It would not be useful to include guidance specifying the content of either the Threshold Standards or specific elements within those standards - such as the research benchmarks - in primary legislation, given the evolving nature of stakeholder perspectives and objectives. For the Higher Education Standards Framework, the protections built into the process to amend or create new standards provides adequate protection to ensure the outcome is well considered and sector-appropriate.

FINANCIAL IMPACT STATEMENT

The student records management provisions in the Bill are expected to cost $2 million over four years from 2020-21. The other measures in the Bill have no financial implications.

REGULATION IMPACT STATEMENT

The Regulation Impact Statement for the Bill titled "What's in a Name? Review of the Higher Education Provider Category Standards" is at the end of this Explanatory Memorandum (Attachment A).