House of Representatives

Explanatory Memorandum

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

Outline and financial impact

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), the Postgraduate Education Loans Scheme (PELS) and the Open Learning Deferred Payment Scheme (OLDPS) and makes provision for the repayment of monies lent by the Commonwealth to students under those schemes.

The Australian Research Council Act 2001 establishes the Australian Research Council (ARC) as a body which provides advice to the Minister on Commonwealth support for research, administers the Commonwealth research programmes for which it has responsibility and makes recommendations to the Minister on the allocation of funds within research programs. This funding is appropriated under section 49 of the Act.

The Australian National University Act 1991 establishes the Australian National University and provides for its governance arrangements.

The Higher Education Funding Amendment Bill 2001 will amend the HEFA to:

-

vary the maximum funding levels in section 17 for the 2002 and 2003 funding years to provide for an additional 670 new student places to be allocated to regional universities and campuses, a 2001-02 Budget measure;

-

vary the maximum funding levels in section 23C for the 2002 and 2003 funding years to include provision for additional support for people with disabilities, a 2001-02 Budget measure;

-

legislate the maximum funding levels in section 17, subsections 20(3), 22A(5), 23C(2), 24(3), and 27A(6) and section 27D for the 2003 funding year, including additional funding provided in the Backing Australias Ability policy and the 2001-2002 Budget measures noted above;

-

vary the maximum funding levels in section 17, subsections 20(3), 22A(5), 23C(2), 24(3) and 27A(6) for the 2002 funding year to reflect supplementation for price movements;

-

vary the maximum funding levels in Part 2.2 to reflect revised estimates of Higher Education Contribution Scheme (HECS) receipts for the 2000, 2001 and 2002 funding years and the Commonwealths superannuation liability for the 2001 and 2002 funding years;

-

vary the maximum funding level in section 17 for the 2002 funding year to reflect a transfer of funds to the Australian Research Council Act 2001 to enable the Institute of Advanced Studies of the Australian National University to access ARC competitive grant programmes;

-

vary the maximum funding levels in subsection 23C(2) for the funding year 2001 to reflect a transfer of innovation programme funds from 2000 to 2001;

-

remove an ambiguity concerning the operation of the Higher Education Contribution Scheme (HECS) in relation to the Bankruptcy Act 1966 ;

-

broaden the Minister's guideline-making power in relation to HECS and work experience in industry to assist higher education institutions in interpreting the current provisions of the Act;

-

enable the Commissioner of Taxation to apply any refunds of HECS repayment credits of less than $50 to existing outstanding taxation debts;

-

remove references to the now repealed Overseas Students Charge Act 1979 .

The Bill amends the Australian Research Council Act 2001 (ARCA) to:

-

legislate the maximum funding level in section 49 of ARCA for the funding year 2003, including additional funding provided in the Backing Australias Ability policy;

-

vary the maximum funding level in section 49 of ARCA for the funding year 2002 to reflect supplementation for price movements;

-

vary the maximum funding level in section 49 of ARCA for the funding year 2002 to reflect a transfer of funds from section 17 of HEFA to enable the Institute of Advanced Studies of the Australian National University to access ARC competitive grant programmes.

The Bill amends the Australian National University Act 1991 to enable the University to establish a new advisory/committee structure.

Financial impact

In relation to the Higher Education Funding Act 1988 , the Bill:

-

provides base funding of $4,044.832 million in 2003;

-

increases funding by $138.254 million in 2002;

-

reduces funding by $0.041 million in 2001.

The aggregate adjustments for each funding year include:

-

additional funding for regional university places of $4.192 million in 2002 and $8.464 million in 2003;

-

additional funding for disability support of $1.836 million in 2002 and $2.961 million in 2003;

-

a transfer $2.22 million in 2002 from section 17 of HEFA to section 49 of ARCA;

-

a transfer $1 million of innovation programme funds from 2000 to 2001 (section 23C of HEFA);

-

technical adjustments on the basis of revised estimates of HECS receipts and superannuation liabilities.

In relation to the Australian Research Council Act 2001 , the Bill provides:

-

base funding of $339.183 million in 2003;

-

increases funding by $7.963 million in 2002.

The aggregate adjustment for 2002 includes a transfer of $2.22 million to section 49 of the ARCA from section 17 of HEFA.