House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Education, Science and Training the Hon Dr Brendan Nelson 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 Post-graduate Education Loan Scheme (PELS), the Open Learning Deferred Payment Scheme (OLDPS) and the Bridging for Overseas-trained Professionals Loan Scheme, 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 an independent body to administer the Commonwealth research programmes for which it has responsibility, make recommendations to the Minister on the allocation of funds within research programs and to provide advice to the Minister on research matters as requested by the Minister. Funding is appropriated under section 49 of the Act.

This Bill will amend the Higher Education Funding Act 1988 (HEFA) to:

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Set a new maximum aggregate funding level in section 17 of HEFA for the years 2002 and 2003 to reflect actual HECS liabilities and other technical adjustments.

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Set new maximum funding amounts in Part 2.2 of HEFA for the year 2003 to reflect indexation increases and other technical adjustments including:

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a new maximum aggregate grant amount for superannuation benefits available to higher education institutions;

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a new maximum aggregate grant amount for certain grants, including equality of opportunity; research; multi-media; innovation and quality assurance;

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a new maximum aggregate grant amount for teaching hospitals; and

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a new maximum aggregate funding level for Commonwealth expenditure on the international marketing and promotion of Australian education and training services.

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Set a new maximum aggregate grant amount for special capital projects in section 27 of HEFA including funds for the reconstruction of the Mt Stromlo Observatory as announced in the 2003-04 Budget.

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

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Update the offices of members of the ARC Board to reflect the current Administrative Arrangement Orders (s.12).

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Broaden Board members' disclosure of interest requirements to include any material interest, pecuniary or otherwise (s.27).

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Allow the CEO of the ARC to be included on a committee if required (s.32).

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Appropriate funding by financial year rather than calendar year, beginning in the 2004-05 financial year (ss.48 and 49).

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Provide the Minister with greater flexibility in determining the funding split between research programs (subs.50(1)).

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Permit the Minister to delegate certain additional powers contained in Division 1 of Part 7.

Financial impact

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

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increases the overall appropriation by $49.368 million in 2002 (note: this variation is for accounting purposes in relation to the Higher Education (HECS) Special Account);

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increases the overall appropriation by $58.385 million in 2003.

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

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increases the overall appropriation by $436.331 million for the period 1 January 2003 to 30 June 2007.