House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Education, Science and Training the Hon Dr Brendan Nelson MP)

1 - Outline and financial impact

Outline

The Bill deals with transitional and consequential matters arising from the enactment of the Higher Education Support Act 2003 and a number of other matters concerning higher education.

The Bill ensures that students who commenced their studies before 2005 and received assistance under the Higher Education Contribution Scheme will be able to continue their studies as Commonwealth supported students under the proposed Higher Education Support Act 2003 until the end of 2008. Until this time, they will have student contribution amounts under the new arrangements that are no greater than the contributions they are required to pay under the current Higher Education Contribution Scheme. They will also have access to HECS-HELP so that they can defer payment of those student contribution amounts.

The Bill ensures that students who commenced their studies before 2005 and received assistance under the Post-graduate Education Loan Scheme will have access, under special conditions, to the new FEE-HELP scheme until the end of 2008. The indexation of the debts that they incur under this arrangement will be limited to changes in the Consumer Price Index and they will continue to receive a bonus for the voluntary repayment of these debts.

The Bill provides for accumulated HEC debts to be converted into accumulated HECS-HELP debts on 1 June 2006. It ensures that the calculation of accumulated HECS-HELP debts takes account of any voluntary repayments, HEC assessment debts or amendments of HEC assessment debts that occur after 1 June 2005.

The Bill provides that the University of Notre Dame and Avondale College may receive funding for student places under the new Commonwealth Grant Scheme until the end of 2008. This will ensure that the Commonwealth makes its contribution to the cost of student places for those students who commence their studies before 2005, as students liable to pay a contribution under the Higher Education Contribution Scheme.

The Bill includes a number of other minor transitional provisions related to the commencement of the proposed Higher Education Support Act 2003. These include matters such as the rollover of grants, merit based equity scholarships and marginally funded places.

The Bill makes changes to the Higher Education Funding Act 1988 as a consequence of the proposed Higher Education Support Act 2003. It increases the expenditure limits for a number of grants and provides for transitional assistance in respect of 2005 to be paid to institutions which received grants in respect of 2004 under the Higher Education Funding Act 1988. It also ends the application of various provisions of that Act to take account of the commencement of the proposed Higher Education Support Act 2003.

The Bill amends the Australian National University Act 1991 and the Maritime College Act 1978. The amendments to these Acts improve the governance structures of the Australian National University and the Australian Maritime College by altering the composition of their Councils and the method of appointment of members to those Councils. It inserts clauses detailing the duties of Council members, clarifies their responsibilities and makes other minor and consequential amendments to these Acts.

The Bill removes Marcus Oldham College from the Higher Education Funding Act 1988 and provides for the Minister to determine an amount of payment to be made to the College in respect of 2004.

The Bill makes a number of other minor amendments as a consequence of the proposed Higher Education Support Act 2003.

Financial impact

Total funding levels for the higher education sector in the 2004 and 2005 calendar years under the Bill are estimated to be around $4.3 billion (2004 prices).