House of Representatives

Explanatory Memorandum

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

OUTLINE

The Higher Education Support Amendment (Cost Recovery) Bill 2019 ( Bill ) is a Bill to amend Divisions 16 and 19 of the Higher Education Support Act 2003 ( HESA ) to:

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implement an application fee for applications for approval as higher education providers whose students are entitled to FEE-HELP assistance under HESA; and

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provide for the administration of the annual charge on higher education providers under the Higher Education Support (Charges) Bill 2019 ( Charges Bill ).

Under the Charges Bill, the amount of the annual charge will be an amount prescribed by the regulations or as worked out in accordance with the manner prescribed by the regulations. It is anticipated the amount of the charge will differ depending on the size of the provider (determined by the number of enrolments per year), recognising the impost of such a charge on smaller providers. Prior to the introduction of the regulations, a fees schedule will be determined that is consistent with the Australian Government Cost Recovery Guidelines (available from www.finance.gov.au ) and documented in a cost recovery implementation statement (CRIS).

This Bill will require higher education providers to pay the annual charge as an ongoing requirement of their approval under HESA, and will facilitate the collection and recovery of the annual charge by the Department of Education.

The Bill also implements an application fee on prospective FEE-HELP providers to fund the FEE-HELP provider application process, including the costs of administration and assessment of the applications from prospective providers seeking approval as a higher education provider under HESA. The amount of the application fee will be a flat fee on prospective FEE-HELP providers (payable upon submission of an application for assessment) that will be calculated in accordance with the manner prescribed by the Higher Education Provider Guidelines.

FINANCIAL IMPACT STATEMENT

This Bill implements the annual charge, and the application fee, which are HELP cost recovery measures announced on 8 May 2018 as part of the 2018-19 Federal Budget. The annual charge which is based on partial cost recovery is expected to deliver savings of $11.4 million in fiscal balance terms over the forward estimates (2019-20 to 2022-23).The application fee which is based on full cost recovery is expected to deliver saving of $0.3 million over 2019-20 to 2022-23. Thereby the HELP cost recovery measures provide an estimated combined saving of $11.7 million over 2019-20 to 2022-23.

LIST OF ABBREVIATIONS