House of Representatives

Explanatory Memorandum

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

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

HIGHER EDUCATION SUPPORT AMENDMENT (JOB-READY GRADUATES AND SUPPORTING REGIONAL AND REMOTE STUDENTS) BILL 2020

The Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 ( Bill ) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The purpose of the Bill is to introduce reforms to higher education funding in Australia, and to strengthen and extend provider integrity measures, primarily through amendments to the Higher Education Support Act 2003 ( HESA ). HESA is the main piece of legislation providing funding for higher education in Australia, providing for Government subsidies and tuition support for students.

The Bill contains measures that will encourage higher education providers to produce job-ready graduates, create more opportunities for regional and remote students - including Aboriginal and Torres Strait Islander Australians - and direct growth in the higher education sector towards Australia's regions and national priorities. The Bill also includes measures to extend and strengthen student protection and provider integrity measures in HESA, and ensure higher education providers are more accountable for the outcomes they deliver for students, industry and the wider community.

Schedule 1 of the Bill includes amendments to HESA to redesign the Commonwealth Grant Scheme ( CGS ) funding clusters and the Commonwealth contribution amounts ( CCAs ) to better align CGS funding to the cost of delivering higher education and ensure this funding is directed to areas of national priority and employment growth. This Schedule also includes measures to ensure that higher education providers will continue to receive the same amount of CGS funding for 'grandfathered students' enrolled in a Commonwealth supported place ( CSP ), where the current maximum student contribution amounts ( SCAs ) will apply for units those students enrol in after 1 January 2021 (see Schedule 2). 'Grandfathered students' include students who are currently Commonwealth supported and:

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are enrolled in a course of study prior to 1 January 2021 who have not completed that course immediately before that day;

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completed a course of study before 1 January 2021 and go on to study a related honours course after that day;

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are undertaking an enabling course in 2020 and go on to study another course of study leading to a higher education award on or after 1 January 2021;

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are undertaking an undergraduate certificate in 2020 and go on to study a related course of study leading to a bachelor degree on or after 1 January 2021.

Schedule 1 of the Bill also amends HESA to change the way grants are paid to higher education providers in relation to CSPs. The changes mean a Table A provider's funding agreement may specify a maximum basic grant amount for any of the following:

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'higher education courses' - any course of study other than a 'designated higher education course' or a 'demand driven higher education course';

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'designated higher education courses' - a course of study in medicine or a course of study determined by the Minister; and

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'demand driven higher education courses' - a course of study leading to either a bachelor degree or bachelor honours degree (other than a designated higher education course, currently a course of study in medicine) undertaken at a Table A university by an Indigenous person from a regional area or a remote area.

These amendments, and others made in Schedule 1 will allow Table A providers to be allocated a funding envelope for all CSPs in 'higher education courses,' which will provide Table A providers with more flexibility in how they use the bulk of their CGS funding to meet the demands of students, industry and their local communities.

Schedule 1 also amends HESA to remove the broad exclusion of 'work experience in industry' ( WEI ) units of study from CGS funding under subsection 33-30(1), and will instead only exclude WEI units from CGS funding where the student does not pay a SCA for that unit of study; that is, where there is essentially no engagement between the provider and the student for that unit of study. This amendment will remove barriers to the availability of this type of learning in higher education and encourage students to gain more work experience in what they learn and as they learn.

Schedule 2 of the Bill amends HESA to change the maximum SCAs for a place in a unit of study to reflect the changes to funding clusters and CCAs that are proposed in Schedule 1. This Schedule also ensures that 'grandfathered students' do not have to pay the higher maximum SCA for a unit of study they enrol in after 1 January 2021 where the SCA for that unit would otherwise increase as a result of the amendments being made by the Bill.

Schedule 3 of the Bill amends HESA to provide legislative authority for the National Priorities and Industry Linkage Fund ( NPILF ), and to allow for the transition arrangements required to implement the Indigenous, Regional and Low Socio-Economic Status Attainment Fund ( IRLSAF ).

Schedule 4 of the Bill amends the Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 to extend various quality and accountability requirements contained in HESA to all higher education providers (now including Table A, B and C universities), and also introduces new student protection measures in HESA (that would again apply to all providers). These amendments will support work being done in the higher education sector around best practice approaches to student enrolment and progression, and will re-signal the quality of Australia's higher education sector both domestically and internationally.

Specifically, the measures contained in Schedule 4 of the Bill will:

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prohibit all providers from engaging in unscrupulous marketing practices and from submitting requests for Commonwealth assistance on behalf of students;

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require a person to be a 'genuine student' in order to receive Commonwealth assistance;

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require providers to assess a person's academic suitability to undertake a unit of study prior to that person receiving Commonwealth assistance for that unit;

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prevent providers from pursuing ineligible students for SCAs or tuition amounts where the provider is at fault;

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require a provider to re-credit a person's HELP balance in a range of circumstances including where the provider completes any part of the person's request for Commonwealth assistance for the relevant unit of study, or where the person was not entitled to HECS-HELP assistance in the first place;

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allow the Minister to audit all higher education providers for matters of compliance with HESA;

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enhance financial reporting requirements for, and improve assessment of the financial viability of providers;

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apply civil penalties to existing obligations on providers under Division 19 of HESA;

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preclude providers from imposing financial or administrative barriers to a student withdrawing from study;

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require all higher education providers to co-operate with HESA and Tertiary Education Quality and Standards Agency ( TEQSA ) investigators;

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require all higher education providers to keep records of a kind, in the manner and for the period required by the Higher Education Provider Guidelines, and publish information as required by those guidelines;

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require a student to maintain an overall pass rate of 50 per cent to remain eligible for Commonwealth assistance; and

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require providers to assess a student's capability to enrol in a concurrent study load above 2.0 Equivalent Full Time Study Load ( EFTSL ).

Schedule 5 of the Bill includes several miscellaneous amendments to HESA, including:

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an amendment to subsection 142-1(2) to define a 'school' as including a 'centre-based day care service' - this change better aligns the legislation with the policy intention relating to very remote HELP debtors;

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an amendment to remove the University College London ( UCL ) as a Table C provider, as UCL is no longer an approved higher education provider under HESA;

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amendments to sections 27-5, 36-55, 51-5, 54-5, 57-1, 57-5 and 238-10 to remove references to the Tuition Fee Guidelines and the Reduction and Repayment Guidelines, as these guidelines have never been made; and

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amendments to the names of certain Table A and Table B providers listed at subsections 16-15(1) and 16-20(1) to better reflect the names of these providers that are included on the TEQSA National Register for Providers and Courses.

Schedule 5 also amends paragraph 137-10(2)(b) of HESA to reduce, for units of study with a census date on or after 1 January 2021, the loan fee for students obtaining a FEE-HELP loan for an undergraduate course of study at a non-Table B provider from 25 per cent to 20 per cent.

The FEE-HELP loan fee recognises the cost to the taxpayer of the Commonwealth providing HELP loans to cover fee paying undergraduate places. The reduction of the loan fee allows the HELP scheme to remain sustainable, while also reducing the financial burden on students and the total time taken to repay a HELP debt. This change also brings consistency to the tertiary sector by aligning the FEE-HELP loan fee with the 20 per cent VET student loan fee that is applied to VET student loans accessed by full fee paying VET students.

Schedule 5 of the Bill also amends the Social Security Act 1991 to reduce (from six to three) the number of months a student living away from home must be receiving eligible student support payments (Youth Allowance, Austudy Payment and the Pensioner Education Supplement) before being eligible to receive Fares Allowance for a return journey home during the study year.

Analysis of human rights implications

The Bill engages the following human rights:

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the right to work - Article 6 of the International Covenant on Economic, Social and Cultural Rights ( ICESCR );

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the right to an adequate standard of living - Article 11 of the ICESCR; and

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the right to education - Article 13 of the ICESCR

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the right to a fair and public hearing and the right to be presumed innocent until proven guilty, and minimum fair trial guarantees (relating to the imposition of penalty provisions) - Articles 14 and 15 of the International Covenant on Civil and Political Rights ( ICCPR ).

ICESCR Article 6: right to work

The Bill positively engages Article 6(1) of the ICESCR, which recognises the "the right of everyone to the opportunity to gain [their] living by work" and that the State will "take appropriate steps to safeguard this right". Article 6(2) cites "technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual" as steps to be taken by a State Party to achieve the full realisation of the right contained in Article 6(1).

The Bill contains various measures aimed at supporting stronger links between universities and industry, and ensuring graduates gain the knowledge and skills they need to be job-ready and successful in a competitive labour market. These measures include:

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directing the bulk of CGS funding towards students enrolled in disciplines with high employment outcomes (see Schedule 1);

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extending CGS funding to certain WEI units, and therefore encouraging providers to include this mode of education in more courses of study (see Schedule 1); and

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creating a new purpose for which the Minister can make grants to higher education providers, being to encourage those providers to engage with industry-thereby providing legislative authority for the NPILF (see Schedule 3).

The Bill is compatible with the right to work.

ICESCR Article 11: right to an adequate standard of living

The Bill engages with Article 11(1) of the ICESCR, which recognises "the right of everyone to an adequate standard of living for [themselves] and [their] family, including adequate food, clothing and housing, and to the continuous improvement of living conditions".

Schedule 1 of the Bill includes a measure to increase the maximum SCA for some Commonwealth supported students. While this measure, on its face, may appear to result in a rise in living costs for impacted students, this is ultimately not the case as impacted students are able to defer their SCAs through the HELP scheme. Students are not required to make payments towards their HELP loan until they earn above the minimum repayment threshold, which is above the minimum livable wage. As such, to the extent this measure limits the right of students to an adequate standard of living (if at all), this limitation is reasonable and proportionate to meet the policy goal of ensuring Commonwealth funding for CSPs is efficient, maximises the number of places available, and is directed towards areas of national priority and employment growth.

Schedule 5 of the Bill also includes a measure to decrease the time period-from six to three months-a student studying away from home must be receiving eligible student support payments prior to accessing Fares Allowance for a return journey home during the study year. This measure enables students to access Fares Allowance earlier in their studies for a return journey home, thereby improving their overall access to this allowance and the positive impact it has on travel costs for impacted students.

The Bill is compatible with the right to an adequate standard of living.

ICESCR Article 12: right to education

The Bill engages the right to education under Article 13(2)(c) of the ICESCR, which provides that 'higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education'.

The Bill contains several measures aimed at improving access to higher education for more Australians. Schedule 1 of the Bill contains a measure to better align Commonwealth funding for CSPs to the cost of course delivery. This measure is aimed at improving efficiency in Commonwealth spending in higher education in order to maximise the number of available CSPs. As a result of these changes, the Commonwealth will be able to support more university places. Schedule 1 of the Bill also contains a measure to introduce demand driven funding for regional and remote Indigenous students to enrol in bachelor and bachelor honours level courses at Table A universities. This measure will improve access to higher education for Indigenous Australians in regional and remote areas, who historically have had lower participation rates than the rest of the population.

Schedule 4 of the Bill contains various measures which promote the right to education by strengthening and ensuring the ongoing quality and operational integrity of Australia's higher educational sector. These measures extend existing requirements to all higher education providers, as well as introduce new student protection and provider integrity requirements in HESA. Collectively, these measures enhance the probity and efficacy of higher education in Australia, ensuring all providers are focused on delivering high quality education and strong outcomes for students.

The Bill also contains measures aimed at diversifying course level and learning style options for Commonwealth supported students. For instance, Schedule 1 of the Bill introduces the concept of a 'funding envelope' for Table A providers. The funding envelope would combine all funding for a provider's CSPs in a single maximum base grant allocation, unless funding for a particular course of study is excluded from that allocation, i.e. courses in medicine and demand driven higher education courses. This gives more flexibility in how providers allocate their CSPs, and improves provider responsiveness to student preferences in terms of learning style, level and discipline. As a result of this measure, students will have significantly more choice in the Commonwealth supported study options available in higher education. The measure contained in Schedule 1, which extends CGS funding to WEI units of study, would also provide more choice in Commonwealth supported study options in higher education and further encourage students to engage in the type of education best suited to their learning style or ability.

The amendment to the waiting period for receipt of Fares Allowance for a return journey home contained in Schedule 5, also supports the right to education. This measure enables students, mostly from regional and remote areas, to access Fares Allowance earlier in their studies for a return journey home, thereby improving their access to support systems and increasing the likelihood that these students will go on to complete their studies.

The Bill also introduces measures which may-or may appear to-limit the right to education. In particular:

Redesigning the CGS funding clusters, Commonwealth contribution amounts, and maximum student contribution amounts for Commonwealth supported places

Amendments to section 93-10 of HESA (see Schedule 2) will increase the maximum SCA for a place in a unit of study for students studying in certain disciplines. While this measure may be perceived as restricting access to higher education, this is not the case as the students affected by these changes are able to defer their SCAs through the HELP scheme. Further, this measure is intended to maximise efficiency in Commonwealth spending for higher education and support a significant expansion in the number of CSPs that will not only improve access to university education but also enable more people to enjoy the opportunities it creates.

As this measure does not directly limit a student's ability to access higher education, the measure is compatible with the right to education.

Extending academic suitability requirements for students at all higher education providers and limits on concurrent study loads

Schedule 4 includes measures that would require all higher education providers to develop and apply appropriate student admissions procedures that ensure a student is properly assessed as academically suitable for a unit of study before enrolling, and that the student is a 'genuine student' for the purposes of HESA. While these measures may technically limit a student's ability to access higher education, the limitation is a reasonable and proportionate action to protect students who do not have the academic ability to undertake a higher education course from being burdened with significant and unnecessary debt. The genuine student requirement is also reasonable and proportionate to the objective of ensuring that higher education resources are directed to students who have a genuine desire and interest in pursuing higher education.

Schedule 4 also includes a measure restricting the amount of units a student can enrol in over a 12 month period to an EFTSL value of no more than two. To the extent the right to education may be limited by this measure, these limitations are reasonable and proportionate to:

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protecting vulnerable people who do not have the academic capability from being burdened with a significant debt;

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ensuring higher education resources are directed to students who have a genuine desire and interest in pursuing higher education;

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protecting students from enrolling in study loads that are beyond their capacity and capability to complete; and

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encouraging responsible use of Commonwealth assistance.

Moreover, limiting a student's study load to units with an EFTSL value of no more than two will not affect the majority of students accessing Commonwealth assistance because one EFTSL is a typical study load for a year, and students will continue to have the option to enrol in a study load with an EFTSL value of more than two, provided they receive support from their higher education provider.

To the extent these measures may limit a student's ability to access higher education, these limitations are reasonable, proportionate and supports the legitimate policy objective to improve integrity, performance and regulatory compliance in the sector.

ICCPR Articles 14 and 15: Criminal process rights

The Parliamentary Joint Committee on Human Rights' Guidance Note 2 specifies that civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the ICCPR, regardless of the distinction between criminal and civil penalties in domestic law. When a provision imposes a civil penalty, an assessment is required as to whether it amounts to a criminal penalty for the purposes of the ICCPR.

The Bill extends the applicability of civil penalty provisions in Divisions 19 (Chapter 2), 169 (Chapter 5), and 174 (Chapter 5) of HESA to all higher education providers (currently those provisions do not apply to Table A, B or C providers). The relevant factors for assessing whether a penalty is a criminal penalty for the purposes of human rights law include the classification of the penalty in domestic law, the nature of the penalty and the severity of the penalty.

The purpose of these penalties is to encourage compliance and deter non-compliance with HESA. The penalties will only apply to the regulatory regime of HESA rather than to the public in general. Based on the nature and severity of the civil penalties imposed under HESA, these penalties are appropriately characterised as civil rather than criminal in nature.

Conclusion

The Bill is compatible with human rights because it advances the protection

of human rights in the delivery of higher education in Australia. To the extent that it may limit human rights, these limitations are reasonable, necessary, and proportionate.