House of Representatives

Second Reading Speech

Mr TEHAN (Wannon - Minister for Education)

I move:

That this bill be now read a second time.

The Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 will create additional university places for Australian students and provide more support for regional students and universities.

The reforms in Job-ready Graduates will grow the number of university places for domestic students by 39,000 in 2023 and 100,000 in 10 years. That means more Australian students will get a university degree.

We will make it cheaper for students to study in areas of expected future job demand. So students will pay less for their degree if they study teaching, nursing, clinical psychology, English and languages, agriculture, maths, science, health, architecture, environmental science, IT, or engineering.

We have made sensible amendments to the legislation after listening to the constructive feedback provided by the consultation process. I would like to thank everyone who made a submission on the draft legislation or participated in the broad consultation process.

Schedule 1 of the bill amends the Higher Education Support Act 2003 to ensure public funding for places at university is directed to areas of expected employment growth, as well as industry and community priority. This includes amendments to the Commonwealth Grant Scheme funding clusters and Commonwealth contribution amounts.

This improves efficiency in Commonwealth spending for higher education and will enable the government to support more university places.

Schedule 1 of the bill extends Commonwealth support to more 'work experience in industry' units of study. This will incentivise universities to include more work integrated learning options in their courses and encourage students to gain more work experience from what they learn.

Improving how we connect graduates to employers, as well as tailoring education and training to ensure young people's skills meet industry demand, is critical to the recovery of the youth labour market.

Schedule 1 of the bill amends the Higher Education Support Act 2003 to change the way grants are paid to higher education providers for Commonwealth supported places.

This amendment will give table A providers flexibility to adjust the number of bachelor, sub-bachelor and postgraduate places within their funding allocation to better meet the demands of students, industry and local communities.

Table A providers will continue to be allocated places for designated courses of study, such as courses in medicine.

Table A providers will also receive funding for Indigenous students from regional and remote Australia on a demand-driven basis. This means all Indigenous students from regional and remote Australia admitted to a table A university will have a bachelor-level Commonwealth supported place. This was a key recommendation made by Dr Denis Napthine in the National Regional, Rural and Remote Education Strategy and will help improve participation and attainment rates for Indigenous people from regional and remote areas.

Schedule 1 of the bill will introduce the 'transition fund' into the Higher Education Support Act 2003. The 'transition fund loading' will ensure that table A providers maintain their revenue over the grant years 2021 to 2023, while the Job-ready Graduates Package is implemented.

The detail of the 'transition fund loading' will be included in the Commonwealth Grant Scheme Guidelines and amounts reflected in table A provider funding agreements. The guidelines are a legislative instrument for the purposes of the Legislation Act 2003 and are subject to the parliamentary disallowance process. This means these guidelines will be subject to parliamentary oversight and scrutiny, ensuring transparency for providers.

During the consultation process, we listened to the sector and the community and have addressed the vital role of social workers and psychologists. Schedule 1 of the bill will create the new disciplines of professional pathway social work and professional pathway psychology in Commonwealth Grant Scheme funding. This change will result in an increase in the Commonwealth contribution and reduce the proposed student contribution amount for social work or psychology units undertaken as part of qualifications that are part of the professional pathway.

Providing a lower cost pathway for social work and psychology will mean that there will be more vital health professionals to support the recovery from COVID-19, drought, bushfires and other events.

Schedule 1 will also introduce a maximum basic grant amount 'floor' for 'higher education courses'. This will increase funding transparency for table A providers by establishing that a provider's maximum basic grant amount for 'higher education courses' for the grant years 2021 to 2024 must not be less than the amount specified in the Commonwealth Grant Scheme Guidelines, and, for 2025 and later grant years, must not be less than the provider's maximum basic grant amount for those courses for the preceding grant year.

Schedules 1 and 2 include grandfathering arrangements to ensure no student enrolled in a course prior to 1 January 2021 is worse off as a result of this bill. These grandfathering arrangements extend to the amended Commonwealth contribution amounts also contained in schedule 1, ensuring universities receive the same Commonwealth contribution for grandfathered students in perpetuity.

Schedule 2 of the bill amends the Higher Education Support Act 2003 to match the student contribution amounts with the Commonwealth contribution amounts as amended in schedule 1. When combined, these two amounts will provide base funding for a Commonwealth supported place that reflects the cost of teaching a student at university.

Based on university data provided by the sector to Deloitte, the government has better aligned the cost to students and the taxpayer of teaching a degree with the revenue a university receives to teach that degree.

These reforms better align the total combined public and private funding for higher education units with contemporary data on the cost of delivering university education.

This is consistent with the reforms we are undertaking in vocational education and training.

The changes in this bill to both Commonwealth and student contribution amounts are going to be essential to Australia's economic recovery from COVID-19.

We are also encouraging students to tailor their studies to learn the skills that will be in demand in areas of future jobs growth. That means breaking down the traditional degree 'silos' by choosing units of study across disciplines and introducing a price signal to students by making degrees cheaper in areas of expected job growth.

Students enrolled in teaching, nursing, clinical psychology, English and languages will pay 42 per cent less for their degree.

Students who study agriculture and maths will pay 59 per cent less for their degree.

Students who study science, health, architecture, environmental science, IT, and engineering will pay 18 per cent less for their degree.

Schedule 3 of the bill amends the Higher Education Support Act 2003 to provide the legislative authority for the National Priorities and Industry Linkage Fund (NPILF) - a $900 million fund aimed at encouraging universities to collaborate with industry to design courses that equip students with the job-ready skills and experience they need to succeed.

Schedule 3 also includes amendments to enable the Indigenous, Regional and Low Socio-Economic Status Attainment Fund (IRLSAF) so that more regional, rural, Indigenous and low-SES students are supported to access university, graduate from their studies, and enjoy the benefits higher education offers.

Schedule 4 of the bill amends the Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 to strengthen and extend the application of various quality and accountability requirements to all higher education providers (including universities). Schedule 4 also amends the Higher Education Support Act 2003 to introduce new student protection and provider integrity requirements.

These amendments will support the work being done throughout the 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.

Schedule 5 of the bill implements another Napthine review recommendation by amending the Social Security Act to reduce from six to three the number of months a student must be receiving eligible student support payments to be eligible to receive fares allowance for a return journey home.

Schedule 5 also amends the Higher Education Support Act 2003 to reduce the loan fee for a FEE-HELP loan for an undergraduate student at a non-table B provider from 25 per cent to 20 per cent.

Schedule 5 to the bill also contains minor technical amendments that improve the clarity and operation of the Higher Education Support Act.

The amendments in this bill demonstrate the government's commitment to ensuring university graduates have the job-ready skills and experience to be competitive in a challenging labour market, as well as the government's commitment to supporting and driving economic growth into Australia's regions.

I commend the bill.

Debate adjourned.