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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER EDUCATION SUPPORT AMENDMENT (2009 budget measures) Bill 2009
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Education the Honourable Julia
Gillard MP)
HIGHER EDUCATION SUPPORT AMENDMENT (2009 BUDGET MEASURES) BILL 2009
OUTLINE
Schedule 1 of the Bill will amend the Higher Education Support Act 2003
(HESA) to revise the maximum funding amounts in:
o section 30-5 for the Commonwealth Grant Scheme;
o section 41-45 for Other Grants; and
o section 46-40 for Commonwealth Scholarships
to reflect supplementation for indexation increases and Budget decisions.
Schedule 1 of the Bill will amend section 30-5 of the Higher Education
Support Act 2003 (HESA) to provide for changes to the maximum grant amounts
under the Commonwealth Grant Scheme (CGS) for 2010 and 2011 to take account
of indexation and measures in the 2009 Budget. These measures include new
grants for performance funding in 2011 onwards, increases to the CGS
funding clusters to replace amounts currently provided as grants through
Other Grants under Part 2-3 for the purpose of assisting with the cost of
providing the practicum component of teacher education and the workplace
reform program. The Schedule deletes paragraph 30-5(h) of HESA to remove
the maximum amount for 2012 to take account of the 2009 Budget measure to
introduce a demand driven system of Commonwealth supported places in 2012
with no overall limit on the number of student places that may be funded
under the CGS.
Schedule 1 of the Bill will amend section 41-45 of HESA to vary the maximum
payments for grants under Part 2-3 of HESA to take account of indexation
and 2009 Budget measures. The maximum amounts under Part 2-3 will be
adjusted to reflect cessation of the Learning and Teaching Performance Fund
and Workplace Productivity Program, new arrangements for quality and
standards, the transfer of funding for the previous Improving the Practical
Component of Teacher Education and Workplace Reform programs to the CGS,
funding for new programs to support equality of opportunity and structural
adjustment, increased funding for continuing research programs and the
introduction of two new programs, Sustainable Research Excellence in
Universities and Joint Research Engagement.
Schedule 1 of the Bill will amend section 46- 40 of HESA to decrease the
maximum grants payable under this part to take account of 2009 Budget
measures to replace certain Commonwealth Scholarships with revised student
income support arrangements and increase Australian Postgraduate Awards.
Schedule 2 of the Bill will amend section 30-15 and section 33-10 of HESA
to include a new funding cluster for 'education'. The amount for the new
education cluster will be increased to reflect the transfer of funds from
the Improving the Practical Component of Teacher Education Program. The
amounts for all funding clusters will be increased to reflect the transfer
of funding from the Workplace Reform Program and to reflect indexation.
Schedule 3 of the Bill will amend section 33-25 of HESA to increase from 5
per cent to 10 per cent the maximum additional funding an eligible higher
education provider can receive for over enrolment when calculating the
adjustment to its basic grant amount. This gives effect to a 2009 Budget
measure.
Schedule 4 of the Bill will amend section 41-10 of HESA to vary the
purposes for which Other Grants may be made and the eligibility for those
grants to reflect 2009 Budget decisions. The Table in section 41-10 will be
amended to remove grants for the purposes of enhancing learning and
teaching in higher education to reflect cessation of the Learning and
Teaching Performance Fund and to assist with the cost of providing the
practicum component of teacher education, funding for which is being
transferred to the CGS, and to include grants for the purpose of supporting
structural adjustment.
Schedule 5 of the Bill will change the maximum student contribution amounts
for 2010 to reflect indexation and the 2009 Budget measure to increase the
maximum amount for commencing students undertaking education and nursing
from the 'national priority' to the 'band 1' amount.
Schedule 6 of the Bill will amend section 137-15 to give effect to a 2009
Budget measure to remove the OS-HELP loan fee from 2010.
Schedule 7 of the Bill will amend section 198-20 to give effect to a 2009
Budget measure to apply new indexation arrangements to maximum student
contribution amounts in 2011, in advance of applying those arrangements
more generally in 2012 onwards.
FINANCIAL IMPACT
In relation to the Higher Education Support Act 2003, the Bill:
- increases the overall appropriation under section 30-5 by $416,349,000
for the period 1 January 2010 to 31 December 2011;
- increases the overall appropriation under section 41-45 by $398,567,000
for the period 1 January 2010 to 31 December 2012 and appropriates
funding for 2013 to a limit of $2,067,383,000; and
- decreases the overall appropriation under section 46-40 by $355,772,000
for the period 1 January 2010 to 31 December 2012 and appropriates
funding for 2013 to a limit of $275,133,000
The estimated financial impact of measures in the Bill on HELP over the
period
2009-10 - 2012-13 is -$156.132 million on the fiscal balance.
HIGHER EDUCATION SUPPORT AMENDMENT (2009 BUDGET MEASURES) BILL 2009
NOTES ON CLAUSES
Clause 1 - Short title
Provides for the Act to be cited as the Higher Education Support Amendment
(2009 Budget Measures) Act 2009.
Clause 2 - Commencement
Subclause 2(1) inserts a three column table setting out commencement
information for various provisions in the Act. Each provision of the Act
specified in column 1 of the table commences (or is taken to have
commenced) in accordance with column 2 of the table and any other statement
in column 2 has effect according to its terms.
The table has the effect of providing for sections 1-3 and any provision in
HESA not covered elsewhere in the table, Schedule 1, Schedule 3, Schedule 4
item 2, Schedule 6, and Schedule 7 to commence on Royal Assent; and for
Schedule 2, Schedule 4 item 1 and Schedule 5 to commence on 1 January 2010.
Subclause 2(2) provides that column 3 of the table is for additional
information which may be added to or edited in any published version of the
Act but that information in this column is not part of the Act.
Clause 3 - Schedule(s)
Provides that each Act that is specified in a Schedule is amended or
repealed as set out in the applicable items in the Schedule and that any
other item in a Schedule has effect according to its terms.
For ease of description, this explanatory memorandum uses the following
abbreviation:
HESA means the 'Higher Education Support Act 2003.'
Schedule 1-Grants
Higher Education Support Act 2003
Item 1 - Paragraphs 30-5(1)(f) to (h)
Repeals paragraphs 30-5(1)(f), (g) and (h) and substitutes new paragraphs
30-5(1)(f) and (g). Paragraph (h) is deleted to reflect the Government's
announcement that there will be no overall limit on the number of places to
be funded under the Commonwealth Grant Scheme from 2012 onwards.
Section 30-5 of HESA provides that the Minister must ensure that the total
amounts of grants payable under Part 2-2 of Chapter 2 of HESA in respect of
a year as a result of allocation to higher education providers under
section 30-10 do not exceed the amounts for each year as specified in
subsection 30-5(1). New paragraphs (f) and (g) provide that the maximum
allocation to higher education providers is $4,467,881,000 for the year
2010 and $4,695,755,000 for the year 2011.
Item 2 - At the end of subsection 33-1(1)
Inserts new paragraph (c) into subsection 33-1(1). Section 33-1 explains
how grants payable to higher education providers for a year are calculated.
New paragraph 33-1(1)(c) provides that, if applicable and the year is 2011
or later, the calculation of a grant for a year also includes the
performance funding grant amount for a provider for the year in question.
Item 3 - After subsection 33-1(1)
Inserts new subsection 33-1(1A) which defines performance funding grant
amount for the purposes of subsection (1). The performance funding grant
amount for a higher education provider for a year is the amount (if any)
worked out under the Commonwealth Grant Scheme Guidelines. The Commonwealth
Grant Scheme Guidelines are made by the Minister under section 238-10.
Item 4 - Subsection 41-45(1) (table items 6 to 8)
Repeals items 6 to 8 in the table at subsection 41-45(1) and inserts new
items 6 to 9 in the table for the years 2010 to 2013. The table sets out
the maximum payment of other grants under Part 2-3 of HESA for a year.
Subsection 41-45(1) provides that the total payments under Part 2-3 in
respect of a year referred to in the table must not exceed the amount
specified next to that year in the table.
Items 6, 7, 8 and 9 provide that the maximum payments for other grants
under Part 2-3 are $1,887,252,000 for 2010, $2,027,324,000 for 2011,
$1,996,679,000 for 2012 and $2,067,383,000 for 2013.
Item 5 - Section 46-40 (table items 7 to 9)
Repeals items 7 to 9 in the table at section 46-40 and inserts new items 7
to 10 in the table for the years 2010 to 2013. The table sets out the
maximum payments for Commonwealth scholarships for a year.
Items 7, 8, 9 and 10 provide that the maximum payments for Commonwealth
scholarships are $301,136,000 for 2010, $315,711,000 for 2011, $303,844,000
for 2012 and $275,133,000 for 2013.
Schedule 2-Funding clusters
Higher Education Support Act 2003
Item 1 - Section 30-15 (table)
Repeals the table at section 30-15 and substitutes a new table listing the
funding clusters for the purposes of HESA. The new table provides a
separate funding cluster for Education (to separate it from the funding
cluster for Mathematics, Statistics, Behavioural Science, Social Studies,
Computing, Built Environment and Other Health).
Item 2 - Section 33-10 (table)
Repeals the table at section 33-10 and substitutes a new table listing the
Commonwealth contribution amount for a place in a funding cluster. In
addition to specifying new Commonwealth contribution amounts, the new table
provides a separate funding cluster for Education (to separate it from the
funding cluster for Mathematics, Statistics, Behavioural Science, Social
Studies, Computing, Built Environment and Other Health).
Item 3 - Transitional provision - indexation
Item 3 is a transitional provision which specifies that the amounts in the
table in section 33-10 of HESA, as amended by Item 2 of Schedule 2, are not
to be indexed on 1 January 2010.
Item 4 - Transitional provision
Item 4 is a transitional provision which specifies that the amendments made
by Schedule 2 are to be disregarded for the purposes of working out if and
how a higher education provider's basic grant for 2010 or earlier years is
to be adjusted under Subdivision 33-C of HESA.
Schedule 3-Adjustment of basic grant amounts
Higher Education Support Act 2003
Item 1 - Paragraph 33-25(7)(b)
Omits "5%" in paragraph 33-25(7)(b) and substitutes "10%".
Subsection 33-25(6) of HESA provides that the basic grant amount for a year
for Table A and Table B providers is increased by an adjustment if the
provider's corrected basic amount for the preceding year was more than the
provider's basic grant amount for the year.
Subsection 33-25(7) provides that the adjustment under subsection 33-25(6)
is the lower of the following:
- an amount equal to the difference between the corrected basic amount
and the basic grant amount (paragraph 33-25(7)(a)); and
- 5% of the basic grant amount (paragraph 33-25(7)(b)).
This amendment will increase the percentage of the basic grant amount
contained in paragraph 33-25(7)(b) to 10%.
Item 2 - Application
Item 2 is an application provision which specifies that the amendment made
by Schedule 3 applies to adjustments of basic grant amounts for 2011 and
later years.
Schedule 4-Other grants
Higher Education Support Act 2003
Item 1 - Subsection 41-10(1) (table items 3 and 8A)
Repeals items 3 (grants to enhance learning and teaching in higher
education) and 8A (grants to assist with the cost of providing the
practical component of teacher education) from the table in subsection 41-
10(1) of HESA.
Subsection 41-10(1) is a table of eligibility for higher education
providers and other eligible bodies for grants for certain specified
purposes under Part 2-3 of HESA in respect of 2005 or later years.
Item 2 - Subsection 41-10(1) (after table item 9A)
Inserts new item 9B into the table in subsection 41-10(1) to provide for
grants to support structural adjustment. This amendment provides that Table
A and Table B providers that are universities would be eligible for this
new grant.
Schedule 5-Maximum student contribution amounts
Higher Education Support Act 2003
Item 1 - Subsection 93-10(1) (table)
Repeals the table at subsection 93-10(1) and substitutes a new table. The
table lists the maximum student contribution amount per place for a unit of
study. In addition to specifying new maximum student contribution amounts,
the new table provides a separate funding cluster for Education (to
separate it from the funding cluster for Mathematics, Statistics,
Behavioural Science, Social Studies, Computing, Built Environment and Other
Health).
Item 2 - Transitional provision - indexation
Item 2 is a transitional provision which specifies that the amounts in the
table in section subsection 93-10(1) of HESA, as amended by Item 1 of
Schedule 5, are not to be indexed on 1 January 2010.
Item 3 - Saving provision - maximum student contribution amounts for old
funding clusters
Item 3 is a savings provision. The effect of Item 3 is that the new maximum
student contribution amounts in the table at subsection 93-10(1) (as
inserted by Item 1 of this Schedule) will not apply to a person where the
following apply:
- the person started their course of study with a higher education provider
before 1 January 2010; and
- the person was a Commonwealth supported student in relation to a unit of
study in that course; and
- any of the following apply to the person:
o the person had not completed the course by 31 December 2009; or
o in 2009 the person was undertaking an enabling course (as defined
in the Dictionary at Schedule 1 of HESA); or
o the person has completed the related course for an honours course
of study and is undertaking the honours course of study; and
- the person is undertaking a unit of study that would have been in
Education in the funding cluster of Mathematics, Statistics, Behavioural
Science, Social Studies, Education, Computing, Built Environment, Other
Health or the funding cluster of Nursing if the amendment made by this
Schedule had not been made.
A person covered by the savings provision will be subject to the maximum
student contribution amount for a unit of study that would have been in
Education in the funding cluster of Mathematics, Statistics, Behavioural
Science, Social Studies, Education, Computing, Built Environment, Other
Health or the funding cluster of Nursing if the amendment made by this
Schedule had not been made.
Schedule 6-OS-HELP debts
Higher Education Support Act 2003
Item 1 - Subsection 137-15(2)
Repeals and substitutes new subsection 137-15(2). New subsection 137-15(2)
provides that the amount of the OS-HELP debt is an amount equal to the
amount of the loan. The effect of Item 1 is to remove the 20% loan fee for
OS-HELP debts.
Item 2 - Application
Item 2 is an application provision which specifies that the amendment made
by Schedule 6 applies in relation to OS-HELP debts incurred on or after 1
January 2010.
Schedule 7-Indexation
Higher Education Support Act 2003
Items 1 and 2 - Section 198-20
Several amounts referred to in HESA are subject to indexation and Part 5-6
of Chapter 5 sets out how those amounts are to be indexed. Section 198-15
provides that the indexation factor for a year is calculated by dividing
the index number for the relevant year by the index number for the
immediately preceding year.
Section 198-20 specifies the meaning of index number and provides that it
is, for a year, the Higher Education Grants Index number for that year
published by the Minister in the Gazette.
Item 1 omits the word "The" and inserts the words "(1) Subject to
subsections (2) and (3), the" at the beginning of section 198-20.
Item 2 inserts new subsections (2) and (3) into section 198-20. New
subsection 198-20(2) provides that, for the purpose of applying
section 198-10 to the amounts specified in item 2 of the table in section
198-5 for 2011, the index number is the Higher Education Student
Contribution Amounts Index number for that year published by the Minister
in the Gazette.
New subsection 198-20(3) provides that, for the purpose of applying section
198-10 to the amounts specified in the items of the table in section 198-5
for 2012, the index number for 2011 is taken to be 1.
These subsections vary the method for indexing maximum student contribution
amounts for 2011. From 2012 the indexation of maximum student contribution
amounts will revert to being in line with the indexation of other amounts
(without affecting the indexation that had already been applied in 2011).
Item 2 also inserts a new subsection (4) into section 198-20 which explains
that a notice in the Gazette specifying an index number is not a
legislative instrument. This provision is included to assist readers, as
the instrument is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act 2003.