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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER EDUCATION SUPPORT AMENDMENT
(COST RECOVERY) BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Education,
the Honourable Dan Tehan MP)
Higher Education Support Amendment (Cost
Recovery) Bill 2018
OUTLINE
The Higher Education Support Amendment (Cost Recovery) Bill 2018 (Bill) is a Bill to
amend Divisions 16 and 19 of the Higher Education Support Act 2003 (HESA) to:
implement an application fee for applications for approval as higher education
providers whose students are entitled to FEE-HELP assistance under HESA; and
provide for the administration of the annual charge on higher education providers
under the Higher Education Support (Charges) Bill 2018 (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 and Training.
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 saving of
$13.8 million over the forward estimates (2019-20 to 2021-22).The application fee which is
based on full cost recovery is expected to deliver saving of $0.3 million over 2018-19 to
2021-22. Thereby the HELP cost recovery measures provide an estimated combined saving
of $14.1 million over 2018-19 to 2021-22.
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LIST OF ABBREVIATIONS
Charges Bill Higher Education Support (Charges) Bill 2018
CRIS Cost Recovery Implementation Statement
HELP Higher Education Loans Program
HESA Higher Education Support Act 2003
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Higher Education Support Amendment (Cost
Recovery) Bill 2018
The Higher Education Support Amendment (Cost Recovery) Bill 2018 (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 Higher Education Support Amendment (Cost Recovery) Bill 2018 is a Bill to amend
Divisions 16 and 19 of the Higher Education Support Act 2003 (HESA) to:
implement an application fee for applications for approval as higher education
providers whose students are entitled to FEE-HELP assistance under HESA; and
provide for the administration of the annual charge on higher education providers
under the Higher Education Support (Charges) Bill 2018 (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 and Training.
The Bill also implements an application fee on prospective FEE-HELP providers to fund the
FEE-HELP provider application process, including the costs of administering and assessing
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.
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Summary of analysis
The Bill does not engage any of the applicable rights or freedoms of individuals, and
therefore the Bill is compatible with human rights.
Analysis of human rights implications
The Bill does not engage any of the applicable rights or freedoms of individuals. It amends
HESA to implement an application fee for an application for approval as a higher education
provider whose students are entitled to FEE-HELP assistance under HESA, and to reflect the
introduction of an annual charge on higher education providers under the Charges Bill.
Conclusion
The Bill is compatible with human rights because it does not raise any human rights issues.
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Higher Education Support Amendment (Cost
Recovery) Bill 2018
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the Act to be the Higher Education Support Amendment (Cost
Recovery) Act 2018.
Clause 2 - Commencement
The table in this clause specifies that parts of the Bill commence at the following times:
sections 1 to 3 and any matters not otherwise covered by the commencement table
commence on the day the Bill, once enacted, receives the Royal Assent;
Part 1 of Schedule 1 commences on the 1 January 2019;
Part 2 of Schedule 1 commences at the same time as the Charges Bill commences.
However, the provisions do not commence if the Charges Bill does not commence.
Clause 3 - Schedule(s)
Clause 3 provides that any legislation that is specified in a schedule to the Bill is amended or
repealed as set out in the applicable items in the schedule concerned and any other item in a
schedule has effect according to its terms.
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Schedule 1 Amendments
Summary
Schedule 1 to the Bill implements an application fee on prospective FEE-HELP providers
submitting an application for approval as a higher education provider under HESA. This will
assist to fund the FEE-HELP provider application process including the costs of
administering and assessing the applications from prospective providers seeking approval as
a higher education provider under HESA.
Schedule 1 to the Bill also amends Division 19 of HESA to provide for the administration of
the annual charge on higher education providers imposed under the Higher Education
Support (Charges) Bill 2018.
Detailed explanation
Part 1--Higher education provider application fee
Higher Education Support Act 2003
Item 1 - At the end of subsection 16-40(2)
Item 2 - At the end of subsection 16-40
Subsection 16-40(2) of HESA requires the application for approval as a higher education
provider under HESA to be in a form approved by the Minister, and accompanied by
information as the Minister requests.
Item 1 adds a new paragraph (c), to require that the application for approval as a higher
education provider under HESA be accompanied by the fee which will be prescribed by, or
worked out in accordance with the method prescribed by, the Higher Education Provider
Guidelines. Item 2 inserts a new subsection 16-40(3) that provides that the application fee
must not be such as to amount to taxation.
The purpose of this amendment is implement the application fee on registered higher
education providers that apply for approval as a higher education provider to offer
FEE-HELP.
Part 2--Higher education provider charge
Higher Education Support Act 2003
Item 3 - After section 19-65
This item enables the Department of Education and Training to administer the higher
education provider charge imposed by the Charges Bill.
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Item 3 inserts a new section 19-66 under Subdivision 19-E of HESA, which outlines the
compliance requirements for higher education providers.
Proposed subsection 19-66(1) will require higher education providers to pay the higher
education provider charge, and any penalty for late payment of the higher education provider
charge, when it is due and payable. A failure by a higher education provider to pay the charge
(or late payment penalty) will constitute a breach by the provider of the quality and
accountability requirements of HESA, for which the Minister can take action under
Division 22 of the Act.
Proposed subsection 19-66(2) provides the Higher Education Provider Guidelines may
provide for all or any of the following matters:
the issuing of notices setting out the amount of higher education provider charge
payable by a provider;
when higher education provider charge is due and payable;
the issuing of notices extending the time for payment of higher education provider
charge;
penalties for late payment of higher education provider charge;
to whom higher education provider charge and any penalties for late payment are
payable;
the refund, remittal or waiver of higher education provider charge or late payment
penalty;
the review of decisions made under the Higher Education Provider Guidelines in
relation to the collection or recovery of higher education provider charge;
any other matters relating to the collection and recovery of higher education provider
charge.
The higher education provider charge will commence from 2019 calendar year and will be
collected from providers yearly 'in arrears' with providers invoiced 'in arrears' for the charge
after providers' student enrolments data for the calendar year has been verified (often occurs
around mid-May the following year). Higher education providers will have 30 days from the
date of the issued invoice to pay the higher education provider charge, and penalties may
apply for late payments.
Item 4 - Subclause 1(1) of Schedule 1
This item inserts the definition for higher education provider charge in the Dictionary under
subclause 1(1) of Schedule 1 in HESA.
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