Commonwealth Numbered Regulations - Explanatory Statements
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AUSTRALIAN EDUCATION AMENDMENT (2022 SCHOOL COMMONWEALTH SHARE ADJUSTMENT) REGULATIONS 2022 (F2022L01510)
EXPLANATORY STATEMENT
Issued by the authority of the Minister for Education
Australian Education Act 2013
Australian Education Amendment (2022 School Commonwealth Share Adjustment) Regulations 2022
Authority
Subsection 130(1) of the Australian Education Act 2013 (the Act) empowers the Governor-General to make regulations prescribing matters required or permitted by the Act to be prescribed by the regulations, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Legislative background
The Act is the principal legislation by which the Australian Government provides Commonwealth financial assistance for schools.
Under the Act, financial assistance is provided to states and territories for distribution to approved authorities for government and non-government schools, block grant authorities and non-government representative bodies for non-government schools. A block grant authority is the body, which exists--for non-government schools only--in order to provide capital funding for capital projects at such schools (and is different to an approved authority, which is the body to which recurrent funding under the Act is ultimately paid). Entities approved to receive financial assistance under the Act must meet and maintain the conditions of approval outlined in the Act.
The Australian Education Regulation 2013 (the Principal Regulation) contains a number of provisions on matters concerning conditions and calculations of grants of Commonwealth financial assistance to states and territories for schools, matters relevant to the effective and efficient administration of that assistance, and matters relevant to the provision of prescribed circumstances funding under the Act.
Purpose and operation of amendments
The purpose of the Australian Education Amendment (2022 School Commonwealth Share Adjustment) Regulations 2022 (the Amendment Regulations) is to prescribe a more appropriate Commonwealth funding share for two schools through an amendment to the Principal Regulation and also make a minor amendment to clarify a definition relating to Capacity to Contribute (CTC) scores which are an element of the school funding formula under the Act that is used to measure a school community's capacity to contribute financially to a school.
Under the 2018 Quality Schools reforms, all non-government schools are moving to consistent Commonwealth funding shares of 80% of the Schooling Resource Standard (SRS) by 2029. The SRS is an estimate of how much total public funding a school needs to meet its students' educational needs. As part of this, schools that were funded as part of a system (such as government and Catholic systems) were all assigned and transitioned to 80% on the same, average share for the whole system.
From 2020 the Principal Regulation was amended to instead assign each non-government school its own school-level shares and individual transition to 80% by 2029, based on the funding schools had received from their systems in 2017 and a 2019 SRS amount for each school.
Structural changes made to All Saints College (Australian Government Education ID number (AGEID) 13863) and Bacchus Marsh Grammar (AGEID 16082) between 2017 and 2019 resulted in these schools receiving disproportionate individual funding shares calculated in accordance with the Regulation.
Under section 35C of the Act, the Commonwealth shares can be varied to apply more appropriate shares over the transition to 80%, by prescribing new Commonwealth shares or a new method for calculating Commonwealth shares in the Regulation.
To address this, the Amendment Regulations will amend the current method to calculate an individual starting Commonwealth share and instead prescribe a more appropriate starting point for the two schools by amending section 19E of the Principal Regulation to prescribe a notional starting share for:
* Bacchus Marsh Grammar (AGEID 16082) of 75.255235070306 per cent for 2019, and
* All Saints College (AGEID 13863) of 184.130020331571 per cent for 2021.
The prescribed new notional starting share for All Saints College will affect financial assistance in respect of the school from 2022 onwards so as to not financially disadvantage the school in respect of previous years, consistently with the requirements of section 12 of the Legislation Act 2003. For the avoidance of doubt, the application of new notional starting share for Bacchus Marsh Grammar will financially benefit the school with respect to its 2020 and 2021 funding entitlements and future years.
The Amendment Regulations will also make a minor amendment to clarify a definition relating to CTC scores. While most non-government schools from 2022 onwards will have CTC scores calculated based on the Direct Measure of Income (DMI) methodology, the Principal Regulation also prescribes other methodologies for calculating CTC scores prior to 2022 and for schools where the DMI is not available or not appropriate. Section 4 of the Principal Regulation ('Definitions') provides a definition for a change in basis of a CTC score which lists several key methodologies (e.g., the 2016 SES score) but inadvertently does not include the Refined Area Based (RAB) methodology. While it is implicit in the Principal Regulation that the RAB methodology is a different basis for calculating a CTC score, this amendment seeks to include a formal definition to make this explicit.
Regulatory Impact
The Office of Best Practice Regulation has agreed a Regulation Impact Statement is not required in relation to the 2022 School Commonwealth Share Adjustment (OBPR reference OBPR22-02437).
Commencement
The Amendment Regulations will commence on the day after registration on the Federal Register of Legislation.
Consultation
The Minister for Education wrote to all state and territory Education Ministers, Independent Schools Australia and the National Catholic Education Commission on 19 September 2022 to formally consult on the Amendment Regulations. All responses received by the Department of Education were supportive of the proposed update to the Principal Regulation.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Education Amendment (2022 Capital Funding Indexation) Regulations 2022
The Australian Education Amendment (2022 School Commonwealth Share Adjustment) Regulations 2022 (Amendment Regulations) 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
The Amendment Regulations prescribe new notional starting shares for All Saints College (Australian Government Education ID number (AGEID) 13863) for 2021 and Bacchus Marsh Grammar (AGEID 16082) for 2019. The Amendment Regulations also refines the definition of 'basis' to include the Refined Area Based methodology.
Human rights implications
The Amendment Regulations engage the right to education under Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), and Articles 28 and 29 of the Convention on the Rights of the Child (CRC).
Right to education
The Amendment Regulations positively engage the right to education in Article 13 of the ICESCR. Article 13 recognises the right of everyone to education, which is directed towards the full development of the human personality and the sense of its dignity, and to enable all persons to participate effectively in society. It also recognises the liberty of parents and guardians to choose non-government schools for their children's education, provided those schools conform to minimum educational standards. The right to education for children is also found in Articles 28 and 29 of the CRC.
The Amendment Regulations promote the right to education by applying two new notional starting shares that more appropriately reflect the intended Commonwealth funding model. This measure will thereby promote the right to education by more effectively allocating finite funding resources and will help to ensure Australia continues to have functioning and sufficiently supported educational institutions.
Conclusion
The Amendment Regulations are compatible with human rights because they promote the right to education under the ICESCR and the CRC.
Minister for Education, the Hon Jason Clare MP
Detailed explanation of the provisions of the Australian Education Amendment (2022 School Commonwealth Share Adjustment) Regulations 2022
Section 1 - Name
This section provides that the title of the instrument is the Australian Education Amendment (2022 School Commonwealth Share Adjustment) Regulations 2022 (the Amendment Regulations).
Section 2 - Commencement
This section provides that the Amendment Regulations commence on the day after it is registered on the Federal Register of Legislation.
Section 3 - Authority
This section provides that the Amendment Regulations are made under the Australian Education Act 2013 (the Act).
Section 4 - Schedules
This section provides that each instrument that is specified in a Schedule to the Amendment Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.
Schedule 1 - Amendments
Australian Education Regulation 2013
Item 1 - Subsection 4(1) (after paragraph(c) of the definition of basis)
This item amends section 4(1) of the Australian Education Regulation 2013 (the Principal Regulation) to clarify the definition of 'basis' for the purposes of section 52 of the Act.
The purpose of this amendment is to clarify the definition of the term 'basis' in terms of a school's Capacity to Contribute (CTC) score for a year. The current definition takes into consideration a variety of different methods of calculating a school's CTC score for the purposes of section 52 of the Act.
This amendment clarifies that the refined area-based score method prescribed in section 23 of the Principal Regulation also provides a basis for the calculation of a CTC score.
Items 2 and 3 - Section 19E; At the end of section 19E
These items amend section 19E of the Principal Regulation to prescribe a notional starting share for:
* Bacchus Marsh Grammar (AGEID 16082) of 75.255235070306 per cent for 2019, and
* All Saints College (AGEID 13863) of 184.130020331571 per cent for 2021.
Section 35C of the Act provides that the regulations may prescribe a percentage, or a method to work out a percentage, for a non-government school for a transition year for the school that is the Commonwealth share for the school for the transition year.
Section 19 of the Principal Regulation specifies the formula for working out the notional starting share for non-government schools. For non-systemic schools, the notional starting share for a school is based on the proportion of Commonwealth funding entitlement for a year compared to 100 per cent of the Schooling Resource Standard (SRS). For systemic schools, the notional starting share is based on the amount their approved system authority provided in 2017 (proportioned to their 2019 Commonwealth funding entitlement) compared to 100 per cent of the SRS.
The purpose of this amendment is to define a new notional starting share for two schools that are receiving disproportionate Commonwealth shares.
Item 4 - At the end of Part 8
This item inserts an application provision which specifies that certain amendments apply to financial assistance for 2020 (for Bacchus Marsh Grammar) and 2022 (for All Saints College) and later years.
Schedule 1 to the Amendment Regulations refers to the amended notional starting shares for two schools. This schedule prescribes a notional starting share in 2019 for Bacchus Marsh Grammar and 2021 for All Saints College. Items 2 and 3 ensure that the new notional starting shares under this schedule are applied to the calculation and payment of funding entitlements from 2020 for Bacchus Marsh Grammar, and from 2022 for All Saints College. The prescribed new notional starting share for All Saints College will affect financial assistance in respect of the school from 2022 onwards so as to not financially disadvantage the school in respect of previous years, consistently with the requirements of section 12 of the Legislation Act 2003. For the avoidance of doubt, the application of new notional starting share for Bacchus Marsh Grammar will financially benefit the school with respect to its 2020 and 2021 funding entitlements and future years.
This item clarifies that the amendments relating to the new notional starting share only apply in the specified commencement year and later years.