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1998-1999-2000-2001
THE
PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
HIGHER EDUCATION FUNDING AMENDMENT
BILL 2001
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Minister for Education, Training and Youth Affairs the Hon Dr
David Kemp MP)
ISBN: 0642 458820
HIGHER EDUCATION FUNDING AMENDMENT BILL 2001
The Higher Education Funding Act 1988 (HEFA) makes provision
for grants of financial assistance to higher education institutions and other
bodies for higher education purposes, establishes the Higher Education
Contribution Scheme (HECS), the Postgraduate Education Loans Scheme (PELS) and
the Open Learning Deferred Payment Scheme (OLDPS) and makes provision for the
repayment of monies lent by the Commonwealth to students under those
schemes.
The Australian Research Council Act 2001 establishes the
Australian Research Council (ARC) as a body which provides advice to the
Minister on Commonwealth support for research, administers the Commonwealth
research programmes for which it has responsibility and makes recommendations to
the Minister on the allocation of funds within research programs. This funding
is appropriated under section 49 of the Act.
The Australian National
University Act 1991 establishes the Australian National University and
provides for its governance arrangements.
The Higher Education Funding
Amendment Bill 2001 will amend the HEFA to:
− vary the maximum funding levels in section 17 for the 2002 and 2003
funding years to provide for an additional 670 new student places to be
allocated to regional universities and campuses, a 2001-02 Budget
measure;
− vary the maximum funding levels in section 23C for the 2002
and 2003 funding years to include provision for additional support for people
with disabilities, a 2001-02 Budget measure;
− legislate the maximum
funding levels in section 17, subsections 20(3), 22A(5), 23C(2), 24(3), and
27A(6) and section 27D for the 2003 funding year, including additional funding
provided in the Backing Australia’s Ability policy and the
2001-2002 Budget measures noted above;
− vary the maximum funding
levels in section 17, subsections 20(3), 22A(5), 23C(2), 24(3) and 27A(6) for
the 2002 funding year to reflect supplementation for price
movements;
− vary the maximum funding levels in Part 2.2 to reflect
revised estimates of Higher Education Contribution Scheme (HECS) receipts for
the 2000, 2001 and 2002 funding years and the Commonwealth’s
superannuation liability for the 2001 and 2002 funding years;
− vary
the maximum funding level in section 17 for the 2002 funding year to reflect a
transfer of funds to the Australian Research Council Act 2001 to enable
the Institute of Advanced Studies of the Australian National University to
access ARC competitive grant programmes;
− vary the maximum funding
levels in subsection 23C(2) for the funding year 2001 to reflect a transfer of
innovation programme funds from 2000 to 2001;
− remove an ambiguity
concerning the operation of the Higher Education Contribution Scheme (HECS) in
relation to the Bankruptcy Act 1966;
− broaden the Minister's
guideline-making power in relation to HECS and work experience in industry to
assist higher education institutions in interpreting the current provisions of
the Act;
− enable the Commissioner of Taxation to apply any refunds of
HECS repayment credits of less than $50 to existing outstanding taxation
debts;
− remove references to the now repealed Overseas Students
Charge Act 1979.
The Bill amends the Australian Research Council
Act 2001 (ARCA) to:
− legislate the maximum funding
level in section 49 of ARCA for the funding year 2003, including additional
funding provided in the Backing Australia’s Ability
policy;
− vary the maximum funding level in section 49 of ARCA for
the funding year 2002 to reflect supplementation for price
movements;
− vary the maximum funding level in section 49 of ARCA for
the funding year 2002 to reflect a transfer of funds from section 17 of HEFA to
enable the Institute of Advanced Studies of the Australian National University
to access ARC competitive grant programmes.
The Bill amends the
Australian National University Act 1991 to enable the University to
establish a new advisory/committee structure.
In relation to the Higher Education Funding Act 1988,
the Bill:
− provides base funding of $4,044.832 million in
2003;
− increases funding by $138.254 million in
2002;
− reduces funding by $0.041 million in 2001.
The aggregate
adjustments for each funding year include:
− additional funding for
regional university places of $4.192 million in 2002 and $8.464 million in
2003;
− additional funding for disability support of $1.836 million in
2002 and $2.961 million in 2003;
− a transfer $2.22 million in
2002 from section 17 of HEFA to section 49 of ARCA;
− a transfer $1
million of innovation programme funds from 2000 to 2001 (section 23C of
HEFA);
− technical adjustments on the basis of revised estimates of
HECS receipts and superannuation liabilities.
In relation to the
Australian Research Council Act 2001, the Bill
provides:
− base funding of $339.183 million in
2003;
− increases funding by $7.963 million in 2002.
The
aggregate adjustment for 2002 includes a transfer of $2.22 million to section 49
of the ARCA from section 17 of HEFA.
HIGHER EDUCATION FUNDING AMENDMENT BILL
2001
Clause 1 - Short title
Provides for the Act to be cited
as the Higher Education Funding Amendment Act 2001.
Clause 2 -
Commencement
Provides for this Act (other than item 11 of Schedule 1)
to commence on the day on which it receives the Royal Assent.
Item 11 of
Schedule 1 will commence or will be deemed to have commenced immediately after
the commencement of the Innovation and Education Legislation Amendment Act
2001.
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.
Australian Research Council Act 2001
Items
1–3
Amend paragraphs 48(b) and 49(b) to provide financial
assistance for approved research programs for the year 2003 under Division 1 of
Part 7 of the Act.
Item 4
Since the introduction of the Higher Education
Contribution Scheme (HECS), funding for the operating purposes and limited
operating purposes of higher education institutions has come from a combination
of HECS liabilities and grants approved under sections 15 and 16 of the Act.
Section 17 sets the maximum aggregate funding levels for operating grants that
may be paid to institutions under sections 15 and 16 while Part 4.3 of the Act
established the Higher Education (HECS)
Reserve[1] and provides for the
application of money in the Account.
Each year the operating needs of
institutions are estimated and funded by a combination of estimated HECS
liabilities during the year and aggregate grants funded within the maximum
amount provided for in section 17 for that year. Actual HECS liabilities for a
year are not available until early in the subsequent year after which an
adjustment is made to the section 17 funding amount for the previous year to
correctly reflect the relative contribution of HECS liabilities to the funding
needs of institutions.
Item 4 amends section 17 to vary the
maximum aggregate funding level for 2000, 2001 and 2002 to reflect revised
Higher Education Contribution Scheme (HECS) liabilities and estimated
liabilities, to vary the maximum aggregate funding level for 2002 to provide for
new student places to be allocated to regional universities and campuses, to
reflect supplementation for price movements and a transfer of funds to the
Australian Research Council Act 2001 to enable the Institute of Advanced
Studies of the Australian National University to access Australian Research
Council competitive grant programmes. Item 4 also inserts the maximum
aggregate funding level for the year 2003 (including funding for new student
places to be allocated to regional universities and campuses).
Items 5
Section 20 provides for grants to higher education
institutions for superannuation expenses for staff whose salaries are funded
from grants provided under the Act. Item 5 amends subsection 20(3) to
vary the maximum aggregate grant amount for 2001 and 2002 to reflect revised
estimates of the Commonwealth’s superannuation liability, to vary the
maximum aggregate grant amount for 2002 to reflect supplementation for price
movements and to insert the maximum aggregate grant amount for the year
2003.
Items 6
Subsection 22A(5) provides for the total
amounts which may be approved as expenditure by way of grants to open learning
organisations. Item 6 amends subsection 22A(5) to increase the maximum
aggregate grant amount for the year 2002 to reflect price movements and to set
the maximum aggregate grant amount for the year 2003.
Items
7
Subsection 23C(2) of the Act limits the total funds available for
grants that may be approved under sections 21, 21B, 22, 23, 23A and 23B of the
Act for specified years. Item 7 amend subsection 23C(2) to vary the
funding limit for 2001 to reflect a transfer of innovation programme funds from
2000 to 2001, to increase the funding limit for 2002 to reflect supplementation
for price movements and additional support for people with disabilities, and to
insert the funding limit for the year 2003 (including additional support for
people with disabilities).
Item 8
Section 24 of the
Act provides grants in respect of teaching hospitals. Item 8 amends
subsection 24(3) to increase the maximum aggregate grant amount for the year
2002 to reflect supplementation for price movements and to insert the maximum
aggregate grant amount for the year 2003.
Item
9
Section 27A of the Act provides for grants to institutions for
special capital projects. Item 9 amends subsection 27A(6) to increase
the maximum aggregate grant amount for the year 2002 to reflect supplementation
for price movements and to insert the maximum aggregate grant amount for the
year 2003.
Item 10
Section 27D of the Act allows the Minister to
determine an amount to be available for expenditure by the Commonwealth on the
international marketing and promotion of Australian education and training
services. Item 10 amends subsection 27D(2) to increase the maximum
aggregate funding level for the year 2002 to reflect supplementation for price
movements and to insert the maximum aggregate funding level for the year
2003.
Item 11
Repeals Schedule 1 of the Innovation and
Education Legislation Amendment Act 2001 to correct a drafting
error.
Bankruptcy Act 1966
Items 1 and 2
Add a note to subsections 82(1) and 153(1) to the effect that the
operation of each section in relation to accumulated HEC debts and semester
debts under the Higher Education Funding Act 1988 is affected by section
106YA of that Act.
Item 3
Inserts a proposed new section 106YA to provide for
the effects of bankruptcy on accumulated HEC debts and semester debts under the
Act.
(NOTE: proposed section is abbreviated as ps)
ps106YA
Effect of bankruptcy
Proposed subsection106YA(1) specifies when the
proposed section applies in relation to a bankruptcy.
Proposed
subsection106YA(2) has the effect of providing that debts relating to the
pre-bankruptcy period are provable debts for the purposes of the Bankruptcy
Act 1966. This includes the pre-bankruptcy part of the bankrupt’s
accumulated HEC debt and the unpaid part of the semester debt, or of each of the
semester debts.
Proposed subsection106YA(3) has the effect of providing that debts relating
to the post-bankruptcy period are not provable debts for the purposes of the
Bankruptcy Act 1966. This includes the bankrupt’s accumulated HEC
debt (apart from the pre-bankruptcy part of that debt) and any semester debt
incurred by the bankrupt on or after the bankruptcy date.
Proposed
subsection106YA(4) has the effect of providing that a dividend paid to the
Commonwealth under the Bankruptcy Act 1966 in respect of the
pre-bankruptcy part of the bankrupt’s accumulated HEC debt or a semester
debt mentioned in subsection 106YA(1), is taken to be money that the bankrupt
has directed to be applied in payment of that debt.
Proposed
subsection106YA(5) provides that section 153 of the Bankruptcy Act 1966
does not operate to release the bankrupt from all or any part of the accumulated
HEC debt or a semester debt mentioned in subsection 106YA(1).
Proposed
subsection106YA(6) has the effect of providing that, if subsections 106YA(2) to
(5) apply to an accumulated HEC debt (the old HEC debt) of the bankrupt
(including because of a previous application of subsections 106YA(6) or (7)) and
the old HEC debt is discharged under section 106O because the bankrupt incurred
another accumulated HEC debt (the replacement HEC debt) under section 106N,
those subsections apply (subject to any later application of subsection
106YA(6)) to the replacement HEC debt instead of the old HEC debt. A proof of
debt under the Bankruptcy Act 1966 in relation to the pre-bankruptcy part
of the old HEC debt (including because of a previous application of subsections
106YA(6) or (7)) is taken to relate to the pre-bankruptcy part of the
replacement HEC debt to the extent of that proof. In addition, if at the time
the old HEC debt is discharged under section 106O, a semester debt of the
bankrupt is also discharged under that section, a proof of debt under the
Bankruptcy Act 1966 in relation to the semester debt is taken to relate
to the pre-bankruptcy part of the replacement HEC debt to the extent of that
proof.
Proposed subsection106YA(7) has the effect of providing that, if
immediately before the bankrupt’s bankruptcy date the bankrupt had one or
more undischarged semester debts (an old semester debt), no undischarged
accumulated HEC debt and on or after the bankruptcy date the unpaid part of an
old semester debt is discharged under section 106O because the bankrupt incurred
an accumulated HEC debt (the new HEC debt) under section 106N, then after the
new HEC debt is incurred subsections 106YA(2) to (5) apply (subject to any later
application of subsection 106YA(6)) to the new HEC debt instead of the old
semester debt. In addition, a proof of debt under the Bankruptcy Act
1966 in relation to the old semester debt is taken to relate to the
pre-bankruptcy part of the new HEC debt.
Proposed subsection106YA(8) has
the effect of providing that, subject to subsection 106YA(9), the pre-bankruptcy
part of a bankrupt’s accumulated HEC debt is the amount that would be the
bankrupt’s relevant debt calculated in accordance with subsections 106Q(2)
and (3) if that amount was calculated immediately before the bankrupt’s
bankruptcy date and the reference in paragraph 106Q(2)(a) to the person’s
accumulated HEC debt referred to in paragraph 106Q(1)(b) were a reference to the
person’s accumulated HEC debt on the 1 June immediately preceding the
bankruptcy date.
Proposed subsection106YA(9) has the effect of providing
that, if immediately before the bankrupt’s bankruptcy date the bankrupt
had one or more undischarged semester debts and at a time (the discharge time)
on or after the bankruptcy date, the unpaid part of those debts (the discharged
amount) was discharged because of the operation of section 106O, then if the
bankrupt did not have an accumulated HEC debt immediately before the discharge
time the pre-bankruptcy part of the bankrupt's accumulated HECS debt is equal to
the discharged amount.. Otherwise the pre-bankruptcy part of the
bankrupt’s accumulated HEC debt is taken to be increased at the discharge
time by an amount equal to the discharged amount.
Proposed
subsection106YA(10) defines certain terms used in the proposed section.
Item 4
Has the effect of providing that that the amendments
made by this Schedule apply to bankruptcies for which the date of the bankruptcy
is on or after the day this Bill was introduced in the House of Representatives
(the introduction day).
However, the amendments made by this Schedule
do not apply to a bankruptcy where a declaration was presented by the debtor
under section 54A and accepted under section 54C of the Bankruptcy Act
1966 on or before the introduction day and the date of the bankruptcy is
after the introduction day but within 6 days after the day on which the
declaration was accepted.
The amendments made by this Schedule are
expressed not to affect the interpretation of the Bankruptcy Act 1966 or
the Higher Education Funding Act 1988 where the date of the bankruptcy is
before the introduction day.
Items 1-3
Amend section 3 to insert new definitions of
Chair of the Education Committee and Chair of the Research
Committee and to amend the definition of ex officio
member.
Item 4
Amends subsection 10(1) to remove
the Chairperson of the Board of the Institute and the Chairperson of the Board
of the Faculties as members of the Council of the University and makes provision
for the Chair of the Education Committee and the Chair of the Research Committee
to take their place as members of the Council, provided that the University
makes a Statute under Part 4 of the Act creating an Academic Board,
subcommittees of which are known as the Education Committee and the Research
Committee.
Item 5
Amends subsection 15(2) to replace
references to the Chairperson of the Board of the Institute and the Chairperson
of the Board of the Faculties with references to the Chair of the Education
Committee and the Chair of the Research Committee.
Items 6 and
7
Replace subsections 20(2) and 25(2) with new subsections reflecting
the proposed new University governance arrangements in respect of the Board of
the Institute and the Board of the Faculties.
Items 1 and 2
Remove references to the Overseas Students
Charge Act 1979, which was repealed by Schedule 1 to the Statute
Stocktake Act 1999. Item 1 does this by repealing paragraph 18(1)(e) while
Item 2 repeals the definition of overseas student charge in subsection
36(3).
Item 3
Broadens the Minister’s discretion
to issue guidelines setting out criteria that an institution must apply in
deciding whether the requirements in paragraphs 36(1) (a), (b) (c) and (d) in
relation to the exclusion of work experience in industry from a student load,
apply to a particular student. Currently the Minister may only issue guidelines
to institutions in relation to deciding work done by a student outside an
institution is done for the purposes of obtaining work experience in industry.
In other words the Minister’s guideline making powers under subsection
36(3) currently extend only to the discretion to make guidelines in relation to
paragraph 36(1)(d).
Item 4
Inserts a new paragraph
61(1)(ba) to permit money in the Higher Education (HECS)
Reserve[2] which would otherwise be
payable under paragraph 61(1)(b) to be credited against primary tax debts within
the meaning of Part IIB of the Taxation Administration Act 1953, for
amounts that are less than $50.
[1] Now known as the Higher
Education (HECS) Account by operation of section 5 of the Financial
Management Legislation Amendment Act
1999.
[2] Now known as the
Higher Education (HECS) Account by operation of section 5 of the Financial
Management Legislation Amendment Act 1999.