Higher Education Support (Charges) Bill 2018 - Commentary on Ministerial Responses [2018] AUSStaCSBSD 257 (28 November 2018)

• Higher Education Support (Charges) Bill 2018
• Charges in delegated legislation 7

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Higher Education Support (Charges) Bill 2018

Purpose	This bill seeks to impose an annual charge on all higher education providers whose students are entitled to HECS-HELP assistance or FEE-HELP assistance under the Higher Education Support Act 2003
Portfolio	Education and Training
Introduced	House of Representatives on 19 September 2018
Bill status	Before the House of Representatives

Charges in delegated legislation ^[7]

2.20 In Scrutiny Digest 12 of 2018^[8] the committee requested the minister's advice as to why there are no limits on the charge specified in primary legislation and whether guidance in relation to the method of calculation of a maximum charge can be specifically included in the bill.

Minister's response^[9]

2.21 The minister advised:

The purpose of the Higher Education Support (Charges) Bill 2018 (Charges Bill) is to provide for the application of an annual charge on higher education providers, which is separate from education legislation, and for the annual charge amount to be prescribed in regulations. This is in line with the Australian Government's cost recovery policy that where appropriate, non-government recipients of specific government activities should be charged some or all of the costs of those activities.
As outlined in the Explanatory Memorandum for the Charges Bill, the purpose of setting the amount of the charge for a year via a legislative instrument is to ensure that the charge can be reviewed and updated annually, which will assist providers by giving them certainty on the annual charge amounts for each calendar year.
In addition, there is existing legislation (VET Student Loans (Charges) Act 2016) for similar annual charge on VET Student Loans approved course providers that does not provide a limit on the charge, and the amounts for the charge are set out in legislative instrument. This sets a precedent, which was used to guide the development of the Charges Bill.
I consider the current provision (subclause 7(2) of the Charges Bill) providing that before the regulations are made, the Minister must be satisfied that the effect of the regulations will recover no more than the Commonwealth's likely costs for the administration of HELP to be sufficient. The charges calculation methodology and appropriate charge amounts must also comply with and meet the requirements of the Australian Government Cost Recovery Guidelines prior to the creation of the regulations. The detail on the annual charge in the regulations will also be subject to Parliamentary scrutiny as it will be a disallowable instrument, thereby subject to disallowance for 15 sitting days after tabling in both houses of parliament.
My department has also released a 'HELP charging measures cost recovery implementation statement' for consultation with the higher education sector, which will further facilitate transparency and accountability.

Committee comment

2.22 The committee thanks the minister for this response. The committee notes the minister's advice that the purpose of allowing the amount of the charge to be set by legislative instrument is to ensure that the charge can be reviewed and updated annually. The committee also notes the advice that this approach is consistent with the VET Student Loans (Charges) Act 2016, and that the minister considers the requirement under subclause 7(2)—that the minister must be satisfied that the effect of the regulations will be to recover no more than the Commonwealth's likely costs in connection with the administration of the Higher Education Support Act 2003 before the legislative instrument can be made—to be sufficient

2.23 However, the committee takes this opportunity to reiterate that one of the most fundamental functions of the Parliament is to levy taxation.^[10] The committee's consistent scrutiny view is that it is for the Parliament, rather than makers of delegated legislation, to set a rate of tax. Therefore, where there is any possibility that a charge could be characterised as general taxation, the committee considers that guidance in relation to the level of a charge should be included on the face of the primary legislation.

2.24 The committee reiterates that the bill neither specifies a maximum charge nor contains any guidance that would limit the imposition of the charge to recovering only the Commonwealth's likely administrative costs (rather, it is limited to whether the minister is satisfied of certain matters). It remains unclear to the committee why it would not be appropriate to specifically include guidance in the bill in relation to the method of calculation of a maximum charge. The committee also emphasises that its scrutiny concerns in relation to this matter are not alleviated by the fact that a similar approach has been taken in other legislation.

2.25 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of allowing delegated legislation to determine the amount of a charge without any guidance on the face of the bill as to the method of calculation or the maximum amount of the charge.

2.26 The committee also draws this matter to the attention of the Senate Standing Committee on Regulations and Ordinances for information.

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[7] Clause 7. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).

[8] Senate Scrutiny of Bills Committee, Scrutiny Digest 12 of 2018, at pp. 6-7.

[9] The minister responded to the committee's comments in a letter dated 16 November 2018. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 14 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest

[10] This principle has been a foundational element of our system of governance for centuries: see, for example, article 4 of the Bill of Rights 1688: 'That levying money for or to the use of the Crown by pretence of prerogative without grant of Parliament for longer time or in other manner than the same is or shall be granted is illegal'.