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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER EDUCATION SUPPORT AMENDMENT (2008 BUDGET
MEASURES) BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Education the Honourable Julia Gillard
MP)
HIGHER EDUCATION SUPPORT AMENDMENT (2008 BUDGET
MEASURES) BILL 2008
OUTLINE
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, Budget decisions and other
technical adjustments for the years 2009 to 2012 and add maximum grant amounts for
the year 2012.
These amendments provide for increased funding for the following measures
announced in the 2008-2009 Budget:
· for additional Commonwealth supported places in early childhood education
and nursing;
· to compensate higher education providers for the reduction in the maximum
annual student contribution amount for certain students undertaking
mathematics, statistics and science units of study;
· for additional Commonwealth supported places and transitional assistance for
the phasing out of full fee paying domestic undergraduate places at Table A
providers;
· for the expansion of Commonwealth scholarships including the doubling of
the number of undergraduate scholarships from 44,000 to 88,000 by 2012 and
the doubling of the total number of Australian Postgraduate Award (APA)
holders to nearly 10,000 by 2012;
· for capital infrastructure, additional Commonwealth supported places and
clinical outreach funding for the establishment of the James Cook University
Dental School; and
· for capital infrastructure and additional Commonwealth supported places in
medicine, nursing and education at the University of Notre Dame Australia.
Schedule 1 of the Bill will amend several sections of and include new provisions in
HESA to implement the 2008-2009 Budget measure to provide for a reduction in
compulsory Higher Education Loan Program (HELP) repayments and, in certain
cases where repayments are not required, a reduction in HELP debt for eligible
persons, in the form of a new HECS-HELP benefit. The detailed arrangements for the
HECS-HELP benefit will be specified in HECS-HELP Benefit Guidelines to be made
under HESA. People will apply to the Commissioner of Taxation for the HECS-
HELP benefit in accordance with the guidelines. The Guidelines will implement the
Budget measures to provide `remissions' of HELP debts for certain mathematics and
science graduates and early childhood education teachers.
The Bill will amend sections 30-10, 30-25 and 33-5 of HESA to provide for a
transitional loading under the Commonwealth Grant Scheme to provide higher
education providers with funding for the reduction in revenue due to the lower
maximum student contribution amount for mathematics, statistics and science units of
study. Transitional loading may also be provided to assist with the costs of replacing
full fee paying places with Commonwealth supported places (over and above the
funding for those places under the Commonwealth Grant Scheme).
The Bill will amend section 36-30 of HESA to provide that commencing
undergraduate domestic students at public universities may not be enrolled on a full
fee paying basis from 2009 with certain exceptions. It will become a condition of
receiving a grant under the Commonwealth Grant Scheme for Table A providers that
a provider may enrol an eligible person only as a Commonwealth supported student
on or after 1 January 2009 except where:
· HESA already specifies that the person cannot be Commonwealth
supported; or
· the person commenced with the provider the undergraduate course of
study of which the unit forms a part before 1 January 2009. A person is
taken to have commenced the undergraduate course of study before 1
January 2009 if they transfer to it on or after 1 January 2009 from a
course at the same level with the same provider that they commenced
before 1 January 2009 and have not completed the requirements of the
course from which they have transferred; or
· the provider has made an offer to enrol the person in a fee paying place in
a course of study to commence in 2008 and the person accepts that offer
but, with the higher education provider's approval, does not commence
the course until a later year; or
· the person commenced the undergraduate course of study of which the
unit forms part as an overseas student.
The Bill will also amend subsection 93-10(1) of HESA to provide for a reduction in
the maximum annual student contribution amount for mathematics, statistics and
science units of study to the same amount as for education and nursing units of study
(the `national priorities' student contribution band) for students commencing a course
of study from 1 January 2009 and students who transfer from a course of study that
was not in the natural and physical sciences to a course of study which is in the
natural and physical sciences.
The Bill will enable higher education providers to charge `continuing' students the
existing maximum student contribution amount for mathematics, statistics and science
units of study (that is, the maximum annual student contribution amount for existing
students will be that currently specified in Section 93-10 of HESA, indexed in
accordance with Division 198).
FINANCIAL IMPACT
In relation to the Higher Education Support Act 2003, the Bill:
- increases the overall appropriation by $2,259,982,000 for the period 1 January
2008 to 31 December 2012 (excluding HELP).
The estimated financial impact of these measures on HELP over the forward estimates
period (2008-09 2011-12) is -$26.050 million on the fiscal balance, resourcing
amounts to $4.198 million and underlying cash is -$33.252 million.
HIGHER EDUCATION SUPPORT AMENDMENT (2008 BUDGET
MEASURES) BILL 2008
NOTES ON CLAUSES
Clause 1 - Short title
Provides for the Act to be cited as the Higher Education Legislation Amendment
(2008 Budget Measures) Act 2008.
Clause 2 Commencement
Provides for the Act to commence on the day on which it receives the Royal Assent.
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.
Schedule 1 - HECS-HELP Benefit
Higher Education Support Act 2003
Item 1 After paragraph 140-1(2)(d)
Section 140-1 is an information provision which provides an outline of Division 140
which deals with how accumulated HELP debts are worked out for any given
financial year. Subsection (2) provides that Stage 1 of the process of working out a
person's accumulated HELP debt is to work out a person's former accumulated HELP
debt for the preceding financial year by taking account of a range of specified matters.
Item 1 amends subsection (2) to add proposed new paragraph (e) which has the effect
of providing that if compulsory repayment amounts are not required to be paid in
respect of a person's debt, the HECS-HELP benefit must be taken into account. A
proposed new step in the method statement at subsection 140-5 (see item 2) sets out
how the HECS-HELP benefit is to be taken into account.
Items 2 Subsection 140-5(1) (method statement, after step 4)
Section 140-5 deals with the method of working out a person's former accumulated
HELP debt for a financial year, by way of multiplying a HELP debt indexation factor
(defined under Schedule 1 as having the meaning given in section 140-10 of the Act)
by an amount worked out using a method statement which is set out under section
140-5.
Item 2 inserts a proposed new step 4A with the effect that in the process of working
out a person's former accumulated HELP debt, in the period (referred to in Step 3 of
the method statement) subtract the amount of HECS-HELP benefit, if any, which has
been determined in respect of the person by the Commissioner of Taxation for an
income year, if the person did not have any compulsory repayment amounts for that
year. The HECS-HELP benefit guidelines will specify the circumstances in which a
person may receive the HECS-HELP benefit when the person does not have a
compulsory repayment amount.
Item 3 subsection 140-5(1) (example after step 4)
The example set out at the end of the method statement at subsection 140-5(1)
provides a hypothetical working out of a person's former accumulated HELP debt
using the method statement. Item 3 inserts a new example after step 4 with the effect
of indicating how proposed new step 4A (see item 2) might apply to the hypothetical
scenario.
Item 4 At the end of section 140-5(1)
Adds proposed new subsection (3) which has the effect of providing that if a
determination by the Commissioner of a person's HECS-HELP benefit is reviewed:
· the reference in Step 4A of the method statement in subsection (1) to the
determination includes a reference to the decision on review; and
· to the extent that the decision on review affects any Step in the Method
statement, the decision on review must be taken into account in working out a
person's former accumulated HELP debt.
The review of the decision would include revising a person's accumulated HELP debt
for any prior year.
Item 5 section 148-1 (second paragraph)
Chapter 4 deals with repayment of loans. Part 4-2 of Chapter 4 deals with discharge of
indebtedness or how a person discharges a HELP debt, either by voluntary or
compulsory repayments. Section 148-1 is an information provision which explains
what Part 4-2 is about. Item 5 repeals the second paragraph of section 148-1, and
substitutes 2 paragraphs with the effect of explaining that, where a person is required
to make compulsory repayments based on whether that person's income is above a
particular amount, that the person's repayment amounts may be reduced by the
HECS-HELP benefit if the person is eligible and applies for it. The paragraphs also
make clear that the Commissioner of Taxation determines eligibility for and the
amount of a person's HECS-HELP benefit.
Item 6 At the end of Division 148
Item 6 inserts proposed new section 148-5. This is an information provision which
notes that the HECS-HELP benefit is also dealt with in the HECS-HELP Benefit
Guidelines, made by the Minister under section 238-10 (and which are a legislative
instrument), and that the provisions of Part 4-2 indicate when a particular matter is or
may be dealt with in these Guidelines.
Item 7 Subsection 154-1(1)
Section 154-1 deals with whether or not a person is liable to repay amounts in
reduction of his or her repayable HELP debt. Item 7 is an amendment to subsection
154-1(1) which is required as a consequence of proposed new section 154-3 (see item
8).
Item 8 After section 154-1
Item 8 adds proposed new section 154-3 with the effect of providing that if the
Commissioner of Taxation has determined in respect of a person an amount of HECS-
HELP benefit for an income year, the amount that the person is liable to pay under
section 154-1 in reduction of the person's debt is reduced by the amount of the
benefit. The first note to assist readers clarifies that the calculation of the person's
compulsory repayment amount remains unaffected by the reduction of liability by the
HECS-HELP benefit. The benefit applies as a reduction of the liability arising under
section 154-1. The effect is that the amount calculated as the person's compulsory
repayment amount is used to reduce the person's HELP debt even though the person
is liable to pay and is required to pay less than the compulsory repayment amount as a
result of receiving the HECS-HELP benefit. The second note to assist readers clarifies
that if a determination by the Commissioner of a person's HECS-HELP benefit is
reviewed, a reference to the determination includes a reference to the decision on
review.
Item 9 - At the end of section 154-35
Section 154-35 deals with the power of the Commissioner of Taxation to make
assessments of a person's accumulated HELP debt and the amount required to be paid
in respect of that debt. Item 9 inserts a note at the end of the section to assist readers
to clarify that the amount that the person actually pays will be less than the amount
otherwise required to be paid in respect of the debt if the person receives the HECS-
HELP benefit.
Items 10 and 11 section 154-40
Section 154-40 deals with notification by the Commissioner of Taxation of notices of
assessment of tax. Items 10 and 11 amend the section to make the existing section
subsection (1) and add a proposed new subsection (2) to provide that if the
Commissioner has determined an amount of HECS-HELP benefit in respect of a
person for the income year, that the notice of assessment for that year may also refer
to the benefit (as well as the person's income for that year, the amount of accumulated
HELP debt and the amount to be repaid). A note at the end of proposed new
subsection (2) to assist readers clarifies that if a determination by the Commissioner
of a person's HECS-HELP benefit is reviewed, a reference to the determination
includes a reference to the decision on review.
Item 12 at the end of Subdivision 154-D
Subdivision 145-D deals with the application of tax legislation to compulsory
repayments. Item 12 adds proposed new section 154-85, which provides that for the
purposes of Subdivision 154-D that, where the Commissioner of Taxation has
determined a HECS-HELP benefit in respect of a person for an income year, that
person's compulsory repayment amount in respect of that year is to be reduced by the
amount of HECS-HELP benefit. A note at the end of proposed new subsection 154-85
(2) to assist readers clarifies that if a determination by the Commissioner of a person's
HECS-HELP benefit is reviewed, a reference to the determination includes a
reference to the decision on review.
Item 13 At the end of Part 4-2
Item 13 is a substantive amendment which inserts proposed new Division 157 which
provides for the HECS-HELP benefit.
Proposed new Subdivision 157-A deals with who is eligible for the HECS-HELP
benefit.
Proposed new section 157-1 provides that a person may apply to the Commissioner
of Taxation for the HECS-HELP benefit in respect of an income year if the HECS-
HELP Benefit Guidelines set out eligibility requirements for the HECS-HELP benefit
and the person satisfies those requirements.
Proposed new section 157-5 provides that an application to the Commissioner of
Taxation for the HECS-HELP benefit must be in a form and contain all information
required by the HECS-HELP Benefit Guidelines.
Proposed new section 157-10 provides that an application must be in the manner and
within the time specified in the HECS-HELP Benefit Guidelines.
Proposed new subdivision 157-B deals with the amount of the HECS-HELP benefit.
Proposed new section 157-15 provides that the amount of the HECS-HELP benefit
for an income year is the amount specified in or worked out in accordance with the
HECS-HELP Benefit Guidelines and that, if an amount is required to be paid under
section 154-1, the amount of the HECS-HELP benefit must not be more than the
amount required to be paid (i.e. the compulsory repayment amount for that year).
Proposed new subdivision 157-C deals with determination of applications for
HECS-HELP benefit.
Proposed new section 157-20(1) provides that if a person applies for the HECS-
HELP benefit for an income year, that the Commissioner of Taxation must determine
whether the person is eligible for the benefit for that income year and, if eligible, the
amount of the benefit worked out in accordance with the HECS-HELP Benefit
Guidelines.
Proposed new subsection 157-20 (2) provides assistance to readers to clarify that the
determination is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003. This subsection clarifies that the determination is
not an additional exemption under section 7 of the Legislative Instruments Act 2003
which declares which instruments are not legislative instruments.
Proposed new section 157-25 provides that the Commissioner must notify the
applicant in writing of his or her determination, and that this notice must be given
within the time specified in the HECS-HELP Benefit Guidelines. A note to assist
readers clarifies that this notification may also be given to a person by referring to the
amount of HECS-HELP benefit in the person's notice of assessment.
Proposed new subsection 157-30 provides that if a determination by the
commissioner of Taxation under proposed new section 157-20 is reviewed, a
reference Part 4-2 (other than in the proposed new Division 157) to the determination
includes a reference to the decision on review.
Item 14 Section 206-1 (after table item 4)
Part 5-7 set out that some decisions made under the Act are subject to reconsideration
and then review by the Administrative appeals Tribunal. The table at section 206-1
sets out the decisions which are reviewable under this Act and the decision maker for
those decisions. Item 14 inserts at new item 4A of the table for determinations of
HECS-HELP benefit eligibility and amounts under proposed new section 157-20, and
that the decision maker is the Commissioner of Taxation.
Item 15 Subsection 238-10(1) (after table item 4)
Section 238-10 provides that the Minister may by legislative instrument make
specified Guidelines on matters either: required or permitted by a specified Chapter,
Part or section of the Act; or necessary or convenient to be provided in order to carry
our or give effect to that Chapter Part or section. Item 15 inserts a new item 4A in the
table at subsection 238-10(1) to provide that the Minister may make HECS-HELP
Benefit Guidelines on matters specified in Part 4-2.
Item 16 Clause 1 of Schedule 1
Inserts a new definition of HECS-HELP benefit in the Dictionary at clause 1 of
Schedule 1, to mean a benefit for an income year that:
· If a compulsory repayment amount is required to be paid, has the effect of
reducing the amount actually payable for that year, and
· If a compulsory repayment amount is not required to be paid, reduces a
person's accumulated HELP debt for that year.
The HECS-HELP Benefit Guidelines will provide for the circumstances in which an
eligible person may receive each form of benefit.
Item 17 Application
Item 17 is an application provision which provides that the amendments made by
Schedule 1 apply in respect of the 2008-2009 and later income years.
Schedule 2 Other Amendments
Higher Education Support Act 2003
Item 1 Paragraphs 30-5(1)(d) to (g)
Amends paragraphs 30-5(1)(d), (e), (f) and (g) to vary the level of maximum grants
under the Commonwealth Grant Scheme (Part 2-2) for the years 2008-2011 to provide
funding for 2008-09 Budget measures, technical adjustments and supplementation
consistent with indexation arrangements. Item 1 also inserts a new paragraph 30-
5(1)(h) to provide base funding for 2012 consistent with the forward estimates.
The 2008-09 Budget measures funded under this item are:
· for additional Commonwealth supported places in early childhood education
and nursing;
· to compensate higher education providers for the reduction in the maximum
annual student contribution amount for certain students undertaking
mathematics, statistics and science units of study;
· for additional Commonwealth supported places and transitional assistance for
the phasing out of full fee paying domestic undergraduate places at Table A
providers;
· for additional Commonwealth supported places for the establishment of the
James Cook University Dental School; and
· for additional Commonwealth supported places in medicine, nursing and
education at the University of Notre Dame Australia.
Item 2 At the end of subsection 30-10 (3)
Section 30-10 deals with the allocation of Commonwealth supported places to higher
education providers. Item 2 adds proposed new paragraph (d) at the end of subsection
(3) to provide that the allocation may also specify the number of places that have a
transitional loading.
Items 3 and 4 Subsection 30-25(3) [After paragraph 30-25 (3) (ca) and after
paragraph (da)]
Section 30-25 deals with the power of the Minister to enter funding agreements with
higher education providers, relating to Commonwealth Grants Scheme grants in
respect of each year in a period of 3 years (the grant years).
Item 3 amends subsection 30-25(3) to insert a proposed new paragraph (cb) which
has the effect of providing that the agreement may specify the maximum number of
Commonwealth supported places provided by the provider which can have a
transitional loading in the grant years.
Item 4 amends subsection 30-25(3) to insert a proposed new paragraph (e) which has
the effect of providing that the agreement may specify the maximum amount of
transitional loading that will be payable to the provider, under the Commonwealth
Grant Scheme Guidelines, in the grant years.
Item 5 At the end of section 33-5
Section 33-5 relates to the working out of basic Commonwealth Grant Scheme grant
amounts payable to a higher education provider. The basic grant amount is the sum of
a set of specified amounts listed at paragraphs (a) to (d). Item 5 adds a proposed new
paragraph (e) to provide that if the allocation has specified a number of
Commonwealth supported places that have a transitional loading under proposed new
paragraph 30-10(3)(d) (see item 2), the amount of transitional loading worked out
under the Commonwealth Grant Scheme Guidelines for those places must also be
added to the other specified amounts at paragraphs 33-5(a) to (d).
Item 6 After paragraph 36-30(1)(a)
Section 36-30 deals with the requirement of providers to fill Commonwealth
supported places before accepting other enrolments. Subsection 36-30(1) sets out that
if a person is enrolled with a Table A provider in a unit of study that is covered by the
person's Student Learning Entitlement, and the provider is not prohibited from
advising the person that he or she is a Commonwealth supported student in relation to
the unit, the provider must enrol the person in the unit as a Commonwealth supported
student. Item 6 inserts the condition at paragraph (aa) that the unit to be undertaken
with the provider forms part of an undergraduate course of study. A note to assist
readers provides that the heading to section 36-30 is replaced with the heading
"Providers to enrol persons as Commonwealth supported students".
Item 7 subsection 36-30 (2)
Item 7 repeals the subsection and inserts proposed new subsection (2) which provides
that the requirement for providers to enrol a person as a Commonwealth supported
student as a result of the proposed amendment in Item 6 does not apply where
subsection (1) would otherwise apply if one the following four scenarios apply:
· The person commences the undergraduate course of study with the provider
before 1 January 2009; or
· The person transfers to the undergraduate course of study with the provider
on or after 1 January 2009 from another undergraduate course of study in
which the person was enrolled with the same provider before 1 January 2009;
and the person had not completed that other undergraduate course of study;
or
· The person was offered and accepted a place other than a Commonwealth
supported place in the undergraduate course of study with the provider before
1 January 2009 and the undergraduate course of study was to commence
before 1 January 2009 and with the provider's approval the person
commences the course of study after that time; or
· At the time the person commences the undergraduate course of study with the
provider the person is an overseas student.
The amendments at items 6 and 7 implement the Government's commitment to phase
out domestic undergraduate full fee paying places at public universities. Table A
providers will not be able to enrol any commencing fee paying domestic
undergraduate students in courses of study that commence on or after 1 January 2009,
with some exceptions as specified at proposed new subsection 36-30(2). Existing full
fee paying students will be able to continue their courses on a fee paying basis.
Item 8 subsection 36-30(5)
A technical provision to amend subsection 36-30(5) to remove reference to notices
which are repealed as a consequence of the amendment made by item 7.
Item 9 Subsection 41-45 (1) (table items 4 to 7)
Repeals items 4, 5, 6 and 7 of the table in subsection 41-45(1) and inserts new table
items 4, 5, 6 and 7 to vary the maximum payments for Other Grants under Part 2-3 for
the years 2008-2011 to provide funding for 2008-09 Budget measures and
supplementation consistent with indexation arrangements. Item 9 also inserts a new
table item 8 to provide base funding for 2012 consistent with the forward estimates.
The 2008-09 Budget measures funded under this item are:
· for capital infrastructure and clinical outreach funding for the establishment of
the James Cook University Dental School; and
· for capital infrastructure at the University of Notre Dame Australia.
Item 10 Section 46-40 (table items 6-8)
Repeals items 6, 7 and 8 of the table in subsection 46-40(1) and inserts new table
items 6, 7 and 8 to vary the maximum payments for Commonwealth Scholarships
under Part 2-4 for the years 2009-2011 to provide funding for 2008-09 Budget
measures and supplementation consistent with indexation arrangements. Item 10 also
inserts a new table item 9 to provide base funding for 2012 consistent with the
forward estimates.
The 2008-09 Budget measures funded under this item will:
· for new National Priority Scholarships and National Accommodation
Scholarships and post graduate awards.
Items 11 and 12 subsection 93-10 (1) (table items 3 and 6)
Subsection 93-10(1) sets out the maximum contribution amounts for places in a unit
of study. Item 11 repeals table item 3 and inserts new table item 3 to reflect the new
maximum student contribution amounts for a place in a unit of study in:
· Mathematics and statistics
announced in the 2008-09 Budget.
Item 12 repeals table item 6 and inserts new table item 6 to reflect the new maximum
student contribution amount for a place in a unit of study in:
· Science
announced in the 2008-09 Budget.
Item 13 application
An application provision which provides that:
· the amendments made by items 2 to 5 of Schedule 2 apply in respect of the
year 2009 or a later year;
· the amendments made by items 6 and 7 of Schedule 2 apply in relation to an
enrolment of a person in a unit of study on or after 1 January 2009;
· the amendments made by items 11 and 12 of Schedule 2 apply in relation to
a person's enrolment in a unit of study that forms a part of a course of study if
the person commences that course of study on or after 1 January 2009; or that
course of study is in natural or physical sciences and the person transfers to
that course on or after 1 January 2009 from a course of study (other than in
natural or physical sciences) that the person did not complete;
· in subitem (3) `course of study' in relation to natural and physical sciences
means a course of study in the field of natural and physical sciences classified
as Broad Field 01 by the Australian Bureau of Statistics in the publication
known as the Australian Standard Classification of Education (ASCED) 2001
as updated from time to time. This updating can be by publication of a new
version from time to time, or material in the current version of the publication
can be updated by other publications of the Australian Bureaus of Statistics
from time to time.
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