Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER EDUCATION SUPPORT (CHARGES)
BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Education,
the Honourable Dan Tehan MP)
Higher Education Support (Charges) Bill 2019
OUTLINE
The purpose of the Higher Education Support (Charges) Bill 2019 (Bill) is 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 (HESA)
and to specify the amount of the charge or the manner by which the charge will be
determined each year.
The Bill provides for an annual charge to be imposed on higher education providers (as
defined in HESA), as a tax. The Bill imposes the annual charge on higher education
providers to fund the Higher Education Loans Program (HELP), including the costs incurred
by the Commonwealth in administering the program, data collection and analysis as well as
compliance activities.
The Australian Government Cost Recovery Guidelines (available at www.finance.gov.au)
state that agencies should set charges to recover some or all the costs of activities that they
provide. These charges should reflect the costs of providing the activity and should generally
be imposed as a fee or, where efficient, as a levy.
The Bill is enabling and mechanistic in character, as laws imposing taxation may only deal
with the imposition of taxation, and deal with only one subject of taxation. It does not set the
amount of the annual charge, as this will be prescribed by the regulations or worked out in
accordance with the manner prescribed by the regulations.
FINANCIAL IMPACT STATEMENT
The Higher Education Support (Charges) Bill 2019 implements the annual charge, which is a
HELP cost recovery measure 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 a
saving of $11.4 million in fiscal balance terms over the forward estimates
(2019-20 to 2022-23).
The amount of the annual charge will be specified in 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 and documented in a cost recovery
implementation statement (CRIS).
2
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Higher Education Support (Charges) Bill 2019
The Higher Education Support (Charges) Bill 2019 (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 purpose of the Higher Education Support (Charges) Bill 2019 is 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 (HESA)
and to specify the amount of the charge or the manner by which the charge will be
determined each year.
The Bill provides for an annual charge to be imposed on higher education providers (as
defined in HESA), as a tax. The Bill imposes the annual charge on higher education
providers to fund the Higher Education Loans Program (HELP), including the costs incurred
by the Commonwealth in administering the program, data collection and analysis as well as
compliance activities.
The Australian Government Cost Recovery Guidelines (available at www.finance.gov.au)
state that agencies should set charges to recover some or all the costs of activities that they
provide. These charges should reflect the costs of providing the activity and should generally
be imposed as a fee or, where efficient, as a levy.
The Bill is enabling and mechanistic in character, as laws imposing taxation may only deal
with the imposition of taxation, and deal with only one subject of taxation. It does not set the
amount of the annual charge, as this will be prescribed by the regulations or worked out in
accordance with the manner prescribed by the regulations.
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 provides
for an annual charge to be imposed on higher education providers (as defined in HESA), as
a tax. This Bill is necessary to give effect to the Government's Budget 2018-19 HELP cost
recovery measures, which includes HELP annual charge measure.
Conclusion
The Bill is compatible with human rights because it does not raise any human rights issues.
3
Higher Education Support (Charges) Bill 2019
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the Act to be the Higher Education Support (Charges) Act 2019.
Clause 2 - Commencement
The table in this clause provides that the whole of the Bill commences on 1 January 2020.
Clause 3 - Crown to be bound
Clause 3 provides that the Bill binds the Crown in each of its capacities. Amongst other
things, this clause will ensure that, in keeping with the principles of competitive neutrality,
higher education providers that are instrumentalities of the crown in right of the
Commonwealth or of a State or Territory are not excluded from paying the charge merely
because they are instrumentalities of the Crown.
Clause 4 - Act does not impose tax on the property of a State
Subclause 4(1) provides that the Bill does not impose a tax on property of any kind
belonging to a State and subclause 4(2) defines property of any kind belonging to a State
as having the same meaning as in section 114 of the Constitution.
Clause 5 - Definitions
Clause 5 provides definitions of the terms and expressions used in the Bill as follows:
higher education provider has the same meaning as in the Higher Education Support Act
2003.
higher education provider charge means charge imposed by subsection 6(1).
property of any kind belonging to a State has the same meaning as in section 114 of the
Constitution. That provision prohibits the Commonwealth imposing any tax on the property of
any kind belong to a State.
year means calendar year.
Clause 6 - Imposition of higher education provider charge
Clause 6 provides a charge is imposed on a body, for a calendar year starting on or after the
commencement of the Bill, if the body is a higher education provider at any time in that year.
The annual fee will be imposed on a calendar year basis, reflecting the typical teaching year
for higher education providers.
4
Clause 7 - Amount of higher education provider charge
Subclause 7(1) provides the amount of higher education provider charge for a year is the
amount (including a nil amount) prescribed by the regulations for that year; or worked out for
that year in accordance with a method prescribed by the regulations.
Subclause 7(2) provides that before the Governor-General makes regulations for the
purposes of subclause 7(1), the Minister must be satisfied that the effect of those 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.
Subclause 7(3) allows the regulations to provide for indexation of amounts specified in the
regulations.
The approach of setting the amount of the charge for a year in a legislative instrument will
ensure that the charge is flexible enough to ensure that the Commonwealth recovers the
likely costs of administration of HELP, as the cost of administration increases or decreases.
Prior to the introduction of the regulations, a fees schedule will be determined that is
consistent with the Australian Government Cost Recovery Guidelines and documented in a
cost recovery implementation statement (CRIS).
Clause 8 - Exemptions from higher education provider charge
Clause 8 enables the regulations to provide for exemptions for higher education providers
from having to pay the higher education provider charge.
Clause 9 - Regulations
Clause 9 provides that the Governor-General may make regulations prescribing matters
required or permitted by the Act to be prescribed; or necessary or convenient to be
prescribed for carrying out or giving effect to the Act.
5