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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TERTIARY EDUCATION QUALITY AND STANDARDS
AGENCY (CHARGES) BILL 2021
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Education and Youth,
the Honourable Alan Tudge MP)
Tertiary Education Quality and Standards Agency
(Charges) Bill 2021
OUTLINE
The purpose of the Tertiary Education Quality and Standards Agency (Charges) Bill 2021
(Bill) is to establish a new registered higher education provider charge to recover the costs of
the Tertiary Education Quality and Standards Agency's (TEQSA) sector risk monitoring and
regulatory oversight activities. These include: concern management and resolution;
stakeholder communications and engagement; risk assessment; enquiries; business
support; and guidance notes. These activities do not currently attract a charge.
The associated Tertiary Education Quality and Standards Agency Amendment (Cost
Recovery) Bill 2021 (Cost Recovery Bill), amends the Tertiary Education Quality and
Standards Agency Act 2011 (TEQSA Act) to give TEQSA the capacity to collect and
administer the registered higher education provider charge.
The 2018-19 Budget included a measure providing additional resources and revised cost
recovery arrangements for TEQSA. It provided additional resources of $24.3 million over
four years to strengthen the agency's regulatory oversight of the higher education sector,
meet a significant increase in applications for registration from prospective providers, and
protect Australia's reputation for high quality higher education. It also included a shift to
increased cost recovery for TEQSA's regulatory activities.
TEQSA's fees for application-based activities are determined by a legislative instrument
made by TEQSA under section 158 of the TEQSA Act. Those fees will increase from
1 January 2022 to reflect the Australian Government's decision to implement increased cost
recovery for TEQSA's regulatory activities. The increased resources for TEQSA's other
regulatory functions will be cost-recovered through the new registered higher education
provider charge, developed in line with the Australian Government Charging Framework
(available from www.finance.gov.au) and imposed by this Bill.
The Bill also authorises regulations to be made that:
prescribe the amount, or the method for working out the amount, of the registered higher
education provider charge (and, in doing so, may provide for indexation of the charge);
and
exempt a registered higher education provider (including a class of registered higher
education provider) from paying the charge.
Prior to making such regulations, TEQSA will seek stakeholder feedback on a draft Cost
Recovery Implementation Statement, consistent with the Australian Government Cost
Recovery Guidelines (available from www.finance.gov.au). The charge is designed to
recover the costs of TEQSA's sector risk monitoring and other regulatory oversight activities
that are not covered by application-based fees.
The new sector-wide charge will be phased in over three years commencing on
1 January 2022, when 20 per cent of these costs will be recovered; rising to 50 per cent of
costs on 1 January 2023; and 100 per cent cost recovery from 1 January 2024.
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FINANCIAL IMPACT STATEMENT
The new charge will be set at a level sufficient to recover the cost of TEQSA's regulatory
activities that are not the subject of its application-based fees. TEQSA estimates the total
cost of these activities to be around $5.7 million annually. The charge will be phased in over
three years. From 1 January 2022, the charge will be set to recover 20 per cent of the total
cost of these activities. From 1 January 2023, the charge will increase to cover 50 per cent
of the total cost. From 1 January 2024 and ongoing, the charge will be set to recover the full
cost of these regulatory activities. The actual amount of the charge for each provider will be
determined each year based on the anticipated cost of TEQSA's regulatory activity for that
year.
The charge will be imposed on all providers on TEQSA's national register at the start of that
year. The amount of the charge payable by each registered provider will be determined in
accordance with a formula set out in regulations made under section 9 of the Bill. The
proposed approach to apportioning the charge will be set out in TEQSA's draft Cost
Recovery Implementation Statement.
LIST OF ABBREVIATIONS
TEQSA Act Tertiary Education Quality and Standards Agency Act 2011
Cost Recovery Bill Tertiary Education Quality and Standards Agency Amendment (Cost
Recovery) Bill 2021
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Tertiary Education Quality and Standards Agency
(Charges) Bill 2021
The Tertiary Education Quality and Standards Agency (Charges) Bill 2021 (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 Bill is to establish a new registered higher education provider charge to
recover all the costs of the Tertiary Education Quality and Standards Agency's (TEQSA)
sector risk monitoring and regulatory oversight activities. These include: concern
management and resolution; stakeholder communications and engagement; risk
assessment; enquiries; business support; and guidance notes. These activities do not
currently attract a charge.
The associated Tertiary Education Quality and Standards Agency Amendment (Cost
Recovery) Bill 2021 (Cost Recovery Bill), amends the Tertiary Education Quality and
Standards Agency Act 2011 (TEQSA Act) to give TEQSA with the capacity to collect and
administer the registered higher education provider charge.
The 2018-19 Budget included a measure providing additional resources and revised cost
recovery arrangements for TEQSA. It provided additional resources of $24.3 million over
four years to strengthen the agency's regulatory oversight of the higher education sector,
meet a significant increase in applications for registration from prospective providers, and
protect Australia's reputation for high quality higher education. It also included a shift to
increased cost recovery for TEQSA's regulatory activities.
TEQSA's fees for application-based activities are determined by a legislative instrument
made by TEQSA under section 158 of the TEQSA Act. Those fees will increase from
1 January 2022 to reflect the Australian Government's decision to implement increased cost
recovery for TEQSA's regulatory activities. The increased resources for TEQSA's other
regulatory functions will be cost-recovered through the new registered higher education
provider charge, developed in line with the Australian Government Charging Framework
(available from www.finance.gov.au) and imposed by this Bill.
The Bill also authorises regulations to be made that:
prescribe the amount, or the method for working out the amount, of the registered higher
education provider charge (and, in doing so, may provide for indexation of the charge);
and
exempt a registered higher education provider (including a class of registered higher
education provider) from paying the charge.
Prior to making such regulations, TEQSA will seek stakeholder feedback on a draft Cost
Recovery Implementation Statement (available at www.teqsa.gov.au), consistent with the
Australian Government Cost Recovery Guidelines (available from www.finance.gov.au). The
4
charge is designed to recover the costs of TEQSA's sector risk monitoring and other
regulatory oversight activities that are not covered by application-based fees.
The new sector-wide charge will be phased in over three years commencing on
1 January 2022, when 20 per cent of these costs will be recovered; rising to 50 per cent of
costs on 1 January 2023; and 100 per cent cost recovery from 1 January 2024.
The Bill engages the right to education - Article 13 of the International Covenant on
Economic, Social and Cultural Rights (ICESCR).
Analysis of human rights implications
Right to education
The Bill engages the right to education which is set out in Article 13 of the ICESCR.
The right to education recognises the important personal, societal, economic and intellectual
benefits of education, and provides that secondary education in its different forms, including
higher education, shall be made generally available and accessible to all by every
appropriate means.
The Bill provides for the introduction of the new registered higher education provider charge
which will ensure TEQSA's monitoring and compliance functions and in turn ensure that the
high quality and reputation of Australia's higher education system is maintained.
Payment of the registered higher education provider charge by registered higher education
providers will ensure TEQSA can carry out its regulatory and quality assurance roles in the
higher education sector. There are more than 1.6 million students currently studying higher
education in Australia and, prior to the pandemic, the annual economic benefit to Australia
from higher education as an export was estimated to be over $37 billion. The Bill engages
and promotes the right to education because it supports TEQSA's role in ensuring that
higher education providers remain compliant with regulatory and quality frameworks, which
in turn ensures that quality education is made available and accessible to students both in
Australia and who come from overseas to study.
The Bill is compatible with the right to education.
Conclusion
The Bill is compatible with human rights.
.
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Tertiary Education Quality and Standards Agency
(Charges) Bill 2021
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the Act to be the Tertiary Education Quality and Standards Agency
(Charges) Act 2021.
Clause 2 - Commencement
The table in subclause 2(1) sets out the commencement information for the Act. It provides
that the whole of the Act commences on 1 January 2022.
Subclause 2(2) provides that information in column 3 of the table at subclause 2(1) is not
part of the Act and information may be inserted into column 3 or information in it may be
edited in any published version of the Act.
Clause 3 - Crown to be bound
Clause 3 provides that the Act 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 property of a State
Subclause 4(1) provides that the Act 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. That provision prohibits
the Commonwealth imposing any tax on the property of any kind belong to a State.
Clause 5 - Definitions
Clause 5 provides definitions of the terms and expressions used in the Act, including the
following:
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.
registered higher education provider charge has the same meaning as in the
TEQSA Act (i.e. a higher education provider registered under Part 3 of the TEQSA
Act and listed on the National Register of Higher Education Providers established
and maintained under section 198 of the TEQSA Act).
registered higher education provider charge means a charge imposed by
section 6.
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TEQSA means the Tertiary Education Quality and Standards Agency.
year means calendar year.
Clause 6 - Imposition of registered higher education provider charge
Clause 6 provides that a charge is imposed on a body, for a calendar year starting on or
after the commencement of the Act, if the body is a registered higher education provider on
the first day of that year - i.e. 1 January.
Clause 7 - Amount of registered higher education provider charge
Subclause 7(1) provides the amount of the registered 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) clarifies that the amount of the registered higher education provider charge
determined in accordance with the regulations may be made up of more than one
component, with the charge being the sum of those components.
Subclause 7(3) 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 TEQSA Act. While the amount of the charge is not set in primary
legislation, this provision ensures that the amount of the charge set in the regulations, which
will be subject to disallowance, must not be more than the Commonwealth's likely costs,
which will provide a limit on how much the charge can be.
A note after subclause 7(3) provides that TEQSA's functions are set out in section 134 of the
TEQSA Act and those functions include functions under other Commonwealth laws such as
the Education Services for Overseas Students Act 2000.
Subclause 7(4) provides that for the purposes of subclause 7(3), any costs that are likely to
be offset by fees determined by TEQSA under section 158 of the TEQSA Act, or an annual
registration charge or entry to market charge imposed under the Education Services for
Overseas Students (Registration Charges) Act 1997 are to be disregarded.
This provision will ensure that the amounts collected by the Commonwealth under the
regulations have not been collected by the Commonwealth through other measures.
Subclause 7(5) 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
provides flexibility to ensure that the Commonwealth recovers the likely costs of
administering the TEQSA Act, and only that amount, as the cost of administration increases
or decreases.
Prior to such regulations being made, a fees schedule will be determined by TEQSA that is
consistent with the Australian Government Cost Recovery Guidelines and documented in a
Cost Recovery Implementation Statement.
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Clause 8 - Exemptions from registered higher education provider charge
Clause 8 enables the regulations to provide for exemptions from having to pay the registered
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.
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