Explanatory Memorandum
(Circulated by authority of the Minister for Education, Science and Training the Hon Dr Brendan Nelson MP)Schedule 1 - Amendment of the Higher Education Funding Act 1988
Higher Education Funding Act 1988
Amends paragraph 60(1)(a) to reflect the introduction of the Bridging for overseas-trained professionals loan scheme by proposed Chapter 4B, by requiring that money paid to the Commonwealth under the proposed Chapter be transferred from the Consolidated Revenue Fund to the Higher Education (HECS) Reserve.
Inserts a new paragraph 61(1)(ab) to permit money in the Higher Education (HECS) Reserve to be applied for the purposes of proposed Chapter 4B.
Inserts a new proposed Chapter 4B providing for a new Bridging for overseas-trained professionals loan scheme.
Chapter 4B Bridging for overseas-trained professionals loan scheme
(NOTE: proposed section is abbreviated as ps)
Provides a simplified outline of the Bridging for overseas-trained professionals loan scheme.
Proposed subsection 98P(1) defines words and expressions used in proposed Chapter 4B (unless a contrary intention is apparent).
Proposed subsection 98P(2) provides that expressions used in proposed Chapter 4B that are defined in Chapter 4 have the same meaning in proposed Chapter 4B (unless a contrary intention is apparent).
Proposed subsection 98P(3) provides that, for the purposes of proposed subsection 98P(2), section 36 of the Act applies to the expression student load as used in proposed Chapter 4B in the same way as it applies to that expression in Chapter 4 as if the references to student and institution in section 36 were references to student and institution within the meaning of proposed Chapter 4B and the references to course of study in section 36 were references to subject unit, course of instruction or tuition and training program.
Proposed subsection 98P(4) provides that, for the purposes of proposed subsection 98P(2), section 37 of the Act applies to the expression semester as used in proposed Chapter 4B in the same way as it applies to that expression in Chapter 4 as if the references in section 37 to institution were references to institution within the meaning of proposed Chapter 4B and the references to course of study in section 37 were references to subject unit.
Proposed subsection 98P(5) provides that expressions defined in the Income Tax Assessment Act 1936 have the same meaning when used in proposed Chapter 4B as they have in that Act (unless the contrary intention appears).
Proposed subsection 98P(6) provides that student fees paid to an institution by a person other than the student are deemed to be payment to the institution by the student.
Proposed subsection 98P(7) has the effect of providing that, for the purposes of proposed Chapter 4B, if a course of instruction or tuition and training program is sub-contracted to another provider, it is deemed to be provided at the institution and a student enrolled with the provider is taken to be enrolled at the institution. Fees paid in respect of BOTP students can be paid only to institutions listed in the Act.
Proposed subsection 98Q(1) provides that the Minister may determine that a specified part of an occupation is an occupation in its own right to maximise the flexibility of the BOTP loan scheme. Since the list of professional occupations is likely to change as the nature of work and the labour market changes, it is preferable to alter the list of occupations by Ministerial determination rather than seeking frequent amendments to the Act.
Proposed subsection 98Q(2) provides examples of ways in which part of an occupation can be specified in a determination by the Minister under proposed subsection 98Q(1). Where, for entry purposes, an occupation is considered to have sub-sets, all of which require a Bachelor degree (or equivalent) for entry, each of those sub-sets is taken to be an occupation in its own right for the purposes of the BOTP loan scheme. For example, an overseas-trained accountant who could become a Certified Practicing Accountant after completing a BOTP loan would be eligible but an overseas-trained accountant with a certificate or a diploma from an overseas equivalent of a TAFE would not. In occupations where there are post-graduate specialties such as Medical Practitioner, any of the medical specialties is taken to be an occupation in its own right. For example, an overseas trained surgeon would be eligible for a BOTP loan if an assessing authority deemed that person to meet the eligibility criteria. The fact that this is not an entry level to the occupation of medical practitioner would not preclude that eligibility.
Ps98R Requirements for entry to occupation
Proposed subsection 98R(1) has the effect of providing that, unless an English language course is integral part of an occupation-related study unit, course of instruction or tuition and training program, a person enrolled or proposing to enrol in an English language course will be ineligible for a BOTP loan in respect of that course.
Proposed subsection 98R(2) provides that, for the purposes of proposed Chapter 4B, a requirement for entry to a listed professional occupation may be imposed by or under a law, or the rules of a body or arise as a generally accepted employment or industry practice.
In regulated professions, entry to the profession is imposed by law. In self-regulating professions, the regulations governing entry to the profession are determined by the professional body. In both cases, responsibility for assessing the applicants qualifications and identifying the education and training requirements for entry into the profession rest with the assessing authority. There are many professions (for example, dieticians or social workers) where there are no regulations per se but an employer recruiting people to work in that profession would expect the person to meet the requirements identified by the assessing authority. In some cases this might be demonstrated by eligibility for membership (if not membership itself) of a professional organisation.
Ps98S Listed professional occupations and relevant assessing bodies
Provides that the Minister may determine that a specified occupation is a listed professional occupation and that a specified person or body is a relevant assessing body for a particular listed professional occupation and the form and manner of publishing such a determination. An occupation may be specified in such a determination even if it is not one of the traditional professions. Two or more persons or bodies may be determined as relevant assessing bodies for the same listed professional occupation and a determination may limit a particular person or body as a relevant assessing body for a listed professional occupation to a particular State.
The proposed Ministerial discretion to make these determinations will allow enough flexibility for the BOTP loan scheme to respond to changes in occupations or assessing authorities without the more lengthy process of amending the legislation. Given the pace of change in the world of work, it is likely that new professions with requirements to practice will emerge in the future.
Ps98T Assessment statement given by relevant assessing body
Post-commencement assessment statement
Relevant assessing bodies may provide an assessment statement to a person that indicates:
- •
- the person has a qualification issued in a foreign country that is comparable to the qualification necessary to enter the profession in Australia; and
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- there are occupation related gaps in the qualification that preclude the person practicing the profession in Australia; and
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- an amount of education and training that does not exceed the equivalent of one year of full time study at university level would be sufficient to fill those gaps if the person successfully completed that prescribed education and training.
The assessing authority may identify one or more pathways for the person to qualify to enter the profession in Australia and as long as the combined components to qualify do not exceed the institutions definition of a full time student load for one year, the person will be eligible for a BOTP loan.
For example, the BOTP course might consist of one unit of a normal undergraduate course, followed by an examination and a period of supervised workplace experience; or several units of a normal undergraduate course; or a preparatory course leading to an examination; or a period of supervised workplace experience. The purpose of this programme is to facilitate rather than impede a persons entry into the profession. The limitation of one year is to exclude people who do not really qualify to practice the profession in Australia and who would be advised to seek a HECS funded place or a PELS loan for a post-graduate course, either of which would lead to an award.
A relevant assessing body may charge a fee for an assessment statement issued under proposed subsection 98T(1).
Pre-commencement assessment statement
Proposed subsection 98T(4) has the effect of providing that if, before the commencement of section 98T, a relevant assessing body for an occupation gave a person a written statement similar to a post-commencement assessment statement under proposed subsection 98T(1), that statement is an assessment statement for the purposes of proposed Chapter 4B. Proposed subsection 98T(5) has the effect of providing that, for the purposes of proposed subsection 98T(4), the first set of determinations made by the Minister under subsections 98Q(1) and 98S(1) had been in force at the time the written statement mentioned in subsection 98T(4) was issued by the relevant assessing body.
A BOTP course can consist of either a series of subject units that would be generally offered as part of an undergraduate degree, a course of instruction that is preparation for an examination (often conducted under the auspices of a professional body),or a tuition and training program that would pick up other avenues for bridging such as supervised workplace experience. Alternatively, it can be a combination of the above.
Proposed subsections 98U(1), (2) and (3) define the expressions subject units , courses of instruction and tuition and training program respectively for the purposes of proposed Chapter 4B.
Proposed subsection 98U(4) defines the expression maximum BOTP student load for an institution for the purposes of proposed section 98U, as the student load determined by the institution (in accordance with guidelines issued by the Minister) to represent the load imposed on a full-time student for one year or the part-time equivalent of that load.
Proposed subsections 98U(5) and (6) have the effect of providing that, for the purposes of proposed section 98U, the total student load imposed on a person is to be worked out on the assumption that the person will not be required to repeat anything. This is not intended to affect the meaning of the expression student load in any provision of the Act other than proposed section 98U.
Ps98V Citizenship/residency requirements
This proposed section specifies the conditions which would meet the citizenship/residency requirements for the purposes of proposed Chapter 4B. The proposed section has the effect of providing that a person who is ordinarily resident in Australia and is an Australian citizen or a person who has been granted Australian citizenship but has yet to make the pledge referred to in section 15 of the Australian Citizenship Act 1948 or a permanent resident of Australia meets the citizenship/residency requirements for a BOTP loan. A person who is not ordinarily resident in Australia would not meet the citizenship/residency requirements for a BOTP loan.
Part 4B.2 - Additional condition of grant of financial assistance
This proposed section has the effect of providing that financial assistance is granted to an institution on the condition that the institution complies with the requirements of proposed Chapter 4B, in addition to the conditions specified in any other provision of the Act.
Part 4B.3- Applications for, and grants of, BOTP loans
Division 1 - Application for BOTP loan
Ps98X Making an application for a BOTP loan
Proposed subsection 98X(1) sets out the circumstances under which a person may make an application for a BOTP loan while proposed subsection 98X(2) provides that the application must be made on or before the census date for the BOTP course for the study period.
Proposed subsection 98X(3) sets out the form of an application for a BOTP loan for a study period and in particular, that the applicant must ask the Commonwealth to lend to the applicant the amount of fees outstanding for their BOTP course for the study period and to use the amount so lent to pay the outstanding fees to the institution on behalf of the applicant.
Proposed subsections 98X(4), (5) and (6) have the effect of providing that the applicant must acknowledge that if their application is successful he/she will be liable for repayments under Chapter 5A, that the application must be in an approved form signed by the applicant and given to an appropriate officer of the institution and that two or more applications may be set out in the same document if they are made by the same person and relate to the same BOTP course.
Ps98Y Tax file number of student
Provides that sections 41A, 41B and 42-53 of the Act apply in relation to the tax file number of a student in the manner specified in the proposed section.
Proposed section 98Z has the effect of providing that an institution must give each student enrolled in a course of study who has made an application for a BOTP loan under proposed section 98X for a study period, a written notice under proposed subsection 98Z(1). Proposed subsections 98Z(2)-(5) set out the content, timing and purpose of such a written notice.
Proposed subsection 98Z(6) provides that a notice under proposed subsection 98Z(1) must set out the effect of subsections 55(1) and (2), as modified in the manner specified in proposed subsection 98Z(7).
Division 2 - Discharge by the Commonwealth of students liability for fees
Ps98ZA Commonwealth to discharge students liabilities
This proposed section provides that if an eligible student has made an application under proposed section 98X before the census date for a BOTP course for a study period that began on or after 1 July 2002, is enrolled in that course at the institution for that study period and has not paid the full amount of the fees charged by the institution for the course of study being undertaken, the Commonwealth must lend the student the amount of the fees outstanding immediately after the census date and apply the amount so lent in making a payment to the institution in discharge of the students liability to pay the amount of the fees outstanding. Proposed subsection 9ZA(3) provides that the Commonwealth may advance an institution an amount that is expected to become payable to the institution under proposed section 99ZA.
Ps98ZB Commonwealth not liable where person does not have a tax file number
Provides that if an institution receives a notice from the Commissioner of Taxation under subsection 42(3) or (5) (as applied by proposed section 98Y) to the effect that a person who has applied for a BOTP loan under proposed section 98X does not have, or no longer has, a tax file number and after 28 days the institution has not been notified of a number that the institution is satisfied is the persons tax file number, the Commonwealth is not liable, and is taken never to have been liable, to lend an amount to the person under proposed paragraph 98ZA(2)(a) or to making a payment to the institution under proposed paragraph 98ZA(2)(b).
Proposed subsection 98ZB(3) provides that regulations may set out procedures for the institution to notify persons who may be affected by proposed subsection 98ZB(2).
Ps98ZC Institution to provide information to Minister
This proposed section provides that an institution must give to the Minister on request such statistical and other information relating to students in bridging courses for overseas-trained professionals as the Minister reasonably requires for the purposes of proposed Part 4B.3, other than information as to the name and address of a student.
The proposed section extends the application of the secrecy provisions of section 78 of the Act to proposed Chapter 4B.
The proposed section imposes an obligation on the chief executive officer of an institution to provide an annual statement of compliance with proposed Chapter 4B requirements on or before 31 December in each year and setting out the particulars of any instances of non-compliance.
Ps98ZF Electronic communications between students and institutions
Proposed subsection 98ZF(1) inserts an explanatory table and provides that sections 56C, 56D and 56E of the Act apply for the purposes of proposed Chapter 4B as if a reference in those sections to a person, thing or provision mentioned in the second column of an item in the table were a reference to a person, thing or provision mentioned in the third column of the table for that item. Proposed subsection 98ZF(2) clarifies that proposed section 98ZF is not intended to otherwise affect the application of sections 56C, 56D and 56E.
Repeals the heading to Chapter 5A of the Act and inserts a new heading to reflect the insertion of proposed Chapter 4B by Item 3.
Insert definitions for BOTP study period debt , census date , fees and study period and modifies the definition of semester debt in subsection 106H(1) of the Act to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Amends subsection 106H(2) to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Amends section 106I by inserting a new paragraph (ab) so that the objects of Part 5A0 reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Inserts a proposed new section 106JB specifying the nature of a BOTP study period debt .
Inserts a new subsection 106R(5) to require an institution to give such data in its possession relating to students in relation to BOTP courses at the institution as the Commissioner of Taxation reasonably requires for the purposes of Chapter 5A.
Insert definitions for census date and study period in subsection 106ZB(1) to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Amend subsections 106ZB(2) and paragraph 106ZE(4)(a) to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Inserts new subsections 106ZG(3A) and (3B) to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B in relation to the consequences of Commissioner of the Taxation exercising his power to issue a loan limit notice in accordance with section 106ZE of the Act.
Amends subsection 106ZG(6) to reflect the introduction of the BOTP loan scheme by proposed Chapter 4B.
Amend paragraphs 110(b) and 110(c) of the Act to make determinations made by the Minister under proposed sections 98Q and 98S and guidelines issued under proposed subsection 98U(4), disallowable instruments.
Amend subsections 118(1) and (2) of the Act to exclude proposed Chapter 4B (which provides for the establishment of the BOTP loan scheme) from appropriations under the Act, but without excluding by implication the application of any existing appropriation in relation to proposed Chapter 4B.