Second Reading SpeechMr TEHAN (Wannon - Minister for Education)
That this bill be now read a second time.
The Higher Education Support Amendment (Cost Recovery) Bill 2019 and the associated Higher Education Support (Charges) Bill 2019 give effect to cost recovery measures for the Higher Education Loan Program, or HELP, in the higher education sector. This is consistent with the Australian Government Charging Framework.
The 2018-19 federal budget includes HELP cost recovery measures (an annual charge and an application fee) affecting higher education providers, which are the subject of this bill.
Part 1 of schedule 1 to the bill amends the Higher Education Support Act 2003to put in place an application fee on applicants seeking approval as higher education providers under the act. The fee will be applied from 1 January 2020. The level of the application fee will be set in the Higher Education Provider Guidelines, at an amount that will recover the government's full costs of administration and assessment of applications from prospective providers.
Part 2 of schedule 1 to the bill also amends the Higher Education Support Act to reflect the introduction of an annual charge on higher education providers under the Higher Education Support (Charges) Bill 2019.
The annual charge will partially recover from higher education providers the costs incurred by the Commonwealth in administering the HECS-HELP and FEE-HELP programs.
The amendments will require a higher education provider to pay the annual charge as and when it falls due, as a condition of their continued approval under the Higher Education Support Act.
The amendments will also enable the Higher Education Provider Guidelines to set out the administrative detail of collection and recovery of the annual charge; for example, when assessment notices will be given to providers, whether there are penalties associated with late payment of the charge, and when and how extensions of time to pay the charge can be given.
The HELP cost recovery measures announced in 2018-19 federal budget will ensure consistency and fairness across the whole of the tertiary education sector, as similar charging measures already exist in the vocational education and training sector.
The HELP cost recovery measures are consistent with the Australian Government Charging Framework and link the cost of services to those who benefit from them.
In this case, the higher education providers will be required to meet the cost for the regulatory arrangements from revenues they raise from students.
Currently these costs are borne by the general public. It also raises awareness with the higher education sector of the costs incurred to the Commonwealth for administering HECS-HELP and FEE-HELP programs, and the costs of assessing applications from prospective FEE-HELP providers.
The HELP cost recovery measures are expected to provide a combined estimated saving of $11.7 million in fiscal balance terms over the 2019-20 to 2022-23 period for both charges. This is an amount that the general taxpayer will not have to bear.
The government consulted with the higher education sector on the annual charge and the application fee through the release of the draft cost recovery implementation statement in late 2018. Feedback received from this consultation process has helped to inform the development of the final cost recovery implementation statement.
It is anticipated that the final cost recovery implementation statement will be released to the higher education sector prior to the commencement of the HELP cost recovery measures on 1 January 2020.
The method of calculation of the annual charge will be settled and prescribed in regulations, and the application fee amount will be settled and prescribed in the Higher Education Provider Guidelines, along with the administrative processes for collection and recovery of the annual charge.
Subject to the passage of this bill and the Higher Education Support (Charges) Bill 2019, the HELP cost recovery measures are to commence from 1 January 2020. However, higher education providers will not be issued an invoice for the annual charge for the 2020 calendar year until May 2021, after reconciliation of higher education providers' HECS-HELP and FEE-HELP student enrolment data has occurred.
I commend the bill.