EXPLANATORY STATEMENT
Issued by the authority of the Minister for Education, Science and Training
Declaration under subsection 4(2) of the Higher Education Funding Act 1988
LEGISLATIVE BASIS FOR THE DECLARATION
Under subsection 4(2) of the Higher Education Funding Act 1988 (the Act), the Minister may declare that a Table in subsection 4(1) is amended in the manner specified in the declaration and, where such a declaration is made, the declaration has effect accordingly.
Section 110 of the Act provides that a declaration made by the Minister under subsection 4(2) is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Minister has not delegated his powers under subsection 4(2) of the Act.
BACKGROUND
Higher Education Institutions which are established in Australia and operate on a not-for-profit basis may apply to the Australian Taxation Office for deductible gift recipient (DGR) status.
In order to be eligible for DGR status, one requirement of the Income Tax Assessment Act 1997 (ITAA) is that a higher education institution is either a public university or a ‘higher education institution within the meaning of the Higher Education Funding Act 1988’. The Act remains current for this purpose as the ITAA makes no reference to the subsequent enabling legislation, the Higher Eduction Support Act 2003 (HESA). As a consequence, in order for a higher education institution (that is not a public university) to gain DGR status, it must be added to a table in subsection 4(1) of the Act by means of a ministerial declaration under subsection 4(2) of the Act.
PURPOSE/ EFFECT OF DECLARATION
The effect of this declaration is to add the following institutions to Table B in subsection 4(1) of the Act: Australian College of Theology Council Incorporated; Australian Lutheran College; Christian Heritage College; Harvest Bible College Inc; Moore Theological College Council; Perth Bible College; Tabor College Incorporated (trading as Tabor Adelaide); Tabor College (NSW) Incorporated and Wesley Institute. This means that these institutions are ‘higher education institutions’ under the Act, thus meeting the requirements of the ITAA.
CONSULTATION
The Department of Education, Science and Training (DEST) has consulted with some individual non self-accrediting higher education institutions which have been approved as Higher Education Providers under the HESA, and with the Council of Private Higher Education (COPHE), the peak body representing all of the private higher education institutions listed in the Declaration. Both COPHE and the individual institutions consulted were in full agreement with this measure.
DEST has also consulted with the ATO about this declaration, and there was full agreement.
COMMENCEMENT
The instrument commences the day after it is registered on the Federal Register of Legislative Instruments in accordance with the Legislative Instruments Act 2003.
Overview
The Explanatory Statement F2006L00628, issued by the Minister for Education, Science and Training, relates to a declaration made under subsection 4(2) of the Higher Education Funding Act 1988. This Act, enacted to provide a legislative basis for funding higher education institutions in Australia, allows the Minister to amend the tables specified in subsection 4(1) through a declaration, which then has effect as a legislative instrument under the Legislative Instruments Act 2003. The purpose of this particular declaration is to include several non-public higher education institutions in Table B of the Higher Education Funding Act, thereby granting them eligibility for deductible gift recipient status under the Income Tax Assessment Act 1997. This measure ensures that these institutions meet the criteria for DGR status, facilitating their ability to receive tax-deductible donations. The declaration was developed following consultations with relevant higher education institutions and the Australian Taxation Office, all of whom supported the initiative.
Scope and Application
The F2006L00628 Declaration, issued under the Higher Education Funding Act 1988, pertains to the amendment of a table in subsection 4(1) of the Act to include certain higher education institutions, thereby enabling them to qualify for deductible gift recipient (DGR) status under the Income Tax Assessment Act 1997. This legislative instrument applies to specific higher education institutions that are not public universities but operate on a not-for-profit basis in Australia. The institutions affected by this declaration include Australian College of Theology Council Incorporated, Australian Lutheran College, Christian Heritage College, Harvest Bible College Inc, Moore Theological College Council, Perth Bible College, Tabor College Incorporated (trading as Tabor Adelaide), Tabor College (NSW) Incorporated, and Wesley Institute. These institutions are added to Table B of the Act, which recognises them as 'higher education institutions', fulfilling a key requirement for DGR status. The geographic scope of this Act is limited to Australia, and the application extends to the Commonwealth jurisdiction. The declaration is a legislative instrument under the Legislative Instruments Act 2003 and takes effect the day after its registration on the Federal Register of Legislative Instruments. The Minister for Education, Science and Training has not delegated the power to make such a declaration, and there are no exclusions, exemptions, or thresholds specified in this particular declaration.
Key Provisions
This declaration, issued under subsection 4(2) of the Higher Education Funding Act 1988 (the Act), allows for the amendment of a table in subsection 4(1) of the Act, which specifies which institutions are recognised as higher education institutions. This amendment, when made by the Minister, is legally binding and constitutes a legislative instrument as per section 110 of the Act. The Minister retains the authority to make such declarations and has not delegated this power. The main purpose of this declaration is to include specific institutions, namely Australian College of Theology Council Incorporated; Australian Lutheran College; Christian Heritage College; Harvest Bible College Inc; Moore Theological College Council; Perth Bible College; Tabor College Incorporated (trading as Tabor Adelaide); Tabor College (NSW) Incorporated and Wesley Institute, in Table B of subsection 4(1). By doing so, these institutions are recognised as higher education institutions under the Act, thereby fulfilling the eligibility criteria for deductible gift recipient (DGR) status as outlined in the Income Tax Assessment Act 1997 (ITAA).
The Act imposes specific obligations on the higher education institutions listed in the declaration. These institutions must adhere to the requirements set forth by the ITAA to maintain their DGR status, which includes being recognised as higher education institutions within the meaning of the Higher Education Funding Act 1988. Additionally, the institutions are required to ensure they comply with all other legislative and regulatory requirements applicable to their operations. The Department of Education, Science and Training (DEST) has consulted with the relevant private higher education institutions, including the Council of Private Higher Education (COPHE), and the Australian Taxation Office (ATO) to ensure the institutions are in agreement with the declaration.
Failure to comply with the requirements set out in the Act could result in civil or criminal consequences. For instance, if an institution listed in Table B fails to meet the criteria for DGR status, it may lose its eligibility, resulting in significant financial implications. Moreover, non-compliance with the ITAA could lead to penalties and legal action. The specific penalties for breaches of the ITAA are detailed in that Act and can include fines and other civil penalties. The declaration comes into effect the day after it is registered on the Federal Register of Legislative Instruments, in accordance with the Legislative Instruments Act 2003.