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 her powers under subsection 4(2) of the Act.
BACKGROUND
Higher Education Institutions which are established in Australia may apply to the Australian Taxation Office for deductible gift recipient (DGR) endorsement.
It is a requirement of the Income Tax Assessment Act 1997 (ITAA) that in order to be eligible for DGR endorsement, a higher education institution must be 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 Physical Education; Brisbane College of Theology; Sydney College of Divinity Ltd;
Tabor College Tasmania; Tabor College Victoria. This would mean 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 the Council of Private Higher Education (COPHE), the peak body representing all of the private higher education institutions listed in the Declaration, about this arrangement for allowing private higher education institutions access to DGR endorsement until the ITAA is amended (if that occurs). There was 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 for the legislative instrument F2007L00840 issued by the Minister for Education, Science and Training under the Higher Education Funding Act 1988 addresses a specific legislative gap regarding the eligibility of certain higher education institutions for deductible gift recipient (DGR) endorsement. The Act allows the Minister to amend a table in subsection 4(1) through a declaration under subsection 4(2), thereby enabling non-public higher education institutions to qualify for DGR status. This declaration is a legislative instrument under the Legislative Instruments Act 2003. The policy objective is to ensure that the specified institutions meet the criteria set out in the Income Tax Assessment Act 1997, facilitating their access to DGR endorsement until any amendments to the ITAA are enacted. The Department of Education, Science and Training has consulted with the Council of Private Higher Education and the Australian Taxation Office, both of which fully support this measure.
Scope and Application
The Higher Education Funding Act 1988 provides the legislative basis for the ministerial declaration concerning the addition of certain institutions to a specified table, thereby enabling them to be recognised as higher education institutions for the purposes of tax law. This declaration applies to specific higher education institutions—namely, the Australian College of Physical Education, Brisbane College of Theology, Sydney College of Divinity Ltd, Tabor College Tasmania, and Tabor College Victoria—granting them eligibility for deductible gift recipient endorsement under the Income Tax Assessment Act 1997. This amendment is critical for these institutions to maintain their tax-deductible status for donations, as the ITAA mandates that higher education institutions must be recognised under the Higher Education Funding Act 1988 to qualify for such endorsement. The declaration does not extend to public universities or other institutions not listed, and it operates within the national jurisdiction of Australia. The instrument takes effect on the day following its registration on the Federal Register of Legislative Instruments, in accordance with the Legislative Instruments Act 2003.
Key Provisions
The primary operative sections of this declaration, under subsection 4(2) of the Higher Education Funding Act 1988 (the Act), empower the Minister to amend a table specified in subsection 4(1) of the Act through a declaration. This means that the Minister can, by making a declaration, add or modify entries in the table, and such amendments take effect as provided in the Act (section 110). This legislative instrument, as stated in section 110, is a formal document that, once registered, becomes effective in accordance with the Legislative Instruments Act 2003.
The Act imposes specific obligations on the Minister and the institutions involved. The Minister must make the declaration in accordance with the Act, ensuring that any amendments to the table are correctly specified and registered. The institutions that are added to the table, such as the Australian College of Physical Education, Brisbane College of Theology, Sydney College of Divinity Ltd, Tabor College Tasmania, and Tabor College Victoria, must meet the criteria for inclusion. Once added, these institutions are recognised as 'higher education institutions' under the Act, which is a prerequisite for obtaining deductible gift recipient (DGR) endorsement from the Australian Taxation Office (ATO).
Failure to comply with the provisions of the Act, or any subsequent ministerial declaration, could result in civil or criminal consequences. However, the specific offences, penalties, or consequences are not detailed within the text of the Act itself. The maximum penalties for breaches of legislation typically depend on the specific nature of the breach and are usually outlined in the relevant Act or subsidiary legislation. It is important for the institutions and the Minister to adhere to the legislative requirements to avoid any potential repercussions.
The declaration has been made after consultation with relevant stakeholders. The Department of Education, Science and Training (DEST) consulted with the Council of Private Higher Education (COPHE), which represents the private higher education institutions listed in the declaration, and there was full agreement with the measure. Additionally, DEST consulted with the ATO, and again, there was full agreement. This collaborative approach ensures that the declaration aligns with the needs of the institutions and the requirements of the relevant tax legislation. The instrument will commence on the day after it is registered on the Federal Register of Legislative Instruments, in line with the Legislative Instruments Act 2003.