EXPLANATORY STATEMENT
Issued by the authority of a delegate of the Minister for Education
Higher Education Support Act 2003
Higher Education (Maximum Amount for Special Purpose Advances) Specification 2023
AUTHORITY
Grants may be paid in relation to Commonwealth supported places to eligible higher education providers each year under Part 2-2 of the Higher Education Support Act 2003 (the Act) and the Commonwealth Grant Scheme Guidelines 2020. Subsection 33-40(1) of the Act provides that the Minister for Education (or their delegate) may determine that an advance of such a grant is payable to a higher education provider, in respect of a year, in relation to expenditure of the provider for “special purposes” or such purposes as the Minister (or their delegate) determines.
Subsection 33-40(3A) of the Act provides that the Minister (or their delegate) may, by legislative instrument, specify an amount for the purposes of subsection 33-40(3).
The Minister (or their delegate) cannot determine that a special purpose advance is payable to a higher education provider under subsection 33-40(1) of the Act unless an amount has been specified in the instrument made under subsection 33-40(3A). Further, pursuant to subsection 33-40(3) of the Act, the total of the advances that the Minister (or their delegate) may pay in respect of a year must not exceed the amount specified by the Minister (or their delegate) in the instrument made under subsection 33-40(3A).
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. The repeal of the Higher Education (Maximum Amount for Special Purpose Advances) Specification 2012 (the Former Instrument) by Schedule 1 to the Higher Education (Maximum Amount for Special Purpose Advances) Specification 2023 (the Instrument) relies on that provision.
In accordance with section 238-5 of the Act, the functions and powers of the Minister for Education under subsection 33-40(3A) of the Act have been delegated to certain persons, including SES employees in the Department of Education who hold a position that is classified as a Senior Executive Band 2 under the Public Service Classification Rules 2000. These delegations are subject to the general direction issued by the Minister under subsection 238-5(2) of the Act. The general direction provides that the employee must not exercise the delegated power unless they have responsibility for, or involvement with, the administration of a program for which it is necessary to exercise the delegation.
PURPOSE AND OPERATION
The Instrument specifies the amount of the total of the advances in respect of a year for the purposes of subsection 33-40(3) of the Act, consistent with the power in subsection 33-40(3A) of the Act. As noted above, subsection 33-40(1) of the Act provides that the Minister for Education (or their delegate) may determine that an advance is payable to a higher education provider, in respect of a year, in relation to expenditure of the provider for “special purposes” or such purposes as the Minister (or their delegate) determines.
Where the Minister (or their delegate) determines that there is a special purpose, providers may “borrow” from expected future payments in one year and make repayments by receiving reduced grant amounts in subsequent years (see subsection 33-40(4)). Determinations of special purpose advances must also be made in accordance with the Commonwealth Grant Scheme Guidelines (see subsection 33-40(5)). The Commonwealth Grant Scheme Guidelines 2020 are the Commonwealth Grant Scheme Guidelines made under subsection 238-10.
The purpose of the Instrument is to repeal and replace the Former Instrument, which was due to sunset on 1 April 2023, and to specify that the total amount of special purpose advances that may be paid by the Minister (or their delegate) to a higher education provider in a calendar year is $25 million. This is the same amount specified in the Former Instrument.
The amount of $25 million is still considered an adequate amount of money to advance to higher education providers to assist with operational cash flow if the Minister (or their delegate) determines a special purpose (for example, financial distress from restructuring) exists. This amount is considered manageable from a financial perspective when it is recouped from payable grants to the provider over subsequent years.
IMPACT ANALYSIS
The Office of Impact Analysis has been consulted and advised that the Instrument is unlikely to have a more than minor regulatory impact. This is because the Instrument is required to ensure that higher education providers are able to receive special purpose advances from the Commonwealth in circumstances of financial distress. As such, the preparation of an Impact Analysis was not required (Office of Impact Analysis reference number: OIA23-04577).
COMMENCEMENT
The Instrument commences on the day after it is registered on the Federal Register of Legislation.
CONSULTATION
This specification of the total number of special purpose advances to that may be paid to a higher education provider in respect of a year is minor and machinery in nature, and does not alter existing arrangements. Therefore, consultation was not considered necessary and was not undertaken.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Higher Education (Maximum Amount for Special Purpose Advances) Specification 2023
The Higher Education (Maximum Amount for Special Purpose Advances) Specification 2023 (the Instrument) 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 Legislative Instrument
Grants may be paid in relation to Commonwealth supported places to eligible higher education providers each year under Part 2-2 of the Higher Education Support Act 2003 (the Act) and the Commonwealth Grant Scheme Guidelines 2020. Subsection 33-40(1) of the Act provides that the Minister for Education (or their delegate) may determine that an advance of such a grant is payable to a higher education provider, in respect of a year, in relation to expenditure of the provider for “special purposes” or such purposes as the Minister (or their delegate) determines.
Subsection 33-40(3A) of the Act provides that the Minister (or their delegate) may, by legislative instrument, specify an amount for the purposes of subsection 33-40(3).
The Minister (or their delegate) cannot determine that a special purpose advance is payable to a higher education provider under subsection 33-40(1) of the Act unless an amount has been specified in the instrument made under subsection 33-40(3A). Further, pursuant to subsection 33-40(3) of the Act, the total of the advances that the Minister (or their delegate) may pay in respect of a year must not exceed the amount specified by the Minister (or their delegate) in the instrument made under subsection 33-40(3A).
Where the Minister (or their delegate) determines that there is a special purpose, providers may “borrow” from expected future payments in one year and make repayments by receiving reduced grant amounts in subsequent years (see subsection 33-40(4)). Determinations of special purpose advances must also be made in accordance with the Commonwealth Grant Scheme Guidelines (see subsection 33-40(5)). The Commonwealth Grant Scheme Guidelines 2020 are the Commonwealth Grant Scheme Guidelines made under subsection 238-10.
The Instrument specifies that the total amount of special purpose advances that may be paid by the Minister (or their delegate) to a higher education provider in a calendar year is $25 million. The amount of $25 million is considered an adequate amount of money to advance to higher education providers to assist with operational cash flow if the Minister (or their delegate) determines a special purpose (for example, financial distress from restructuring) exists. This amount is considered manageable from a financial perspective when it is recouped from payable grants to the provider over subsequent years.
Human rights implications
The Instrument engages the right to education in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).
Right to education
Article 13(2)(c) of the ICESCR provides that ‘higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education’.
The Instrument promotes the right to education by allowing the Minister (or their delegate) to pay to a higher education provider an advance of their grant under the Commonwealth Grant Scheme in Part 2-2 of the Act where the Minister (or their delegate) determines that there is a special purpose (in accordance with the Commonwealth Grant Scheme Guidelines 2020). By allowing for the provision of financial assistance to providers, the Instrument thereby ensures that providers can continue to provide quality higher education services and that students can continue to have support and access to higher education.
Conclusion
The Instrument is compatible with human rights because it supports the right to education through the delivery of higher education in Australia.
Delegate of the Minister for Education, Damian Coburn
HIGHER EDUCATION (MAXIMUM AMOUNT FOR SPECIAL PURPOSE ADVANCES) SPECIFICATION 2023
EXPLANATION OF PROVISIONS
Section 1: Name
- This is a formal provision specifying the name of the instrument.
Section 2: Commencement
2. This section provides that the Higher Education (Maximum Amount for Special Purpose Advances) Specification 2023 (the Instrument) commences on the day after it is registered on the Federal Register of Legislation.
Section 3: Authority
3. This section provides that the Instrument is made under section 33-40(3A) of the Higher Education Support Act 2003 (the Act).
Section 4: Definitions
4. This section defines the term ‘Act’ to mean the Higher Education Support Act 2003. This section also includes a note that provides that the expression ‘higher education provider’ used in the Instrument is defined in Schedule 1 to the Act.
Section 5: Schedule
5. This section provides that the instrument that is specified in the Schedule (the Higher Education (Maximum Amount for Special Purpose Advances) Specification 2012 (the Former Instrument)) is repealed.
Section 6: Maximum amount of special purpose advances for a year
6. This section provides that, for the purposes of subsection 33-40(3A) of the Act, the total of the advances that may be paid to a higher education provider in respect of a year must not exceed $25,000,000.
Schedule 1 – Repeals
Item 1: The whole of the instrument
7. This item repeals the Former Instrument because it is replaced by the Instrument.