Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

I table an addendum to the explanatory memorandum relating to the Tertiary Education Quality and Standards Agency (Charges) Bill 2021. The addendum responds to concerns raised by the Scrutiny of Bills Committee.

In regard to the document I've just tabled, the Scrutiny of Bills Committee raised two significant matters in relation to the delegated legislation: firstly, why it's considered necessary and appropriate to give the minister a broad discretionary power to provide for exemptions from the proposed registered higher education provider charge in delegated legislation; and, secondly, whether the bill can be amended to include at least high-level guidance on the face of the primary legislation regarding when it will be appropriate to provide for such exemptions.

I'd like to deal with the first issue in relation to the broad discretionary power. I advise the chamber that the government believes it's appropriate to include the capacity for exemptions, should they be necessary, in the instrument that defines the parameters of the charge. Having exemption power in delegated legislation provides the flexibility necessary for the government to be responsive to the needs of higher education providers, either as a whole or for part of a class of providers, and also to act quickly if need be. The COVID-19 pandemic has provided numerous examples where the government needs to respond quickly to provide targeted financial relief to particular groups. This included, for example, the waiver or refund of all of TEQSA's regulatory fees for existing higher education providers from 1 January last year to 31 December this year. Any such waiver, should it be instituted, would necessarily be consistent with the legislative intent outlined in the bill and the government's overarching policy framework, including the Australian Government Charging Framework. The latter requires that entities that create the demand for a regulatory function should contribute to the cost of regulation through cost recovery unless the government has decided to fund that activity. A decision to waive collection of the annual charge for a period of time or for a particular class of higher education providers could not be taken lightly or without careful consideration.

In relation to the issue of whether the bill can be amended, the government does not consider it necessary to amend the bill to provide guidance on the application of a waiver provision as outlined above, and any exercise of such power could only be done after careful consideration and must be consistent with the legislative intent and the Australian government's overall cost recovery policy. I note that the committee, in response, thanked the minister for his response. And the committee noted the minister's advice that it is appropriate to include the capacity for exemptions, should they be necessary, in the instrument that defines the parameters of the charge as it provides the flexibility necessary for the government. The committee also notes the minister's advice that a waiver would necessarily be consistent with the legislative intent outlined in the bill and the government's overarching policy framework, including the Australian Government Charging Framework.

The committee also advised that they had generally not accepted a desire for administrative flexibility or reliance on non-legislative policy guidance to be a sufficient justification to provide broad discretionary powers in circumstances where there is no guidance on the face of the primary legislation as to how the power should itself be exercised. The committee also draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of giving the minister a broad discretionary power to provide for exemptions from the proposed registered higher education provider charges in delegated legislation. The committee also requested that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the parliament as soon as practicable, noting the importance of these explanatory materials as a point of access to understanding the law. The committee also drew the attention of the Senate to this.

In relation to the second issue, in relation to why it was considered necessary and appropriate to leave key aspects of the operation of the proposed registered higher education provider charge to delegated legislation and also whether the bill could be amended to include at least high-level guidance on the face of the primary legislation regarding matters to be contained in the Registered Higher Education Provider Charge Guidelines, the minister's response to this important question was that the matters to be included in delegated legislation are purely administrative in nature, and the government believes it appropriate for these matters to be detailed in subordinate legislation, as they will likely need to be adapted over time to changing circumstances.

In relation to whether the bill could be amended or not, our response is that high-level guidance on the content of the Registered Higher Education Provider Charge Guidelines is already specifically included in the bill, at item 2, section 26C(2). This outlines the matters that can be included in the guidelines, including issuing of notices about charges payable, due dates for payment, extension of payment time frames, penalties for late payment, and reviews of decisions relating to the payment of the annual charge. I note that the committee, in response, thanked the minister for his response and the advice that the matters to be included in delegated legislation are purely administrative in nature, and they agreed with that point. Again, the committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of leaving key aspects of the operation of the proposed registered higher education provider charge to the delegated legislation.

Kim Carr (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I thank the minister for her outline. I'm a member of the committee that she spoke of, the Scrutiny of Bills Committee. I think she's probably been a little generous in her interpretation of the committee's response. The nature of this committee is that it is concerned—and had repeatedly expressed its concern—at the growing amount of legislation that now contains material that effectively allows the detail of policy questions to be left to subordinate legislation by way of these regulations. That was the thrust of the correspondence to the minister and the reason the questions were asked as to why these matters can't be contained in the primary legislation, to which the minister has responded, as is so often the case, that this is just an administrative matter and doesn't require a substantive amendment to the legislation.

The committee has thanked the minister for his response because there has been some movement in the government's position—namely, to adjust the explanatory memorandum to explain the circumstances. But that's not to say that the committee is satisfied with the minister's response. The Labor Party is opposing this legislation, and we'll express our disappointment in the government's position in that vote. But it should not in any way be put to the Senate that the position that's been outlined is an acceptance of the government's position. When the committee says, 'We'll draw these matters to the attention of the Senate and leave it to the Senate to make a judgement call on it,' that's simply a mechanism by which the committee says, 'We're not happy with what's happened, but we acknowledge that there has been some movement by the government.' But it's not satisfactory because these are questions that should have been answered in the primary legislation, and it should have outlined clear guidance on the mechanism by which exemptions will be raised in the future for the direction to policy officers in the department as to the way in which they administer this legislation. It's just not good enough to say, 'Look, we need the flexibility because we don't know what's going to happen in the future'—that's an age-old excuse within the Commonwealth Public Service these days—and to take away the responsibility of the parliament to make decisions about what is appropriate and what is not, particularly on policy questions.

I've raised particular concerns about the way TEQSA is functioning at the moment, especially in regard to standards. I've indicated that I intend to pursue this with some vigour at the next round of estimates. I think the way we are seeing a number of private colleges now being moved into the category of university requires furthers explanation. When we have a series of Bible colleges being promoted as universities, we're entitled to know under what circumstances those decisions have been made and against what criteria they have been made. This is the sort of thing that I think we're entitled to pursue, and we certainly will at estimates.

When it comes to the question of charges, this bill will contain increases in charges of up to 700 per cent for some categories. These are charges which will inevitably be passed on to students. There are two questions that concern me about this bill. It's not just the issue of fee recovery; it's the effect of the increased charges and the cost to students, given the way in which, inevitably, these charges will be passed on. My concern goes to the question of standards, particularly research standards, given that we passed legislation only in February that now seems to have led to circumstances where a series of private colleges have been shunted into the category of university in a manner which I think requires further explanation. So there are two questions: fee rises and standards, and the mechanisms by which they occur. For the minister to say, 'We've done the right thing; we've made a statement in regard to the explanatory memorandum,' doesn't go anywhere near far enough.

As I say, the Labor Party is opposing this legislation because this is a pretty ham-fisted way to do business. It reflects a very poor understanding of the way in which the education system actually operates. It demonstrates, in my judgement, a movement by this government by stealth to fundamentally change the way in which the higher education system in this country operates and to see circumstances where there's a considerable shift away from public provision towards what some vice-chancellors used to call Ma and Pa Kettle operations.

I see one of these colleges today, because of their financial circumstances, has moved to extend the vacation considerably to try to make up savings, forcing people to use up their various entitlements. They did so without consultation, without any engagement with their workforce, bringing into practice some measures which really do demonstrate a culture alien to the way in which the tertiary sector and the education sector in this country has traditionally operated.

Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

I thank Senator Carr for those questions. I'll deal with them in turn. First of all, generally, the claims by Senator Carr are complete rubbish. They have been promoted by many of the speakers in this chamber and are simply wrong, particularly in relation to the funding of higher education. The fact is this: since 2019, total funding to the higher education sector has actually increased, from $17.3 billion to $20.4 billion in 2021. That's a 17 per cent increase in just two years. This includes an additional one-off boost of $1 billion to the university research program—Senator Carr asked about the research program—to maintain the capability of Australian research during the COVID-19 pandemic. That research funding did cease in the 2021-22 budget, but it was a one-off payment and that was very, very clear.

If any of those opposite had any mathematical skills at all, they would know that when you don't include additional one-off funding then these decreases they keep crying over disappear, because it's a one-off payment—like so many other payments we have made to get this nation through COVID-19. The figures in the budget papers also exclude the Higher Education Loan Program, the HELP outlays. Including HELP outlays shows that the government's overall funding to universities in 2021 was in fact $20.4 billion, which is an increase of 37 per cent since we came into government—when those opposite were no longer in government, when they were booted out by electors. But no matter how many times we say the facts—and they are very clearly facts; they're in the budget papers—no matter how many times we repeat this, those opposite do not listen and they keep peddling what are clearly lies.

Senator Carr asked a number of other questions, and I'll happily deal in turn with all of those. Firstly, in relation to why the bill is needed and how it is going to be funded, these bills give effect to a 2018-19 budget measure to implement cost recovery arrangements for TEQSA in line with the Australian Government Charging Framework. The framework links the cost to those who generate the need for them—in this instance, higher education providers. These costs are currently borne by taxpayers, and we believe it is only right that those who are receiving the services pay for them. So the subject of these bills is the creation of an annual charge to recover the costs of TEQSA's risk monitoring and regulatory oversight activities. Senator Carr talked about the cost and made incredibly overblown claims about the cost and the impacts. The annual charge for providers will be between $25,000 and $35,000 per annum once fully implemented. However, it will be phased in over three years. Providers will pay 20 per cent of the charge—that is, between $22,000 and $35,000 a year—in 2022 and 50 per cent in 2023, transitioning to 100 per cent in 2024.

Senator Carr also asked about who it is applicable to. Prior to the COVID-19 pandemic, providers only paid application based fees. The amount a provider paid depended on their specific circumstances, but, in broad terms, a university would pay around $15,000 a year and a non-university provider would pay between $5,000 and $85,000. The price rise is broad because providers without self-accrediting status pay to have their courses accredited, and the price increase is based on the number of courses themselves to be accredited.

Senator Carr also wanted to know how the charge will be calculated. I can confirm to the Senate that the annual charge will cover the cost of delivering six regulatory activities. The first is concern management and resolution, the second is risk assessment, the third is inquiries, the fourth is business support, the fifth is guidance notice and the sixth is stakeholder communication and engagement. The consultation paper itself proposed that the cost for delivering concern management and resolution activities be proportionally distributed amongst providers, factoring in each provider's size and their student enrolments. For the remaining regulatory activities the consultation paper itself proposed that the cost be evenly split amongst providers. At TEQSA's estimates, the cost of delivery is the same regardless of provider size. For example, a risk assessment is a database process that takes the same effort for a provider that has 20 students as it does for a large university with 40,000 students. And that to me, and to the government, seems eminently sensible.

The last issue that Senator Carr asked about is what impact these new arrangements will have on students. The answer is: exactly nil. The annual charge will be charged to registered higher education providers. This is not a cost for students. It is up to the higher education providers to determine how they cover this quite modest cost. Maximum student contributions for Commonwealth supported places are determined by the government, and they will not increase.

Louise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | Link to this | Hansard source

In closing this debate tonight, all the minister has really outlined is the desire of this government to pass these costs on to students, particularly full-fee-paying students. Of course, the cost of regulation, when it's passed on to them, will naturally end up coming out of their pockets. In some cases, this will include students who pay, in effect, 20 per cent interest to the government for their fees. In turn, they will pay 20 per cent interest for the cost of regulation. It's completely false for the minister to argue that the impact on students would be nil. All that the government's explanations have done tonight is reassert the desire of the government to pass on these charges. Indeed, the additional addendum they've tabled tonight said:

A decision to waive collection of the annual charge for a period of time or for a particular class of higher education providers, could not be taken lightly …

Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

It would be remiss of me not to rebut what Senator Pratt has just said. Senator Pratt, I'm sure, was sitting here in the chamber when I specifically said that this very modest fee, which has been worked out very fairly, is not a cost for students. It is up to higher education providers to determine how they will cover the cost, and the annual charge will be charged to registered higher education providers. Let me just remind senators that this, again, is a very modest charge, which will be factored in over the next three years—20 per cent next year of between $25,000 and $35,000. Far from being a huge burden, this is a fair fee for service that the providers are currently getting from TEQSA.

Detail about how the charge was proposed to be calculated was set out on page 24 of TEQSA's consultation paper, which I know has been reviewed here in this place. To comply with the Australian Government Charging Framework, the amount of the charge has to be directly linked to the regulatory effort itself and the cost of that. The benefit derived from a service is not a factor in determining the amount of the fee or charge. If benefit were to be included as a factor, the charge would be considered a general tax. I believe—and the government believes—that this is a fair measure. It is actually not a burden on students at all, quite the contrary to what Senator Pratt has just asserted.

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

[by video link] I just want to ask the minister how she is assuring us that this was will not be a charge that is passed on to students. Can you actually guarantee that that's not going to happen? If universities haven't lost funding over so many years, how come there are thousands upon thousands of staff who have lost their jobs? I think it's completely disingenuous to say that universities aren't in strife and then put on this charge of tens of thousands of dollars and say that students won't be impacted. Minister, can you guarantee us that students won't be impacted?

Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

I thank Senator Faruqi for her question. I'll say for the third time: this is not a cost for students. I don't know how much clearer I or this government can be. As I've said several times in the committee stage already, a university would pay around $15,000 per year and, again, it would be introduced over three years. This is not a charge against students; this is a charge to universities and non-university providers.

Kim Carr (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It's a very simple question. Show me which clause in the bill will prevent a university or a tertiary institution from passing on any fee increases to students.

Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

I thank Senator Carr for that question. As Senator Carr would well know, HECS fees themselves are subject to legislation and they cannot be increased for students.

Kim Carr (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

There are many fees and charges that universities strike against students. Show me where in this bill it says that any of these charges the government is now levying cannot be passed on to students.

Linda Reynolds (WA, Liberal Party, Minister for Government Services) Share this | Link to this | Hansard source

I think this is becoming tedious repetition in terms of questions. It is very, very clear that this is a charge for the providers and for the institutions; this is not a student charge.

The CHAIR: The question is that the bills stand as printed.