Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -0.5 | -1.0 | -1.5 | -1.5 |
Explanation
Direct financial support for Language Australia provided under the Commonwealth Schools Programme will be phased out gradually by reducing funding by one-third in 1997-98 and two-thirds in 1998-99, with funding ceasing in 1999-2000.
Education authorities will have the opportunity to contract Language Australia for research work which makes use of its expertise.
This measure will:
Language Australia (formerly the National Languages and Literacy Institute of Australia) has a brief to contribute to improving the quality and relevance of language and literacy education in keeping with the goals of State and Commonwealth language and literacy policies and Australia's economic, social and cultural needs. Language Australia maintains an information-sharing network through 22 locations throughout Australia.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| 1.0 | 1.6 | 1.9 | 2.1 |
Explanation
This measure will provide, from 1 January 1998, a 25 per cent discount for partial up-front payments of at least $500 made by a student before the Higher Education Contribution Scheme (HECS) census date in any semester. The administrative processes relating to the remission of HECS debt will also be streamlined.
Although this initiative has a small cost, there are gains to the Government in terms of net lending for HECS in the early years. These changes reduce the headline budget balance by $1.6 million in 1997-98, $4.5 million in 1998-99, $5.6 million in 1999-2000 and $6.2 million in 2000-01.
This measure will:
All Australian citizens, New Zealand citizens and Australian permanent residents enrolled in higher education student places funded by the Commonwealth are required, unless specifically exempt, to make a contribution to the cost of their course through HECS. Each semester, eligible students choose either to pay their HECS up-front or to defer payment. Eligible students who pay up-front pay 75 per cent of their HECS liability for the semester direct to the relevant institution. The Commonwealth pays the remaining 25 per cent on their behalf to the institution. New Zealand citizens must pay the whole of their HECS liability up-front.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| 10.2 | 7.3 | 4.3 | 4.4 |
Explanation
This measure will provide financial assistance to universities which need help in restructuring their activities. To be eligible for assistance, proposals from higher education institutions will need to generate long-term benefits and show that the cost is beyond the funding capacities of the institutions involved.
Further Information
The 1996-97 Budget reduced funding to higher education institutions by 1 per cent in the 1997 calendar year, 3 per cent in 1998 and a further 1 per cent in each of 1999 and 2000. At the same time, the Budget relaxed Government administrative constraints on institutions to provide them with greater flexibility and greater opportunities to diversify their income sources. The smaller and regional institutions might have greater difficulty adapting to the changes because of a higher degree of dependence on government funding and a more limited capacity to attract non-government funds.
The Government made a commitment in the 1996-97 Budget that in exceptional circumstances it would be prepared to consider specific proposals for financial assistance from institutions to restructure their activities.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -5.2 | -16.5 | -22.7 | -23.0 |
Explanation
This measure involves the phased abolition of the Commonwealth Industry Places Scheme (CIPS) over 1998 and 1999. The Scheme contributes to the cost of providing higher education places in undergraduate courses by sharing the cost between the Commonwealth and industry.
The Scheme is being phased out in recognition of the fact that there are now alternative ways for institutions to meet employer demand for higher education courses. For example, from 1998 the Government will pay institutions the minimum up-front Higher Education Contribution Scheme (HECS) payment for all undergraduate students enrolled above the target student load agreed between institutions and the Government. Industry may also fully fund award courses or buy places in award courses. In addition, private sector employers have access to assistance through the tax system as they are able to claim tax deductions for business-related education and training.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -2.9 | -2.7 | -2.8 | -2.8 |
Explanation
The proposal involves the abolition of funding for the Australian Language and Literacy Council, and the reduction in funding for the National Board of Employment, Education and Training (NBEET) by 35 per cent.
Funding reductions to NBEET reflect the Government's policy to abolish three of the existing five separate Councils within the Board, and the Board itself in due course (i.e. retaining the Australian Research Council and the Higher Education Council as independent bodies). The Department of Employment, Education, Training and Youth Affairs has estimated that the administrative support required by these two Councils represents some 65 per cent of all current funding, allowing NBEET's operating expenses to be reduced by 35 per cent in total.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| 1.6 | 1.5 | 1.6 | 1.6 |
Explanation
This measure increases the AUSTUDY parental income test dependent deduction from $3,700 to $7,400 for tertiary students eligible for AUSTUDY, at the away from home rate, in families where there are two or more such students. Although the AUSTUDY income tests recognise the additional costs incurred by families with more than one dependent student, the current test does not recognise the extra costs for families where two or more of their dependent students must live away from home to undertake tertiary study.
AUSTUDY entitlement for each applicant is calculated on the basis of 'adjusted family income', which is parental taxable income less deductions for dependants. This proposal will introduce a higher rate of deduction for each AUSTUDY eligible, tertiary away from home student where there are two or more such students in the family.
Students with one eligible sibling could gain up to $925 a year extra in AUSTUDY benefits, or up to $1,850 a year if they have two eligible siblings, and so on. In addition, some students who currently do not receive AUSTUDY because their assessed benefit falls below the $1,000 minimum payment threshold would pass that threshold and could benefit by up to $1,925 (with one other eligible sibling) or $2,850 (with two other eligible siblings).
It is expected that students benefiting from this proposal will receive their additional AUSTUDY from around October 1997, with payments backdated to 1 July for eligible students.
Further information
AUSTUDY provides income support grants to students 16 years of age and older undertaking approved courses of study in secondary schools, Technical and Further Education (TAFE) colleges, approved TAFE equivalent courses offered by private providers and higher education institutions. The AUSTUDY away from home rate is paid to students who need to live away from home to study due to either the student living too far from the educational institution, difficult home conditions or compulsory residency requirements of the course of study.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -5.0 | -10.9 | -11.2 | -11.6 |
Explanation
This measure aims to better target access to some ABSTUDY benefits from 1 January 1998, and address anomalies. Notwithstanding these changes, ABSTUDY will continue to provide indigenous students with access to a broader and more generous set of benefits than is available under AUSTUDY.
The following limits on ABSTUDY benefits are to be introduced from 1 January 1998:
An abatement rate in the calculation of living allowance and dependent spouse allowance, including living allowance under the Masters and Doctorate Award, will be introduced. This will align ABSTUDY with the abatement rate used in the calculation of AUSTUDY living allowances. From 1 January 1998, the ABSTUDY living allowance will be reduced by $1 for every whole $2 of personal or partner income over the threshold, and will be reduced by $1 for every whole $4 of parental income over the threshold.
This measure will reduce estimated ABSTUDY outlays by approximately 8 per cent from 1998-99.
Further information
The ABSTUDY programme is designed to help overcome disincentives to participate in secondary and further education by indigenous Australians through the provision of financial assistance to study. ABSTUDY provides assistance on a non-competitive basis to all eligible indigenous students who enrol in an approved course of study. ABSTUDY provides an income tested living allowance to assist students to overcome financial barriers to study. The ABSTUDY income test is based on personal and parental or partner income. Currently, ABSTUDY income test cut-out points are broadly aligned with those for AUSTUDY, but the ABSTUDY test has no abatement so that the maximum rate of ABSTUDY living allowance is payable up to the cut-out point. Some 24,000 students currently receive the ABSTUDY living allowance.
In addition to a living allowance, ABSTUDY also provides a range of supplementary allowances to assist with education costs such as school and course costs, fares, attendance at compulsory course activities and postgraduate study costs. Few of these allowances have limits on use and they also have broad eligibility criteria.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -10.0 | -20.3 | -20.7 | -21.0 |
Explanation
The Commonwealth provides grants of around $900 million a year to the States to put towards the operation of vocational education and training (VET). Primarily, this funding is used for the operations of the Technical and Further Education (TAFE) sector. Funding is allocated by the Australian National Training Authority (ANTA) under the ANTA Agreement between the Commonwealth and the States. Commonwealth funding for VET has increased by 37 per cent in real terms since 1992. This additional funding has been put towards growth in the sector, with a focus on increasing opportunities for young people.
This measure reduces Commonwealth funding from 1 January 1998 by $20 million a calendar year to provide an incentive to the States to achieve efficiency gains in their VET operations by, for example, benchmarking their activities against the most cost effective States. The $20 million cut represents around 0.7 per cent of total VET expenditure.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -0.9 | 6.4 | 16.2 | 29.5 |
Explanation
Entry Level Training (ELT) incentives provide support to employers of apprentices and trainees under a contract of training. They consist of cash payments generally made when an apprentice or trainee commences training, recommences or progresses to a higher skill level. The regime of incentive payments has been amended through two changes.
The first change involves the abolition from 1 January 1998 of the tax exemption for payments under the Commonwealth Rebate for Apprentice Full-time Training (CRAFT) and conversion into outlays under the incentive payments regime. The corresponding Revenue measure for this initiative is titled: 'Conversion of the CRAFT tax expenditure to outlays' (see Part II).
The second change is a package of measures to enhance and re-focus the incentive payments. The package provides for introduction of a $1,500 completion payment to 'for profit' employers of apprentices and trainees being trained at the Australian Qualifications Framework (AQF) Level 3. This new payment returns to employers the approximate value of the discontinued tax exemption for CRAFT incentives. The package is subject to passage of the legislation necessary to remove the CRAFT tax exemption.
The package also includes:
| Type of payment | AQF2 | AQF3 * | * includes apprentices and trainees |
| Commencement | $1,250 | $1,250 | |
| Recommencement | nil | $750 * | * $500 for Group Training Companies |
| Progression | nil | $1,250 | |
| Completion | nil | $1,500 * | * 'for profit' employers; all employers in the case of recommenced AQF3 apprentices/trainees |
| Group training | $1,000 | $1,000 * | * only payable for trainees |
| Women in non-traditional positions | $1,000 | $1,000 | |
| Sporting operations traineeships | $3,000 | n/a |
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 | ||
| Employment, Education, Training and Youth Affairs | 11.0 | 3.8 | 0.0 | 0.0 | |
| Health and Family Services | 0.5 | 0.1 | 0.0 | 0.0 | |
| Social Security | 5.3 | 0.9 | 0.0 | 0.0 | |
| TOTAL | 16.8 | 4.8 | 0.0 | 0.0 |
Explanation
The aim of the Work for the Dole initiative is to give young unemployed people a chance to develop a work ethic through participation in projects which are supported by the community and which will be of lasting value to the community. This initiative is based on the principle of mutual obligation: that it is fair and just that people be asked to work in return for payment of unemployment allowance.
It is proposed to pilot around 70 projects comprising up to 10,000 places. Most will be located in non-metropolitan regions with high levels of youth unemployment. Project proposals will be sought Australia-wide and will be required to benefit the wider community. Subject to the passage of legislation it is anticipated that the first participants will start in late 1997.
Priority will be given to young people aged 18-24 years who have been unemployed for at least six months, but participants will not be restricted to this group. Participants will work for two six-hour days if aged 18 to 20 years, and two and one-half six-hour days if 21 years or over. This is based on averaged National Training Wage Award rates. They will be required to participate for up to six months and will be paid an extra $20 per fortnight in recognition of the unavoidable costs of working.
Further Information
The legislation to support the Work for the Dole initiative, the Social Security Legislation (Work for the Dole) Bill 1997, was referred to a Senate Committee on 26 March, to report by 23 June 1997.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -2.1 | -2.8 | -2.9 | -3.0 |
Explanation
The functions of the National Skills Shortages Programme are to be subsumed into the regional assistance element of the Enterprise and Adjustment Programme. The Programmes had similar objectives and outcomes in terms of employment and training. The objective of the National Skills Shortages Programme was to minimise the effects of current and emerging skills shortages through the provision of short term skills training to the existing work force and suitably qualified unemployed persons. The Enterprise and Adjustment Programme, however, is broader in its operation in that it develops and implements strategies to improve employment, as well as the skills base, in regions where there are growing employment opportunities.
The reduction is less than 8 per cent of the total funding for the regional assistance element.
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| 0.0 | -15.2 | -15.5 | -15.8 |
Explanation
The reductions in administrative funding result from structural changes associated with the implementation of new employment servicing arrangements.
Further Information
In the 1996-97 Budget, the Government announced that new arrangements for delivering labour market assistance to jobseekers would be introduced during 1997-98. The key components of the new arrangements are:
Financial Implications ($m)
| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| -30.2 | 0.0 | 0.0 | 0.0 |
Explanation
As announced in last year's Budget, during 1997-98 the Government will introduce a new contestable market for employment services involving a government provider as well as private sector providers. This will enhance the cost-effectiveness and delivery of employment assistance. Savings come from the wind down of current arrangements prior to the implementation of the new arrangements and will not impact on the operation of the new market.
