Jason Clare’s student places capping bill appeared in the Senate several times last week, but there were no votes on substantive amendments. Parliament does not sit again until 12 October.

It is clear, however, that agreement has been reached on amendments that will secure its passage through the Senate. Greens Senator Mehreen Faruqi said in the Senate on Wednesday 16 September that the Greens had ‘secured’ twelve amendments. There are twelve Greens amendments on the bill’s home page, so I will assume that this is the same twelve, although I could be mistaken.

This post summarises the proposed amendments, focusing on the Greens and the Liberals, as both have the numbers to get an amendment through if Labor agrees. The Greens, the Coalition and cross-benchers combined could also pass amendments Labor does not support.

I mostly do not discuss Senator David Pocock’s proposed amendments, because on his own he cannot sway a Senate decision. But he had a high level of intellectual engagement with the bill and proposed sensible changes. He is particularly good on something that the government is particularly bad at – putting rules scrutinised by parliament over ministerial and administrative discretion.

A floor number of places

On the bill’s introduction the explanatory memorandum indicated a floor number of Commonwealth supported places was intended, but this was not reflected in the bill itself.

In the House of Representatives a government amendment created a ‘core student load’ minimum number of places for public universities, although the amendment does not preclude year-on-year reductions in places.

But there was no corresponding requirement that the minister set a ‘total allocation pool’ of Commonwealth supported places sufficient to cover all the minimum ‘core student load’ allocations.

A government amendment to be moved in the Senate will ensure that a year’s total allocation pool will be at least the previous year’s level: proposed new section 30-5(1A).

That could still leave continuing student enrolment growth without sufficient places in the total allocation pool. But overall this amendment improves the bill’s internal coherence.

A Greens amendment would push the statutory latest announcement of the total allocation pool back a month, from 30 June to 31 May.

Over-enrolment buffer

The bill’s limits on student contribution-only over-enrolments are one of its most controversial elements. To recap, universities with fewer than 15,000 students would be able to over-enrol 5% above their ‘domestic student profile’ of Commonwealth supported places, while larger universities would have a fixed cap of 750 places, in practice 2-3% above their domestic student profile.

In my view these caps limit student choice, risk an unmet demand crisis, and jeopardise the government’s own attainment goals.

Under a Greens amendment all providers get the 5% over-enrolment buffer. The Liberals have an amendment to flip the rule, so that smaller universities get a flat 750 cap (so more than 5%, giving them room to expand) and larger universities get the 5% buffer. The Liberals also want ATEC to have discretion to reduce the over-enrolment penalty in some circumstances, such as when unexpectedly high enrolments are caused by increased retention.

On my rough calculations, the Greens amendment would increase the system’s theoretical capacity by about 7,000 places and the Liberal amendment by 12,000 places. Both would also ensure that growth in fully-funded places always triggers additional over-enrolment places; every 1,000 fully-funded places would create 50 student contribution only places.

Both proposed amendments are clearly better than the bill as drafted, but also both would still result in a significant loss of flexibility and capacity compared to the status quo.

The Greens also have an amendment to the transitional provisions for over-enrolled universities. The current bill sets commencing student limits for over-enrolled universities, with cumulative penalties for consecutive year breaches – so if a university was 100 places over-enrolled above its cap in each of Years 1 and 2, their penalty would be 100*their average student contribution in Year 1 and 200*their average student contribution in Year 2.

Under the Greens amendment only consecutive years immediately preceding the allocation year would count. So if a university exceeded its commencing cap in Year 1 and 2, was below it in Year 3, and then exceeded it again in Year 4, the university would only be penalised for Year 4 and not the cumulative total of Years 1,2 and 4.

ATEC considerations when allocating places

ATEC has already provided, in briefings, a long list of considerations when allocating places. However the bill only requires ATEC to take into account the minister’s strategic priorities and the provider’s performance under mission based compacts: proposed section 30-45(1). To this a Greens amendment would add ‘student demand’. In the Senate on 16 September Labor Senator Carol Brown said the government supported this idea.

Another Greens amendment would require ATEC to publish a summary of the matters ATEC took into account when allocating places. A Liberal amendment would have a similar effect.

Designated places

Under the bill as it stands the minister designates a course or kind of course and then ATEC sets a maximum number of places. This lifts another provision that prevents ATEC from allocating places to a specific course or kind of course. The bill also contains a rather chaotic provision that allows the same course to be designated and not designated in the same year.

The Greens want to remove designated places altogether. From Senator Faruqi’s remarks in the Senate last week this is so a future Coalition or One Nation government cannot designate courses they don’t like.

In the Senate on 16 September Labor Senator Carol Brown said Labor supported amendments to ‘reduce or remove the scope of ministerial power relating to designated courses and designated course allocations’ (although under the bill ATEC does the allocation).

Ministerial conditions

A broad ministerial power to add conditions, in proposed section 36-65, to Commonwealth Grant Scheme funding was opposed by numerous stakeholders and supported by none. In the House of Representatives the government amended its own bill to restore existing constraints on industrial relations conditions and to limit the minister’s power to defund courses he or she does not like.

A Liberal amendment and identical David Pocock amendment would remove section 36-65. The Greens also propose removing section 36-65 but add a ministerial power to add conditions to medical places. The conditions must be ‘in relation to medical courses’. I would not oppose ATEC being given a similarly narrow power to add conditions, such as the current rules on course closures.

Another Greens amendment removes a ministerial power to add conditions to specific providers in relation to needs based funding.

Definition of ‘low SES’ for needs based funding purposes

The bill as introduced was widely criticised for defining ‘low SES’ for needs based funding as the student’s address when they enrolled in a unit (a subject). That would mean a student who enrolled as a low SES student but then moved closer to campus would probably lose their low SES status. Because the number of university students is in the IEO formula, geographic areas around universities tend to be in the higher IEO deciles.

A Greens amendment would delete the reference to when the student enrolled in the unit. In the Senate on 16 September Labor Senator Carol Brown said the government supported this idea.

Regional students as eligible equity students

A Liberal amendment would add to the list of ‘eligible equity students’ people who, prior to enrolment in an eligible equity course, lived in a ‘high priority area’.

A ‘high priority’ area is defined in proposed section 39-50(4) to be regional areas as classified by the ABS or an area specified in the Needs Based Funding Grants Guidelines. Another Liberal amendment would remove this discretionary element. A downside for universities of losing this discretion is that regional classifications change with each Census, which could mean that some campuses suddenly lose funding.

The substantive amendment would have two effects. It would add equity funding for regional students under proposed section 39-30 and make it possible, under proposed section 39-70, to spend equity component needs based funding on regional students. As the bill stands, equity funding cannot be spent on regional students unless they are also either or both of low SES or Indigenous.

I am not sure what other parties think of this proposal, but as it would significantly increase the cost of needs based funding I doubt the government will support it. Under section 53 of the Constitution this could only be a request to the House of Representatives as it would appropriate money. Proposed laws appropriating money cannot originate in the Senate.

Campus location

The regional component of needs based funding supports students at regional campuses rather than regional students.

The original bill includes within its definition of regional campus a unit ‘administered or delivered’ at such a campus. A Liberal amendment removes ‘administered’. I think this avoids putting a subject administrator at a regional campus to receive needs based funding.

In the Senate on 16 September Labor Senator Carol Brown said the government supported this idea.

Use of equity funding

The use of equity funding under proposed section 39-70 is quite prescriptive. Stakeholders were concerned that it only permitted support of equity students after they enrolled, and did not support activities to attract them to university (although there is a dedicated outreach fund for that).

A government amendment would allow spending on activities that support eligible equity students to access eligible equity courses. In practice, that means that universities could spend the money promoting undergraduate courses to low SES students but not postgraduate courses. For Indigenous students, universities can promote undergraduate and postgraduate courses.

Equity and regional modifier amounts

The proposed needs based funding system has statutory base loadings multiplied by a ‘modifier amount’ if a student has characteristics set out in the legislation. For example, a low SES student gets more funding if they have a low rather than a high ATAR.

Under the bill as introduced, the minister decides the modifier amount. It can be less than one, and indeed a modifier amount of .5 is proposed for online regional campus students.

A Greens amendment would set a minimum modifier of 1 for equity students and .5 for regional campus students.

International student commencements

Under the bill ATEC allocates international student commencements to higher education providers. ATEC must consult Table A (public university) and Table B (private university) providers on their allocation, but not other higher education providers. Under a Liberal amendment ATEC must consult all providers offering courses to international students.

A Greens amendment alters the wording of ‘number of overseas students that may commence a course of education’, replacing ‘a course’ with ‘courses’.

I’m not quite sure whether this change is grammatical or more substantive. If the latter it may require counting overseas students rather than overseas student enrolments. For example, international students who enrol in a sequential diploma and bachelor course in the same calendar year should only be counted as one commencement.

Evaluation of Act

Proposed section 37-1 requires an evaluation of the system of allocating places to commence before 1 January 2031. A Greens amendment would bring that forward to before 1 January 2030.

The amendment would also bring a review of needs based funding, as required under proposed section 39-75, back a year to 1 January 2030.

ENDS