Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Hansard source

Senator Carr knows very well that we have a history with education going back some years. We might have both shared an interest in it but I am not so sure we agreed on how that interest was to be reflected. The Higher Education Endowment Fund is an unprecedented investment in higher education in Australia. That is a common theme and something which is accepted. This is a $6 billion fund which provides future funding for capital and research facilities in the higher education sector. It is a true endowment fund, with a requirement in the legislation to maintain its real value over the medium to long term. Grants from the endowment fund will be directed towards promoting excellence, diversity, quality and specialisation in Australian universities—all laudable goals which I am sure are supported by all.

There will be an advisory board to ensure that grants are allocated in a way that delivers meaningful outcomes for the sector. This independent Higher Education Endowment Fund Advisory Board will be established to provide advice to the education minister, and its role will be to advise on the best way to implement and manage the endowment fund.

The provisions of the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 allow for the movement of moneys into the endowment fund and for those moneys to be invested for the future. The responsibility for that investment rests with the Future Fund Board of Guardians. So there is a layer of probity, accountability and prudential requirement.

The sector will have a genuine opportunity to provide input into the development of guidelines, outlining how the funding program will operate. There is no requirement for this level of detail to be included in the legislation, but I say that so that it is on the record. I think the sector would welcome that opportunity to provide input.

Consistent with the government’s aim of encouraging diversity within the sector, all institutions listed under table A and table B of the Higher Education Support Act 2003 will be eligible to apply for funding. That is something which speaks for itself and is open to transparency and public inspection.

With the establishment of the endowment fund the government has created a new avenue for business and the general public to make philanthropic donations to the sector. That is something that universities in particular benefit from. In my home state of Western Australia, the University of Western Australia has, over a period of time, enjoyed that to great benefit. That is the reason it is perhaps one of the wealthiest universities in the country.

In the first instance, the bills provide that tax deductable gifts of money to the endowment fund will only be able to be accepted on an unconditional basis. At the time the endowment fund was announced, the government indicated that contributions could be earmarked for particular universities and that universities could choose to have their own philanthropic funds managed along with the endowment fund. These issues will be addressed following more detailed consultation with the higher education sector and the board of guardians. The government may then consider amendments to the legislation.

In order to support the establishment and operation of the Higher Education Endowment Fund, amendments to the Future Fund Act 2006 and the Income Tax Assessment Act 1997 are required. Broadly, the amendments to the Future Fund Act extend the functions of the board of guardians to include its functions under the endowment fund act. The bill also makes it clear that there are two investment mandates that the responsible ministers can issue to the board: one for the Future Fund and one for the endowment fund. Correspondingly, the consequential bill clarifies that the board has two investment functions: one for the Future Fund and one for the endowment fund.

Both bills set out the limitation of the investment mandates. In line with good governance practice, the bills also specify that the responsible ministers cannot direct the board to use the assets of the Future Fund to invest or support particular financial assets. The Income Tax Assessment Act is also being amended to allow deductable gifts of money to be made to the endowment fund. I thank those senators who have contributed to this debate and, in particular, the standing committee for its work in relation to these bills. I commend these bills to the Senate.