Kate Ellis (Adelaide, Australian Labor Party, Minister for Employment Participation and Childcare) Share this | Link to this | Hansard source

I present the explanatory memorandum and move:

That this bill be now read a second time.

During the height of concerns confronting the international education sector in 2009 the Prime Minister, in her then role as the Minister for Education, asked the Hon. Bruce Baird AM to conduct a review of the Education Services for Overseas Students Act 2000 and associated legislation. At that time she also introduced a number of amendments to the ESOS Act to strengthen registration requirements and enable re-registration of all providers by the end of 2010.

This interim step was necessary to reinforce the integrity and quality of Australia’s international education sector. When those amendments were passed in February she gave an undertaking to come back with further amendments at the earliest opportunity following the finalisation of the Baird review. This amendment bill is delivering on that commitment.

The Education Services for Overseas Students Act 2000, or the ESOS Act, protects Australia’s reputation for delivering quality education services. It does this by establishing a regulatory regime for the provision of international education and training services and looks to the interests of overseas students through the establishment of minimum standards and providing tuition assurance.

The ESOS Act also complements Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.

Since it was first written in 2000 the ESOS Act has been amended several times to keep pace with change, and it is widely recognised as one of the best legislative frameworks for international education in the world. However, unprecedented growth in recent years has created new pressure points in the sector which continue to play out.

Following extensive consultation with the sector, Mr Baird reported back to the government in February 2010 with 19 recommendations for making the ESOS Act stronger, simpler and smarter. Key messages have been that there needs to be a clearer focus on the interests of students and that, given the size and diversity of the international education sector now, a one-size-fits-all approach to regulation will no longer suffice.

In general the recommendations from Mr Baird are about strengthening the registration process, supporting more effective monitoring and enforcement, empowering students with information and improved complaints-handling, encouraging the ethical recruitment of students and introducing a simpler, more robust consumer protection regime.

The government released the final report of the ESOS review on 9 March 2010 and at that time indicated a staged approach to the government’s response starting immediately with a number of the recommendations that build on recent changes to the act.

Consistent with this staged approach, the government’s response to the remaining recommendations will be considered in a second tranche in the coming months.

The Education Services for Overseas Students Legislation Amendment Bill which I am introducing today is the first round of changes to the ESOS Act recommended by the review and will make adjustments to the ESOS Act as well as the Ombudsman Act 1976 and the Privacy Act 1988.

The dual focus of this bill is risk management and more effective enforcement.

The bill introduces provisions to further strengthen the registration process for approved providers of international education. An amendment is proposed to make it clearer that providers will have to demonstrate that they have access to the financial resources to meet the objectives of the ESOS Act, that they have a sustainable business model and that they have the capability, governance structures and management to deliver education of a satisfactory standard. Recent college closures have highlighted that greater upfront scrutiny of these matters can help identify providers which are at greater risk of not meeting their legislated obligations.

This amendment will raise the bar of entry into the international education sector and is consistent with proposed changes to the Australian Quality Training Framework, announced by COAG in December 2009 and taking effect from July 2010, to strengthen the gateway for all registered training organisations.

Building on the risk managed approach developed for the re-registration process currently underway, this bill will extend a risk management approach to all registrations both at the point of registration and throughout the registration period. The purpose is to better identify risk and ensure a consistent assessment of risk by all regulators and, in time, the national regulators being established for the vocational education and training and higher education sectors. Together with the strengthened registration criteria, this amendment aims to reduce the number of high-risk providers entering the international education sector and set appropriate conditions on providers’ registration, including for ongoing monitoring to better manage risk.

This will enable better targeting and reduced duplication of compliance efforts and will shift the regulatory burden to those providers that present the greatest risk to the student experience and the reputation of the sector as a whole.

While registration criteria will apply to all providers, higher-risk providers may have new Commonwealth imposed conditions placed on their registration, such as a cap on enrolments, annual financial statements or restrictions on the fees that can be collected in advance, as well as more frequent and detailed auditing. This, in turn, will create incentives for providers to reduce their risk by rewarding low-risk providers with less onerous monitoring regimes.

As part of this measure, consistent with common practice, when registering a provider, the regulator will assess the provider’s risk profile and set a period of review and any conditions to ensure appropriate levels of scrutiny are applied to the provider’s operations. The Commonwealth will also be able to assess risk and apply risk based conditions at any time, rather than only as a result of compliance activity. As with re-registration, the details of the risk management approach, such as the broad indicators of risk and type of conditions that should apply, will be further developed in consultation with states and territories through ministerial council processes, and with the sector, prior to implementation.

The risk management approach will be supported by limiting a provider’s registration period on the Commonwealth Register for Institutions and Courses for Overseas Students to no more than five years. This will also help introduce consistency into the registration regime by allowing the ESOS Act to formally recognise and align with limited periods of registration for each provider set by the states under domestic quality assurance frameworks.

Amendments are introduced to strengthen the ability to take effective enforcement action by introducing financial penalties for a broader range of non-compliant behaviour and to enable regular publishing of targets and information on regulatory activities undertaken by the Commonwealth.

A perception raised during the Baird review consultations is that, while the ESOS legislation is sound, it is not adequately enforced. Financial penalties are a tangible immediate action against providers for compliance breaches, reducing the need to go through lengthy court processes or potentially compromising a provider’s ability to continue operating. There is existing scope for financial penalties to be extended for a range of breaches of the national code by making amendments to regulations. The government looks forward to the second tranche of legislative change and implementing our response to the remaining Baird recommendations. I commend this bill to the House.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I rise to speak in support of the Education Services for Overseas Students Legislation Amendment Bill 2010. The bill seeks to amend the Education for Overseas Students Act 2000, the ESOS Act, to strengthen the registration criteria for providers of education services to overseas students. It introduced a risk management approach for the regulation of these providers. These measures have been introduced by the government to restore confidence in the international education sector and are steps which the coalition broadly supports.

The international education industry is our fourth major export industry, worth an estimated $18.5 billion. An Access Economics report into education in April 2009 found that it creates an extra $12.6 billion contribution for our economy through employment such as teaching and through services such as food and accommodation for international students. These figures combined mean that the international student market contributes more than $30 billion to our economy.

Of course, the contribution international students make to Australia is not just financial; having international students study in Australia contributes to the student experience for Australian students as well. Students from all parts of the world are brought together, and this brings them the opportunity to understand and learn from each other about other cultures and perspectives. Supporting cross-cultural dialogue at the university and vocational education and training sector level plays a key role in our international diplomatic efforts. A strong international education industry assists Australia to build and maintain good relationships around the world.

We are lucky in Australia to have a very welcoming and multicultural society. Students do want to come here to experience our culture and lifestyle. I note that Universities Australia recently released the findings of a new benchmark survey. The survey involved 34 of Australia’s universities and covered the expectations and experiences of international students pursuing higher education in Australia. The results indicate that overall 86 per cent of the 36,308 international students who responded to the survey are satisfied with their education experience. There is obviously room for improvement, but the Universities Australia research tells us that, on the whole, students find studying in Australia a positive experience. This is heartening news, particularly in the light of recent events in the international student sector.

It is well known that the international education sector went through a period of rapid growth over the last decade. Unfortunately, the downside to such accelerated growth in the overseas student market is that it has attracted some unscrupulous education providers to the system. We saw reports emerge in 2009 that some education providers appeared to be operating only to provide a pathway for students to gain residency in Australia rather than for the primary goal of providing a quality education service. These shonky operators preyed on students, taking thousands of dollars to supposedly guarantee results in the English language exam required for skilled migration. Some students fell victim to such rorts.

Other disturbing reports of unethical behaviour towards students also emerged. We have witnessed under-regulated private colleges close. These events, compounded with some violence towards some international students, particularly Indian students, have impacted on our international reputation and led to a decline in enrolments in Australia. The council of higher education providers estimated last year that universities may see a possible downturn of 10 per cent or more in enrolments in 2011. Australia will have to work very hard to reverse the damage to this important industry to remain competitive in the global environment.

The Education Services for Overseas Students Act works in conjunction with immigration requirements to ensure that education providers collect and provide information relating to student visas and to regulate minimum standards, financial assurance and tuition. It is about making sure international students receive a quality education and also meet the conditions of their student visa. Improving the current regulatory framework is a complex issue, but it is essential if we want to maintain the reputation of our industry in the long term.

To work through some of the matters that I have raised, the government appointed the Hon. Bruce Baird to review the Education Services for Overseas Students Act in August 2009. Mr Baird provided a report back to government suggesting changes to ensure that Australia continues to offer world-class quality in international education. The report, titled Stronger, simpler, smarter ESOS: supporting international students, suggested some requirements which now appear in this bill. This includes that approved providers be able to demonstrate their ability to access financial resources to meet the requirements under the ESOS Act 2000 and have a sustainable business model with the capability, governance structures and management to deliver education of a satisfactory standard. This new measure will add to the requirements in the original ESOS Act as well as the Education Services for Overseas Students Amendment (Re-registration of Providers and Other Measures) Act, which passed in 2010.

Included in this bill is also a new strategy for managing risk in the private education sector. Registration periods for approved providers will be limited to five years. Additional conditions will be able to be placed on a provider’s registration when the provider is first registered or at any time throughout the registration period. The bill also provides for the Commonwealth to take steps without referral from state or territory regulators to introduce financial penalties for a broader range of behaviour, including unethical recruitment and services and failure to comply with the proper maintenance of student records.

The Commonwealth will also, upon the passage of this bill, be able to publish any enforcement action taken against education providers. I note one last measure in this bill: that is, the amendment to the Ombudsman Act 1976 to establish an Overseas Students Ombudsman within the office of the Commonwealth Ombudsman. Its function will be to provide advice to private education providers on complaint-handling processes and possibly report on other issues across the international education sector.

Reforms to education services for overseas students do not end with this bill. The measures in this legislation are important steps to strengthen the current arrangements to be of support to international students. The coalition hopes these measures help the services to provide and deliver quality education qualifications while being effectively regulated to ensure sustainability. I understand that the Baird review has many other recommendations that we could consider to improve current arrangements in the sector. While the coalition supports the measures in this bill, we would hope that the government continues to take action to rebuild this industry. As this bill before the House goes some way to doing this, I commend it to the House.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the Education Services for Overseas Students Legislation Amendment Bill 2010. We are blessed in this city to have at our disposal five providers of tertiary or technical education. As a result, technical and tertiary education form a significant part of the local economy here in Canberra. The education sector represents the second largest contributor to the local economy behind government. International education is a significant part of this contribution and it would be remiss of me not to speak today towards any measure that strengthens this vital part of the Canberra economy.

I also have a strong interest in the welfare of students in higher education, particularly vocational and technical education, from my days as president of the Royal Melbourne Institute of Technology Student Union. At that time the RMIT was the biggest campus in the Southern Hemisphere and it had a mix of vocational, TAFE and higher education courses. We had everything from mechanics and chefs to engineers, journalists and movie makers. We also had the largest mix of part-time and full-time students, and a large proportion of those students were international students. So I am deeply committed to the welfare of students, having that imbued in me from a very young age as a result of looking after about 25,000 students at RMIT at that stage—it was a very large institution, and the oldest workers’ college in the world.

As a tutor at the University of Canberra, I also taught undergraduate and postgraduate students from China, Malaysia, Vietnam and Indonesia. These students face enough challenges being here on their own to study, trying to get used to our culture and our food, being away from their families and trying to make new friends in a new land. When I moved up here from Melbourne when I was 18 to study at the ANU and lived in at Burgmann College, I found it very, very hard being away from my family. So not just being away from their family but also being in a new land would be a challenge for these students—and it is a challenge, I know, from speaking to them.

That is why I have been deeply shocked and dismayed by the stories that have emerged in recent years concerning some education providers and their seemingly unscrupulous actions. Maybe I should not have been but, nonetheless, it was a great concern to me that some of these operators existed—operators such as the catering colleges with no kitchens and the pilot training schools that would not let students fly planes. These types of fly-by-night operations place at risk not only the students who unwittingly enrol in the courses but also the entire international education sector and the reputation of education in Australia and here in Canberra. Given this threat to such a large contributor to the Australian economy, and to the ACT economy, I am very pleased that the Gillard government has taken on some of the recommendations of the Baird review.

The Education Services for Overseas Students Act, better known as ESOS, ensures that students who come to this country receive the quality education promised to them—that is not too much to ask. The ESOS Act also complements Australia’s migration law by ensuring the providers collect and report information relevant to the administration of student visas. The bill follows on from the Prime Minister’s commission of a review into the ESOS Act when she was Minister for Education. The review considers four areas of enhancement for the ESOS framework: supporting the interests of students, delivery quality as the cornerstone of Australian education, effective regulation and sustainability of the international sector.

When the report was handed down in March 2011, it contained 19 recommendations covering better consumer protection mechanisms, more support for international students and improved regulation of education providers. The report’s conclusions follow an extensive consultation process with those in the sector—most importantly, the student groups, the education unions, international students and diplomatic missions.

The recommendations from the Baird review are being implemented in two main stages, with those recommendations which can be implemented immediately being put first to ensure they are not held up by those requiring more detailed analysis. The bill continues the work from previous amendments and seeks to introduce provisions to strengthen the registration process for approved providers. The bill will require providers to demonstrate, as part of the registration process, that they have the financial resources to meet the objectives of the ESOS Act, that they have a sustainable business model and the capability, governance structures and management to deliver the education to a suitable standard. The bill will strengthen the work already done in this area which aims to ensure a repeat of past incidents does not occur in future.

These provisions will go a long way to ensuring the viability of providers. Certainly, it is my hope that with these provisions we will never see a repeat of the times when the viability of a provider is limited to the current provisions of the Migration Act. I am glad of this because I was particularly struck by the comments made by SUPRA, the Sydney University Postgraduate Representative Association, to the Baird review. The association stated:

It is apparent that the closure of an education provider has a markedly negative impact on the welfare of students.

The association went on to say that, from its experience, students felt significant anxiety—as one would—as a result of dodgy providers.

The bill complements the risk management approach agreed between all states concerning CRICOS re-registration and better focuses resources on those in the sector who are at high risk. The bill also addresses noncompliant behaviour by providers by extending the use of financial penalties to a broader range of noncompliant activities. I am pleased that this bill will extend the coverage of the Commonwealth Ombudsman to include students in private providers, such as the flight schools which would not allow students to fly aeroplanes—extraordinary!

As it stands, while the ESOS Act requires providers to have access to an external complaints mechanism, this is not always easily identifiable. Students enrolled in a state or territory statutory provider such as a university or TAFE have access to the state ombudsman. This is a more difficult prospect for those enrolled in private institutions. The bill will provide that the Commonwealth Ombudsman is able to investigate complaints made by students and ensure appropriate action is taken in those private institutions. The Commonwealth Ombudsman will also work with providers to make sure their systems are rigorous, further improving standards.

I am similarly pleased that this bill also delivers on the recommendation to publish the targets and regular reporting of all regulatory activities. Moreover, while providers can appeal against enforcement action, this is no bar to the publication of their reporting data. I spoke previously about the need for transparency and how it highlights strengths and weaknesses. This is another example of the benefits of transparency.

I welcome any move that makes our education providers more accountable and transparent to their students, customers, the broader Australian community and the global community. Education and international education are far too important to Australia’s economy and reputation—and to Canberra’s reputation and economy—to be taken lightly. We cannot assume that the complaints from students are isolated, rare or from malcontent individuals. They must be treated seriously and this gives them the vehicle to do that. We must work hard to stamp out the providers who, through their negligence, incompetence or just plain money grabbing, place at risk a valuable industry for Australia and for Canberra. This bill focuses on financial and business viability and is essential to ensuring a repeat of the past does not occur. I commend the bill to the House.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

International students bring huge benefit to the Australian economy, both socially and economically. That is why the Education Services for Overseas Students Legislation Amendment Bill 2010 is of such importance. It will enable the Commonwealth Ombudsman to establish an independent body for overseas students to make complaints against private registered providers, offer advice and training to private institutions to facilitate best practice complaint handling, and review and investigate complaint handling and report on systemic issues.

Whilst I do not generally support simply applying another layer of bureaucracy to try to fix an issue, I believe that these amendments will provide much needed transparency and reassurance to international students in Australia who are currently feeling threatened by the Gillard government’s recent actions.

Education services are Australia’s third largest export earner, second only to coal and iron ore. For a relatively small country, Australia hosts a high portion of the world’s international students. In 2006, there were almost 2.8 million tertiary students studying abroad, with just over 207,000 studying in Australia—7.5 per cent. Additionally, international students study not only at our universities but also through business schools, English language study institutions, through the VET sector, on study tours, and through foundation courses to prepare them for further study. In doing so, they contribute to a wide and diverse range of sectors even within the education industry, and the benefit of this becomes clear when looking at their contribution to the overall economy.

Access Economics reports that each international student contributes approximately $29,000 per annum, on average, value added to our economy. This means that overall, including associated visits from their friends and family, international students contribute $12.3 billion value added. While students spend about 46 per cent of their expenditure—$6.4 billion—directly on their education, they also spend money on other items such as food, accommodation and travel. Again, based on an average $14.3 billion value added, it is estimated that for every dollar an international student spends on their education, there is a flow-on effect. This in turn, of course, generates jobs for Australians.

Tourism Research Australia suggests that, for every two formal students, one friend or relative visited Australia throughout the duration of their studies. These travellers contribute an estimated $314.7 million to the economy. It is clear that international students contribute enormously to Australia as a whole, but the effects are also clear when broken down to a state-by-state level. In Queensland, international students and their friends and visitors contribute approximately $1.7 billion in value added to the state’s economy.

Comparing this to the gross state product of $214 billion, international student flow-on effects account for 0.81 per cent of GSP. Of this, $1.2 billion is in the direct form of employee wages, with the remainder representing return to capital owners. International student activity in Queensland contributes close to 17,500 full-time equivalent workers, including almost 14,000 jobs in my home town of Brisbane alone. This equates to $970.4 million in direct wages, and $416.8 million as returns to capital owners, with the sector contributing $4.15 billion to Brisbane’s economy. When broken down to a local level, the contribution and importance of international students becomes particularly clear.

These amendments are a positive step towards supporting our international students. However, I do have grave concerns about the management of this sector under the Gillard Labor government. Changes to the Skilled Occupation List made in July last year saw international students across the country reach the end of their degrees without the certainty they thought they had throughout the duration of their course. Whilst the changes may have been necessary, the transitional arrangements for these students were inadequate, undermining international confidence in studying in Australia. This is not good for our international reputation and relationships. On top of this, the government’s attempt at reintroducing compulsory student amenities fees would see international students studying at our universities hit with yet another upfront cost for services that are optional.

The negative effects of this government’s mismanagement of the international student sector are clear. As reported in the Australian in May last year, the sector saw a 40 per cent decrease in overseas student applications in one month alone. At the time, Stephen Connelly of the International Education Association of Australia cautioned that, should this decline continue, the sector could lose up to 35,000 jobs by the end of 2011. These statistics have not improved. On 12 February, Dan Harrison of the Sydney Morning Herald reported that the number of international students choosing Australia for their degree had continued to fall, with student visa applications from outside Australia decreasing 32 per cent over the past six months of 2010, compared with 2009, which had already fallen 22 per cent compared to the same period in 2008. This drop must seriously concern universities, which have an increased reliance on the funds paid by international students given that the real value of government funding to universities has declined.

The cumulative effect of this Labor government’s mishandling of the implementation of these changes has caused uncertainty and decline. Indeed, last year Monash University, Australia’s largest, announced that it would lay off 300 staff to cover the budget shortfall caused by the decline in the number of international students at their institution. Estimates by Access Economics also show the impact of a five per cent increase or decrease in international student activity. The effects of a five per cent decrease are significant, reducing total value-added contributions by more than half a billion dollars. As seen through the Monash example, however, the most telling effect of a decline in international students is its effect on employment rates, with a five per cent decrease resulting in an employment drop of more than 6,000 full-time-equivalent workers.

Clearly, something needs to be done to regain Australia’s standing within the international education sector. Our universities and education institutions are world class, and I am sure that honourable members would agree that we are yet to find a country that offers greater safety, better natural attractions or, indeed, a better lifestyle than Australia. It is little wonder that Australia has been so competitive in this sector in the past. I have already noted the huge benefits that a thriving international education sector and international students bring to the economy. These are benefits we cannot afford to lose. This bill goes some way to providing international students with a reassurance that they are valued and that they do have a voice whilst they are here. History has shown that students who enjoy their education experience in Australia become friends for life.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise today to speak on the Education Services for Overseas Students Legislation Amendment Bill 2010. This bill touches on a sector of the economy which is incredibly important for my electorate of Throsby on the South Coast of New South Wales. We have a great regional university and a number of schools, particularly in the southern highlands, which have successfully tapped into the demand for high-quality education services. I am very pleased to say that the demand for the education services provided by places like the University of Wollongong and St Paul’s International College in my electorate has grown and has not been hit like other institutions have throughout the period of the GFC. International education services are now the third largest income earner in the region. A region that once relied upon manufacturing and mining is now diversifying because of the benefits of overseas education services.

I was interested to hear the contribution earlier by the member for Ryan. I am pleased to see that there is some bipartisan support for the implementation of the Baird review findings. I do part company with the member for Ryan on some of her observations. Yes, it is true that international student applications and applications for international student visas have declined over the last three years. But if you listened to the contribution from the member for Ryan you could be forgiven for thinking that we have not been through a global financial crisis, which has had a significant impact on the demand for overseas education services, or that we have not had a high Australian dollar, which has had a big impact on the capacity of many Australian institutions to compete with other countries not only in our region but also around the world in what is now a global market.

We also inherited a lack of quality control in a sector that grew like Topsy over a decade under the watch of the previous government. As a result we saw a number of institutions that have been described by previous speakers as nothing more than shonky operations. They have also been described by many commentators as nothing more than visa factories. It was with an eye to the need to implement some quality control in this critical sector of our economy that the government acted. Yes, more refinements to the regulations of this sector are needed, and I will have something more to say about that shortly, but we did exactly what was necessary to ensure that we had some quality control in this sector.

Every year, thousands of young people from around the world travel to Australia to enrol in a variety of educational institutions, including schools, TAFEs, universities and English language schools. As previous speakers have noted, our reputation as a safe, multicultural country ensures that we are one of the largest providers of education services for overseas students. It is critical that we in this place do nothing to damage the reputation we have as an open, welcoming country that values multiculturalism and the contribution that our overseas students make not only to our economy but also to our cultural life.

We note that the current Australian dollar is impacting on many of our export industries, and the education sector is no exception. Despite this, I am very pleased to say that the education services sector will continue to grow and be a part of Australia’s economy. In my own region the high Australian dollar, thankfully, has not yet had an impact on enrolments and the demand for future enrolments, particularly in the tertiary education sector. I met yesterday with representatives from the University of Wollongong and they advised me that demand was still very strong. That is good news indeed.

The principal act regulating this area is the Education Services for Overseas Students Act 2000—the ESOS Act—which protects the interests of students and Australia’s reputation for delivering quality education services by establishing a regulatory regime and standards for the provision of international education and training services, and by providing tuition and financial assurance. The ESOS Act also complements Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas. In August 2009 the Prime Minister in her then capacity as Minister for Education asked Bruce Baird AM to review the ESOS Act and its associated instruments and to recommend actions for ensuring Australia continued to offer world-class international education services.

Ahead of the Baird review, the ESOS Amendment Act 2010 required the re-registration of all existing Commonwealth Register of Institutions and Courses for Overseas Students providers and the introduction of two new registration criteria, and required providers to publicly list the names of all of their education agents. This went to the problem that has been identified by many speakers: unscrupulous activity by a small number of institutions and their education agents. The Baird review was tasked to consider the need for enhancements to the ESOS legal framework in four key areas, as set out in the terms of reference. They included supporting the interests of students, delivering quality as the cornerstone of Australian education, and effective regulation and sustainability of the international education sector.

A division having been called in the House of Representatives—

Continuing my speech, Mr Baird released his report Stronger, simpler, smarter ESOS: supporting international students in March 2010. The report contained 19 recommendations, including, firstly, more support for international students and improved information, secondly, stronger consumer protection mechanisms to ensure students are protected from unscrupulous operators, thirdly, improved regulation of Australia’s international education sector and, fourthly and finally, improved support for those who study and live in Australia, including having somewhere to go when problems arise. During debate in the Senate on amendments to the ESOS Act in 2010, the then Deputy Prime Minister committed to introducing an amendment bill for the Baird ESOS review recommendations. The initial changes proposed to be implemented in this bill will build on recent amendments to the ESOS Act and the re-registration measure to raise the bar for entry into the international education sector and give regulators greater flexibility to effectively manage risk and enforce compliance with legislation. This bill before the House today contains provisions that will, firstly, ensure that only those providers that have a capacity to offer quality education are permitted entry into the sector. Secondly, it will protect the interests of students in strengthening and simplifying the regulatory framework to ensure it can respond to the pressures international education faces now as well as those that it will face into the future.

Third, it will ensure resources are better targeted towards high-risk providers and release and reduce the regulatory burden for low-risk providers. It will complement the risk based approach agreed with states and territories for CRICOS re-registration. It will address non-compliant provider behaviour by extending the use of financial penalties to a broader range of non-compliance. It will allow the Commonwealth to publish targets and regular reporting on all regulatory activities taken under part 6 and part 7. Finally, it will extend the jurisdiction of the Commonwealth Ombudsman to include students of private registered providers. Taken together, these amendments to strengthen ESOS will result in a more sustainable international education sector through better protection of international students and an ongoing commitment to continual quality improvement. These measures are important to protect the integrity of Australia’s education services sector, which is, as I said, of great value to our economy, including the economy in my electorate of Throsby. There is no doubt that in the past there have been issues with the integrity of the international education sector, and these measures in the bill today are a response to that. There have been allegations of immigration rorts, shonky providers, poor quality education services, college closures and exploitation of students. This legislation is a positive development to ensure that Australia’s international reputation is protected and these practices are stamped out.

In 2009-10 student visas were granted to 269,000 applicants. It is also relevant to note that new measures have been put in place to address integrity issues about some parts of the student visa program, including an increased number of interviews for offshore applicants, increased financial requirements and changes to the way in which course packages are assessed. In December 2010 the Minister for Tertiary Education, Skills, Jobs and Workplace Relations and the Minister for Immigration and Citizenship announced a strategic review of the student visa program. This strategic review of student visas complements the work being done in responding to the Baird ESOS review. The review of student visas is being done because the government recognises that there have been adverse impacts on the Australian international education sector as a result of the rising value of the Australian dollar, together with the ongoing impact of the global financial crisis on countries and the growing competition from alternative providers in countries such as the United States, New Zealand and Canada for international students.

As I mentioned, there are a number of international education providers in my electorate and I have had representations from a number of them, including St Paul’s International College in Moss Vale. This college in the Southern Highlands of New South Wales is a leading international school, providing services in education services, particularly to mainland China. I know that schools like St Paul’s have been struggling with the impacts of some aspects of these regulatory changes and the high Australian dollar in this highly competitive market. I have made representations on behalf of the school to the minister, and he is sympathetic to the situation facing schools in my electorate. We are hopeful that, as a result of the review, these issues will be brought forth and we will have a comprehensive response to the problems being faced by these providers. It is important that schools like St Paul’s continue to remain financially viable. I am assured that it is this government’s intention to find the right balance between our economic interests and the importance of an education and immigration system that are based on sound regulatory principles.

In conclusion, the goal of the Gillard Labor government is to invest in education and to build the best education system in the world. The ESOS amendment bill before the chamber today protects the interests of students and Australia’s reputation for delivering quality education services, and for these reasons I commend the bill to the House.

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

The Education Services for Overseas Students Legislation Amendment Bill 2010 is an important bill both for the electorate of Bennelong and for the nation in general. I support the bill but add reservations that further amendments are required to achieve a better balance between the needs of higher education providers and the legitimate expectations of students.

The changes to this bill arise out of the review, chaired by the Hon. Bruce Baird, delivering the report titled Stronger, simpler, smarter ESOS: supporting international students. This bill implements some of the Baird recommendations, adding some further strength and flexibility to the original ESOS Act 2000, as well as the ESOS Amendment Act 2010. The primary purpose of this bill is to: bolster the existing standards for the registration of an education provider; improve the manner in which the industry manages risk; provide the government with the authority to penalise providers financially if they engage in practices considered inappropriate or unethical; and allow a wider scope for the Commonwealth Ombudsman to investigate complaints about education providers. It is my contention that these measures need to be expanded to include enhancement of the student experience, with flow-on benefits to all sectors of the economy—a concept I refer to as ‘edu-tourism.’

Macquarie University is based in the Bennelong suburb of Marsfield and recently ranked ninth in the Australian Education Network’s ranking of Australian universities. Like many higher education providers, Macquarie University’s financial viability is inextricably linked to the health of our overseas student market, which is responsible for a large proportion of their tuition income. Australia is one of the largest providers of education services for overseas students. Education is our nation’s largest services export industry and is currently our fourth largest export earner overall, following coal, iron ore and gold.

In 2008-09, education contributed more than $17 billion to our national export earnings and it is linked to the employment of approximately 120,000 people. The total value-add generated by international higher education students was $9.3 billion. On average, each international higher education student studying in Australia contributes over $50,000 to our economy each year. Two-thirds of this amount is spent on goods and services, injecting vital income into the economy and generating more jobs. Many overseas students will remain in Australia, contributing to our nation in a variety of economic and cultural ways. Others will return home and share their affection for their second home as a legitimate business, study and tourist destination.

In short, government inaction or poor policy can have massive repercussions on our nation’s economic wellbeing, on each education provider’s financial viability and on the costs of tertiary study for our own citizens, thereby impacting on the professional and intellectual capacity of our future generations.

Over the past few years we have observed a sharp decline in commencement numbers of international students. In 2009-10, the number of visas granted for the higher education sector dropped by 11.5 per cent, compared to the previous year. A John Curtin Institute of Public Policy report, dated August 2010, found that overseas enrolments in higher education could slide by up to 100,000 places by 2015, costing up to $7 billion in fees and risking up to 8,800 university jobs.

This serious issue has been widely linked to a variety of factors, including the global financial crisis; competition from improved domestic networks, specifically those choosing to use English as the language of tuition; recent changes to the General Skilled Migration Program; the increasing strength of the Australian dollar; the collapses of local providers found to be dodgy through improved checking mechanisms; and incidents of violence perpetrated on overseas students, which attained sensational press in their home markets. I agree that these factors, many of which are out of our control as policymakers, have been largely influenced by global events. Any efforts we can implement to right the ship and improve our position will be of great benefit. But these efforts should not be limited to just trying to take things back to how they were prior to the GFC.

A key reason for the current situation is the increased competition we face from other countries, particularly the United States, Canada and the UK, who offer international students the package experience of studying in a foreign country. This is the idea that education institutions provide a holistic experience which includes not only a high quality of teaching from the provider but also the living and cultural elements associated with the national experience. In countries such as the UK and Canada, it is normal practice to accommodate first-year students, as a minimum, within the university’s portfolio of accommodation. Almost all US colleges and universities provide their students with the option to live in campus residences or dormitories. Australia must compete with these countries by taking a more proactive role in securing student accommodation and ownership of the broader student experience and development. At the very least, larger education providers should take responsibility for finding first-year foreign students suitable accommodation, preferably on campus but possibly in private accommodation.

In addition, Australia must ensure that we give foreign students a holistic experience of life in Australia by ensuring that they have access to affordable public transport and to the social aspects of life on campus which make studying in another country so enjoyable. We must nurture these individuals so that they either remain in Australia as skilled workers and contribute to our society or return to their home country with genuine praise and affection for our country. We need to be creative. We need to fully utilise the opportunities available to us to improve the overall student experience. We need to move away from just viewing overseas students as purely economic assets. We need to take a wider perspective on the overall impact of this industry on our local community as well as our broader economy.

Macquarie University is a very large provider of education services to overseas students. As the local MP I have witnessed firsthand the impact that an inadequate system can have on the local community. As I mentioned in my maiden speech to the House, since my very first day of campaigning for this position over a year ago I have observed and participated in the protest actions of a community group called MARS—Marsfield Against Residential Suffocation. Coincidentally, I will be addressing a MARS rally this coming Sunday afternoon in Dunbar Park. MARS was formed by residents neighbouring the university who have witnessed a sharp escalation in the number of illegal boarding houses providing cheap and substandard accommodation options to overseas students. Some reports have up to 15 students sharing a three-bedroom unit, leading to a degree of physical and psychological abuse by those choosing to prey on the students’ ignorance of the Australian way of life. The flow-on impact on infrastructure, services and detriment to the quality of life of the community cannot be overstated.

Some of this matter relates to powers administered by the state government, particularly those relating to tenancy laws. My New South Wales state colleague Victor Dominello, the member for Ryde, introduced a private member’s bill late last year to impose significantly increased sanctions on operators of these illegal boarding houses and to set a cap on student numbers per room permitted under the legislation. Unfortunately this private member’s bill did not proceed through the Legislative Assembly prior to the New South Wales parliament being prorogued. I am very grateful to Mr Dominello and hopeful that he will serve as a government MP later this month and that this bill will becomes part of the new government’s legislative agenda.

Under the federal government’s authority, as exemplified by the bill we are debating, it has become increasingly clear that action is not being taken to protect one of our greatest industries—one that has every potential for sustainable growth. We are in the early stages of suffering a syndrome that those of us in Sydney’s north-western suburbs know only too well whereby appropriate action is not taken in a timely manner in the form of infrastructure investment to provide dividends for generations to come.

Several weeks ago I inspected the clever yet simple prefabricated budget student accommodation buildings constructed over the past few years at the Australian National University. ANU has taken proactive measures to provide real options to the overseas student market and has markedly reduced the rental pressure on the surrounding residential neighbourhoods in the process. It gave me no surprise to learn that the ANU is ranked as the No. 1 university in Australia on the ranking guide mentioned earlier.

I also note that several days ago the University of Canberra announced their intention to follow the lead set by ANU and convert a block of offices in neighbouring Belconnen into student accommodation. Aside from the obvious and immediate assistance this would provide to the university’s standing in the overseas student market, the Vice-Chancellor of the University of Canberra, Professor Stephen Parker, was quoted by ABC News as saying:

In many way it’s the big issue for Canberra about Tertiary education and for the community, because if you’ve got students out there renting houses that aren’t really suitable for them, then they’re making housing less available, less affordable for members of the community.

It is imperative that a program is commenced to provide high-standard budget student accommodation with a unique Australian experience for our overseas students. This will serve to broaden their educational experience and create a distinct point of difference and superiority to the conditions and services offered by other countries in an increasingly competitive overseas student market. This opportunity should not be missed.

I understand this bill is the first of two amendment bills on the legislation which will be debated in this House over the coming months and that the next bill also has correlation to the issues I am addressing today. I will be working to ensure that preliminary negotiations on the future legislation include discussions on a university’s duty of care to their overseas students, including access to budget accommodation options of sufficient quality. Incorporation of these standards can assist in the development and improvement of the ranking or grading system of universities to include the quality of the students’ overall university experience, thereby assisting those providers to promote their services in international markets. The focus of our parliament must not be to promote unnecessary regulation or bureaucracy and other burdens which weigh down the strong performers. Instead, we must motivate our great schools of learning to be proactive in attracting the best young minds of the world, giving them the standard of support they deserve and assisting them to reach their full potential. The flow-on benefits to our country will be significant.

The measures covered in this bill will go a small way towards addressing these numerous issues. With the key role that Macquarie University plays in Bennelong, and the important position that the industry holds in our national economy, I will be working towards implementation of greater and further reaching reforms into the future. I commend this bill to the House.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise today to give my support, with conditions also, to the Education Services for Overseas Students Legislation Amendment Bill 2010. This bill aims to ensure that all providers of education services to overseas students are financially stable, have a solid business model and have the right management practices in place to ensure they deliver education that is of a suitable standard.

In Australia we have a fine record in educating students from overseas and, given that we are one of the world’s largest providers of overseas education and a market leader, it is imperative that we constantly seek to set high standards in education. The fallout from the global financial crisis, combined with the rise in the Australian dollar and, unfortunately, the sledgehammer approach to the issuing of visas, means that gaining an education in Australia has become more expensive and more difficult for students from overseas. This has put considerable pressure on the industry and has resulted in 11,544 fewer students in 2010 than in 2009. Therefore, it is important that we ensure the standard of the education we offer is high, giving an additional incentive so that we can limit the impact of the high dollar and continue to attract students from overseas. We also have to ensure that students have a seamless approach in applying to access our tertiary education, because such approaches are being offered in competing countries such as the United States and the United Kingdom.

I feel that if this bill works towards this aim it will provide greater certainty for overseas students that the product they are paying for is of a suitable standard. With the establishment of the Overseas Students Ombudsman, there will also be an avenue for complaint resolution of any issues that students may have with their provider. This is certainly a welcome move and may uncover any problems with providers before they reach crisis point. Recent collapses of educational providers and issues with overseas student integration have also damaged our standing as a desirable education destination, and we do need to act to ensure that this does not happen again.

While our capital cities accommodate the majority of overseas students, these students are increasingly important for our rural and regional educational facilities. The right balance of local and overseas students results in a viable and diverse educational facility. This is especially important in more remote areas with lower population densities, where international student numbers can support a provider whose facility may not be viable if accessed only by local students. This has great advantages for local rural and regional students because a local facility is available and helps to create greater cultural diversity in our regional areas. As we see in our university residences, students mix and live in a truly global environment which adequately prepares them for the challenges of today’s workforce. Most young students now aim to live and work overseas for a period of time, and the contacts made while studying with students from other countries are extremely valuable. Many students form lifelong friendships with people from another country, and many make vital future business contacts.

In Wannon, we have campuses of both the Deakin and RMIT universities and, as an example, the training for doctors is especially popular and considered superior to some city based options, due to the variety of experience students get when working in a regional area. This influx of students leads to a greater chance of them choosing to stay and gain employment in rural and regional areas, helping considerably to fill some gaps that exist for skilled professionals, especially in the area of health. This in turn benefits our local communities. Many of our doctor and other health professional shortages are filled by overseas trained immigrants in regional areas. Encouraging overseas students to train in rural and regional areas can encourage those people to consider applying for permanent residency in the area and further assist in providing essential services to local towns. Overseas students who have been trained in regional Australia are already up to date with our standards and are more likely to stay in regional areas to work if they have a connection with the area formed while studying. Students who do return to their country of birth take home with them a better understanding of Australia and the Australian culture, assisting Australia’s standing in any future business dealings that they may have throughout their career.

A good example of the importance of international students to educational facilities in Wannon is the Hamilton and Alexandra College. When most people think of overseas students, they assume that they are mostly in our universities, but there is a growing trend for secondary schools to be actively attracting overseas students as well. The Hamilton and Alexandra College, an independent school educational leader in south-western Victoria—which, I might add, some of my children attend—fosters a relationship with China and our other Asian neighbours which results in strong overseas student numbers at the college. As this is a relatively small school, the component of overseas students at the Hamilton and Alexandra College means that the college is still able to support a boarding facility. This, in turn, benefits Australian-resident country families who might otherwise have to send their children to a city boarding school. All students learn Chinese, and the year 9 group undertakes a ‘China Experience’ in which they attend school in China for approximately two months. The students at the college benefit from forming friendships with students from other countries at an influential age. It produces more worldly and tolerant young adults who are prepared for the demands of our modern, multicultural society.

I am glad to see that with this bill the government is acting to address the decline in overseas students that occurred last year and the negative publicity that occurred as a result of the collapse of some educational providers. However, I am severely disappointed that the government will not acknowledge and act on the growing disadvantage our Australian resident country students face in gaining a tertiary qualification when compared to their city counterparts. While I support the aims of this bill, I hope that continual improvements will be made. (Extension of time granted) High-quality, world-class educational opportunities are a reflection internationally of Australia. Our international students go forth into the global community and we need to ensure that they have wonderful, positive and beneficial experiences to tell the world about.