Luke Hartsuyker (Cowper, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I thank all honourable members for their contribution to this debate on the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015, which amend the Education Services for Overseas Students Act 2000, or ESOS Act.

These bills deliver on the government's commitment to cut red tape and free up education institutions to invest in their own growth and future success, while maintaining Australia's stringent student protections. The bills are an important element of the National Strategy for International Education currently being finalised by the government. They will further strengthen the fundamentals of our education system by ensuring Australia maintains the highest standards through best practice quality assurance.

As honourable members would be aware, international education is Australia's largest services export, outstripping personal travel. It is by far our largest non-resources export, directly and indirectly employing tens of thousands of Australians in both our cities and regional areas. Preliminary figures from the Australian Bureau of Statistics show that export income from international education reached a record $18.1 billion in 2014-15. To support future growth we need to have in place a long-term strategy to build Australia as the world's pre-eminent destination for international students. That means getting the fundamentals right—and that is what these bills will do.

The amendments to the ESOS Act through these bills will remove unnecessary and duplicative regulation to provide significant savings for education institutions, estimated at some $75.9 million a year. By reducing complexity in a number of areas, the changes in the bills will support continued growth and enhance the competitiveness and reputation of this significant industry.

The bills have been developed in close collaboration with international education stakeholders, including education institutions and peak bodies across all sectors, international students, our national quality assurance agencies, state and territory agencies, the Department of Immigration and Border Protection and the Overseas Students Ombudsman. Throughout our consultations on these reforms, stakeholders strongly endorsed a robust ESOS framework.

They know that our reputation for quality is essential to the continued success of our international education system. But they also believe that some of the regulation we have in place imposes unnecessary costs without effectively addressing risk or benefitting students. The government is committed to upholding world-class standards in international education. We need to target regulation effectively and appropriately so that our quality assurance agencies, particularly the Tertiary Education Quality and Standards Agency, and the Australian Skills Quality Authority, can focus on the highest risk areas and stamp out any poor practices in the international education sector.

The first key streamlining measure in the bill makes minor amendments to the current restriction on education institutions receiving, or any student paying, more than 50 per cent of their tuition fees before the course starts. Currently the only exemption is for courses of less than 24 weeks duration. Having the option to pay more up-front will enable students, or the person paying on their behalf, to take advantage of favourable exchange rates and have the convenience of paying only once. These amendments will not compel students to pay more than 50 per cent of their tuition before their course starts, if they do not wish to do so. To better reflect enrolment periods and in response to feedback from education stakeholders, the short course exemption on collecting prepaid tuition fees will be slightly increased to 25 weeks. However, the government will retain the limit in all other cases so that the original important protections remain in place.

The second streamlining measure removes the requirement for certain education institutions to hold all tuition fees paid by students before they start their course in a designated account. This requirement only applies to private institutions. It is a costly and unfair imposition on more than half of our international education sector simply because their main source of funding is not from government. It limits their competitiveness and their ability to invest in innovation and focus on their core business—that is, providing education. It does nothing to reward those private institutions who do the right thing and add so much to Australia's reputation for quality.

By removing the requirement on some providers to hold tuition fees in a designated account, education institutions will have greater operational flexibility. However, they will still have the same obligations to protect students and pay their fees through the Tuition Protection Service. The Tuition Protection Service will continue in its important role of placing students in alternative courses and providing refunds where a provider ceases to operate, just as it does now. Conditions may still be imposed on the registration of an education provider at any time where concerns arise about the provider's financial viability.

The third streamlining measure reduces reporting requirements on education institutions relating to information about students who default on their course—commonly referred to as a 'student default'. During consultations, stakeholders told the government these requirements were unnecessarily burdensome, a disproportionate risk and did not allow enough time for students and institutions to resolve issues and confirm that a default had actually taken place. Consequently, the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill removes the requirement to report a student default and instead relies on other legislative provisions that require reporting of a range of changes to a student's course of study. However, the amendments maintain a shorter reporting timeframe of within 14 days for some information relating to students under the age of 18 to ensure the safety and wellbeing of this more vulnerable group.

The fourth streamlining measure will remove the concept of a study period as being less than 24 weeks. During consultations, the government was told by stakeholders that this requirement was extremely burdensome. Many education institutions were forced to change their administrative practices to accommodate this requirement. The concept of a study period in the ESOS Act stems from the introduction of the Tuition Protection Service in 2012 and was an administrative mechanism to determine when students paid their tuition fees. Education institutions needed to change their course structures and administrative arrangements to accommodate this requirement. This is an example of unnecessary regulation, when other provisions in the ESOS legislative framework require education institutions to have a written agreement with each international student setting out the student's course details, tuition fees and the conditions of refund. This prevents any unilateral changes by institutions to students' study periods.

These reforms do not water down protections for international students or compromise our quality assurance settings. They will improve quality by ensuring regulation is clear, targeted and appropriate. This is central to ensuring the global competitiveness of Australia's education institutions. Most significantly, they remove the previous reliance on Commonwealth delegations for regulation which stems from the time when states and territories performed the quality assurance roles now largely performed by our national regulators. The ESOS Act will now ensure that the ESOS agencies, TEQSA and ASQA, and the Department of Education and Training have direct and clear responsibilities. The bills also ensure the states and territories retain their important role of assessing and recommending schools for registration by the Commonwealth under the ESOS Act. The result will be less administrative complexity and more emphasis on getting the regulation right.

As ESOS agencies, TEQSA and ASQA will have strong powers to target poor practices in international education and take action against high-risk education institutions. The bills allow the minister to direct the ESOS agencies in the performance of their functions under the ESOS Act, in line with the minister's powers under the Tertiary Education Quality and Standards Agency Act 2011 and the National Vocational Education and Training Regulator Act 2011. This will ensure appropriate oversight of TEQSA's and ASQA's responsibilities as ESOS agencies.

The amendments also address a number of differences between the ESOS Act, the TEQSA Act and the NVETR Act. Addressing inconsistences and duplication across these legislative frameworks was a key recommendation from the 2013 review of higher education regulation by Professor Kwong Lee Dow and Professor Valerie Braithwaite. As a result of the amendments, the registration periods for institutions will be consistent across the three acts—up to a maximum of seven years. This will reduce the workload on institutions in meeting multiple registration time frames. The changes will also allow an ESOS agency considering an institution's application for initial registration, or renewal of their existing registration, under the ESOS Act to use information provided for other purposes, in particular registration under the TEQSA Act and NVETR Act. This will reduce requests for information from education institutions, saving them time and money. A further amendment will allow an education institution to seek an internal review of an ESOS agency decision rather than requiring them to appeal directly to the Administrative Appeals Tribunal. Again, this streamlines the ESOS Act, TEQSA Act and NVETR Act, increases efficiency and reduces costs for educational institutions.

The stakeholder consultations on the bill identified a need to align ASQA and TEQSA's ability to take equivalent action under the ESOS Act where they have already taken action against an education institution under the domestic legislative framework. Consequently, where an institution's registration under domestic frameworks ceases, or where it ceases to be accredited to deliver a particular course to domestic students, the ESOS agency will now be able also to cancel, suspend or otherwise impose a condition on that institution's registration under the ESOS Act. This will ensure that regulatory action is robust and consistent between the ESOS and the domestic frameworks, and will improve transparency and equity for the institution against which action is being taken.

A further measure to protect the best interests of students and tighten the existing provisions in the ESOS Act responds to stakeholder concerns regarding the continuation of teaching to international students after an education institution's registration expires. In the case of a school, the changes will ensure that a provider can continue to teach students only until the end of the year in which its registration expired. In the case of other education institutions, they will be able to continue teaching only to students who have commenced their study. While a provider is able to teach out, the bill also makes it clear that an institution cannot recruit or enrol new students in a course after their registration expires.

Debate interrupted.