Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

I rise to speak on the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and a similarly entitled bill, the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006. International education is Australia’s fourth largest export industry, recently revalued by the ABS as being worth over $9.8 billion. This significant contribution to the Australian economy demands that we demonstrate our commitment to protecting the consumers, Australia’s international students, and Labor believe that these two bills do support this end. Australia’s reputation as a provider of globally recognised education is reliant on our ability to maintain the standards of our providers. The ESOS regime is principally concerned with safeguarding that good reputation by regulating minimum standards of quality and ensuring that adequate consumer protection measures are in place.

The Australian Labor Party has been a strong supporter of the international education services sector since the Hawke Labor government first opened our universities to international students in the 1980s. This market has now grown to be worth almost $10 billion annually. I note that my home state of South Australia has increasingly led in the growth of international education through its universities. So it is with this 20-year history of initiating and supporting the Australian education export industry that Labor gives its support to the bills before us today.

These bills are in response to an evaluation carried out in 2004 which invited submissions from industry and from other stakeholders. The original ESOS acts were found to have some serious limitations, and the administration of the regime had also caused some problems. The evaluation report contained 41 recommendations aimed at improving the ESOS legislation, and some of these recommendations have been adopted in these bills.

One such recommendation relates to the registration of international education providers with the Commonwealth Register of Institutions and Courses for Overseas Students—a very long title; I understand CRICOS is the acronym. In order to qualify for registration, the provider must demonstrate an ability to comply with state or territory legislation as well as the ESOS Act and also satisfy a fit and proper person test.

Under the ESOS Act, all providers of education to overseas students must pay a registration fee annually. This fee is based on the total number of enrolments of overseas students for the previous year. Currently, enforcement action may be taken against a provider that fails to pay the registration fee. However, DEST has raised some concerns about the amount of resources being directed towards the recovery of registration fees. Thus the bills before the chamber allow for the automatic suspension of the registration of any provider that has not paid its annual registration fees. Suspension from CRICOS renders a provider unable to continue to provide education services to overseas students in Australia. Clearly, that is a severe sanction.

The opposition do recognise that chasing late registration fees is an administrative problem. During the estimates process, in response to our questions, the department revealed that, of the 1,193 providers liable, 493 had not paid by the due date. However, all providers have since paid the CRICOS registration fee, except for one, and this solitary provider has had its registration suspended.

Labor believes the way the sanction for the late payment of CRICOS registration fees is currently proposed in the bill could be seen as unfair. The Australian Vice-Chancellors Committee, the peak representative body for 38 of Australia’s premier higher education providers, were also troubled by this particular amendment and have voiced their concerns in a letter, stating:

Timely payment by universities or any other provider is contingent upon early notification from the Department of Education, Science and Training regarding the rules and calculation of the annual registration charge for the period, which should include time to discuss any discrepancies between DEST and provider calculations. The annual registration charged is calculated according to section 5 of the ESOS (Registration Charges) Act 1997 at a $300 base amount plus a $25 per student contribution based on enrolments the previous year. Thus the AVCC is concerned that the provider and DEST are required to agree on the total number of enrolments in the previous year. Resolution of discrepancies can affect the amount to be paid and obviously could also be caused by departmental errors. There is no allowance for adequate time to question the amount of the total registration fee charged under the proposed changes. In addition, DEST is under no obligation to detail the extent of the liability. For these reasons, automatic suspension at the end of February could be unfair.

So the opposition do share the concerns raised by the Australian Vice-Chancellors Committee and we will be moving an amendment to this bill in the committee stage with a view to allowing 28 days notice of the specific amount due as registration under the act. Our amendment does not significantly impact on the department’s desire to gain administrative efficiencies in relation to registration payment recovery. However, at the same time it offers a more transparent process for providers and gives providers the certainty they need from the charge calculation process. I urge the government to consider this amendment as a common sense approach advocated by the Australian Vice-Chancellors Committee within its area of expertise.

The bills also propose a change through the fit and proper person test. As I said at the outset, the act provides for a fit and proper person test designed to ensure that past behaviours which impact on the suitability of a provider to be registered are identified. Currently, this test is only applied at the time of initial registration. The bills before us amend this situation to allow for the test to be applied at any stage in the provider’s registration and also extend the test’s provision to include high managerial agents of the provider as a new category, along with providers and associates.

There have been some concerns raised about the extent of this amendment and in particular the amendment’s definition of high managerial agents as inclusive of teachers, consultants and principals. Issues resulting from this extension place onerous responsibilities on large institutions and also could unreasonably expose an individual’s private information. Some providers have expressed apprehension about the diversion of resources away from their priority of delivering high-quality education.

The Minister for Education, Science and Training promised in her second reading speech on these bills in the other place that these amendments will have a ‘minimal regulatory impact on providers’. In this instance concern has been expressed by various sectoral groups to the opposition that this objective may have been compromised by the burden of running background checks on large numbers of employees. However, it is commonplace in the financial services sector to maintain an up-to-date record of employee suitability. In the interests of consumer protection we believe that on balance the extension of the test is warranted. These bills also protect providers through the insertion of a sunset clause limiting the time for a claim by students for refunds to 12 months. This will ease pressure on providers, which will be required under the changes to the ESOS Act, to contribute to a tertiary assurance scheme covering the specific courses offered.

However, there is still a significant burden placed on providers regarding the enforcement of department of immigration student visa requirements. Currently, students who breach these conditions relating to attendance or satisfactory academic performance must be reported to DIMA. These bills remove the reference in the act to the precise visa conditions for which this occurs. Instead, these requirements will be placed in the regulations made under the ESOS Act. These regulations will be mirrored by migration regulations and will reflect the student visa conditions outlined in the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students—again, a very long title—known as the ‘national code’.

The national code has been redrafted this year and negotiations surrounding the measurement of a student’s performance with respect to visa conditions have created some problems. The Australian Vice-Chancellors Committee has been arguing for higher education providers to measure and report academic progress as opposed to attendance. For vocational education and training sector providers, however, there is an insistence on providing both academic and attendance information to DIMA. DEST needs to consider industry suggestions for sector specific measures rather than insisting on a one-size-fits-all approach, and we urge the government to consider this.

There are many other provisions in these bills focused on tightening the regulatory framework of the ESOS regime. It is important to note, however, that amending the regulatory framework surrounding providers will not necessarily achieve quality control. Ultimately, effective quality control requires that DEST enforces compliance with the legislative framework and actively pursues non-conforming providers in the interests of both the consumer and the Australian public.

A letter from joint sectoral peak bodies, in response to the draft national code made by the AVCC, the Australian Council for Private Education and Training, TAFE Directors Australia, and English Australia late this year stated:

DEST is not using the authority available to it in dealing with ... unscrupulous providers but rather has imposed more regulation on all providers in an attempt to resolve an area of substandard performance. That is, to date, the government has not used the existing consumer protection measures available to it to protect the interests of international students.

This joint statement demonstrates the frustration of several peak bodies in relation to their experiences in the day-to-day operation of the ESOS regime. In June last year the Auditor-General presented a report to the parliament which also highlighted that there was little evidence to show that DEST was proactively protecting students and the international education industry from unscrupulous providers. It is time for the Howard government to stop paying lip-service to regulating a $9.8 billion industry and to show that the compliance burden placed on all providers is matched by a similarly labour-intensive administrative approach by the department to ensure compliance with the appropriate standards.

I want to move to the other amendment the opposition will be moving today relating to the inclusion of Christmas Island in the definition of ‘state’ contained in the act. Currently, the national code applies only to service delivery in Australia but not to the external territories. Senator Crossin has been advocating on behalf of Christmas Island High School that the scope of the ESOS Act should be extended to include Christmas Island. This would allow the provision of education to overseas students at the high school in years 11 and 12. The change is one that was recommended by the evaluation report of the ESOS regime which stated:

The policy and practical difficulties which apply to a sweeping extension of scope which apply to a sweeping extension of scope to all External Territories do not apply to Christmas Island High School.

We have understood informally that the government was inclined to support this recommendation. The redrafted national code released for comment by the minister removes one of the barriers to the extension of the ESOS regime to Christmas Island. However, we have received advice that any change to the national code to include Christmas Island also requires legislative amendment to the ESOS Act. Accordingly, in the committee stage of this bill the opposition will propose amendments to the definition of ‘state’ in section 5 of the act to include Christmas Island alongside the Northern Territory and the ACT. This will give the high school on Christmas Island the opportunity to take international students on a fee-paying basis, putting it on the same footing as providers of education on the mainland. The school would of course still need to meet all the other registration requirements under ESOS, as does any other provider, and to maintain itself as a provider of good standing. Our amendment today merely seeks to remove a barrier to Christmas Island’s participation in the regime.

The opposition is a strong supporter of ensuring consumer protection for our fourth largest export industry and we will continue to seek to promote the integrity and calibre of an Australian education in terms of our actions in this parliament and elsewhere. As such, we will be supporting the passage of these bills after proposing our minor amendments. The opposition is a keen advocate of the ESOS regime and its objectives, which have an important role to play in the promotion of this vital and valuable industry.