Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Hansard source

In speaking to the second reading of the Education Services for Overseas Students Legislation Amendment Bill 2007, I make the point that this bill makes a number of changes to the ESOS regime and amends positions that were taken through this parliament in 2000. These changes have been characterised by the government as ‘technical’ or ‘minor’. In fact, at least one of them is a major and significant change which I will address in my remarks here today.

The bill follows a series of more substantial amendments to the regulatory framework, changes that were introduced after a major review of the ESOS regime that reported in 2005. That review recommended some 41 changes to the act, not all of which were actually adopted by the government. These amendments, finally passed through the parliament in December 2006, followed other changes to the act in 2002 and 2005. It is quite clear that this is an area of regulation that requires constant updating. It is gratifying to see that the government has at least acknowledged the importance of that principle and is continuing to monitor the effectiveness of its legislative framework in this area.

However, the fact is that this government has yet to get things right when it comes to regulating the international education industry in this country. International education is an extremely lucrative service export for Australia. Its net impact on the economy is said to be around $7 billion per annum. For that reason alone, this country simply cannot afford to get it wrong. It is an industry that depends vitally on our international reputation and on the quality and reliability of what might be in economic terms described as the product that we offer. In this case, it is the education and training that is provided. We cannot treat our international students lightly or negligently, whether they come to this country to undertake their studies or whether they study in Australian institutions operating offshore.

While Labor is supporting this bill, there is an opportunity here to draw attention yet again to the poor management of the international education industry in this country. Despite all the tinkering that has gone on with the regulatory regime throughout recent years, it is my contention that there remain considerable problems yet to be addressed. There are recent examples of highly questionable activity which in themselves constitute a threat to the quality and the international reputation of Australia’s higher education sector. Serious issues surrounding the quality of education and the treatment of international students at several of our international education and training institutions across the country have been exposed in recent times.

At the centre of those reports, I might remind the Senate, has been Central Queensland University’s Melbourne shopfront campus. There was a situation which was given some attention in the Melbourne Age where there was a hunger strike by some 60 international students at Central Queensland University’s Melbourne campus. The Minister for Education, Science and Training told the Age newspaper on 15 March 2007:

... the Government had imposed a rigorous framework to protect the rights of overseas students.

The truth is that there is no evidence that the government has actually taken any action in these matters. The students claimed that they had been tested on subject matter that was not included in their coursework and that 300 did not pass the final exam for a master’s degree. Since the Howard government has been in control of higher education, there has been an increase in Central Queensland University’s reliance on international student fees from some 10.7 per cent of their total income in 1997 to 45.7 per cent in 2005. Central Queensland University receives $132 million each year from international students. However, it would seem that the regulation of this industry has not kept pace with what has been going on in Central Queensland University’s international education programs.

The minister and the department have failed to act on reports of the substandard training by private providers. In Melbourne, there was the International Business and Hospitality Institute. The government failed to quickly respond to claims that up to 30 Chinese students at the International Business and Hospitality Institute were given substandard training. When the college suffered a cash flow crisis, it simply stopped teaching the students and told them to ‘take a holiday’. This is despite the fact that the students had paid their fees in advance. According to the Age of 22 March 2007, several former teachers went to the Australian Crime Commission over this matter, so dissatisfied were they that the problems had not been satisfactorily addressed by the government. Following the revelations of this particular case and another one in Victoria, the CEO of the relevant office in the state education ministry resigned suddenly. It has been suggested within the industry that there is some connection between these events and that resignation, although the Victorian government has declined to make such a connection.

The umbrella organisation for private training and education providers, ACPET, has complained over and over again to this minister, Minister Bishop, about the activities of problematic private providers, but she has consistently failed to respond to those complaints. This is despite a whole raft of powers available to her under Commonwealth legislation—set out in the ESOS Act—to draw attention to errant providers. While it is true that state governments do have a role in monitoring the performance of international education providers, it is quite clearly the case that the primary responsibility rests with the Commonwealth of Australia. The responsibility may well be shared, but the lead responsibility is with Canberra.

Over the years Labor in the Senate have drawn attention to the government’s failure to deal with these issues—to deal with the rorts and the abuses by the unscrupulous providers that have been able to bring the whole industry into disrepute. We have argued that, if you do not deal with the rotten apples in the barrel, the whole barrel will ultimately be ruined. However, it is not just a case of the damage done to other providers; it is a case of the Australian government having the responsibility to protect the rights of students who come to this country and expect—and have a right to expect—the highest of standards.

I argue that, as with tax avoidance, the government must exercise constant vigilance in this area to safeguard the reputation of this vital industry. If it does not, our international reputation will be seriously affected. This not only will have profound consequences in terms of our capacity to attract students and to earn income from this industry but also may well have serious consequences for our diplomatic relations. This is not just a question of economic relations; it is a question of social and personal relations. Ultimately, over time, it can have an enormous impact in terms of our standing within the region. As I say, it only takes a few rotten apples to poison the whole barrel.

The other significant amendments that are being proposed by this legislation are the insertions of the objects into the act. Such an addition to the act was recommended by the 2004-05 review, but the government have only now sought to move in this area. The objects have been inserted to adopt a general way of wording as recommended, and they include, among other things, ‘To protect and enhance Australia’s reputation for quality education and training services’ and ‘To complement Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas’.

Why the government have taken so long to act on this is a matter of some curiosity to me. It strikes me that it is difficult for the government to acknowledge that they have got it wrong. It is better that they do so now than not do so. The Labor Party has been arguing for some time that the substantive rorts in the international educational regime, the immigration rorts and the rorts that have seen students sold short in terms of the quality of the education and training provided to them, needed to be addressed. The Commonwealth has to face up to its responsibilities in this way.

I know I have been arguing this case for the better part of 10 years. I will continue to argue it. It is better late than never that the government have started to move in this direction. It was certainly the position that I argued in 2000, it was the position that we argued last year and it is the position that we have continued because the rorts have continued. We finally see in 2007 the government come clean about why there is a necessity to acknowledge the Commonwealth responsibilities with regard to the ESOS legislation.

I acknowledge that the amendments inserting the objects into the act in no way affect the operation of the act, but it is a significant reminder to those within the Public Service of their obligations and to ensure that the ESOS regime is aimed at producing that outcome. Every provider and government authority that reads this legislation should understand it and should be able to appreciate their obligations to the sector as a whole, to maintain and enforce the highest of standards of both education provision and compliance with Australia’s migration laws. The failure of both providers and government departments to fulfil their obligations under the ESOS regime puts at risk not just the viability of that individual college or institution but also the viability of other providers and the ultimate success of the industry as a whole.

The other thing that really disturbs me about these matters is the way in which international education is being used by this government, particularly through our public university system, to provide an inordinate reliance on overseas students as a way of making up the shortfalls in government revenue. Over the last decade we have seen a determined and persistent underinvestment in higher education by this government which has seen Australia’s universities become more and more reliant on international students as an alternative source of funding. So there has been a massive shift in the level of university funding from public to private sources. In 1996, of the full amount of money that was available for universities, some 60 per cent of revenues came from the Commonwealth. It is now down to 40 per cent. In 1997 income from overseas students made up 7.8 per cent of the total revenue for all universities. That proportion had almost doubled by 2005 to 15.1 per cent. As I understand it, it is well over $2 billion in terms of income derived from this source. Claims have been made from time to time about international students who have been put into the system graduating in such numbers, with serious impacts on the quality of provision by some universities. It has been argued that all too often international students with a poor grasp of English are graduating and getting permanent residency visas. Their English is so poor that they never should have been accepted for study in the institutions to begin with, let alone allowed to graduate.

Prominent Monash academic Professor Bob Birrell’s findings on the English language abilities of international students have been rejected by the minister for education, who was quoted in the Age on 17 March 2007 as saying that she had seen no evidence that substandard students were graduating from Australian institutions. The minister herself argued that the industry had brought $10 billion to the Australian economy over the financial year. Yet she is not prepared to deal with these questions up-front and to ensure that the quality arrangements in our universities are such that a charge such as that made by Professor Birrell could not be made.

In recent times we have seen discussion by this government about their changes to education and they have argued that they are now providing additional support for funding of universities, particularly through capital. The Australian National University, for instance, is worth about $1.5 billion in terms of its plant; the backlog, in terms of its capital requirements, is probably $500 million. I see in the paper today that other universities are arguing that they have funding backlogs of some $200 million and above.

In the case of the Australian National University, they have a capital roll-in of $12 million per annum. While I do not in any way associate the Australian National University with any misuse of international programs, it highlights a question about what is happening to the finances of our university system. It is the same with the University of Sydney and other Group of Eight universities. The capital requirements of these universities are such now that there is a massive backlog as a result of the failure of this government to invest over 10 years. In some of our other universities that do not have the level of resourcing that a Group of Eight university has, there has been an undue reliance on international students to try and fill the gap. The capital programs are the area in which this enormous deficit is becoming most pronounced, because there has been this presumption for 10 years that you can put off fixing the buildings, you can put off fixing the drains, you can put off building necessary accommodation and you can put off buying equipment for the necessary research programs. The end result has been an undue reliance on international students—to the point where some of these institutions have been forced to take steps that I am sure that they would have preferred not to take. They have exposed themselves to an undue reliance on that source of income, which makes them very vulnerable in terms of their overall finances.

This is a bill that is long overdue. I am sure that it will not be the last in this area. It highlights the need for the government to be much more conscious of and diligent in its responsibilities in regulating international education. I move:

At the end of the motion, add:

but the Senate notes that while there is a need to update the requirements for the provision of education to overseas students, it condemns the Government for poor management of Australia’s international education industry, including:

(a)

the threat to quality in Australia’s higher education sector as a result of the Government’s cuts to, and lack of investment in, universities, leading to undue reliance by the higher education sector on revenue from international student fees; and

(b)

a lack of action taken in response to recent examples of questionable activity in the overseas student area in both the university and vocational education and training sectors”.