Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

I move:

That the committee does not insist on its amendments to which the House of Representatives has disagreed.

This is an important piece of legislation that seeks to ensure confidence in this critical industry and to give certainty to providers and students. The ESOS amendment bill will ensure that all education and training providers currently registered on the Commonwealth Register of Institutions and Courses for Overseas Students, or CRICOS, re-register under new and stronger criteria by 31 December 2010. The original intention of the amendment bill was to provide an interim response to concerns about disreputable providers and agents pending the outcome of a comprehensive review of the legislation.

It is not the government’s preference to load up this bill and cause unnecessary delays with additional amendments that may or may not pre-empt the findings of that review. The first amendment that was moved by the shadow minister for employment participation, apprenticeships and training relates to a risk management approach to re-registration. This same amendment was rejected by the House of Representatives last year because the relevant minister, through MCEECDYA and the Joint Council of International Education had already agreed to the development of such an approach in September 2009.

The details of a national risk management approach to registration are now being finalised by the Joint Committee on International Education. The benefit of this arrangement is that risk criteria can be refined through agreement as the approach is tested throughout the implementation of reregistration. So, while the amendment is not needed, the government will support it as worded in order to facilitate the passage of this legislation on the understanding that the approach does not need to be specified in regulations.

The Deputy Prime Minister, Julia Gillard, has given careful consideration to the amendments on refunding certain consequential costs. The government maintains the view that this is ill considered in terms of the potential financial burden on future governments. While it is the case that some students, through no fault of their own, are left out of pocket when a provider closes, they are not left high and dry. The government has confidence in the comprehensive consumer protection framework that has worked well to date in placing students in alternative courses and refunding their fees in a timely way. No other country in the world offers such a guarantee. This is the one that has been attracting students to study in this country.

Students affected by closures are readily given an extension on their visas and have not had restrictions on their working while they are awaiting alternative arrangements. The alternative arrangements for those under the age of 18 years are organised by Australian governments as a matter of priority. While it is acknowledged that the consumer protection system is working hard at the moment, due to the unprecedented numbers of displaced students as a result of a combination of factors affecting segments of the industry, a major issue under examination under the ESOS review and being finalised by the Hon. Bruce Baird has been to help sustain the assurance, in the face of significant demand, that the government will increase industry contributions, including a special levy. The government will commit an additional $5.1 million to provide additional support to the solvency of the fund.

Even so, with nearly half a million overseas students, to add any consequential costs may well test the capacity of the insurance fund to its limits and require further significant taxpayer contributions. It has not been made clear what was intended by the amendments that were moved in this chamber and what consequential costs will be reasonable or realistic. While it will be argued that the amendment is only to enable the minister to make regulations specifying consequential costs, it will create, if accepted by the government, expectations on future potential costs, including living costs, travel agent fees, health insurance costs and a number of other costs that I have outlined to the chamber on previous occasions. It carries with it expectations that domestic students might also wish to pursue.

The Education (Overseas Students) Act established a framework for consumer protection for overseas students studying in this country. As I have indicated, it has a unique set of arrangements which guarantee that students will receive support for the education they have paid for or will receive a refund of their course money. There are three elements to the consumer protection arrangements. Firstly, the provider carries primary responsibility in the event of a college collapse. If that fails, students may next be offered a suitable alternative place under the Tuition Assurance Scheme, which is run by industries on behalf of bodies such as the Australian Council for Private Education and Training, ACPET; English Australia; and the Western Australian Private Education and Training Industry Association.

The fund is managed by PricewaterhouseCoopers under contract to the Secretary of the Department of Employment, Education and Workplace Relations. Industry money is managed at arm’s length from government—a position that this government has maintained—and recent discussions at Senate estimates committee hearing seem to have overlooked that proposition. The fund was established in 2000 with a $1 million start amount provided by the government. Ongoing costs to the funds are met by contributions from providers of courses to overseas students based on a percentage of their overseas student income. The majority of contributions are from private providers of English language vocational education and training.

If, within any funding year, the fund manager considers that funds that are available on hand are insufficient to meet the expected liabilities, the fund manager is able to suggest an additional special levy on industry. This was done late last year, with the industry making payments totalling approximately $1 million. The regulating of contributions for 2010 provided to the fund by providers is due in March of this year. Given the student college closures of funds expected to make payments to students relating to the closures in the near future, the current balance of the fund is $3,356,292. Since the fund was established in 2000, the total call on funds has been $5.3 million—$4 million in 2008 and $1.3 million in 2009. I urge the Senate to deal with these matters in a speedy fashion. This is important legislation, and the industry is looking to us to provide the assurance that is needed to maintain confidence and to ensure that students get the protections they are entitled to.