Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I would like to say a few words 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, quite independently from what I have just said! Hopefully by now senators might actually be reaching for the detail of this report. And if senators are not reaching for it, maybe their staff might be so they can actually look at the detail of it.

Labor does not oppose the goal of streamlining all of the different aspects. We have to acknowledge that circumstances change. As I have indicated, a bit like tax avoidance, one has to recognise that there are different circumstances that need to be met. But we strongly urge the government to revise this package, because its presence in this form is likely to aggravate the problems the bill has sought to resolve. In particular, Labor has great doubts about the effect of removing the requirement that private providers must hold tuition fees paid before the commencement of a course in a designated account. I will be moving amendments to strip that provision from the legislation.

We also have concern about the consequences of lifting the prohibition on the provider receiving more than 50 per cent of the tuition fees before a course begins. While we do not oppose the measure outright, we have doubts about how it will actually operate. It will be a challenge to the regulators to ensure that provisions are not abused. These bills take us down a path that has become, regrettably, all too familiar under this government. Under the guise of cutting red tape and removing supposed burdensome regulation the proposed legislative change opens the door to further abuses. This is what happened in the ill-considered attempt to change the Tertiary Education Quality Standards Authority.

In that case, fortunately, the undermining of TEQSA was prevented because the government accepted criticisms of the bill that Labor had made, and amended it accordingly. The government in this case has no interest whatsoever in looking at the perhaps unintended consequences of their folly.

I hope the government will, however, demonstrate a willingness to consider the bills before the chamber. The question arises: why does the government keep trying to dismantle robust regulatory frameworks for the provision of educational services? The answer can only be that the government's ideological preference for private provision blinds it to the abuses that manifestly occur when there is inadequate regulation to maintain standards and protect students.

Last year's TEQSA bill risked repeating that lamentable history of the Howard government, when a flood of shonky providers threatened to undermine the reputation of the entire international education industry. Some senators will remember the saga of Greenwich University, which was a scam degree factory operating out of Norfolk Island and which the Howard government allowed to run rampant for four years. It is not the only example of dodgy practices—merely the most bizarre.

Between 2008 and 2011, 54 providers of educational services for overseas students collapsed, affecting 13,000 students and triggering a major crisis in the industry. The effect on reputable providers, who do strive to maintain standards and treat students fairly, of course meant that they were often overwhelmed by the avarice and corrupt practices of the shonks and the sharks. When that practice came to light, it tainted the entire industry, the good with the bad. It is a familiar story and one which is being played through in the VET sector around the country today. That is why when Labor came to government we established the higher education and VET regulators, TEQSA and ASQA, and instituted the Tuition Protection Service and other protections for international students. We cleaned up the international education industry in this country and saved Australia's reputation as an education provider.

That is a reputation that must be protected. I remind senators that the provision of international education services brings some $18 billion a year into the Australian economy. I have indicated that it is the third largest export industry after iron and coal. It is probably the largest in Victoria. Any harm to Australia's reputation as an education provider will stem the flow of students into this country and will of course cause enormous damage to our export capacity.

I should also point out that it is important that we actually learn the lessons of history here. Senators will be aware that this is the experience of the Howard government. International students continuing to be exploited by education providers and by employers is an ongoing problem which we need to address. The Australian taxpayer and the students are defrauded. Sometimes even public agencies have been implicated in that exploitation. Only three months ago a joint operation in Melbourne by the AFP, the Australian Borden Force and ASQA resulted in three men being charged with serious migration and workplace exploitation offences. I have indicated that that was the operation on the St Stephen Institute of Technology, owned by Baljit Singh and Rakesh Kumar; and the Symbiosis Institute of Technical Education, owned by Mukesh Sharma.

Foreign students were lured to Australia with promises of receiving working visas or permanent residency after completing their courses at these colleges. Once they arrived, however, no education service was actually provided. Instead they were subcontracted to work for Australia Post, sorting and delivering packages for below-award wages. Mr Singh was a labour-hire contractor for Australia Post, which has since severed its relationship with him. But it is appalling that such an arrangement could ever have begun. Although the colleges are alleged to have provided no training, they charged international students fees of up to $10,000 as part of this scam. The St Stephen Institute was one of the higher education providers granted access to streamlined visa processing under the 2014 budget measures and their subsequent deregulation measures. They were provided special entry provisions to allow people to work as subcontractors for Australia Post and to be ripped off, and students were paying $10,000 for the privilege.

Streamlining visa processing is, of course, another one of those deregulation measures for individual students. It reduces the paperwork—there is no doubt about that—but it also increases the responsibilities for education providers. This is why Labor when we were in government did not approve streamlined visa processing from non-university providers. We were concerned that to do so would risk a revival of the shonky practices of the Howard era. Our concerns have been vindicated by the St Stephen Institute.

Senators will also be familiar with the media reports of the scandalous behaviour of underpayment of foreign students employed by the 7-Eleven chain of convenience stores. Employees at 7-Eleven stores were paid $12 an hour to work in one of the most dangerous retail jobs in the country. Convenience stores experience an average of three robberies a week.

Adele Ferguson, who covered the 7-Eleven stories for Fairfax and the ABC, also exposed underpayment of the delivery drivers for the Pizza Hut fast food chain. Drivers hired by Pizza Hut franchises were paid $6 a delivery, with two deliveries per round trip. Drivers had to provide the car and pay full maintenance, fuel and insurance. They were hired as contractors, although this was clearly a scam. They were, in effect, employees of the franchise. Madam Acting Deputy President Lines, your committee has highlighted this particularly scandalous behaviour. But they were not even paid according to the enterprise agreement. This kind of arrangement is a classic trap for international students.

In the case of the 7-Eleven workers they are typically reluctant to complain because they are afraid of being penalised for infringing their visa obligations. The government has recently passed up an opportunity to provide greater protection for foreign students. It rejected Labor's amendments to the Migration Amendment (Charging for a Migration Outcome) Bill 2015 which were passed by the Senate last week. Those amendments would have extended the bill's provisions to include people on student visas and working holiday visas as well as 457 visas. They would have included protection for whistleblowers who exposed the conditions of businesses like 7-Eleven and Pizza Hut. The amendments would have also prevented vulnerable people such as international students being hired as sham contractors, because they would not have been able to obtain an Australian Business Number. Of course, they could only be hired as staff under regular conditions of employment where their conditions under their student visas could have been checked. But the government rejected these safeguards being included in the migration bill.

So it is more urgent now that we redraft this current bill that is before us. It does not take a great deal of imagination to see how the removal of the need for providers to hold fees in a designated account is an absolute gift to the disreputable private providers. You might as well tell them to take the money and run. The operators of St Stephen Institute of Technology would have loved to have been able to operate under the regime that these bills would introduce. The government, apparently, does not lack the imagination there, does it? It does not take any lack of imagination to see that happening. This sector, however, understands the implications only too well.

In its submission to the Senate inquiry—and I quoted this this morning in consideration of the printing of the report—TAFE Directors Australia stated:

In the current environment where there is so much public concern surrounding the actions of some less reputable private providers, TDA feels it imperative that the requirement for retaining pre-paid fees in a designated account remains.

Government Education and Training International, an agency of the Tasmanian government, commented, in its submission:

The designated account ensures private providers are able to guarantee consumer rights of students in times of provider failure … the designated account should remain to provide this protection in the more vulnerable private sector.

The Tuition Protection Service, while acknowledging the view of those who want to remove the designated account obligation, argued that that remains, 'an area of potential risk for the TPS', which 'would prefer the retention of this integrity measure'.

The TPS submission noted that the worst outcome would be the abolition of the designated account obligation together with removal of the existing limits on prepaid fees which, of course, is exactly what this bill proposes to do. So the body set up to provide the protection is telling us, 'Don't do it.' And the worst outcome would be exactly as this government is proposing: that it be done.

By itself, the amendment to prepaid fee limits has the arguable merit of giving students greater choice and flexibility. That will be the government's case. But abolishing the designated account requirement is dangerous and, in combination with the removal of the prepaid fees, is in fact pernicious. Defenders of the abolition of the requirement have argued that it is not needed now because we have an Overseas Student Tuition Fund and that should fulfil the role of the previous account. That is exactly what the fund was not designed to do. It was envisaged as a last resort—not as a right; as a last resort. If it had operated this way, then—as I have said in the previous discussion—in the events of 2008 to 2011 the fund's resources would not be able to cope. I suppose then that we would have recourse to the government again? So private providers would be bailed out by the government—is that the argument? And the real assurance scheme is going to have to be the Commonwealth budget? These are people who are making money out of students. You should ensure that there are proper consumer protections in place. As I said, this fund, the Overseas Student Tuition Fund, was envisaged as a last resort instrument.

Some may object that the majority of providers are not shonks and sharks—I have heard this argument once or twice before—and they do not exploit students the way I have suggested. Of course that is true, but the problem in this industry is not the majority it is the minority. The problem in this industry is the rotten apple in the barrel which always ruins the whole barrel. The regulation framework has not been set in place because of what the compliant majority do. It exists because of what the rorting minority do—the ones that actually damage this country's reputation and do such harm to students that they rip off. What the shonky minority does is that it destroys this industry. That is why this is so important.

We acknowledge there are some aspects which could always been improved—I do not know a scheme that could not—and eliminating any duplication between the work of TEQSA and ASQA and other agencies through an aligning of reporting of registration requirements is more than reasonable, but the abolition of essential regulatory requirements, such as the designated account, will not result in streamlining; it will be opening the door for the crooks.

The system will not flow more smoothly, because the rorts will come thick and fast. The government's ideological obsessions for deregulation and for privatisation are clouding its vision in all sectors of education. It refuses to see that admitting private providers to contestable funding under the proposed deregulation of higher education will mean the degradation of Australia's world-standard public university system. It has had early warnings in that regard. We have seen what has happened in Victoria with the TAFE system after the introduction of contestable funding in the VET sector. But still the government will not see this. And we see the crisis that has now developed with VET FEE-HELP. But the only interest that the government have is in tinkering at the edges of these problems so they can say, 'We've dealt with that,' and move on.

I will have a lot more to say when the relevant sections of the bill come before the chamber in the committee stage, but, with respect to the bill before us now, the wilful blindness of this government needs to be called to account. Despite the continuing media reports about rorts and exploitation of international students, the government is intent on making life easier for the rorters themselves. For the sake of the international students in Australia and for the sake of Australia's international reputation, we will be urging this government to reconsider these measures.

When these questions are put to the chamber, I trust that senators will have had an opportunity to read the minority report, the additional comments that the Labor Party has presented, in regard to this legislation. This is not an area in which we should act in haste, particularly given the start-up date for private providers is the middle of next year. What is the urgency here? Why is it necessary for the government to try to pull stunts like we have seen this morning, in terms of bringing on the committee report early, and then attempt to ram this legislation through? Why is it necessary to behave in this way unless there is a blind obsession with deregulation for the sake of deregulation, no matter what the evidence to demonstrate that there are colleges out there that pose an unacceptable risk to this nation's reputation and an unacceptable risk to students who enrol in good faith, only to find that they are used and abused in a manner which is unconscionable, even to the point now where the ACCC has had to take action against some of these crooks? Their own regulators should have moved much more rapidly to deal with this question in a timely way, to prevent these people regaining registration, in some cases, or being registered at all, in others. The circumstances are clear, the evidence is abundant and I trust that senators will consider these matters carefully given the long-term consequences— (Time expired)