Deborah O'Neill (NSW, Australian Labor Party) Share this | Hansard source

I rise to put remarks on the record as a Labor senator in regard to Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015. 'Streamlining regulation' is the part which first caught my attention and I worry about what that might mean for who gets the benefit and who ends up paying the cost. One of the things we have seen on occasion after occasion since the election of the Abbott-Turnbull government is days where they have heralded great advances for the nation in terms of cutting red tape. In the midst of their haste to cut red tape—which is also sometimes very necessary regulation to ensure that people have the safety and protection against very powerful interests that would exploit them—we have already seen this government throw the baby out with the bathwater on more than one occasion. That is why we need to pay close attention to this legislation and to watch carefully what it is the government say they are seeking to do and what the unintended consequences of them, in their haste, pressing forward may end up costing those who need the protection of regulation that this government seem too hastily ready to remove from too much legislation.

Let us have a look at what ESOS is—the term we use for 'education services for overseas students'—and why it is such of an important debate for our country today. The fact that international education is our highest earning service in terms of export means that this bill requires incredible scrutiny. We know that the Education Services for Overseas Students Act 2002 and the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 were instrumental in establishing obligations on Australian institutions to make sure that international students received services of a high quality.

This is an area where students have not always been guaranteed access to high-quality education nor access to processes that were transparent and enabling and gave them a right to ask questions about the quality of the services they were receiving and to ensure that funds they provided for courses were being properly spent and well allocated to their education. The ESOS Act was established to make sure that tuition assurance and refunds for overseas students were available.

I want to make some remarks on Labor's amendment, foreshadowed by the minister in the chamber this morning, which will go to the fifth schedule in the act, talking about the need for providers to keep fees in a separate account. It goes to the first principle of why the act was established in the first place. Sometimes, like the great romances people might have, they might start off wonderfully but when things start to fall apart, there needs to be a way for there to be redress, where a parting of the ways can be done in a way which does not unduly benefit one over the other. Sadly international students often arrive with a language disadvantage and a language set of practices that do not enable them to fight big institutions and perhaps because of a lack of understanding about the processes in Australia, they were required by legislation to have greater protections wrapped around them.

The other role of ESOS when it was established was to protect and enhance Australia's reputation for excellence in education and training services. I know there has been sufficient commentary already about the critical demand for providing assurances of the quality of the experience people are going to have when they come to university in Australia. The foreshadowing of changes to the VET legislation, which in my view are way too late, by a very tardy government in regard to the VET sector, contrast markedly with their haste to change things with this legislation and their haste particularly in their early period of government to get rid of protections from all sorts of legislation. We want to make sure that this significant industry, this significant enabler of learning right across the globe, which we are a part of, maintains its standards and improves constantly on those standards in a highly competitive environment.

The role of ESOS originally was also to ensure that educational institutions report information that is necessary to support the administration of immigration laws in regard to student visas. That was a critical part of it. Labor will always look at this legislation making sure that there is due regard given to that dimension of it. I put on the record my incredible concern about the exploitation of students who are on student visas who are now a part of the conversation in the public place about the 7-Eleven franchise chain. I know that the Acting Deputy President, in her role as the chair of the Education and Employment References Committee, is leading a very significant inquiry into the practices of a company that has decided that the exploitation of student workers for their own purposes is a ripe ground for growing their business in the most unethical way.

Here we have students coming to university—clearly intellectually capable students, though they might lack a degree of cultural knowledge about what a fair wage is in Australia—who have been engaged by franchisees. With their wages being paid by head office—let's not let head office off the hook, as well—those students have had their visa status used against them. This plays into other action from the government, and is why our looking very carefully at this piece of legislation is so important. Those very students who are going to be disadvantaged by the 7-Eleven chain continuing this practice are the students who are desperately in need of this government giving them a visa amnesty. Yet we have a government that refuses to do that.

So students can be vulnerable in a number of ways, not just in their interactions with the institutions at which they seek to study but also in terms of exploitation of the fact that they are on a visa, and a visa with very specific restrictions. This visa says they are allowed to work for no more than 40 hours over a two-week period, and when they have broken that arrangement—often unknowingly, by coercion by their employer—they find themselves in a situation where they have no power. They are just looking for a little income to feed and clothe themselves and to pay for the necessities for their study so as not to be a burden on their families back home, and they are being exploited.

So it is not all good news in this sector. I have had students say to me: 'I thought that I would come to this country and that I would find a fair and free democracy; that my wages would be safe.' Yet what we are seeing is wage fraud being perpetrated on these students. So before we start throwing out regulation—because this government said that they are going to come in and cut regulation, as if that is going to absolutely transform the lives of every person in the country in a positive way—we need to give it the due scrutiny it deserves.

Why do we need this universal protection scheme? I guess the Tuition Protection Service provides both a universal and a streamlined approach to placing or refunding students when their educational institution cannot meet its obligations. This reality, the Tuition Protection Service, came into being because we had revelations of an incredible inadequacy of supervision in the sector that, in the period of 2008 to 2011, led to 54 educational institutions closing and over 13,000 international students being affected by those closures. One of the big problems is that only 11 of those 54 educational institutions were actually able to meet, or partially meet, their refund obligations. We should not forget that. The legislative change undertaken by the Gillard government in the last parliament was significant and effective in redressing that big problem. At the time there were three tiers of tuition protection: there were providers who were meeting their obligation to students; there were the tuition assurance schemes; and there was the ESOS Assurance Fund. The ESOS Assurance Fund is a critical part of schedule 5 in the piece of legislation that is being put here today.

When that ESOS Act of 2012 came in to deal with risk—and this is where Labor's concerns with this particular piece of legislation lie—it was to support the viability and the sustainability of that tuition protection scheme. To ensure that, there was a limit on the amount of course fees that could be collected by the educational institution. Basically they could not take the money and run, which is what we saw happening. The limitation was to make sure they could not collect more than 50 per cent of the total fees for courses of more than 24 weeks duration prior to a student commencing the course. It was very clearly aimed at reducing potential refund liabilities for both the educational institution and the tuition protection scheme. It also required stronger record keeping of student contact details and of academic progress to make sure that students did not just land in the country and disappear off the radar, with the money being held by the institution and no servicing of that student's education occurring. They were the reasons for the changes in 2012.

Let's come to where we are now. What we have in this piece of legislation is a call from the federal government to change this legislation one more time on the strength of 27 submissions from organisations. In principle, Labor does support the streamlining of regulatory and reporting requirements as much as they can be improved, once the sector has settled in response to Labor's original intervention with the 2012 legislation. But I have some concerns about the changes that are being proposed by the government here.

There are two parts. The first part, if we look at this explanatory memorandum, is all about streamlining registration and monitoring providers with the purpose of lining up reporting requirements and registration periods. The first response to that is that it sounds okay at first blush; if we can use new technologies in new ways that make transparency still achievable but with a lower impact on the people who have to enter, monitor and report the data, then essentially Labor would support that. This is consistent with the review of reporting requirements for the universities that was put forward by PhillipsKPA, which was one of the critical documents that was commissioned as part of Labor's consideration of the 2012 amendments to the bill. It was commissioned in August 2012 and released in 2013.

But there is a second part of the government's deregulation agenda embedded in this bill, that wants to remove a range of requirements that really affect the providers. While we have some support for those, we have concerns about the way in which that may be open to interpretation and that it may lead to a loss of security of funds for students who find themselves departing from an institution.

Some of the proposed provisions we see from this government really leave Labor senators with some concern around the removal of the requirement to report all instances of a student default, the definition of what a study period might be and the requirements for providers to enter into agreements with each overseas student, setting out the study period and the tuition fees payable for each student period. The government says that it is better to deal with this through a national code. But Labor have concerns not only because of the scale of the exercise that is undertaken and the value of the industry that is at risk if we get this legislation wrong; also the project of revising the national code is something that is being undertaken right now by the government. Without the clarity of what that national code looks like, there are probably some questions we should ask about what the current legislation might allow because it is going to draw on the code for some of its strength.

In regard to the measure amending the restriction on education providers receiving more than 50 per cent of tuition for a course before the student commences the course if it is longer than 24 weeks, Labor understand the arguments that have been put that the change is going to give students the ability to pay more. But what does that mean in practice and what does it mean to ensure that students are genuinely freely choosing to do that, and where is the point at which we can get some oversight of whether there is coercion?

If I could go to the explanatory memorandum and look at the facts about one of the arguments being put by the government that there is regulatory failure and that they need to change it because students have limited choice on payment options. The data they source tell us that only seven per cent of students, on average, made a significant prepayment of more than one semester at their time of enrolment. Granted it does go on to say that there is significant variation by sector, with ELICOS students paying 44 per cent in advance compared to only four per cent in the higher education sector and five per cent in the VET sector, the problem here is that students really should be able to pay everything up-front. This is an imposition by not allowing them do something administratively simpler and to get the discounts that are available when you pay up-front. But if seven per cent is the number of students who are going to get the benefit of that then I wonder how broad that general claim really is and how valid that argument really is.

That is my constant concern with this government. I have just seen them do so many dodgy things and try to sneak through advantages for those who already have the most while kicking those who have the least when they are down. I do raise some concern about that.

As I said earlier in my remarks, when students commence their studies in Australia—and tens of thousands if not hundreds of thousands of students now have come through and have had wonderful learning experiences in this country under different regimes and taken back an advantageous view of Australia's tertiary sector—we all know that, from time to time, things do come to tears, things do fall apart. That is why, with reservations, Labor will support this legislation. But we will seek to amend it specifically with regard to the student's capacity to have clear sight of the money that should be rightly theirs if their course, for any reason, does not proceed, or if they become unwell and they cannot proceed, that the money that they have paid up-front, even if it is only seven per cent, should be available for them to have access to.

We cannot allow the situation to occur, once again, where the failures of tertiary institutions were so significant that hundreds of thousands of students were negatively affected. The impact on those individual students is something that I am sure they still keenly feel and that their families still keenly feel. Their families often go without a great deal to enable one particularly gifted child the opportunity of studying in Australia. Families who have been disadvantaged by that investment falling over need great protection.

While supporting this legislation in principle and the capacity of technology and new systems to improve and streamline the way in which students might be enrolled and their fees taken, Labor will make sure—and we will seek the support of the crossbenchers—in our amendments that the money that needs to be there when things fall away, when it all ends in tears and the milk is spilt—