Perin Davey (NSW, National Party) Share this | Hansard source

I continue my remarks from earlier in the day. As I was saying earlier, TEQSA is focused on quality assurance and student outcomes. They ensure that higher education providers meet minimum standards, promote best practice and improve the quality of the Australian higher education sector. The Tertiary Education Quality and Standards Agency (Charges) Bill 2021 and the Tertiary Education Quality and Standards Agency Amendment (Cost Recovery) Bill 2021 set up a framework to recover the costs of TEQSA's operations. These bills are not a surprise. The intention of cost recovery for TEQSA was announced in the 2018-19 budget. Understandably and unfortunately, with the effects of COVID, implementing this change was necessarily delayed, but it cannot be delayed indefinitely and it is now time to look to implement them.

I want to reassure people that the cost recovery is not going to recover 100 per cent of TEQSA's costs. As would be expected, certain costs associated with non-regulatory activities will continue to be fully funded by the government. But those costs associated with applications, risk monitoring and regulatory oversight will be recovered through application based fees and annual charges. Implementation will be phased to increase from the current low 15 per cent cost recovery that we're already at to 20 per cent in the first year, 50 per cent in the following year and 100 per cent in the third year. That way, our higher education providers can adjust to the implementation of this cost-recovery framework.

The bills that are before us today establish the legal framework for the cost recovery and charges but do not set the amount of the annual charge, which will be prescribed by regulation. I heard Senator Kim Carr's contribution to this debate earlier today and his concerns, as well as the concerns of the scrutiny committee, that both he and I are on, about setting aside the charges in regulations. I accept those concerns—in fact, I do share some of those concerns—and I've heard the same concerns from the industry. But I also appreciate the need for continuing consultation on the charges model to ensure that it is not rushed, that it is well considered and that the charges are fit for purpose—that they're not just recovering fees that are imagined or not fair and reasonable. I've also heard the concerns of some in the sector, particularly smaller providers, who are worried about the potential for inequity of the charges model. This is why I commend the ongoing consultation—in fact, I implore those who are going through the stakeholder feedback at the moment and who are designing the final model to take into account those concerns and the concerns of smaller providers, and to consider not only a fair and reasonable model but also capacity to pay, what the likelihood is of providers to pass on fees to their students and the capacity to pay of those students.

There are many factors that must be considered when developing the right model to set these charges. One component to the cost recovery is the annual charge, and certainly this has driven the highest level of correspondence to my office. The annual charges will cover the cost of delivering a range of regulatory activities, including student and stakeholder concern management resolution; stakeholder communications and engagement; the provision of risk assessment; and administrative support, including responding to inquiries, business support and guidance. Importantly for the first item, student and stakeholder concern and management, the draft cost-recovery model indicates it would be divided amongst tertiary providers proportionate to each provider's size by student enrolments. It will not be applied in a postage stamp model. This means that an institution like the Batchelor institute of the Northern Territory, the only First Nations dual sector tertiary education provider in Australia, with 223 students commencing in 2019, will pay vastly different rates to that paid by a large university such as the University of New South Wales, with 59,000 students. The reason for proportional costs recovery is that activities related to student and stakeholder concern are directly related to the number of students. More students means more issues raised with TEQSA and then more work for TEQSA. So that proportional split is fair.

In the current proposal, which, as I said before, is being reviewed, the remaining regulatory activities are proposed to be evenly split. The argument put forward by TEQSA is that these regulatory activities often provide more support to smaller providers who have fewer staff and less capacity to do risk assessments for themselves. This is an area I'm confident that those sifting through the stakeholder feedback will consider when designing the final formula.

The final impact on a provider must also consider the changes to application based fees. As part of the changes facilitated by these bills today, there is capacity for reduced course accreditation for smaller providers with fewer than 500 full-time equivalent students. This means some of our smaller providers but with a large number of courses could save up to $50,000 per year. This is a crucial point. This is specifically designed to address the concerns that have been raised with my office by smaller providers about the potential inequity of the cost-recovery model. At an individual provider level, the percentage change in fees and charges will vary due to the different application based fees. It will also vary year to year based on the fact that it is dependent on enrolment and the student and stakeholder management side of the fees. Some will pay less in accreditation fees. Some of it, as I said, will be based on the difference in student numbers.

There is absolutely no doubt that our tertiary education sector has a quality assurance system that makes us very attractive to international students. We want to ensure that our tertiary sector continues to have a strong international reputation so that, at the other side of COVID, we can bring back those international students to enjoy studying onshore here in Australia.

At the same time, however, I commend our university sector for being able to pivot, for being agile during COVID and for being able to maintain relationships with their current international students through online offerings and other mechanisms to ensure that we remain a primary place of study for international students. As I said at the opening of my remarks earlier in the day, many of our universities, despite fearing the worst, have actually produced financial results this year far greater than they were expecting, which is a testament to their ability to pivot, to respond to the challenges of COVID and to continue to service not only their international students but, more crucially and more importantly, our students throughout Australia who have been impacted themselves by various lockdowns. There have been various impacts in different states. Some of the students who were to commence university this year haven't even set foot on campus, not through any fault of their own but just due to the fact that COVID keeps popping its head up, left, right and centre. I credit them. I credit our universities and thank them all for the work they've done to see us through. I thank our university sector for its ongoing and crucial contribution to our economy.

There is no doubt our tertiary sector has a quality assurance system that is robust and adds to this attractiveness for international and domestic students. We know this sector greatly contributes to our national economy through both import dollars and domestic activity. It's also very important to recognise that our higher education providers also attract research dollars, both domestically and internationally, and they have many other beneficial community associations, through local sponsorship and through local community interactions, that cannot be underestimated.

I reassure our community and the sector that these bills are not a negative. In fact, they should be viewed as an opportunity to ensure that our international reputation for a high-quality tertiary sector will be ongoing and robust into the future in a manner that is fair and equitable, so the burden is not met purely by taxpayers, some of whom have never set foot on a university campus.