Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to 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.

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

On behalf of the coalition, I am pleased to note that the government, despite all the rigmarole in this chamber when we were debating the coalition’s amendments on enshrining risk management into the Education Services for Overseas Students Amendment (Re-registration of Providers and Other Measures) Bill 2009, has seen fit to support what is a very sensible amendment and, of course, an amendment which will further strengthen this legislation. We agree with the minister that this is an important piece of legislation, and it is a piece of legislation that should have been dealt with some time ago. We are pleased to see that the government is now moving swiftly to get this legislation through the parliament.

In relation to the amendment which was supported by the Senate after it had been moved by Senators Xenophon and Hanson-Young, we take the view that the government is making alarmist and unsubstantiated claims about the potential harm of those amendments. We do not think that what the government is saying is accurate. We think the government is yet again jumping up and down without having the facts substantiate their statements. However, whilst we do not agree with these claims, it is important, as the minister has said, that this legislation gets passed. We on this side do want to see the re-registration process proceed as swiftly as possible.

Mr Baird, who is chairing a review of the Education Services for Overseas Students Act on behalf of the government, contacted me, at the request of the government, last week or the week before. He assured me, and assured the opposition through me, that his review has seriously considered the issue that is canvassed by the amendment that was put forward by Senators Xenophon and Hanson-Young and that, in his review and in the recommendations he will make, those issues will be addressed. We will look with interest at how the government responds to the review, when it is finally tabled.

In relation to the ESOS Assurance Fund, the minister has finally provided us with the current financial position of the ESOS fund and has finally provided some of the detail that has been asked for for some time. Clearly, the minister got some advice from Deputy Prime Minister Gillard as to how he ought to address this. I have to commend the Deputy Prime Minister on the way in which she handled this legislation when it went back to the House of Representatives, and on the way she has clearly given instructions to Minister Carr as to how he should approach things in the chamber today—because, quite frankly, the way this legislation was dealt with when we last discussed it in this chamber was quite disgraceful.

But the way the questions around the ESOS Assurance Fund were dealt with during estimates was even more disgraceful. The minister has now brought up the issue of the ESOS Assurance Fund. We asked a very simple question during Senate estimates: how much money is left in the ESOS Assurance Fund? Given the imposition on that fund as a result of successive closures of private training colleges, we thought it was a reasonable question. Given that the most recent publicly available information went to 31 December 2008, during which year the fund lost about $1.3 million, we thought it was a reasonable question. Furthermore, the officer who was responsible for the ESOS Assurance Fund, from the Department of Education, Employment and Workplace Relations, started off by saying, ‘We can answer that,’ before saying a few things to put that answer into context. But what happened? Minister Carr, consistent with the attitude he had taken during the debate in the Senate chamber on this legislation, jumped out of his chair and ran around the other side of the table to prevent the officer at the table from answering the question. That was completely bizarre. The officer did not refer the question to a superior officer. The officer was clearly not concerned about providing that information. But, for some reason, Senator Carr was desperate to keep that information secret. I am pleased to see that, again, he has been overruled by the Deputy Prime Minister, who is taking a much more conciliatory and constructive approach to these matters.

With those few comments, and having noted our great pleasure and satisfaction that the government has accepted our amendment, and having put into context the reasons why we will support the proposition that the chamber should not insist on the other two amendments, I call on the government to take very swift action to go through the re-registration process, based on a proper risk management approach, and to start addressing some of the other, more fundamental issues in a more strategic way.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Can I indicate that I am disappointed that the government is not supporting the amendment that I and my colleague Senator Hanson-Young moved. It is an amendment that seeks to give greater assurance and greater protection to Australia’s third-biggest export industry, and I am disappointed it has been rejected by the government. Let us put this in context: we have seen a drop of between 40 and 50 per cent in applications coming from South Asian countries, particularly India, according to the Australian Council for Private Education and Training, and there are forecasts of an overall 10 per cent drop in international students coming to Australia. You have to ask the question: to what extent is that due to what has occurred with the collapse of colleges? I commend the government for going down the path of strengthening regulation—all those things are laudable. But this amendment was about strengthening this legislation, not taking away from it, and I think we need to put into context what was said by the government, here and in the other place, as to the reasons why it should not be supported.

Overall, the overseas education sector is a $16 billion-a-year industry. Sadly, more and more reports are emerging about substandard education services, hence this bill. That is where there is common ground. There are questionable practices by providers and migration agents, and last year we saw a number of private colleges close down, including, more recently—earlier this year—a college whose closure affected hundreds of students—

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Thousands.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Sorry, I have been corrected: thousands. I think there were 2,000 students recently, and overall—Senator Hanson-Young can correct me on this—there have been thousands of students who have—

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

2,300, two weeks ago.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Senator Cormann says there were 2,300, two weeks ago. We are looking at literally thousands of students who have been left high and dry as a result of dodgy colleges collapsing. These are students who have been promised, and who have paid for, a high-quality education, who have nowhere to go. Some were able to be placed in suitable alternative courses. Those who were not were repaid their course moneys, either directly from their education provider or out of the ESOS Assurance Fund.

But, as I stated when this bill was debated three weeks ago, I support the government in its efforts to require re-registration of providers so as to ensure that education is their main focus, and I support the coalition’s move—which has been picked up by the government—to take a risk management approach. That is laudable as well. But these measures are designed to give greater assurance to the overseas education sector. That is the nub of the amendment that I moved with Senator Hanson-Young.

This amendment gives the minister the discretion to include, as part of the ESOS Act, certain consequential costs that could be refunded to students when a college collapses, either from the education provider or via the assurance fund, in addition to course moneys. I have to stress that this is a discretionary power. The government in its responses here in the Senate and in the House has failed to acknowledge that it is a discretionary power. I am not, as the government would suggest, encouraging a bottomless pit of money to be paid out to students. It is entirely discretionary. What I and Senator Hanson-Young have been seeking is for the minister to be able to, at his or her discretion, define certain consequential costs—which can be capped by the minister, again at the minister’s discretion—that should be paid to overseas students in the event of a college collapse in addition to course monies, either by the course provider or out of the ESOS Assurance Fund, which is contributed to annually by education providers for instances such as these.

Yes, consequential costs may well include migration agent costs, or a percentage of those, if the minister determines under his or her discretion that they should be refunded. They may include initial travel costs, or a percentage of those. They may include other costs, such as the cost of books which the students no longer require as a result of the college closure. It would all be at the minister’s discretion—what the items were and what the overall cap would be.

I take the point noted in the letter I received from the Deputy Prime Minister, in response to the amendments moved in the Senate, that these expenses are ‘not normally considered education-related nor reimbursed to domestic students’. However, given the extent to which some of these overseas students’ families go to have their children come to Australia to study—which we encourage them to do—an overseas student finding that the course they and/or their family have paid thousands of dollars for has been unexpectedly shut down is surely an exceptional circumstance. We hear stories of families in India mortgaging their homes to send their children to study here and of mothers and fathers working three jobs to send their children to Australia to study. These families save for years to afford the high-quality education our colleges supposedly provide, but sadly we have seen a number of cases where thousands of students have been left in the lurch.

I concede the government’s point that Australian families face similar financial hardship but I think it is important to note that what this amendment is ultimately seeking to do is to give greater assurance to this sector. Without doubt, the colleges that have collapsed have disproportionately—overwhelmingly—impacted on overseas students. It is a way to say to the overseas student sector—which, let’s face it, has copped a battering in recent months—‘Let us support you; let us encourage you to come to Australia to study.’ The government offered—I believe quite appropriately—assurance to the financial sector when it introduced bank funding guarantees; this amendment seeks to do the same for our overseas education sector.

Over the past few weeks, my office has spoken with a number of student groups. They have all indicated their support for this amendment and spoken of the difference they believe this measure would make to the sector. It would make a difference financially, for individuals, if the minister used her discretion in the future to refund certain consequential costs, and it would also mean a lot for the industry broadly in terms of offering assurance to potential overseas students.

Ultimately, what needs to be addressed is the broader issue facing our overseas education sector. If the government truly feels it is regulating this industry well enough, it should have no concerns about certain consequential costs being refunded to students—no costs would need to be refunded if the industry was properly regulated in the first place. I think that guarantee, that assurance, as to consequential costs would send a very strong signal to overseas students that are thinking of coming here to study. In the meantime, this amendment gives intending overseas students the comfort of knowing that, if they choose to come to Australia and then unfortunately the college they have chosen collapses, we will assist them as much as possible with their financial hardship—within reason and completely at the minister’s discretion.

I look forward to the Baird review into these matters. It is my view that we ought to insist on this amendment—contrary to the government’s position. I think that ultimately we need to do more for our overseas students, and this will be an opportunity lost if it is not supported.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I will be brief, as Senator Xenophon put the argument very well in terms of why the government should accept this amendment and debunked the claims within the Deputy Prime Minister’s letter and also the statements made by Senator Carr in this chamber today and some three weeks ago when we first discussed the issue.

This was about trying to give students the confidence that we do have a robust international education sector that would look after them. The claims that this would be a bottomless pit of money are simply not true. Senator Xenophon has pointed specifically to the clause which refers to the discretion of the minister. That has not been accurately interpreted by the government, at least as evidenced in their comments in relation to it.

Obviously the opposition are not going to insist on this amendment. I understand why we need to get this piece of legislation through, but I think it is very important for us to remember that this is only dealing with one small part of the crisis within the international education sector. As an election looms closer and closer, we need to start seeing here in the parliament legislation that deals with the bigger issues in the international education sector, because the re-registration of some of these colleges by 31 December is not in itself going to fix the problem. We need to see the government respond to the Baird review as soon as it is released in March. We need to see the government respond to the Senate inquiry that had a unanimous report. Every voice on that inquiry, including from an ombudsman and from both sides of the chamber, said that we needed massive reform in the area. We need to see the government respond to those things. I will be introducing a private member’s bill to introduce an ombudsman precisely because I do not believe the government are responding to these issues as fast as they could be.

I am disappointed that the government is not supporting this amendment. Obviously, Senator Xenophon and the Greens will insist on it.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

The question is that the committee does not insist on its amendments to which the House of Representatives has disagreed.