Dr SOUTHCOTT (12:04 PM) —Without a doubt the expansion of international education in Australia over the last 25 years has been a great success story. Of course, Australia has been taking international students since 1904. The Colombo Plan, which ran from 1950 to 1967, was a very far-sighted plan and the first real large-scale expansion of international education. But over the last 25 years we have seen an expansion of international education to the point where, based on 2008 data, education services is now the third largest export for Australia. Only iron ore and coal are larger in terms of export income. Education services is the largest services export. Education services currently bring in more revenue than the leisure travel sector. In 2007-08 education services was the largest export for the state of Victoria. At July 2009, there were 547,663 enrolments by full-fee international students in Australia on a student visa. China remains the largest source country, followed by India, Korea, Malaysia and Nepal. China and India together account for more than 40 per cent of international students studying in Australia. But there are other nationalities outside the top five which together also account for more than 42 per cent of international students. According to the UNESCO Institute for Statistics, Australia is the No. 1 destination for overseas study in Hong Kong, Indonesia, Malaysia and Singapore. We are No. 2 in India, Sri Lanka, Kenya, the United Kingdom and Thailand. We are No. 3 in Japan, South Korea and the United States.

Significantly, the vocational education and training sector has seen growing enrolments, with July 2009 figures indicating a 39.4 per cent growth in enrolments. Only recently, commencements in VET outstripped commencements in higher education. That has occurred only over the last 12 months. So it goes without saying that it is absolutely critical that we as a country get this right. The opposition believe that it is important that we have international education on a sustainable foundation going forward.

There are several areas which need to be addressed for this important national enterprise to continue. Firstly, the welfare of international students while studying in Australia is critical to maintaining our strong enrolments and strong reputation as a provider of quality education, and I note that the Senate have a committee which is specifically looking at this very issue and is due to report next month. Secondly, the effectiveness of the regulation of the education sector, both higher ed and vocational education and training, needs to be improved. Thirdly, we need to address any pull factors which are occurring with the interaction with Australia’s migration program so that the provision of education is sustainable.

In recent developments, there has been a rapid increase in the number of international students choosing to undertake VET courses in Australia, partly as a result of changes to migration eligibility. As a result of this high demand, there has been a dramatic increase in provider numbers as providers seek to benefit from this demand. This has resulted in increased pressure on state regulatory bodies, who may struggle for adequate resources to monitor all these providers, allowing some unscrupulous providers to operate. Recent reports have acknowledged poor-quality education and substandard facilities at some providers, with some registered providers enrolling more than the allowable number of overseas students. As a result, hundreds of international students have either needed to be placed with new registered providers or been refunded their course fees through a tuition assurance scheme or the ESOS Assurance Fund.

As for the overall quality of education in Australia, while there have been some recent high-profile cases of education providers who have left students stranded, I want to emphasise that the vast majority of the education sector is offering quality education and training. It is a source of national pride that in many Asian countries we are now one of the destinations of choice, ahead of their more traditional markets like the United States or the United Kingdom.

I mentioned before some of the current inquiries in this sector. As problems have emerged with the minister’s handling of her numerous portfolios, the opposition, through the shadow minister for immigration and me, called for an independent inquiry into international education. We therefore welcomed the bringing forward of the review into the ESOS legislation by the Hon. Bruce Baird in early August 2009. Reflecting the importance of getting this issue right, there are a number of further reviews. We await the Senate inquiry into the welfare of international students; the committee will be reporting back to the Senate in November. The Senate Education, Employment and Workplace Relations References Committee is also examining this legislation, and I know many stakeholders have made submissions to the committee to put their point of view.

We welcomed the international students roundtable, but we were concerned that the minister was more interested in hearing from students from the Group of Eight universities and from high-end VET providers than students from the smaller VET providers, who now represent the majority of international students in Australia. As Minister for Social Inclusion, this was one exercise where she was not inclusive enough.

Importantly, the legislation that this bill amends provides the regulatory framework from a Commonwealth point of view. The ESOS Act includes provision for registration on CRICOS, compulsory membership of a tuition assurance scheme, contributions by providers to the ESOS Assurance Fund and the compulsory national code and sanctions. There is some overlap, and states and territories are the responsible jurisdictions for quality assurance—and that is where many of the problems arise.

The Skills Australia report Foundations for the future: proposals for future governance, architecture and market design of the National Training System of June 2009 identified a number of weaknesses in the current operation of the regulation of education providers. In summary, to quote from the report:

It said there was a need for ‘quick action and consistent approaches on poor performance’, the current operation ‘limited the ability to swiftly deal with under-performers’ and:

The Skills Australia report highlighted the need for risk management by the state and territory regulators; with more than 4,000 providers, states and territories should be doing a risk rating for each provider. There is a problem with the state registration and course accreditation bodies reacting to emerging problems. The Skills Australia report recommended strengthening ‘AQTF risk management protocols, scope for interventions and treatment of sanctions to enable rapid national response to poor RTO performance’.

Turning to the ESOS Assurance Fund, the majority of providers are members of a tuition assurance scheme; however, if the tuition assurance scheme is unable to source an alternative place for a student then they may be referred to the ESOS Assurance Fund. The ESOS Assurance Fund was established to protect the interests of overseas students, whether currently studying or planning to study with registered providers in Australia. Its intention is to refer students to alternative providers if their provider defaults or, if no suitable alternative is available, to refund moneys paid. The ESOS Assurance Fund is financed by contributions made annually by registered providers. However, over the last year in particular, there has been a significant increase in calls made on the fund, depleting reserves. There are now serious concerns held as to whether the fund remains solvent.

The opposition’s position, as I said at the beginning, is that this is very important to Australia. It is good for international students and it is good for Australian students to get the cultural interaction. But it is also a very important source of export income for this country. It is our largest services export and our third largest export, behind coal and iron ore. We believe that it is important that we have a very strong foundation so that the education services industry is sustainable going into the future. We support measures which will enhance confidence in the sector.

We support the principle of this bill. However, we believe that focusing on re-registration and publishing the list of education agents does not address the problems which have been identified. The major problem in this area is the capacity of state and territory regulators to act quickly and to identify emerging problems. There is a major problem with the lack of risk rating by the state and territory jurisdictions. We should be moving to a quality assurance system which supports quality improvement and recognises excellence. We believe there is a need for a better risk management approach, and that has been ignored by the minister in her response to the problems encountered by international students. As a result, while we support the intent of the bill and will support it at the second reading stage, I will be moving a number of amendments during the consideration in detail stage. These should be circulated during my speech in the second reading debate. These amendments relate to a risk management approach being used by the state and territory regulatory authorities, the requirements for education agents being used by education providers and more transparency for the ESOS Assurance Fund. I will address these amendments during the consideration in detail stage.