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Wednesday, 23 June 2010
Page: 6259


Mr CLARE (Parliamentary Secretary for Employment) (9:39 AM) —I move:

That this bill be now read a second time.

During the height of concerns confronting the international education sector last year, the Minister for Education asked the Hon. Bruce Baird AM to conduct a review of the Education Services for Overseas Students Act 2000 and its associated legislation that had originally been planned for 2012.

At that time the minister also introduced a number of amendments to the act to strengthen registration requirements and enable re-registration of all providers by the end of this year.

This interim step was necessary to reinforce the integrity and quality of Australia’s international education sector. When those amendments were passed in February the minister gave an undertaking to come back with further amendments at the earliest opportunity following the finalisation of the Baird review. This amendment bill is delivering on that commitment.

The Education Services for Overseas Students Act protects Australia’s reputation for delivering quality education services. It does this by establishing a regulatory regime for the provision of international education and training services and through this protects the interests of overseas students through the establishment of minimum standards and providing tuition and financial assurance.

The act also complements Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.

Over recent months, the Minister for Immigration and Citizenship has announced a number of measures to improve the integrity of student visas. These include a review of e-visa processing and enhanced fraud detection, an increase in financial requirements a student must demonstrate to meet living expenses whilst in Australia, new legislative powers related to deferrals and suspensions, and higher assessment levels for packaged courses. In this regard the act plays a critical role in supporting and complementing Australia’s migration laws.

Since first written in 2000, the act has been amended several times to keep pace with change and is widely recognised as one of the best legislative frameworks for international education in the world. Unprecedented growth in recent years has created new pressure points in the sector which continue to play out. The emergence of a small group of providers who have responded to demand created through the unintended nexus between education and migration by offering substandard educational experiences has unfortunately damaged Australia’s good reputation and brand of education.

Nonetheless, Australia’s longstanding focus on educational excellence and the fact that our reputation is built on genuine quality standards are holding us in good stead during these demanding times. Despite the recent challenges faced by the sector as well as the affects of the global financial crisis and a high Australian dollar, enrolment numbers for international students in the 12 months to the end of April have increased by 4.2 per cent. While this is not the double-digit growth rates that were enjoyed in previous years, it is a strong testimony in support of the strength and the quality of Australian education and our ability to address emerging issues.

Following extensive consultation with the sector, Mr Baird reported back to the government in February this year with 19 recommendations for making the legislation stronger, simpler and smarter. One of the strongest messages was the need to have a clearer focus on the interests of students and that, given the size and diversity of the international education sector now, a one-size-fits-all approach to regulation will no longer suffice.

In general, the recommendations are about strengthening the registration process, more effective monitoring and enforcement, empowering students with information and improved complaints handling, ethical recruitment and a simpler, more robust consumer protection regime.

When the minister released the final report of the review on 9 March she indicated a staged approach to the government’s response, starting immediately with a number of the recommendations that build on recent changes to the act for implementation by 1 January 2011.

The government’s response to the remaining recommendations is currently being considered, with further consultation with the states and the sector planned in the coming weeks.

The Education Services for Overseas Students Legislation Amendment Bill which I am introducing today is the first round of changes to the act recommended by the review and will make adjustments to the legislation as well as to the Ombudsman Act 1976.

The dual focus of this bill is risk management and more effective enforcement.

The bill introduces provisions to further strengthen the registration process for approved providers.

Providers will have to demonstrate access to the financial resources to meet the objectives of the act; that they have a sustainable business model and that they have the capability, governance structures and management to deliver education of a satisfactory standard.

This will raise the bar of entry into the international education sector and is consistent with proposed changes to the Australian Quality Training Framework, announced by COAG in December last year for introduction in July 2010, to strengthen the gateway for all registered training organisations.

Building on the risk managed approach developed for the re-registration process currently underway, this bill will extend a risk management approach to all registrations at the point of registration and throughout the registration period.

The purpose is to better identify risk and ensure a consistent assessment of risk by all regulators and, in time, the national regulators being established for the vocational education and training and higher education sectors.

Together with the strengthened registration criteria, we want to ensure there are no high-risk providers entering the international education sector. We aim to set appropriate conditions on registration, including for ongoing monitoring to better manage risk.

This will enable better targeting and reduced duplication of compliance efforts and will shift the regulatory burden to those providers that present the greatest risk to the student experience and the reputation of the sector as a whole.

While registration criteria will apply to all providers, higher risk providers may have new Commonwealth imposed conditions placed on their registration, such as a cap on enrolments, annual financial statements or restrictions on the fees in advance that can be collected, as well as more frequent and detailed auditing. This in turn will create incentives for providers to reduce their risk by rewarding low-risk providers with less onerous monitoring regimes.

As part of this measure, consistent with common practice, when registering a provider the regulator will assess the provider’s risk profile and set a period of review and any conditions that are appropriate to manage the provider’s risk profile.

The Commonwealth will also be able to assess risk and apply risk based conditions at any time, rather than only as a result of compliance activity. As with re-registration, the details of the risk management approach, such as the broad indicators of risk and type of conditions that should apply, will be further developed in consultation with states and territories through ministerial council processes and the sector more broadly, prior to implementation.

The risk management approach will be supported by limiting a provider’s registration period to no more than five years. This will also help introduce consistency into the registration regime and allow the act to formally recognise and align with limited periods of registration for each provider set by the states under domestic quality assurance frameworks.

Amendments are introduced to strengthen the ability to take effective enforcement action by introducing financial penalties for a broader range of non-compliant behaviour and to enable regular publishing of targets and information on regulatory activities undertaken by the Commonwealth.

A perception raised during the Baird review consultations is that while the act is sound it is not adequately enforced.

Financial penalties are a tangible immediate action against providers for compliance breaches, reducing the need to go through lengthy court processes or potentially compromising a provider’s ability to continue operating.

There is existing scope for financial penalties to be extended for a range of noncompliance with the standards for ESOS providers in the national code. However, the amendments introduced in this bill identify specific offences within the act itself which should attract a financial penalty because they get to the heart of emerging issues confronting the international education sector, such as unethical recruitment activity and maintaining student records.

Similarly, by publicly setting and publishing targets and outcomes of regulatory activity, the sector and the rest of the world will know that Australia is serious about enforcement and it is committed to quality education and training.

This amendment is to allow the government to publish any actions taken under the enforcement and monitoring part of the act. The appeals of providers against the enforcement action taken will be no bar to the publication of this information. The publication will be corrected if the appeal is upheld.

Finally, the jurisdiction of the Commonwealth Ombudsman will be extended to include students of private registered providers. This is a key recommendation arising from the Baird review, but it was also proposed separately by Senator Hanson-Young earlier this year and included as a key measure in the International Student Strategy for Australia, developed through COAG. Currently, while these providers must provide access to an external complaints body (as required under standard 8 of the national code), students of these providers do not have recourse to a statutorily independent external body, such as an ombudsman, competent to hear and investigate their complaints in a consistent and quality assured manner.

By doing this, all international students, whether studying at a public university or a small private provider, will now have the same level of access to an external appeals body.

This will increase confidence in complaints-handling processes by both students and providers, lead to a greater acceptance of decisions and reduce lengthy and costly appeals processes for all parties.

The Commonwealth Ombudsman is well positioned to promote greater understanding of the complaints process and of provider obligations, as well as provide useful feedback to government on complaint trends to further inform policy.

Mr Baird recommended a number of other measures, including the development of a risk based approach to various costs associated with registration—for example, consumer protection and the collection of noncourse fees.

Tuition protection is a significant reform requiring a consultation regulatory impact process, and, also noting the need to align ongoing legislative reforms with the establishment of national regulators for VET and higher education, the minister has decided, therefore, that these recommendations will be taken forward in the next phase of the government’s response to the Baird review.

Timely passage of this legislation will ensure these measures can commence quickly to effectively respond to ongoing concerns and uncertainty in the international sector. The cooperation of the states and territories, along with the providers and many other stakeholders of the industry, will be required to implement these and any future recommended changes to the act.

I commend the bill to the House.

Debate (on motion by Mrs Gash) adjourned.