Senator KEMP (Assistant Treasurer) (9:36 AM) —I table the explanatory memorandum and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Education Services for Overseas Students (Registration of Providers and Financial Regulation) Bill 1998 proposes to amend section 20 of the principal act, the Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 (ESOS Act). Section 20 of the ESOS Act is a sunset clause which will deactivate the act on 1 January 1999.

The government requests an amendment to the sunset clause by extending the date the sunset clause takes effect from 1 January 1999 to 1 January 2002. This amendment recognises that the ESOS Act:

. has universal and strong support of stakeholders in the industry; and

. has achieved its objectives of ensuring the quality of providers and courses and a stable domestic environment for the industry.

A stable domestic environment is particularly important to maintain confidence in Australia's international education industry during the current volatile period in many of Australia's major source markets.

The ESOS Act was introduced to provide both financial protection and quality assurance for international students who choose to study in Australia. In 1993 the ESOS Act was amended to enhance the quality and integrity of our educational products and to strengthen the protection the act offers to international students' prepaid funds. Assurances are provided by registering providers of international education and training, based on State or Territory approval and accreditation, and by imposing financial conditions on private education providers.

The principal act was introduced in 1991 to meet three main objectives, namely:

. to ensure that international students in Australia are treated with equity and fairness;

. to provide a positive basis for promoting Australia's international reputation as a provider of reliable high quality education and training; and

. to ensure that tax payers' funds are not required to recompense international students who may have been let down by individual education and training providers.

These objectives remain relevant today. This is the universal view of industry representatives expressed to independent consultants in national consultations in 1996 and in further consultations with stakeholders in April and May 1998.

In 1996 the ESOS Act was amended to extend the sunset clause from 1 January 1997 to 1 January 1999. This followed a review of the ESOS Act by an independent consultant which indicated universal support for the continuation of the current cooperative approach to industry regulation. The reviewers found strong support for the Commonwealth maintaining a regulatory role in relation to the education exports industry. The relevant arguments relate to international trade, immigration and foreign affairs matters which could not readily be coordinated by the States or Territories or by industry bodies.

International trade in education and training services will earn an estimated $3.4 billion for Australia in export revenue in 1998. Stakeholders argue that the existing regulation of the industry adds value in the market place and they have indicated strong support for retaining the ESOS Act as part of a cooperative Commonwealth, State/Territory and industry approach to regulation. In particular, they want to maintain the Commonwealth Register of Institutions and Courses for Overseas Students (the register).

There are costs to the Commonwealth in maintaining the regulatory framework, including the register. The costs are shared by the Commonwealth and industry through the collection of annual and initial registration charges, introduced in 1997.

The cooperative regulatory model, with the Commonwealth's ESOS Act as the key national element, has successfully maintained a stable domestic environment for the education and training services export industry over the past five years. This is evidenced by Australia's highly successful engagement in education exports and the continued strong support which stakeholders have for the ESOS Act.

Stakeholders' support for the ESOS Act recognises that the growth of Australia's international education industry depends on the confidence that students overseas have in the quality of the courses they undertake and the protection of the moneys they invest in receiving an Australian education.

The international education and training industry is an important and valuable one for Australia. It is a major part of Australia's growth in the export of services, bringing many intangible benefits, including the development of contacts for future trade, and ideas and international perspectives. The confidence of students is fundamental to the credibility and viability of the industry which accounts for over $3 billion in export earnings annually. This industry deserves the support of the existing Commonwealth, State/Territory and industry cooperative framework and this bill enables the framework to continue until 1 January 2002 during a volatile and uncertain period for export services industries.

A three year extension to the ESOS Act's sunset clause will allow a stable domestic environment to be maintained during a time of economic volatility in major source markets. The extension will also allow time for the Commonwealth, State and Territory governments and industry to focus on possible future regulatory models with a view to progress a greater degree of self regulation.

I commend the bill to the Senate.

Ordered that further consideration of the second reading speech of this bill be adjourned till 14 days after today, in accordance with standing order 111.