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Thursday, 30 November 2000
Page: 20340


Senator CARR (8:47 PM) —This legislation is a package of five bills known as the ESOS bills 2000. The major bill is the Education Services for Overseas Students Bill 2000, giving effect to the creation of a significantly strengthened regulatory regime in Australia's international education industry. There are three minor consequential bills and a related bill dealing with amendments to the Migration Act 1958 and the connected provisions of student visas. Generally, the Labor Party supports these bills. For over two years, Labor has been calling for radical strengthening of the Commonwealth's powers in the area of international education. It is a pity that it has taken the government so long to act, even though Australia's international reputation has been damaged by the collapse of several colleges and by example after example of seriously unethical behaviour. In fact, there have been demonstrable examples of failure to deal with criminal behaviour within this industry.

Education is Australia's fifth most valuable export industry, worth over $4 billion per annum. Overseas students in Australia have increased from around 50,000 in 1990 to well over 150,000 today. The industry has grown by 300 per cent in the last 10 years. All of Australia's publicly funded universities and TAFE systems participate in the industry. Fifty per cent of overseas students are enrolled in higher education where international students account for eight per cent of the entire system's revenue. Australia's international education industry facilitates and enhances international contact and communications in culture, business and personal relationships. It leads to fringe benefits for Australia in tourism and in other export opportunities and contributes significantly to international understanding. Yet the growth in the industry has not been matched by adequate regulation. This industry is at serious risk. Rapid change in the climate and the context in which the fast growing international education industry operates over the last several years has rendered obsolete and inadequate the current cumbersome regulatory framework, at both the national and the state and territory level.

While in all the speeches I have made on this issue I have been anxious to point out that the overwhelming body of businesses and companies involved in international education do so on an ethical and honest basis, the fact remains that unscrupulous operators have been able to enter the industry undeterred. Existing highly reputable private providers and publicly funded universities and TAFE colleges have experienced damage to their reputations due to the failure of the regulatory regime as much as to the naivety of those who administer that regime. This has been compounded by dramatic staff cuts in DETYA's international division. The situation has far-reaching implications. The continued success of the industry depends, above all, on Australia's reputation for high quality and integrity in educational provision. Further, our economic wellbeing in a more general sense is dependent on our international standing as a highly educated nation with a skilled work force. If our education system becomes known around the world as a site for scams, criminal activity and low quality, then our very economic future is at risk.

Over the last two years, the Labor Party has campaigned to draw attention to the risks and problems facing the industry. Within government, there appears to have been a conflict between the imperative for growth and expansion on the one hand and on the other the need to ensure the continued integrity of Australia's migration laws and the ongoing quality of educational provision. This has resulted in a failure to maintain a whole of government approach.

I have given many examples in this chamber of the sorts of problems we have been facing. Through the Senate estimates committees and other committees of this parliament, I have been able to draw out the evidence to suggest there are very serious problems facing the industry and undermining the confidence in and integrity of those providers who are trying to do a good job. We have, for instance, differences in priorities and approaches between the major Commonwealth departments involved in the industry—between the Department of Education, Training and Youth Affairs on the one hand, and on the other hand the Department of Immigration and Multicultural Affairs, DIMA. One department has been pushing the unfettered expansion of the industry while the other has been deeply concerned about the industry's potential and actual use as a cover for migration rorts and scams. Meanwhile, another part of the government, Austrade, has been handing out export incentive grants to companies and colleges already known to other parts of government as being involved in undesirable and shady business practices, and who should have been prosecuted for illegal activity—not rewarded with a Commonwealth export development grant.

Another major area of difficulty for the government has been the legislative chasm between the various levels of government—the states and the Commonwealth. Far too often, the states have taken a lackadaisical attitude to the regulation and monitoring of educational providers in international education. We all understand that, in theory, it is their responsibility but, in practice, they say it is up to the Commonwealth to pursue these issues. The result has been regulatory failure on a grand scale. Nevertheless, the progress on these issues has been demonstrated by the fact that these bills are currently before this chamber. To me, it demonstrates the crucial value of parliamentary processes when a senator like me is able to pursue these questions and force government to acknowledge its responsibilities. It is important to demonstrate that it is possible to secure change in this country through parliamentary processes—even from opposition. The fact is, the Public Service has had to respond to the serious problems that have been exposed through those parliamentary processes.

Given the nature and seriousness of the allegations that I have been obliged to make—that is, in regard to criminal activity, fraud and the like—the protection of parliament has equally been critical in allowing that discussion to take place. I can give example after example of where there has been a suggestion that legal action would be taken if these complaints were made outside parliament. We are now seeing the product of that, insofar as the government has been obliged to respond and acknowledge the shortcomings of its administration.

As I say, while the majority of educational providers are reputable, the extent to which unfettered criminal activity has been unnoticed by the regulatory agencies has been a shock and a surprise to most people who have been involved in this particular story. Criminals—and I use the term quite deliberately—have been operating with impunity. We have had cases of the disappearance of students on a grand scale. The provider known as the National College of Australia, which collapsed in Sydney in 1998, allegedly had 700 students who just disappeared with it. A year later more than 100 of those students were yet to be accounted for. We have a situation where the Commonwealth departments responsible seem to go on forever trying to claim that they were not issues that were of much concern to them. I am afraid this was following the suicide of the proprietor of that particular college, who apparently spent a good deal of time shredding the records of that college. This college was registered on the CRICOS to take over 2,000 students.

According to the industry body ACPET, another college in Sydney officially had 1,380 students enrolled and only 280 actually attended classes. We are entitled to ask where the rest were. In the cases of Lloyds International College and Excelsior College, there was serious document fraud and the manufacturing of fake records. In the case of Excelsior, one gullible DETYA official apparently accepted the college's assertion that there had been a bit of a problem but, after counselling, the offending students had turned up and, of course, had turned over a new leaf. In that case, I was obliged to table a complete set of records that indicated that only a handful of students were meeting the DIMA attendance requirements at that college. The college responded by producing an amended set of records—hey presto, out they pop!—for the same period of time showing full attendance for everybody. Both sets of records quite clearly could not be correct. In answer to a question, the Commonwealth department of education told us that these students were at remedial courses and had shown their intentions at the primary course only, and this explained the discrepancy between these two sets of documents. The education department in New South Wales did not see the issue quite so clearly and they suggested that the inspection assessment revealed that the college attendance records were incomplete. Were there any prosecutions? Were any actions taken? It would appear not.

I have another situation with regard to the associated entity known as Lloyds International College. The two partners of the organisation received registered training organisation status back in 1999. They were actually running a program which instructed students on how to get permanent residency in Australia—quite clearly an action which is associated with migration agents. I know of no action being taken with regard to that particular college. Another college known as the National College in Sydney, which was owned by Mr Yang, had an alleged student enrolment of 1,380 students on their books and, as I say, only 280 were in attendance. They had a tuition fee of $400 per student. It does not take you long to work out precisely what amounts of money were involved.

There are other cases where the regulatory regime has broken down. The G-Quest Institute of Advanced Learning was a college in Sydney that was allowed to enrol overseas students, but it did not physically exist. A student who complained about this to DIMA was referred to DETYA. What was DETYA's response? `We'd better organise a refund on her prepaid fees.' That is not a satisfactory res-ponse to a serious breach of the administra-tive arrangements. It seems that no-one saw any need to do anything about that complaint. No-one in DETYA seemed to recognise that there was a bigger problem here— the registration of a non-existent college. That was one complaint. What about all the rest? What about all the other examples that have been raised? How was it that a non-ex-is-tent college was able to recruit students and bring them to this country? Why wasn't action on these matters taken within government?

Another example is Skywell College, which is one of the most notorious cases. It charges bargain basement tuition fees of $1,200 per semester. It offers students prizes and incentives such as free holidays to encourage them to move from other colleges within the international sector. In Melbourne, it is registered to take 1,000 students in tiny premises—it has two floors in a small building. Opposite Skywell College is the old Taylor's College—a study group college which also has 1,000 students registered. The difference is that Taylor's College had 10 floors—one floor devoted entirely to a library—a cafeteria and all the other facilities required to run a reputable college of 1,000 students. Why hasn't the Commonwealth acted against Skywell? A whole series of examples demonstrate to me a dereliction of duty by the Commonwealth. Of course, we would be told that the existing laws are inadequate. Why wasn't the Crimes Act ever used? Why weren't other devices ever brought into play? The full weaponry of the law was available to protect Australia's international reputation; why were there never any prosecutions under the ESOS Act?

I can point to some of the other correspondence I have received. Within the industry, the view was that, when questions of deregistration were raised in the states or in the Commonwealth, the blatantly dishonest providers could not be prosecuted because of the concern about litigation. In one document I have, it says so. Herein lies another flaw in the ESOS Act. The dishonest private provider operates knowing that DETYA is unlikely to prosecute, that DIMA is unlikely to investigate and that the state's registering authority is unlikely to deregister. I am sure officials will take umbrage at that suggestion, but it does seem to me there is considerable truth in that assertion. When these issues were first canvassed—the government's response is highlighted in an answer to a question that I raised in August last year—we were told that the mechanisms governing the registration of courses for overseas students, the CRICOS, were a creature of the ESOS Act and that, for an institution or a course to be placed on CRICOS, the institution has to apply to the relevant state or territory education authority. The state or territory education authority approves or refuses the application and passes the names of the approving institutions to DETYA. The information is then loaded onto DIMA systems for use by DIMA decision makers. So the officers required to decide the student visa applications are not able to look behind either the ESOS Act or CRICOS. It is not legal for DIMA to grant a student visa to an applicant not enrolled in an institution or course of study not registered on CRICOS.

This whole proposition that you could not look behind these registration facilities when everybody else could do so struck me as clearly naive. It certainly was not a view taken by the unethical providers, who were looking behind the legislative framework and were taking the view that they were not likely to be prosecuted by a government that essentially had a laissez-faire attitude to the industry. `The market will determine these things' is the proposition that was put to us. I am sure it was a shock to the government when it was obliged to appreciate just how widespread these concerns were, and how obvious the infringements of our international reputation were as a result of these actions.

These complaints had been made to government for some time. I have evidence here from constituents within the industry who have said that they were not able to get satisfaction when these matters were raised with government. It was not until these questions were pursued through the Senate that there was any serious movement by this government. These scandals have had an effect on Australia's international reputation.

The actions taken in these bills are long overdue. The package before us addresses many of the problems in the industry. There are, however, some other issues that we are concerned about. Labor's minority report on these bills highlights some of our concerns. We agree with the thrust of the government report; however, there are issues that go to the fit and proper person test. If we are serious about removing criminal elements from this industry, we have to be serious about ensuring that this parliament takes up its responsibilities for these matters. We can no longer take the buck-passing. We cannot have the Commonwealth government saying, `It's the states' responsibility' and the states saying, `It's really the Commonwealth's responsibility.' Action needs to be taken to ensure the integrity of the administrative arrangements. To that end, we will be pressing amendments on those questions.

We are concerned about the operations of the national code, and we are concerned to ensure that the national code that is proposed in these bills is a disallowable instrument. The government has met a number of those requirements. Other actions need to be taken, and I will address those in the committee stage of the bill. Discussions are under way, and I trust that agreement can be reached to ensure a smooth and quick passage of this package of bills.