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Wednesday, 29 February 2012
Page: 1172


Senator MASON (Queensland) (11:07): Thank you to Senator Conroy. I always enjoy his interjections as well as his contributions in this place. I rise to speak on the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 and related bills. Madam Acting Deputy President Moore, you would be aware the international education sector in our country has been through a lot lately: the global economic crisis affecting demand, increasing foreign competition, an uncompetitively high Australian dollar, well-publicised provider collapses, and, indeed, violence against overseas students. These have all been subjected to very sharp media scrutiny. Last but not least, the sector has had to adjust to a series of reforms, of which the most recent raft is contained in the three bills before the Senate today.

It is very important that we get it right. Today's—and previous—education services for overseas students bills might sound right. They might sound rather technical and, indeed, they are at one level, but these changes belie their importance to the sector. International education is Australia's fourth-largest export industry and Australia's largest personal service industry, contributing over $16 billion to our national economy—not counting many less direct and less easy to quantify benefits.

I know I quote these statistics very often to the Senate and I will continue to quote them because I believe they are telling and need to gain more currency, both in the parliament and in the community. All too often still, post-secondary education, particularly but not just restricted to university education, is seen as something rather ethereal or boutique and far removed from the realities of everyday life—something of just niche interest. Yet it benefits the Australian economy nearly as much as gold and a few billion dollars more than tourism.

It is not our beaches, the Great Barrier Reef or the Outback that bring in most visitors to Australia. It is our lecture halls. The most common answer to the famous tourism ad slogan, 'Where the bloody hell are you?' is: 'At university, studying.' That is why it is imperative that we continue to nurture and grow this industry. International education deserves as much of our attention and appreciation as mining, tourism and manufacturing.

The proposed legislative changes before us today arise out of the Stronger, simpler, smarter ESOS: supportinginternational students report conducted by the former distinguished member of the New South Wales Legislative Assembly and former member for the House of Representatives, Hon. Bruce Baird. Several reforms recommended by Mr Baird have already been implemented, including changes to registration fees and the establishment of an overseas student ombudsman. These bills being debated today are in response to Mr Baird's recommendations, primarily recom¬≠mendation 16 of his report. These bills will establish a single tuition protection service for all higher education providers listed on the Commonwealth Register of Institutions and Courses for Overseas Students—CRICOS.

The Tuition Protection Service can be accessed by students to gain a refund on that part of their course which is not delivered in the event their higher education provider does not meet its refund obligations under the ESOS act. Students will only be eligible for a refund of the unused part of prepaid tuition fees. In other words, tuition for which the student has paid but which has not yet been delivered by the provider, rather than a full refund as was previously the case, in recognition that students may obtain credit for part of the study already completed.

The new scheme limits the collection of fees to no more than one study period in advance and requires providers who do not receive recurrent government funding to place all students' pre-paid course fees for their first study period into a designated account which can only be drawn down when the student begins study. In addition, these bills establish an online information service to allow students to select from suitable placement options in circumstances where their higher education provider does fold, and will establish national registration for providers operating in more than one jurisdiction.

These bills were referred to both the House of Representatives and the Senate committees on education and employment. All stakeholders had an opportunity to comment and some common threads have emerged. The Australian Council of Private Education Providers, ACPEP—the peak body for private higher education providers—Universities Australia as well as the Group of Eight universities are all concerned about the rushed implementation of these forecast changes. They think the time frames are unrealistically short. But beyond the time frame for the changes, there are also specific concerns relating to cash flow issues, quantum of fees and the approach to risk.

The coalition shares some of these concerns so let me briefly touch upon them in greater detail. The time frames proposed by the government for implementing this significant suite of legislation does indeed seem very short. The coalition would have preferred to have a longer lead time to allow some providers more time to change their business model, which the new fee regime will necessitate. We are not talking about a minor or cosmetic change here. The quantum of fees that institutions will be able to collect upfront makes a huge difference to cashflow. If the quantum is reduced, as it is under the proposed legislation, institutions have to restructure the way they operate and do business. Clearly, this is not something that can be done overnight. The ESOS Act, as it currently stands, requires providers to give notification of default within 14 days. While the coalition acknowledges some of the problems the Department of Education, Employment and Workplace Relations outlined in evidence to the Senate committee with the current 14-day time frame, the opposition is not convinced that the proposed new 24-hour deadline is adequate—though I have just been looking through the recently released proposed government amendments and I do notice that amendment (1) changes the government's proposal from 24 hours and substitutes that for three business days. Looking at that amendment here and now, it would seem that that amendment is far more preferable. So I think the government is on the right track. I should also remind the Senate that both the House and the Senate committees that looked at the legislation recommended that the notification period be 72 hours or three business days respectively. So I do think the government is on the right track.

The coalition acknowledges the diverse nature of the providers who will be affected by the changes envisaged in these bills and has some concern about the one-size-fits-all nature of the way in which student tuition fees may be dealt with. The legislative changes proposed allow operators to collect, in most circumstances, only a proportion of upfront course costs and for those fees to be placed into a designated account. Many providers argue that this scheme may result in a destabilisation of their existing business model. On the other hand, the department believes allowing providers to collect pre-paid fees 'encourages poor business practices'. We acknowledge that for some operators the department's view is probably the correct one but we believe the department has underestimated the great diversity of the international education sector. For that reason the coalition would have preferred a legislative scheme in which riskier operators are subjected to more regulation than less risky operators in order to reflect this great diversity.

The coalition will support this legislation, but we will, as we often do—and as you have often heard me say in this place—monitor its implementation to ensure it achieves its policy objectives. We owe the international education sector nothing less.