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Wednesday, 29 February 2012
Page: 1177


Senator THISTLETHWAITE (New South Wales) (11:34): The Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011, the Education Services for Overseas Students (Registration Charges) Amendment (Tuition Protection Service) Bill 2011 and the Education Services for Overseas Students (TPS Levies) Bill 2011 build on the significant and progressive reforms that the Gillard government has made in Australia's education sector. A commitment to a long-term, high-quality international education sector is at the forefront of the Gillard government's priorities.

It would come as no surprise to anyone in the broader community that this government is delivering a significant number of reforms to our education sector. These reforms are aimed at ensuring not only that all Australians get the best education but also that Australia's reputation as a provider of high-quality, first-class educational services in the international community is fulfilled. In last year's budget, Labor outlined $3 billion of additional investment in training to address skill shortages across the industry. This government is putting back into a number of industries that matter most to our nation, and through these vocational education and training reforms we will see, in the longer term, productivity growth in our economy.

International education is one of Australia's most important industries. It is our third-largest export industry and annually provides revenue of more than $16.3 billion to the Australian government. Income generated in my home state of New South Wales by overseas education services amounted to $5.8 billion, or 37 per cent of export income from all onshore students, in 2010-11. In Victoria and Queensland, there was $4.8 billion and $2.5 billion respectively, while in other states the income from overseas students amounted to $2.6 billion. Of the total export income generated by education services, $15.8 billion was from spending on fees and goods and services by onshore students, and a further $595 million was earned through offshore and other educational activities. The international education sector in this country cannot be taken for granted. In recent times we have seen the effects that the high Australian dollar has had on the demand for placements of international students in Australia. And not only are the economic effects important; reputation is crucial to our nation's ability to attract international students and grow this important export market. That is why in 2009 the Prime Minister, in her then role as Minister for Education, asked Bruce Baird to conduct a review of the Education Services for Overseas Students Act and associated legislation. While the review was conducted the government moved to have the ESOS Act amended to require reregistration of all overseas student education providers to ensure ongoing integrity in this important industry. When the Baird report was released the government committed to a staged response to that review. April last year saw the enactment of the first stage of the government's response to the Baird review. Legislation soon followed in June to adjust the annual registration charge for cost recovery. This bill represents the government's fourth piece of legislation to strengthen the regulation of international education in Australia.

The government has already taken other significant steps towards creating a long-term future for international students in the higher education sector, including the establishment of a national regulator for the vocational education and training and higher education sectors and significant reforms to the student visa program. This bill will strengthen Australia's reputation as a high-quality education provider within the region and throughout the world. It does this by establishing a strong but fair regulatory regime for the provision of international education and training services. This ensures that the interests of overseas students are protected by establishing minimum standards and providing tuition and financial assurance for those overseas students. Also, the bill is designed to strengthen Australia's migration laws by ensuring providers collect and report information that is relevant to the administration of the law relating to student visas.

As I said earlier, the education sector is of huge significance to the Australian economy. It is one of our largest export industries, generating about $16.3 billion a year for our economy. The sector is also very important when it comes to employment. It is responsible for about 125,000 jobs throughout the economy. The international education sector in Australia has also grown considerably in a relatively short period of time—from about 50,000 students at the beginning of the 1990s to more than 600,000 students now. Obviously this growth has led to an increased number of international students at our universities. Macquarie University, in the north of Sydney, has around 12,000 international places, Monash University has around 13,000 places and my old stomping ground the University of New South Wales also has around 13,000 places.

On top of this we have also had a huge rise in the number of education providers for international students, particularly in the private sector. Significantly, there are now more than 1,200 providers in this sector. These huge numbers, and the relatively large increase in recent times, have caused pressures on the regulatory framework that underpins our international education sector. The Baird review focused on several major aspects of those pressures in the international education space. When the report was released in 2010 some of the key recommendations included strengthening the registration process; effective monitoring and enforcement provisions; empowering students with information about complaint handling; ethical recruitment; and stronger consumer protections for students.

In early 2011 the government acted to bring in a wide range of reforms designed to give effective enforcement, to restrict processes around the registration of education providers and to give access to the ombudsman to allow students who attend private schools and private education providers to access a fair and balanced complaints facility. These changes were necessary at the time and they have created a framework for this second round of reforms. These bills will address many of those remaining recommendations contained in the Baird report.

Key to those reforms is the strengthening of tuition protections, and education providers who close their doors will no longer be able to take their students' money with them without some recourse. The reforms contained in these bills are also the government's response to a series of closures within the sector that have cost students a great deal of time, money and heartache to get refunds but have also done damage to Australia's reputation in the international community as a market for overseas students.

Closures affect not only the students but also our reputation throughout the world as a stable provider of services. The current system requires all non-exempt providers to belong to a tuition assurance scheme and pay into the ESOS Assurance Fund. This process involves separate applications and fees as a condition of CRICOS registration. Often the process means that the costs of placing affected students are not distributed throughout the industry in an equitable way.

The introduction of the Tuition Protection Service allows for a single point of placement for students and, in the worst cases, a refund for students. The TPS will allow for all possible placement options for students, placement incentives for providers and greater student choice. A single TPS means greater flexibility in service, a single entry point for students, a single set of fees for providers and, of course, greater accountability to government. The TPS will also mean providers who take on displaced students will receive the equivalent of an unexpended prepaid fee. This means the education providers and, importantly, the students are not out of pocket when these circumstances occur. If students do not meet the entry requirements of an education provider there is no obligation to admit the student; and for providers who are unable to pay any difference in fees that may be payable to take on a student there are no compulsory placements. The TPS will include student refunds for unspent portions of upfront fees paid to education providers. Under the current system, if an education provider closes in the final weeks of a student's study, the student is entitled to a full refund even if they obtain credit for completed units of study from another provider. These changes are about ensuring that we strengthen the framework of our approach to providing education services. The changes will provide greater integrity and greater security which will only bolster Australia's reputation as a provider of first-class international student services.

In the past, growth was seen as the only objective; no thought was given to Australia's reputation as a global education supplier. Neither was any thought given to the welfare of students receiving the education nor, worst of all, to ensuring that their education was of a good standard. Growth in the overseas student education sector is fantastic for the Australian economy, and the creation of jobs servicing overseas students is of great importance to all of us. This bill is designed to ensure that growth in the industry continues and that we strengthen the reputations of the industries which are providing the services.

Let us take the example of a potential student from China, from where more than $4.1 billion of student related income comes into the Australian economy each year. That potential student will now be able to choose an Australian education provider and have confidence that their investment in the future will be secure. Another example is that of a potential student from India, from where more than $2 billion of student related income makes its way into the Australian economy each year. There are also potential students from Korea, Vietnam, Malaysia, Thailand, Indonesia, Nepal, Hong Kong and Saudi Arabia. The combined economic benefit to the Australian economy of the education of students from these countries is more than $4.8 billion. These students expect to come to Australia and receive an education of the highest calibre; this government has an obligation to protect those students and to ensure that the Australian education sector has the reputation it deserves—and that is what these reforms will do.

Whether for Australian students or for international students, the Gillard government is delivering better education services in our economy which will provide the platform for better delivery of services as well as greater growth and greater strength in our economy. These are things that must be supported by the Senate.