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Wednesday, 29 February 2012
Page: 1184

Senator BACK (Western Australia) (12:02): I rise also to contribute to the debate on the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 and cognate bills, and to affirm the comments of my colleagues—that is, the critical importance of overseas student education to this country, particularly in the Asian region. I am very pleased to acknowledge visitors in the public gallery who come from the very regions where we are hosting and, in some cases, receiving higher education.

People must not overlook or dismiss the importance of overseas student education to the Australian economy, to our foreign affairs and to the long-term wellbeing of our relationships in the region. We are pleased to have a circumstance in which the export income to this country from the overseas higher education sector is now the third highest in the nation and it is the highest service based export income earner for Australia. This is undervalued by most Australians. It is not understood by most Australians, and it needs to be far more deeply seated into the psyche of our community.

The benefit for us is not just when the students are here; there is also the long-term benefit that comes from them having studied in this country. In 2009 I had the pleasure of giving the occasional address at Edith Cowan University in Perth, where I was informed that one-third of the graduands in front of me that day were from overseas. I think back too to the occasion in 2004 when the company that I then ran opened an office in Manila in the Philippines. There was a Filipino businessman who could not have been more helpful to us in opening doors and in introducing us to people in government and in the business sector. At a function at the ambassador's home, I asked him: 'Why are you giving us so much assistance? Why are you so keen to see our company here?' He said: 'Because I got my opportunity during the Colombo Plan back in the 1950s. I studied at the University of Western Australia. It was an opportunity that would otherwise have been denied me and I have never forgotten it. I have never ever wasted an opportunity to be able to join with Australian companies and government in trying to advance their interests.'

I urge my colleagues and the wider community to understand and realise that as we move more into the Asian region, politically, diplomatically, militarily and economically, we have an enormous resource in the graduates and alumni of our Australian institutions—those who have come from overseas to study here and those who go back to their countries and who, hopefully, think well of their Australian experience. We should be building on that: we should be maintaining contact with the alumni and we should be using them as they move into senior positions in business, commerce and government. We should be using those links all the more into the future. That is why this legislation is so important.

It has been mentioned by others that the income to this country from overseas students is now in the order of some $16.3 billion. It has been as high as $25 billion annually, and I want to explore for a few moments the reasons for its decline. Referring back to an earlier age, when I was engaged in business activities in India in the early part of the last decade, I remember reading and then discussing with our Australian consul in Mumbai the widely-publicised fact that Australia had passed the United Kingdom and was second only to America as a location popular with Indian students wanting to study overseas and gain overseas qualifications. I was very proud as an Australian and as one who had been on the faculty of the Curtin University in Western Australia, another university that has long had an association with overseas students and relies heavily on the income from full-fee-paying overseas students. I ask: why is it that we have gone down on the list? We would be no closer now than probably fourth or fifth. Yes, currency fluctuations and the high Australian dollar are points. Others have obviously alluded to the unfortunate publicity that occurred as service providers failed, as overseas students were left here helpless and, regrettably, as some students from overseas countries, particularly in this case India, seem to have been the subject of attacks, particularly in Melbourne. I made it my business to inquire about the background and the basis of that and I am absolutely satisfied that there was no deliberate attempt to target Indian students as such. What came home to me is the fact that those who arrive on our shores need some form of orientation—to be aware that you do not get on a train late at night with a laptop computer and the sorts of objects that others might want to steal from you, or they might cause physical damage to you. I am sure that we have seen that overcome.

Unfortunately, also evident to us when we undertook the hearings on this particular matter under the chairmanship of Senator Marshall in the Senate Education, Employ¬≠ment and Workplace Relations Legislation Committee was the lack of consultation prior to decisions being taken. I learnt that recently from vice-chancellors; we have certainly learnt it from other registered training providers. If there is one lesson that we all want to get out of this process it is that we must engage—government must engage and departmental senior officers must engage with all of the players before we make precipitous decisions. We had a circum¬≠stance in which overseas students were coming to this country and enrolling in spurious courses—hairdressing and cooking type courses—with the expectation, often driven by agents in their home countries, that this was an easy path to Australian residency, ongoing to Australian citizenship. Those are the sorts of issues we should have foreseen and we should have put measures in place to prevent them happening.

We all know very well that overseas agents and, in some cases, Australian providers are only too willing to see the short-term benefit and ignore the long-term loss and the long-term damage that they cause by building up expectations that can never be realised. From this side of the chamber to the government side of the chamber, if we can work constructively to put those sorts of activities behind us we will be all the better for it.

The figures are interesting. A previous speaker mentioned that 125,000 full-time equivalent positions were generated here in Australia for service providers to provide educational services for overseas students—a very impressive figure. When we saw the downturn, unfortunately the dramatic loss of those positions was also reported to us. What is equally interesting to me is that, of the 380,000 students who had student visas, the average number of family member visits per student was 1.8 last year. If my calculations are correct, somewhere approaching 700,000 visitors come to this country who would not have come had their relative not been studying here. Again, that is something which we should surely be encouraging. I would be very interested to learn from tourism authorities and others about what the yield might have been. How high spending were those overseas visitors who came directly as a result of their student relative being here?

Of course, that 380,000 student figure is low because it only includes those on student visas. When you add in short-term, English-as-a-second-language students who come here on tourist visas, we would see that number of students, with the multiplier effect, dramatically increased. Those of us who have had sons or daughters overseas on Rotary exchange or similar types of programs always seem to find an opportunity to visit them when we otherwise would not have gone there. We all know the attraction and the power that accompanies these sorts of visits, and we would often see a multiplier effect with the visitors going back to their home country, speaking well of Australia, speaking well of their relative's experience here and generating others to come.

It is interesting to listen to the evidence, particularly from those who were providing short-term training, especially in the English language. For example, English Australia advised us that the number of students under the umbrella that they represented had decreased from 219,000 in 2008 to 122,000 in 2011. The number had almost halved in that three-year period. That has a dramatic effect on employment, service provision and the jobs of those who would have been providing the service. It is also interesting that there was a 30 per cent decline in the number coming from China for short-term courses in the English language, a 40 per cent decline in those coming from Thailand and a 50 per cent decline in those coming from Vietnam—some of the very markets that we want to promote to. I go back to tourism. Naturally enough, in terms of yield, in terms of dollars left and dollars invested—not in terms of numbers yet—we know that China has become the highest contributor to offshore tourism to this country. We should not overlook those opportunities.

Recommendations were put forward to the department and onwards to the government, especially when it came to questions about prepayment fees. I thought very good suggestions were put forward by those organisations. They said that we are now in stiff competition with service providers from other countries and that we do not want to put into place legislation that would make it so unnecessarily onerous for those wanting to come to Australia that they look to other countries. We would simply be denying ourselves the opportunity.

It was put to us that representatives support the intent of the legislation—and I am quoting here from correspondence to me—'to ensure that fees are utilised for the study period for which they are collected' and that 'the proposed legislation proposes two broad mechanisms to achieve it: firstly, depositing funds into a nominated account and drawing it down; and—not or; and—secondly, putting a limit on collection of no more than six months or 50 per cent of the fees themselves'. These people made the point eloquently that the objectives would be served by either one of those two but that the administrative burden of having to comply with the two of them was certainly unnecessary. They said it would be expensive and it would be confusing for the overseas students. So I still ask that the government give consideration to what have been very reasonable submissions from them.

If nominating an account and drawing it down was not enough, they would strongly recommend that legislation to limit fee collection to no more than two weeks prior to the course commencing be abolished entirely or extended to a minimum of six weeks. The point they were making is that, in a very short course, the confusion associated with having to break the payment into two, the administration associated with collecting the funds a second time and the inconvenience to those who are supporting overseas students in having to make two payments rather than one is simply unnecessary.

If ever there was an instance in which a risk management approach should be taken to this whole question, then the funding for and protection of overseas students as part of their education is a prime example. I am interested in knowing the sort of risk analysis that was done on those service providers who failed. I am interested in knowing, for example, the status and structure of those which failed. Were they the university sector? Were they the publicly owned TAFE sector? Were they long-established Australian companies? Were they long-established Australian private providers? Were they substantially overseas companies or organisations that had come into Australia to take advantage of this burgeoning demand?

Until we know the background of those who failed—of those who failed their students, of those who took money and ran with it—I do not believe we can introduce legislation that is a catch-all for all purposes. For example, do we think for one minute that any one of the 28 or 29 universities in this country are going to close up shop and run away with overseas student money? The answer is patently no. Do we think that would happen with state owned, run and managed TAFEs or their equivalent? The answer is no. Therefore, it is critically important that we apply legislation on the basis of risk, and where there is no risk or low risk then the legislation should reflect that. We have many analogies. We have the capacity to put funds into escrow. We have the capacity to place a bond on a new provider if we perceive there is a risk associated with their capacity or willingness to deliver on what they are charging and claiming. I do not yet see that we have this approach.

I see we have a sledgehammer to kill a nut. I see we have a one-size-fits-all approach. I do not think this is the way to go. I do not believe we get the best when we penalise those for whom there is no risk associated with the activity, function or legislation under which they will be caught. I made this point to the department, I made it in the hearing itself: we must be much more forensic, if that is the term, in identifying where the risk lies and in applying treatments to that risk to ensure that we minimise or negate it. If it does not exist, do not impose the penalty or imposition in the first place. Witnesses before us and submissions placed before us from the various service providers made that point.

On the point of competition, Australia has a great track record of 'aid, trade and fade'. If time permitted I could go through industry after industry where we have provided aid throughout regions of interest to us, that has led to trade and, for various reasons, we have faded. I make the plea that we do not fade. But, in so doing, I also make the point that it is such a lucrative opportunity that it is not just this country that has that opportunity, it is countries throughout Asia—the Philippines, for instance. Our universities have campuses in Singapore, Malaysia and other countries, and increasingly now in the Middle East, in the United Arab Emirates et cetera. So let us not think for a minute—arrogantly—that we are the only country capable of providing these educational services.

There are two things I do not want to see happening: firstly, our own service providers shifting offshore because they cannot—or do not want to and do not believe they need to—comply with restrictive legislation here and move offshore to locations where they do not have these levels of governance and insistence but can still equally and safely provide the education; and, secondly, our being disadvantaged as a result of overseas service providers setting up and taking the very market that we are building a reputation for and in which we have enormous capacity for growth.