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Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006

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2004-2005-2006

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

EDUCATION SERVICES FOR OVERSEAS STUDENTS LEGISLATION AMENDMENT (2006 MEASURES NO. 1) BILL 2006

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Education, Science and Training the

Hon Julie Bishop MP)

 



EDUCATION SERVICES FOR OVERSEAS STUDENTS LEGISLATION AMENDMENT (2006 MEASURES NO. 1) BILL 2006

 

 

OUTLINE

 

 

The provision of education and training to overseas students in Australia is regulated by the Education Services for Overseas Students Act 2000 (the ESOS Act).  The ESOS Act aims to protect the reputation and integrity of Australia’s education and training export industry by ensuring that overseas students coming to study in Australia on student visas receive the education and training for which they have paid and that there is nationally consistent registration of providers of courses to overseas students. 

Only providers who are registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) are able to offer education and training services to overseas students.  CRICOS registered providers must meet certain obligations under the ESOS framework to obtain and maintain registration.  These obligations are designed to ensure that students receive education and training of a high quality and appropriate consumer protection and that the integrity of the student visa system is maintained. 

The ESOS Act required an evaluation of its operation to commence within three years of Royal Assent.  The evaluation commenced in late 2003, and the report of the independent evaluation of the ESOS Act was released by the former Minister for Education, Science and Training, the Hon Dr Brendan Nelson MP, on 10 June 2005.  Extensive consultation with stakeholders including international students was an important component of the evaluation.

The evaluation found broad industry support for existing arrangements, but made a range of recommendations aimed at improving the overall workability of the ESOS legislative framework.

The Australian Government’s response to the recommendations of the evaluation will:

§    maintain Australia’s reputation as providing a quality education experience;

§    enhance consumer protection for overseas students; and

§    improve national consistency in implementation and application of the ESOS legislative framework.

 

These legislative amendments are the first tranche of amendments to implement those recommendations requiring a change to the ESOS Act which have been agreed by the Australian Government.  Most are of a technical nature.  A further tranche of amendments will be submitted for the spring sittings.

All measures proposed are consistent with the ESOS Act’s underpinning principles of quality assurance and consumer protection for overseas students.

 

The Bill will amend the ESOS Act to:

§    Provide for automatic suspension of a provider's registration where the provider no longer meets the 'fit and proper' test during their registration.  Suspension is for all courses for a State.  Notification and reinstatement procedures are similar to existing provisions, but the decision to allow removal of a suspension must now be notified to the provider.

§    Provide for the Minister to impose sanctions against a registered provider if the Minister believes on reasonable grounds that the provider is not ‘fit and proper’ to maintain registration.

§    Extend the ‘fit and proper’ test to ‘high managerial agents’ of the provider who could be assumed to represent the provider in relation to the business of providing courses.  Sections 9, 11, 17 and 83 of the ESOS Act will now apply to high managerial agents in the same way these provisions currently apply to associates of providers.

§    Clarify that where a registered provider is involved in the delivery of a course with another provider, course money may be received and disbursed by one of the other providers, as long as there is an agreement in writing which allows this.  However, the registered provider is deemed responsible, as if the money had been paid to the registered provider.

§    Clarify that Tuition Assurance Scheme (TAS) coverage now relates to each course that a provider offers to overseas students. 

§    Clarify that, in the event of provider default, a provider is relieved of its obligation to offer a student a refund if the student accepts an alternative course offered by the provider at their own expense, or a suitable alternative course through their TAS.  The student must accept the offer in writing.

§    Require that a provider who is unable to meet their refund obligations inform the Secretary of the Department of Education, Science and Training (the Secretary) as well as the ESOS Assurance Fund Manager.

§    Allow for the automatic suspension of the registration of a provider who fails to pay the Annual Registration Charge (ARC) by the due date.  The suspension will be removed on payment of the amount owing, any late payment penalty and the reinstatement fee.

§    Require that the initial registration charge be paid before registration.  This requires a consequential amendment to the Education Services for Overseas Students (Registration Charges) Act 1997 .  

§    Require that the reinstatement fee is paid before the removal of the suspension of, or a condition on, the registration of a provider.  Also provides for notification and reinstatement procedures similar to those in section 89, but the decision to allow removal of a suspension or condition must now be notified to the provider. 

§    Extend the Secretary’s authority to give information obtained for the purposes of the ESOS Act to TASs and other persons listed in the regulations.



FINANCIAL IMPACT

 

The Bill will be Budget neutral and will not increase costs to the Commonwealth or the education export industry.

 

 

 

 

 

 



EDUCATION SERVICES FOR OVERSEAS STUDENTS LEGISLATION AMENDMENT (2006 MEASURES NO. 1) BILL 2006

 

 

 

NOTES ON CLAUSES

 

 

Clause 1 - Short title

 

Provides for the Act to be cited as the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1 ) Act 2006 .

 

 

Clause 2 - Commencement

 

Provides for the Act to commence on 1 January 2007.

 

 

Clause 3 - Schedule(s)

 

Provides that each Act that is specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule and that any other item in a Schedule has effect according to its terms.

 

 



Schedule 1 - Main amendments

 

 

Education Services for Overseas Students Act 2000

 

 

Item 1 - Section 5

 

Item 1 inserts a new definition of high managerial agent to reflect the amendment to proposed paragraph 9(6A)(c) made by item 6.

 

 

Item 2 - Section 5

 

Item 2 amends the definition of reinstatement fee in section 5 to redefine the term to mean “the fee referred to in section 171”.

 

 

Item 3 - After paragraph 9(2)(a)

 

Item 3 inserts proposed paragraph 9(2)(aa) that requires the provider to pay the associated initial registration charge before the Secretary can register the provider in accordance with subsection 9(2). 

 

Two notes at the end of this item insert a new heading to subsection 9(1): “Recommendation by designated authority” and a new heading to subsection 9(2): “Registration by Secretary”.

 

 

Items 4 and 33 - Paragraphs 9(2)(e) and 173(1)(b)

 

Items 4 and 33 amend paragraphs 9(2)(e) and 173(1)(b) to reflect the amendments made by items 25 and 26.

 

 

Item 5 - Subsection 9(6)

 

Subsection 9(6) lists the factors that constitute the fit and proper test.  Item 5 amends this subsection to insert the words whether a person to whom subsection (6A) applies which expands the class of persons who are referred to in subsection (6A) and who must satisfy the fit and proper test in paragraph 9(2)(ca).

 

A note at this end of this item inserts a new heading to subsection 9(5): Fit and proper to be registered .

 

 

Item 6 - After subsection 9(6)

 

Item 6 inserts proposed subsection (6A) that clarifies which persons are referred to in subsection 9(6) and must meet the fit and proper test to be registered in paragraph 9(2)(ca).  The following are examples of persons that would come within the ambit of proposed paragraph 9(6A)(c):

 

·          Officers with management responsibility;

·          Teachers;

·          Consultants; and

·          Principals of the provider.

 

 

Items 7, 9, 10, 11, 12 and 23 - subsections 11(1) and 17(1), paragraphs 17(1)(b), 17(1)(c) and 17(1)(d) and subsection 83(1)

 

Items 7, 9, 10, 11, 12 and 23 amend subsections 11(1) and 17(1), paragraphs 17(1)(b), 17(1)(c) and 17(1)(d) and subsection 83(1) respectively to reflect the amendments made by item 1.

 

 

Item 8 - Section 12

 

Section 12 deals with payment of an initial registration charge.  Item 8 repeals this section and substitutes proposed new section 12 which requires the Secretary to give a written notice to each provider who is liable to pay the initial registration charge and the amount of the charge.  A provider cannot be registered until the initial registration charge has been paid. 

 

Two notes are inserted at the end of this section.  Note 1 (one) provides that a provider cannot get registered until it has paid the initial registration charge.  Note 2 (two) refers the reader to section 6 and 7 of the Education Services for Overseas Students (Registration Charges) Act 1997 for the amount of the initial registration charge.

 

 

Item 13 - Subsection 18(1)

 

Subsection 18(1) deals with payments of course monies to registered providers.   Item 13 repeals this subsection and substitutes proposed new subsections 18(1) and 18(1A).

 

Proposed subsection 18(1) requires that, if a registered provider for a course enters into an arrangement with one of more providers to provide a course jointly, the arrangement must:

 

·          ensure that the student pays the course money to the registered provider; or

·          be in writing and set out the procedure for the receipt and disbursement of course money paid by the student to the other provider.

 

Proposed subsection 18(1A) provides that any course money paid by students directly to any of the other providers is taken to have been paid directly to the registered provider for the purposes of determining the registered provider s obligations under the Act.

 

A note at the end of this item makes it clear that the heading to section 18 is altered by omitting registered .

 

 

Item 14 - Subsection 22(1)

 

Subsection 22(1) requires a registered provider to be a member of a tuition assurance scheme and comply with the rules of the scheme.  Item 14 repeals this subsection and substitutes proposed new subsection 22(1) which requires a registered provider for a course to at all times be a member of a tuition assurance scheme that is established in accordance with the regulations and covers each course it is registered to provide.  The registered provider must at all times comply with the rules of the scheme.  A note at the end of the subsection makes it clear that the Minister may take action under Division 1 of Part 6 against a registered provider that has breached section   22.

 

 

Items 15, 16 and 20 - Subsections 22(2), 22(3) and 60(2)

 

Subsections 22(2), 22(3) and 60(2) deal with certain requirements that registered providers must comply with.  Items 15, 16 and 20 amend these subsections to ensure that the terminology used in these subsections is consistent with the definition of registered provider in section 5.

 

 

Item 17 - Section 23 (note 2)

 

Section 23 deals with payment of an annual registration charge.  Item 17 amends this section to substitute the second note that provides if section 23 is breached by a provider the registration of the provider is automatically suspended.

 

 

Item 18 - Section 31

 

Section 31 deals with alternative arrangements other than refunds of course money to students.  Item 18 repeals this section and substitutes proposed new section 31.

 

Proposed subsection 31(1) provides that section 31 applies if the provider defaults under subsection 27(1).

 

Proposed subsection 31(2) provides that as an alternative to making a payment required by Division 2 of Part 3, the registered provider (or former registered providers) may arrange for the student to be offered a place in an alternative course at the provider s expense.

 

Proposed subsection 31(3) provides that if the student accepts in writing the offer under subsection 31(2), the provider is relieved of its liability to make the payment.  A note at the end of this subsection further provides that a call is not made on the Fund in respect of the original course if the student accepts the offer (paragraph 76(1)(a)) or the alternative arrangement is a suitable alternative course (paragraph 76(1)(c)).

 

Proposed subsection 31(4) provides that the tuition assurance scheme that covers the course, as an alternative to the registered provider (or former registered provider) making a payment required by Division 2 of Part 3, may arrange for the student to be promptly offered a place in a suitable alternative course.  A note at the end of this subsection clarifies that not all courses are required to be covered by a tuition assurance scheme (subsection 22(3)).

 

Proposed subsection 31(5) provides that if the student accepts in writing the offer under subsection 31(4), the provider is relieved of its liability to make the payment.  A note at the end of this subsection clarifies that if this happens, a call is not made on the Fund in respect of the original course (paragraph 76(1)(c)).

 

 

Item 19 - Section 32

 

Section 32 requires the registered provider to notify the Fund Manager of non-compliance.  Item 19 amends this section to include the words the Secretary and which require the registered provider to tell, as soon as practicable, the Fund Manager and the Secretary if the registered provider fails to comply or will not be able to comply with its obligations under Division 2 of Part 3.  A note at the end of this item makes it clear that the heading is altered by omitting notify and substituting tell the Secretary and .

 

 

Items 21 and 22 - Paragraph 76(1)(c) and at the end of subsection 76(1)

 

Section 76 deals with when a call is made on the Fund. 

 

Item 21 repeals paragraph 76(1)(c) and substitutes a proposed new paragraph which requires that a call is made on the Fund if the Fund Manager decides that the student has not been promptly offered a place in a suitable alternative course. 

 

Item 22 inserts a note at the end of subsection 76(1) which clarifies that a provider is not required to refund an amount under Division 2 of Part 3 if the student accepts an alterative course from the provider in accordance with subsection 31(3).

 

 

Item 24 - After subsection 83(1A)

 

Section 83 deals with when the Minister may impose sanctions against a registered provider for non-compliance.  Item 24 inserts proposed new subsection 83(1B) which provides that the Minister may take one or more actions in subsection 83(3) against a registered provider (other than a provider covered by subsection 9(5)) if the Minister believes on reasonable grounds that the provider is not fit and proper to be registered or remain registered.  A note at the end of the section refers the reader to section 93 for the procedure for taking action.

 

Three notes at the end of this item insert new headings to subsection 83(1): Circumstances in which Minister may take action , subsection 83(3): Actions the Minister may take and subsection 83(4): Actions not limited to particular courses .

 

 

Item 25 - Subsection 89(2)

 

Subsection 89(2) provides that the Minister may remove the suspension after the State s suspension is removed.  Item 25 repeals this subsection and substitutes proposed new subsections 89(2) and 89(3).  These proposed subsections provide that after the State s suspension is removed, the Minister may give the provider a notice which informs the provider that the suspension will be removed once the provider has paid the reinstatement fee.  A note at the end of subsection 89(3) refers the reader to section 171 for the amount of the reinstatement fee.

 

 



Item 26 - Section 90

 

Section 90 deals with automatic suspension of a registered provider for non-payment of an annual Fund contribution or special levy.  Item 26 repeals this section and substitutes proposed new sections 89A and 90.

 

Proposed section 89A deals with automatic suspension of a registered provider if not fit and proper. 

 

Proposed subsection 89A(1) provides that the registration of a provider is suspended for all courses for a State if the designated authority for the State tells the Secretary that the authority is no longer satisfied that the provider is fit and proper to be registered.  A note at the end of this subsection refers the reader to section 95 for the effect of suspension.

 

Proposed subsections 89A(2) and 89A(3) provide that if the designated authority tells the Secretary that the authority is again satisfied that the provider is fit and proper to be registered, the Minister may give the provider a notice which informs the provider that the suspension will be removed once the provider has paid the reinstatement fee.  A note at the end of subsection 89A(3) refers the reader to section 171 for the amount of the associated reinstatement fee.

 

Proposed subsection 90(1) provides that the registration of a provider who fails to comply with a reminder notice given under section 75 or fails to pay the annual registration charge in accordance with section 23 is suspended for all courses for all States.  A note at the end of this subsection refers the reader to section 95 for the effect of suspension.

 

Proposed subsection 90(2) provides that the suspension is removed when the provider has paid the amount owing, the associated late payment penalty and the reinstatement fee.  A note at the end of this subsection refers the reader to section 171 for the amount of the associated reinstatement fee.

 

 

Items 27 and 28 - Paragraph 93(1)(b) and subparagraph 93(1)(d)(iii)

 

Paragraph 93(1)(b) and subparagraph 93(1)(d)(iii) deal with giving the registered provider written notice of the Minister intending to make a decision under subsection 89(2) or 89A(2) and giving the provider 7 days to provide a written submission.  Item 27 repeals paragraph 93(1)(b) and substitutes a new paragraph and Item 28 amends subparagraph 93(1)(d)(iii) to reflect the amendments made by items 25 and 26.  These items give the Minister discretion as to whether to give a notice which informs the provider that the suspension will be removed once the provider has paid the reinstatement fee. 

 

 

Item 29 - Section 94

 

Section 94 provides that the Minister may remove a condition or a suspension of a provider s registration after giving the registered provider written notice.  Item 29 repeals this section and substitutes proposed new section 94. 

 

Proposed subsections 94(1) and 94(2) provide that if the Minister imposes a condition on the provider s registration, the Minister may give the provider a written notice which specifies the condition and notifies the provider that the condition will be removed when the provider has paid the reinstatement fee.  A note at the end of subsection 94(2) refers the reader to section 171 for the amount of the associated reinstatement fee.

 

Proposed subsections 94(3) and 94(4) provide that if a provider s registration is suspended the Minister may give the provider a written notice that notifies the provider that the suspension will be removed when the provider has paid the reinstatement fee.  A note at the end of subsection 94(4) refers the reader to section 171 for the amount of the associated reinstatement fee.

 

 

Item 30 - Subsections 171(1), 171(2) and 171(3)

 

Subsections 171(1), 171(2) and 171(3) deal with payment of a reinstatement fee.  Item 30 repeals these subsections and substitutes proposed new subsection 171(1) which requires the registered provider to pay a reinstatement fee before the suspension of (or a condition on the registration of) the provider is removed under subsection 89(3), 89A(3), 90(2), 94(2) or 94(4).  A note at the end of this item inserts the heading Annual Indexation to subsection 171(5).

 

 

Item 31 - Paragraph 172(1)(b)

 

Paragraph 172(1)(b) provides for a late payment penalty for any overdue reinstatement fee.  Item   31 repeals this paragraph as a consequence of the amendments made by items 25 and 26.

 

 

Item 32 - At the end of subsection 172(1)

 

Subsection 172(1) provides for a late payment penalty.  Item 32 inserts a note at the end of this subsection which clarifies that the Minister may take action under Division 1 of Part 6 against a registered provider that has breached section 172.

 

 

Item 34 - At the end of subsection 175(1)

 

Subsection 175(1) deals with giving information to relevant bodies.  Item 34 amends this subsection to insert proposed new paragraphs 175(1)(g) and 175(1)(h) which provide that the Secretary may give information obtained or received for the purposes of the Act to a tuition assurance scheme or a person specified in the regulations for the purposes of paragraph 175(1)(h).  A note at the end of this subsection refers the reader to subsection 13(3) of the Legislative Instruments Act 2003 for specification by class.  A note at the end of this item makes it clear that the heading to subsection 175(1) is altered by omitting and the Fund Manger and substituting , the Fund Manager etc .

 

 

Item 35 - Paragraph 176(1)(c)

 

Section 176 deals with review of decisions and paragraph 176(1)(c) provides that an application may be made to the Administrative Appeals Tribunal for review of a decision not to remove a suspension under subsection 89(2).

 

Item 35 repeals this paragraph and substitutes proposed new paragraph 176(1)(c) to reflect the amendments to proposed new subsection 89(2) made by item 25 and the amendments made by item 26.

 

 

Education Services for Overseas Students (Registration Charges) Act 1997

 

Item 36 - Subsection 6(1)

 

Subsection 6(1) deals with an initial registration charge.  Item 36 amends this subsection to provide that, before becoming registered, a provider is liable to pay an initial registration charge.

 

 

 



Part 2— Application and saving provisions

 

 

Item 37 - Application

 

An application provision which provides that:

 

·          the amendments to the Education Services for Overseas Students Act 2000 made by items 2, 3, 4, 8, 30, 31 and 33 and to the Education Services for Overseas Students (Registration Charges) Act 1997 made by item 36 apply to a liability to pay the initial registration charge or a reinstatement fee that exists on or after the commencement of this item;

·          the amendments to the Education Services for Overseas Students Act 2000 made by items 9, 10, 11 and 12 apply to a provider becoming aware as mentioned in subsection 17(1) of that Act before, on or after the commencement of this item;

·          the amendments to the Education Services for Overseas Students Act 2000 made by items 25, 27 and 35 , so far as they relate to section 89, do not apply to suspensions under that section that happened before the commencement of this item.  To avoid doubt, subsection 176(1), as in force immediately before that commencement, continues to apply to suspensions under section 89 of that Act that happened before that commencement;

·          the amendment to the Education Services for Overseas Students Act 2000 made by item 26 , as it relates to paragraph 90(1)(b) of that Act, applies to a failure to pay an annual registration charge that becomes due for payment on or after the commencement of this item or became due for payment before the commencement of this item and remained unpaid immediately before that commencement;

·          the amendment to the Education Services for Overseas Students Act 2000 made by item 26 , so far as it relates to subsection 90(2), applies to suspensions under subsection 90(1) of that Act that happen on or after the commencement of this item.

 

 

Item 38 - Saving

 

A saving provision which provides that:

 

·          the Regulations made for the purposes of paragraph 22(1)(a) of the Education Services for Overseas Students Act 2000 and that are in force immediately before the commencement of this item continue to have effect as if they had been made for the for the purposes of subparagraph 22(1)(a)(i) of that Act after that commencement;

·          the amendments to the Education Services for Overseas Students Act 2000 made by items 14 and 16 do not affect the continuity of the rules referred to in paragraph 22(1)(b) or the regulations made for the purposes of subsection 22(3) of the Education Services for Overseas Students Act 2000 that are immediately in force before the commencement of this item; and

·          the amendment to the Education Services for Overseas Students Act 2000 made by item 21 does not affect the continuity of determinations made under subsection 76(1) that are in force immediately before the commencement of this item.