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Wednesday, 2 November 2011
Page: 12551

Mr MELHAM (Banks) (18:09): The bill before us today represents the next step in the government's commitment to ensuring the quality and transparency of education for overseas students in Australia. The primary purpose of the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 is to strengthen the standards to protect students' tuition in cases where providers are unable to meet their obligations. The bill takes the next step from amendments enacted in April this year which included better complaints handling, strengthening registration requirements, improved complaints handling and introducing a risk management approach to the regulation of international education.

There is no doubt that in the past international students have faced difficulties. The government realises that many families spend large amounts of money to ensure that their children have access to the outstanding educational opportunities Australia offers. The last thing those families need—and the last thing the government wants for them—is to be out of pocket if an educational provider goes out of business or defaults on its obligations in any way.

In August 2009, the government asked the former member for Cook, the Hon. Bruce Baird AM, to review the regulatory framework for education for overseas students. Mr Baird reported back in March 2010 with a series of recommendations outlined in his report, Stronger, simpler, smarter ESOS: supporting international students. In his letter introducing the report he commented:

Extraordinary growth in the sector, from 228 119 students in 2002 to 491 565 students in 2009 resulting in an industry worth $17.2 billion in 2008-09, has enhanced Australia's cultural richness, strengthened diplomatic ties and delivered great economic benefit to Australia. It has also put a number of pressures on the sector in terms of education quality, regulatory capacity and infrastructure.

Following the release of the final report, the government indicated its intention to implement a number of recommendations immediately and to consult further with the international education sector on its response to the remaining recommendations. The government is responding to those recommendations in two phases, with the legislation before us today representing the second phase.

On 27 October 2010, the Education Services for Overseas Students (ESOS) Legislation Amendment Bill, which lapsed due to the federal election, was reintroduced to the Australian parliament as a part of the first phase of the government's response to the Baird review. This bill was passed in parliament on 21 March 2011, enacted on 8 April 2011 and is known as the ESOS Amendment Act 2011.

The changes to the ESOS Act 2000 and the Ombudsman Act 1976 included: further strengthening the registration requirements of education providers delivering to overseas students with a specific focus on business sustainability; introducing a consistent risk management approach to the regulation of international education; limiting the period of registration and allowing conditions to be placed on a provider's registration according to risk; extending the range of non-compliant behaviour that could attract financial penalties to strengthen regulation; publishing targets and regularly reporting on regulatory activities undertaken; and expanding the role of the Commonwealth Ombudsman for external complaints relating to private providers.

The package of bills representing the second phase comprises amendments to include a new Tuition Protection Service, TPS, to establish a single mechanism to place students when a provider cannot meet its obligations, or, as a last resort, to provide refunds of unexpended course moneys. To support the TPS, the bill introduces a series of complementary initiatives including: limiting the amount of prepaid course fees that may be collected by providers; a requirement on some providers to keep initial prepaid fees in a separate account until a student commences study; strengthening record keeping obligations; and establishing a national registration system which will allow the registration of providers who operate across jurisdictions.

These reforms are an important development in the substantial strengthening and reforms that occurred in 2000 amidst allegations of immigration rorts, poor-quality education services, college closures and exploited students. More recently, problems in the international education sector came to a head in 2009 with media exposés of unethical behaviour within the sector, college closures and protests by Indian students following some assaults on individuals in their community. In the past, the training and education market attracted some businesses that were unviable. Closure of a number of these meant that the burden for tuition and fee assurance provided by ESOS fell disproportionately on the remaining reputable and viable providers. The effect of the closures is that a significant number of businesses which have proven unviable or not met the required standards have damaged Australia's reputation as a high-quality, reliable provider of international education services. The government's reforms are reversing this trend, and Australia's reputation in the international education and training market is improving.

The latest figures from the Department of Immigration and Citizenship—the figures are taken from the DIAC publication Student visa program quarterly report: 30 June 2011—show that in the financial year 2010-11, by sector, the following numbers of visas were granted. For schools 10,460 were granted. For vocational education and training institutions 67,406 were granted. For higher education institutions 112,567 were granted. For postgraduate study 9,203 were granted. There was a total of 199,636 visas granted for international students to study in Australia. In the non-awards sector another 17,107 visas were granted, and in the AusAID and Defence sponsored sector there were 4,633 granted. Almost 20 per cent of visas were for students from China, 11.6 per cent were for students from India, and the third-highest group, 5.3 per cent, were from South Korea.

The international education sector is one of Australia's largest export industries and is important to Australia in supporting bilateral ties with key partner countries, supporting employment in a broad range of occupations throughout the Australian economy and delivering high-value skills for the economy. That is why, apart from its value to our international reputation, it is so important to ensure that the students studying here have a positive experience.

In September, the minister announced streamlined processes for student visas. These processes were designed to enhance Australia's competitiveness in the international education sector. Unfortunately, some of the growth in international student numbers in the past has included people on student visas who were not genuine students. Some students came to Australia to undertake an education in order to gain permanent residence without any intention of undertaking employment related to their course of study. Regrettably, this expansion of non-genuine student numbers was facilitated by some agents and institutions whose business practices were highly dubious and sometimes illegal. In 2010, the government made changes to skilled migration requirements which effectively severed the nexus between studying certain courses and an almost guaranteed path to permanent residence. This led to a dramatic reduction in the numbers of non-genuine students commencing studies in certain courses.

I have no problem with that result. Australia offers a first-class education at the secondary, tertiary and postgraduate levels. It is important to the integrity of that system that our reputation be maintained. The legislation before us today, as I said previously, is another step to ensuring the maintenance of that integrity while protecting the students and their families' investments in their future. The centrepiece of this legislation is the commitment to strengthening tuition protection to ensure that students are looked after in a timely and effective way should their provider close. I commend the bills to the House.