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Education Industry Reform

18 Feb | '2021

I rise to speak on the Education Services for Overseas Students Amendment (Refunds of Charges and Other Measures) Bill 2020.

Educating overseas students is an important industry in Australia and it’s very important in the seat of Moncrieff. Pre COVID it was worth $1.6 billion to our economy on the Gold Coast. And educating overseas students is about far more than education providers making money; the Australian experience is that it helps to attract international talent to Australian businesses. Also, when international borders reopen it will return to being a driver for tourism, which is worth $5 billion to the Gold Coast economy. Students themselves and their visiting families spend considerably with tourism operators and those small businesses which need that extra injection right now. Moncrieff is missing these very welcome visitors and we look forward to the day when we can welcome them back.

Significant challenges—or, indeed, a crisis like the pandemic—can understandably cause individuals, businesses and governments to focus on the large and most obvious problems. That’s necessary, to an extent, but the Morrison government is being very disciplined by listening to industry stakeholders and applying their detailed insights to other addressable reforms. This is just such a bill. Stakeholders in Moncrieff tell me that these are achievable reforms which will benefit them now, and especially later, as our education exports recover as circumstances permit.

Shortly I’ll go through some of the detail in this bill but, firstly, I will give a bit of an overview of the bill and what it will do. It will maintain quality without unintended disincentives to genuine short-course education providers who are seeking to address market demand. It will promote the competitiveness of the Australian education system by maximising the quality of the Australian experience for students. That’s very important. By allowing students to pursue personal interests through short courses and permitting workplace components of their substantive study this bill will facilitate the growth of our education industry with all of the economic benefits which flow from that. Ultimately, through a more vibrant education sector this bill will promote better quality experiences and choices for Australian students too.

The first question that Australians might ask is: why do we need these amendments to the ESOS Act? Currently, all courses, including single units of competency, such as first aid courses, may only be offered to overseas students where the course and provider are registered on the Commonwealth Register of Institutions and Courses for Overseas Students—CRICOS. The requirement for CRICOS registration to offer courses to overseas students is constraining supply by placing a regulatory burden on providers of very short courses which they may judge as too arduous to be worthwhile.

Registration on the Commonwealth Register of Institutions and Courses for Overseas Students is deliberately onerous to create barriers to entry by low-quality providers. Genuine providers which specialise in short-course provision are being discouraged. For example, in the VET space, only 29 of the 1,070 RTOs with supplementary courses have sought and obtained CRICOS registration. These changes mean providers will be able to offer these short courses to the 450,000 overseas students currently in Australia and will not have to check a student’s visa status before enrolling them in the course—a much simpler process. Finally, it will allow students to pursue their personal interests that complement their formal studies, enhance the quality of their Australian experience, as I mentioned before, and attend workplace components approved as part of a substantive qualification.

You might be asking: what are the changes? This bill removes regulatory barriers for education providers and enables overseas students to study some supplementary courses, such as first aid—which is something that everybody should do—responsible service of alcohol and construction white cards, which are all very important. Two changes to the ESOS Act are needed to achieve this. The first change refines the definition of ‘course’ in the ESOS Act. The new definition will refer to existing definitions for formal education qualifications in Australia and will have the effect of removing hobby or recreational courses from its scope. Only courses that lead to a substantive educational outcome will need to be registered. This enables providers to offer recreational or hobby courses, such as craft, cooking or scuba diving, without registering them on CRICOS, unless the courses are delivered by a higher education provider, in which case all courses will need to be registered with CRICOS. The second change is to provide a power for the minister to make a disallowable legislative instrument to include or exempt certain courses from the ESOS Act. This will specify skillsets, modules or the units of competency, such as first aid, responsible service of alcohol, construction white cards, hygienic food preparation, and infection control. International students will be able to undertake these supplementary courses in addition to their main course study.

The next question is: when and how will the legislative instrument be introduced? If this bill is passed in autumn this year, the minister for education will be able to create an instrument to exempt courses from the ESOS Act. As the instrument is disallowable, it is of course subject to parliamentary scrutiny. What else? Only a limited number of courses will be available for supplementary study. The ESOS legislative framework imposes stringent monitoring and reporting requirements on the student’s primary course, and these will remain in place. All supplementary courses will remain covered by the same quality assurance mechanisms that apply to other domestic courses and students, including oversight by the Australian Skills Quality Authority, or ASQA, as it’s known. The Tertiary Education Quality and Standards Agency, TEQSA, which a tongue twister, will identify and respond to any malpractice. Like domestic students, international students will be protected by Australian consumer law for supplementary courses, which is good news.

Other questions are: will these changes adversely affect international students’ primary course of study, and how will the risk of course overload be monitored? I’m sure that, on the other side, that question is of interest. Existing mechanisms equip the primary course provider to oversee student progress and take action, as needed, with consequential effects on visa conditions. The amendments will not alter these mechanisms in any way. There will be communications and guidance material produced dealing with this particular concern. Members opposite will be pleased to hear that. The amendments will not make it easier for providers to poach students, as all the same transfer restrictions will apply if a student decides to change providers for their primary course. Will there be sufficient oversight of the minister’s power to include or exempt courses through the legislative instrument? That is another very good question, which I will answer for the Federation Chamber.

An honourable member interjecting—Hear, hear! I’m glad you asked.

Indeed. The instrument will list courses exempted from the ESOS Act through this instrument, which will be determined following consultation with the regulators, industry peak bodies and the international education sector. The Minister for Education and Youth’s power to control which supplementary courses will be exempted from the ESOS framework will be exercised with a view to curbing sharp practice. The instrument will be disallowable, providing parliamentary scrutiny, of course.

The next question is: how will the oversight and quality be maintained? I’m sure again that members opposite will be talking about this question next up on the list. I assure them that the stringent monitoring and reporting requirements already in place in the ESOS Act will continue to apply to international students’ primary course of study. Student will still need to meet existing requirements associated with their student visa, including progressing in their primary course. Domestic assurances including oversight by ASQA and TEQSA and coverage by the Australian Consumer Law will apply. These are peak bodies that can take compliance action against a provider for noncompliance, which is terrific. By making course exemptions through a legislative instrument, the government will be able to respond quickly to address exploitative practices as well as meeting the emerging needs of those overseas students.

The other question they may have—and I’m sure there’s a member opposite I can see who’s grinning with this question, no doubt—is: how did the department consult the sector? That is an absolute corker of a question—a very important question. A consultation paper on proposed arrangements for supplementary courses was released for public consultation on 25 September last year, 2020, with the closing date of 9 October 2020. The department received 44 submissions from education providers, education and student peak bodies, and industry bodies, and it held follow-up meetings with stakeholders to address key issues. These included ITICA, TDA, IHEA, TPS and the University of Melbourne. There was strong stakeholder support for the proposed changes and the flexibility for both providers and students. The Department of Home Affairs, TEQSA and AQSA have been consulted and support all of these measures.

How were providers refunded in 2020, you might ask? As part of the Australian government’s economic response to the COVID-19 pandemic, registered providers are not required to pay annual registration charge or entry-to-market charges for the period from 1 January 2020 to 30 June 2021. Registered providers who already paid a 2020 ARC or EMC invoice from 1 January 2020 were refunded using the active grace provisions in the Public Governance, Performance and Accountability Act 2013, which is known as the PGPA Act—lots of acronyms today—to a total of more than $10.9 million. These changes are necessary, and this amendment will enable a more effective and flexible response in the future from 1 July 2021 should further refunds be required, providing sector-wide support to registered providers in special circumstances such as the current COVID-19 pandemic.

Currently, the ESOS legislation does not contain the legislative authority required to enable or permit charges to be refunded to those providers. Without this amendment, only mistaken overpayments of charges are refundable.

I’d like to finish by saying that the amendments will allow for sector-wide support only in special circumstances. The secretary has limits in place on his or her power to make payments under the duties of the position in the PGPA Act.

Finally, these questions have all been addressed in the bill, and I commend it to the chamber.

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