Ross Hart (Bass, Australian Labor Party) Share this | Hansard source

I rise today to speak on the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017. This bill makes changes to key legislation in order to strengthen the regulation of Australia's higher education system, including the Higher Education Support Act 2003, the Tertiary Education Quality and Standards Agency Act 2011 and the Education Services for Overseas Students Act 2000. Its objective is to strengthen application standards for providers in higher education and to strengthen provisions for the FEE-HELP loan program.

It has become clear in recent years that unscrupulous vocational education providers have taken advantage of this system and of students, and, insofar as this bill acts to reduce the risk to students and taxpayers, Labor will be supporting it. This legislation is designed to address the risk that education providers may choose to target higher education as an alternative to vocational education. There is, in my submission, a systemic risk that without attention to the regulation of the sector that bad practices, which have been address in the VET sector, may be allowed to propagate in the higher education sector. Indeed, there is a suggestion that action to address unscrupulous practices in the VET sector has resulted in a surge of VET providers, including some who have had their VET FEE-HELP approval revoked, seeking to transition their operations into the higher education and international education sectors.

Ensuring that Australia's world-class higher education system and our students are properly protected is absolutely critical to its ongoing success. The amendments contained in the bill increase the enforcement powers and oversight capability of relevant regulators, enabling them to intervene as necessary to prevent malicious practices across the higher and international education sectors. Labor fully supports a robust and rigorous higher education regulatory system.

It's very important to note that the higher education sector is Australia's largest service export, worth $21.8 billion in 2016. Indeed, it's very important for us to note the importance of higher education generally. There is, as has been reported in a number of economic reports, a spillover benefit to the Australian economy which arises merely from the presence of university graduates and higher education graduates in our economy. This is important because it drives the growth in the Australian economy. It results in additional employment. For example, for every 1,000 university graduates entering the workforce, over 120 new jobs are created for people without a university degree. In 2014-15 the effect of new graduates entering the Australian workforce created 25,000 additional new jobs for people without a university degree. So you can see it's vitally important that we continue to invest in the higher education sector, and the maintenance of high standards is an investment in reputation which bolsters and sustains the sector and Australia's reputation for high-quality education. Domestic and international students should be able to plan and consume these services with confidence that malicious practices and unscrupulous providers are subject to appropriately stringent controls.

We welcome the additional focus and the greater scrutiny placed on the background of organisations who wish to operate in our higher education system. For example, the Education Services for Overseas Students Act 2000, the ESOS Act, is amended to update the 'fit and proper person' test provisions, changing reporting requirements and providing additional powers to the Secretary of the Department of Education and Training to share information with the Overseas Student Ombudsman and other agencies.

This bill allows also for the strengthening of processes around assessing provider histories, extending the 'fit and proper persons' test for providers at the point of application, and also making a number of technical amendments to the Tertiary Education Quality and Standards Agency Act 2011. These particular amendments will enhance the TEQSA's compliance capability and introduce more stringent provider application requirements to better equip the TEQSA to implement robust student protection mechanisms.

I'm very pleased to note that among the amendments contained in schedule 2 there are additional financial viability and transparency requirements, which include requiring general-purpose financial statements for providers of a certain size, and amending the definition of 'qualified auditors' to ensure the auditor of a higher education provider's financial statements must be a registered auditor for the purposes of the Corporations Act 2001, or otherwise someone who is approved by the regulator. Further, we see that the Higher Education Support Act 2003 is amended to change the definition of 'genuine student' for the purposes of accessing FEE-HELP to ensure compliance arrangements and provider application requirements and to increase the financial viability and financial transparency of agreements.

Perhaps most importantly, the HESA is also amended to strengthen student protections by prohibiting unscrupulous marketing practices and barriers to withdrawal from study. Aggressive recruiting tactics by some private VET providers saw students persuaded into unsuitable courses with a promise of free iPads, gym memberships and more. The extent to which unreasonable and unscrupulous behaviour infected the VET sector has been well documented. Nevertheless, it is vitally important to reflect on just how corrosive and insidious these practices became, particularly when they were entrenched across a sector. Labor supports early attention to ensure these practices do not transmit to the higher education and overseas education sector.

When ASQA reviewed the marketing and advertising practices of the VET sector in 2013, it discovered widespread departures from reasonable standards. Specific breaches of the standards found in the review of marketing practice amongst registered training organisations examined in that review included: 59.3 per cent marketed qualifications in unrealistically short time frames or time frames that fell short of the volume of learning requirements of the Australian Qualifications Framework; 32.3 per cent had websites which enabled the collection of tuition fees in advance, and half of a sample of these websites allowed RTOs to collect fees in excess of the amounts allowed by the national standards and 60 per cent did not mention the RTO's refund policy; 11.8 per cent advertised superseded qualifications and 8.6 per cent engaged in potentially misleading or deceptive advertising, such as guaranteeing a qualification from undertaking their training, irrespective of the outcomes of assessment, and guaranteeing a job outcome from undertaking training, even though an RTO was in no position to ensure that somebody would get a job as a result of undertaking training.

Providers had been able to attract millions of dollars in loan support for domestic VET students, with little or no consideration given to the circumstances or the capability of these students to complete their courses. The introduction, therefore, of a 'genuine student' test is very important. For a student to be and remain entitled to FEE-HELP, they must be a genuine student in that they have been assessed as academically suited to undertaking the relevant unit of study and have had a reasonable unit completion rate.

There are, of course, other considerations which are relevant. For example, if a student does not have adequate English language skills to undertake higher education, this may affect their academic suitability to undertake a particular course. Australia's reputation for undertaking high quality education and training, as well as a moral imperative, requires regulation to ensure that debts, either through the FEE-HELP system or privately incurred, do not arise for units of study which are beyond a student's particular academic capability.

The experience of many in the VET sector is still instructive. My electorate office has been contacted by several constituents over the past 12 months who have been induced to enrol in VET courses. When they found themselves unable to complete the course, through no fault of their own, they were left with significant debts and facing an almost impossible withdrawal process. It is pleasing to note that there are integrity measures surrounding the completion of applications for Commonwealth assistance which are required to be completed by the student and also on withdrawal from the courses. The measures are intended to prevent and countermand issues which arose again in the VET sector and in the context of VET student loans, where unscrupulous providers at one extreme and the less scrupulous at the other, completed student requests for VET assistance without the student being fully aware of the details or their loan commitments. Similarly, there are provisions relating to students withdrawing from units of study.

The higher education provider guidelines will be permitted to prescribe, amongst other things, that fees are not charged by higher education providers for withdrawal, either generally or in specified circumstances. These should specify the requirements to be met in relation to a re-enrolment after a process of withdrawal and in relation to establishing and operating processes and procedures relating to students for withdrawal from units of study. This is all necessary to ensure that higher education providers will not create financial barriers for students withdrawing from a course. The guidelines will be amended to prescribe the processes and procedures that a provider must have in place for a student to withdraw from a course of study. These processes must not involve financial, administrative or other barriers to the withdrawal.

I need to make some general observations with respect to this side's commitment to higher education. As I indicated earlier, we, on this side, believe in and have an absolute commitment to investment in higher education for economic reasons. We believe that investment in higher education and education generally has a significant economic benefit to the nation. But it's not just an economic benefit. We believe that, when we invest in higher education, we are investing in the health of our communities and in transforming communities.

In the context of my electorate of Bass, and in the context of northern Tasmania, we know that we have an underperformance with the Tasmanian economy. We have communities that are mired in disadvantage in part because of the lack of educational attainment and in part because there's been an underinvestment in ensuring that people go on to either technical and further education or higher education. I have already referred to the economic flow-on effects that arise from investment in higher education. We know that simply the presence of higher education graduates in a market is a benefit to everyone within a community. We know that the evidence is that this creates jobs.

In the context of the investment in the university relocation project in Bass, we know that the ongoing jobs and employment that will be created within my community are very, very significant. In fact, the investment of some $300 million will drive jobs and growth for the next 10 or more years.

But what is this government's response with respect to investment within the higher education sector? Despite the fact that this government is quite appropriately investing in the university relocation project in Northern Tasmania—something which is vitally important for my community—we see that the University of Tasmania is receiving less funding. Its growth in funding over the next five to 10 years is severely reduced. I submit that that's as a result of this government's wrong priorities. They have prioritised cuts to income tax and cuts to corporate taxation instead of investing in education. When they talk about investment in education through Gonski 2.0, they are actually short-changing many communities throughout Australia, particularly the communities that are served by the member for Solomon, my friend, and also those within Tasmania. We know there is an underinvestment within those disadvantaged communities within the Northern Territory and Tasmania.

So, despite the obvious imperative to invest further in higher education, we have a government that is putting less money in expenditure in the higher education sector and increasing the rate at which graduates are required to repay their student loans when they graduate. I have said before that it is vitally important, particularly for disadvantaged communities like my community in Bass, that we see people take up the opportunity for higher education, that they invest not just in their future but in the future of our community. Any steps by this government to place barriers in front of people taking on higher education is a retrograde step.

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