Kate Ellis (Adelaide, Australian Labor Party, Minister for Employment Participation and Childcare) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

During the height of concerns confronting the international education sector in 2009 the Prime Minister, in her then role as Minister for Education, asked the Hon. Bruce Baird AM to conduct a review of the Education Services for Overseas Students Act 2000 and its associated legislation that had originally been planned for 2012. A number of amendments to the ESOS Act were introd­uced to strengthen registration requirements and require re-registration of all providers by the end of 2010. This interim step was necessary to reinforce the integrity and quality of Australia's international education sector. When those amendments were passed in February 2010 an undertaking was given to come back with further amendments following finalisation of the Baird review.

The government released the final report of the Baird review on 9 March 2010 and indicated a staged approach in responding to its recommendations. The first phase of legislative changes, passed in March of this year, had a dual focus on risk management and more effective enforcement. Those amendments also introduced changes to the Ombudsman Act 1976 to extend the jurisdiction of the Commonwealth Ombuds­man to include students of private registered providers. Consistent with this staged approach, the government's response to the remaining recommendations will be consid­ered in a second phase of legislation to be introduced in the coming months.

The ESOS Act protects Australia's reputation for delivering quality education services. It does this by establishing a regulatory regime for the provision of international education and training services and through this protects the interests of overseas students through the establishment of minimum standards and providing tuition and financial assurance. The ESOS Act also complements Australia's migration laws by ensuring providers collect and report information which is relevant to the administration of the law relating to student visas.

Unprecedented growth in recent years has led to education becoming one of Australia's largest export industries, generating in the order of $19 billion annually and supporting around 125,000 jobs across Australia. In 2000 the number of international student enrolments in Australia was 188,000, which grew to 619,000 in 2010. Consequently, the growth in the student population has led to significant growth in the number of education providers offering services to international students with over 1,100 providers ranging from large universities and TAFEs, public and private schools, to small private VET and English language providers.

Since its commencement in 2000, the ESOS Act has been amended several times to keep pace with this changing industry and is widely recognised as one of the best legislative frameworks for international education in the world.

The Commonwealth recovers the costs of administering the ESOS Act through compulsory registration fees. These are charged to all providers wishing to be registered on the Commonwealth Register of Institutions and Courses for Overseas Students, CRICOS, which allows them to offer courses to overseas students.

The purpose of the bills I am introducing today is to make amendments to the ESOS (Registration Charges) Act in response to recommendations from the Baird review that regulators adopt a risk assessment and management approach to the registration and ongoing monitoring of education providers delivering courses to international students, including the costs to apply at registration and through the period of registration.

The bill creates a new fee structure focused on risk to replace the current charging structure for the compulsory annual registration charge payable by CRICOS registered providers. The new annual registration charge is comprised of a $1,300 base fee, a charge of $10 per student enrolment per year together with a $100 charge for each course registered on CRICOS. It also includes provision for a flat fee of $1,000 in circumstances where a provider has in the past 12 months had action taken against them for noncompliance under section 83 of the ESOS Act.

Flexibility is afforded for providers that routinely offer courses of less than 13 weeks duration with the introduction of a new provision for each student enrolled in such a course at any time during the year to count as a quarter of an enrolment. This represents a reduction from the current half an enrolment charge for a course of less than 26 weeks, and addresses issues raised in relation to the existing length of enrolment calculation by providers offering courses of a shorter duration to large numbers of students.

The rebased annual registration charge is designed to cover the administrative costs of the registration process and reflect the number of courses offered by each provider, as well as the overseas student cohort, in order to more accurately recoup the costs relative to the size of any supervision, compliance or enforcement activity necess­ary to ensure that only reputable providers are permitted to operate.

The bill also introduces an entry to market charge payable for the first three years of registration which will replace the current initial registration charge. A charge of $7,500 will be payable at the time the provider first becomes registered on CRICOS, followed by $5,000 payable at the end of the first anniversary of registration and a further $2,500 at the end of the second anniversary period.

The entry to market charge is designed to recoup the additional costs associated with new applications for registration and the additional supervision required by providers with a shorter history of registration. Evidence suggests that these providers present a greater risk to the sector, so the new entry to market charge will enable better targeting of compliance efforts and shift the regulatory burden to those providers with the greatest risk to quality, the student experience and the reputation of the sector as a whole.

Importantly, these bills provide a regul­ation-making power to allow the registration charges to be varied for different classes of providers on the basis of their risk profile. Under this proposal providers deemed to present a significantly lower risk to the market may pay a lesser amount or be exempt from the requirement to pay components of the registration charges. It is expected that any providers qualifying for a variation will be subject to rigorous additional quality control processes.

Overall, the financial impact on providers of a rebased annual registration charge is expected to significantly reduce from its current level. The rebasing of the charge will result in registration charges paid by the sector reducing from $15 million in 2011 to less than $7 million in 2012. As there will be an overall reduction of approximately $8 million in the amount collected from the sector as a whole, the majority of existing CRICOS registered providers will exper­ience considerable relief in relation to this charge. Providers representing a greater risk to the market, such as those with a history of noncompliance and new entrants, may pay more under the new arrangements. Protection and enhancement of Australia's reputation for providing reliable and high-quality education is crucial for both providers and their international students, who rely on the strength of an Australian qualification as they further their careers, both here and overseas.

These bills continue the government's support for the industry and its place in the economy through a strengthened regulatory framework for Australia's education and training export industry. This follows dir­ectly from the Baird review recommendation and will ensure the long-term integrity and viability of this key export industry.

The government looks forward to bringing forth the final phase of our response to the Baird review recommendations later this year. I commend the bill to the House.

Debate adjourned.