Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I rise to speak on the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011, the Education Services for Overseas Students (TPS Levies) Bill 2011 and the Education Services for Overseas Students (Registration Charges) Amendment (Tuition Protection Service) Bill 2011. These proposed legislative changes stem from the Stronger, simpler, smarter ESOS: supporting international students report conducted by a former member of this House, the Hon. Mr Bruce Baird, who is also a very good personal friend of mine. As members of this House will be aware, in August 2009, the then Minister for Education, the Hon. Julia Gillard, commissioned the review of the Education Services for Overseas Students (ESOS) Act 2000. Issues in the international education sector came to a head in 2009 with media reports of unethical behaviour within the sector and a when series of colleges collapsed over financial viability issues. The sector was also damaged by protests and sensationalist media coverage in overseas markets concerning a spate of assaults which were portrayed as having been racially motivated. It has also been a very difficult time for many education providers, who have been impacted by other pressures such as competition from other countries, the value of the Australian dollar and the government's visa rule changes. Unfortunately, the combination of these factors led to falling enrolments in the sector, which is a deeply concerning matter both to the sector and to the coalition.

Bruce Baird was asked to report back to the government with recommendations designed to ensure that Australia could continue to offer quality international education to students studying in Australia. The review considered the need for enhancements to the ESOS legal framework in a number of key areas and was reported to government in February 2011. The report emphasised the need for a new and strengthened regulatory approach to protect Australia's reputation as a provider of quality education. In particular, the recommendations focused on: more support for international students; improved information; stronger consumer protection measures to ensure students are protected from unscrupulous operators; improved regulation of Australia's international education sector; and improved support for those who study and live in Australia, including their having somewhere to go when problems arise.

The coalition has supported in principle the recommendations to amend the ESOS Act in order to improve and strengthen our international education industry. Reform to the ESOS Act has been undertaken in a number of stages. The coalition supported the reforms requiring the re-registration of all institutions already on the Commonwealth Register of Institutions and Courses for Overseas Students, CRICOS, by 31 December 2010. We also supported the introduction of two new registration requirements to strengthen the education credentials of education providers. These require providers to list the names of their agents and to comply with any regulations relating to them.

These new requirements were implemented following the passage of the Education Services for Overseas Students Legislation Amendment Bill 2010. Education providers are now required to demonstrate more rigorously that they have a sustainable business model. They also need to demonstrate that they have access to financial resources and have appropriate capability, governance and management structures in place.

There will now be a more consistent requirement for assessing risk to be applied by all state authorities. Further reforms have been implemented, including changes to registration fees and the implementation of an Overseas Students Ombudsman, in response to Baird recommendations 16 and 17. Changes to registration fees were considered in the Education Services for Overseas Students (Registration Charges) Amendment Bill 2011 and the Education Services for Overseas Students Amendment (Registration Charges Consequentials) Bill 2011, which received royal assent on 26 September 2011.

The coalition supported the passage of those bills, which amended the ESOS Act to create a new fee structure replacing the previous charging structure for the compulsory annual registration charge payable by all registered providers of courses to students on student visas. Those bills also provided for an entry-to-market charge payable for the first three years of registration.

Now the parliament is considering a further stage of reforms to the ESOS Act. The bills that are being considered today seek to do the following. Firstly, strengthen tuition protection to ensure students receive the tuition they have paid for or, as a last resort, a refund. Secondly, introduce national registration for providers operating in multiple jurisdictions. Thirdly, make technical amendments, including clarification of the definitions of tuition fees to include only the costs directly associated with the course as well as to include former accepted students in the definition to make reporting requirements and complaints-handling processes applicable even if a student has ceased with a provider.

The Tuition Protection Service are to be accessed by students who seek to gain a refund on those parts of their courses which were not delivered in the event that higher education providers do not meet refund obligations under the ESOS Act. Students will only be eligible for a refund of the unused portion of prepaid tuition fees—that is, tuition for which the student has paid but which has not yet been delivered by the provider—rather than a full refund, as was previously the case, in recognition that they may obtain credit for part study already completed.

The new scheme limits the collection of fees to no more than one study period in advance and requires providers who do not receive recurrent government funding to place all students' pre-paid course fees for their first study period into a designated account which can only be drawn down when the student begins study. In addition, these bills establish an online information service to allow students to select from suitable placement options in circumstances where their higher education provider does fold. The bills will establish national registration for providers operating in more than one jurisdiction.

These bills also establish the framework for the administration of the scheme. I note that the explanatory memorandum to one of the bills states that the implementation of the Tuition Protection Service comprises $5 million of seed money for the Overseas Student Transition Fund in 2012-13. Also provided for is $800,000 to remunerate the Tuition Protection Service directors across the forward estimates. It is understood that these costs will be offset by funding sourced from government financial assistance provided to the Assurance Fund in 2010. As a consequence, the government expect that the establishment of Tuition Protection Service will be budget-neutral. I note the government has indicated that, based on modelling, possible revenue for 2012-13 is estimated at $6.1 million.

While the coalition support the measures contained within these bills, we are aware of a number of education stakeholders who are concerned that such rapid changes could result in some quality providers having to change their entire business structures in a relatively short period. The new scheme limits the collection of fees to no more than one study period in advance and requires providers who do not receive recurrent government funding to place all students' pre-paid course fees for their first study period into a designated account which can only be drawn down when the student begins study.

Some stakeholders, for example, while supporting the changes, are concerned that the time frame in which the government requires providers to change their business structure is far too short, given what I have just described. Some private higher education providers are particularly worried about the associated cash-flow issues and are worried that rushing the implementation of this scheme may increase the chance of higher education providers closing. They are concerned about the quantum of fees payable, which have not yet been set. Universities also share these concerns, and some seek assurances that the payment of fees to the scheme will be clearly differentiated on the basis of risk. Based on these concerns and suggestions from the industry, the coalition suggests a very straightforward amendment: full implementation of the scheme by 1 January 2013 rather than 1 July 2012, as currently provided for. Therefore, we intend to begin the scheme six months later than is currently provided for under the act. Specifically, the amendment I will seek to move at consideration in detail stage is as follows:

(1) Clause 2, page 2 to page 4 (table), omit "The first 1 July that occurs on or after the day this Act receives the Royal Assent" (wherever occurring), substitute "1 January 2013".

I have written to the crossbenchers seeking their support for this amendment, which I hope they will consider supporting, and I hope the government might consider supporting it too. I place on the record that the coalition support the series of bills which have passed the parliament and led to the implementation of the Baird review's recommendations to strengthen the risk management of education services to overseas students. Action was needed to protect the reputation of Australia's international education export industry, which is estimated to be worth $19 billion annually.

The latest measures being considered today are the most recent of the many amendments to the ESOS framework. Many amendments were made by the former coalition government from 1997, particularly over the period of 2006-07, which sought to protect the industry. I hope that the government is willing to consider the extension of time that I intend to propose in the consideration in detail stage, and I commend the other aspects of the bill to the House.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

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 2011show 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.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 and related bills. The Education Services for Overseas Students Act has been evolving through substantial reforms since the year 2000, when there were allegations of immigration rorts, poor-quality education services, college closures and exploited students. Forty-one recommendations from an independent evaluation in 2004-05 were endorsed to improve the act's effectiveness. Following this, amendments were made to the act in 2006-07. However, in 2009, further allegations of unethical behaviour reported by the media led to protests by the Indian community against assaults on Indian students and the closures of a number of colleges.

In just over a decade reforms and amendments to the ESOS Act have been implemented to ensure the fair treatment of the international student body. The proposed amendments that I am speaking on here today have the potential to strengthen and reform the existing act. The bills seek to strengthen tuition protection to ensure that overseas students receive the tuition they have paid for or, as a last resort, a refund. This will be done through the Tuition Protection Service, which is intended to make more flexible and streamlined student placement and refund arrangements in the event of a defaulting provider's not meeting its obligations. In addition, there will be a limit to prepaid course fees, and these fees will be required to be placed into a designated account and only drawn upon when the student's course has commenced. Providers will also be required to ensure that efforts have been made to encourage students to update their contact details, with penalties applying for failure to do so. New requirements and penalties related to ensuring academic records are kept up to date will also be introduced. National registration for providers operating across different jurisdictions will be introduced, as will technical amendments, including clarification of various terms.

These bills were referred to the House of Representatives Standing Committee on Education and Employment, and the committee's report was presented earlier this week. There were a total of 22 submissions received. I note that the issue of concern raised by many of those who made submissions was in relation to the proposed 24-hour reporting periods for provider and student defaults. It is the recommendation of the committee that this period be extended from 24 hours to 72 hours. The member for Grey, who is the deputy chair of the committee, made the point that there are two parties who may default: the provider, who may default on delivery of the service, and the student, who can also default by not presenting for the first day of classes. The last may happen for any number of reasons. I note that the extension of the notification period from 24 hours to 72 hours will allow the opportunity for the provider to find or locate the student who has failed to present for class and, if they are unable to do so, to alert the TPS—the Tuition Protection Service. I also note the comments of the member for Grey indicating that industry is generally relaxed about the 72-hour notification period and on that basis the coalition did not lodge a dissenting report.

International students are very important to this country. They not only contribute financially to our economy but also contribute to the student experience of many Australians and the Australian student community. Unfortunately, we have had a downturn in the number of overseas students enrolling in Australian educational institutions. While almost 270,000 student visas were granted during the 2009-10 financial year, this number is a decrease of 15.8 per cent from the previous financial year, when 320,000 visas were issued. There are a number of reasons that we are seeing a decline in the number of international students in our educational institutions, many of which were identified in the Baird review. They include social issues as well as provider and educational issues. For every poor experience that a student has here in Australia there is a high possibility that the student will share the details of this experience with others. We need to ensure that our reputation is upheld as an international education destination. We need to make these students feel safe and, most importantly, we need to make them feel welcome.

The Gold Coast has a lot to offer international students, and we already have many international students at our schools, at our training colleges and at our universities. The Gold Coast lifestyle, coupled with world-class educational facilities, ensures that we are well placed to provide the experience, education and support which these students both deserve and require as visitors to our country. We have an excellent climate on the Gold Coast, with wonderful beaches and an equally beautiful hinterland. Structurally, we have public and private hospitals, public transport services and numerous shopping centres as well as sporting clubs and community support organisations, so we certainly have the infrastructure and the support services in place for our large international student community. We have a lot to offer our overseas students and they in turn offer a lot to our community.

Education services are one of Australia's most productive export earners. Access Economics has reported that each international student contributes approximately $29,000 per annum on average to our economy. Additionally, these students invite their friends and families along to visit and they in turn contribute to our economy. For every dollar spent by an international student in our economy there is a flow-on effect which ensures that we are able to support Australian businesses and workers. It is important that we encourage our international students, though not just for their economic contribution. Their presence in the classroom and on campus adds to the learning experience for all students. Firstly, their presence at our educational institutions encourages an international approach to the curriculum. This is certainly very advantageous to our Australian students who later go on and seek international work experience. Whilst some of those graduates will permanently relocate overseas, there are many who will return to Australia and bring their experience and knowledge back to us.

With international students in the classroom, our Australian students also receive some of the benefits of international study without leaving their home. The broader student extracurricular experiences that students have access to thanks to the presence of international students helps them to understand cultures, religions and values different from their own and those generally around them. I will speak specifically about Bond University and their Latin American student contingent. Bond University is located within my electorate of McPherson, and they have a strong Latin American presence at their campus. They annually run a Latin American day, when all of the students on campus are invited to participate in activities that are relevant to Latin America. I have spoken to Bond University on a number of occasions about strengthening our links with Latin America, particularly with regard to the developing mining and resources sector and with the establishment of science and engineering courses and faculties on the Gold Coast. I will continue to work with Bond and our other universities on the Gold Coast to strengthen our engineering and science based courses.

The relationships between Australian and international students are often long-lasting and valuable, not just for the individual students but also potentially for us as a nation. I believe that we do need to build quite strongly on that. Our international students who remain on the Gold Coast also contribute to the local community, working within occupations that are experiencing skills shortages and volunteering within the community. In addition, these students are supporting the growth of our higher education participation rates, which at about 11 per cent on the Gold Coast are much lower than the national average. This has been illustrated by data from the 2006 census, which showed that only 18 per cent of the Gold Coast population aged 25 to 34 were degree qualified. Each additional enrolment in our local higher education sector is a positive step towards achieving a better outcome for our local education sector. I have expressed many times in this place how important our education sector is to the Gold Coast. While there has been a downturn in our tourism and construction industries, our education sector offers the greatest potential for further development to ensure we have a reliable second layer of industries to support our local economy.

In closing, I stress that we need to continue to improve our international education sector. There is still a lot of work to be done in this area, and I support this bill with the recommendation of the acceptance of an extension of the implementation date.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to voice my support for the Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 and related legislation. I thank the member for McPherson for her contribution. We have seen a growing number of students from overseas enrol in Australian universities. Australia is home to 460,000 overseas students, including 126,000 from China and nearly 70,000 from India. Many students also come from South Korea, from Indonesia, from Malaysia, from Thailand and, as mentioned by the previous speaker, there is an emerging South American market. In fact, international students here come from more than 190 countries. It is a vote of confidence in our wonderful Australian universities and proof that an Australian degree is highly regarded all around the world.

Australia is a very attractive place to study—great people, great climate—I am sure you would agree, Deputy Speaker Slipper, that that is the case in Queensland at least—and a very welcoming multicultural society. Young people want to come to Australia: they want to be educated in Australia and they want to experience Australian culture. It is estimated that overseas students and their families spend more than $14 billion a year in Australia. Access Economics estimate that their presence creates an extra $12.6 billion in goods, in services and in jobs. That means, in all, overseas students contribute more than $26 billion to our economy, making education our third biggest export. When we see coal trains going through Brisbane and in North Queensland, we need to think of our overseas students in similar terms—they are valuable commodities and it is our job to protect them.

Their contribution is not just economic or financial; overseas students contribute to the broad tapestry of Australian multiculturalism, and they also ensure that there is a diversity of thought in our universities and in the broader community. Griffith University's Nathan campus, in my electorate, is home to nearly 4,000 international students. They have an even stronger presence on the Gold Coast and in Logan. The Gold Coast campus particularly caters for international students for some of the reasons the member for McPherson detailed, including the sand, the sunshine and the healthy lifestyle. Obviously our community is all the richer and stronger for having these international students in our presence.

Of course, such a rapidly growing sector does create challenges, and the Labor government has responded in recent years to improve the integrity of the sector. There are other problems associated with this rapidly growing sector. At Griffith University in my electorate there are community consultation meetings, which I try to attend. These meetings are all about the university engaging with the community—the local residents—because sometimes we have had to educate international students about some of the topics which will not be in the end-of-semester exams. These are things such as: where do you put the wheelie bins? How loud do you have the music? Is it okay to walk around without a top on? They are things like that, although I do not get a lot of complaints from people in my electorate about the last topic. Apparently some Swedish students did have this practice.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

Get back on the bill!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I had better get back to the legislation—I take the interjection from the member for Blair. However, returning to the legislation, there are some unscrupulous education providers who exist only to provide a back door for students or who represent themselves as being able to provide a way for the students to gain residency—they do not have particularly accurate product disclosure statements. The government has responded to regulate and make sure there are minimum standards, better complaints handling and further strengthening of the registration requirements. This is important to ensure that international students get a quality education in Australia and, on the flip side, that our international students meet the conditions of their student visas.

I was doing street stalls at the weekend in Graceville when a lady came up to me on behalf of the international students who are employed by a cleaning company. It was pointed out that they were being taken advantage of because their English is not perfect. It turned out that their employer is not paying superannuation on their behalf and that there are some other questionable work practices. This does happen.

These bills are the second part of the government's response to the Baird review of 2010, which made a number of recommendations to government regarding overseas students. The bill introduces a tuition protection service to protect students when an education provider cannot meet its obligations. The service includes a TPS director and advisory board, both to be appointed by the minister, and a DEEWR secretariat to support the work of the director and the board. The bill also creates a service provider to manage the student placement arrangements.

A TPS levy will be applied to all registered international education providers. Where a provider defaults on tuition, it will be required to refund any part of the course paid for but not delivered. This will ensure that students can choose and afford an alternative provider and have the tuition received recognised at this new provider.

The bill will also amend the Education Services for Overseas Students Act to limit the collection of prepaid course fees to no more than one study period in advance. Providers will also be required to keep the fees for the first study period in a designated account until the student commences study. This ensures that, in the sad circumstances of the provider going belly up, the provider will still have funds to meet its refund obligations should it default or the student's visa application be refused.

The bill will make study in Australia more affordable as students will no longer be required to pay huge amounts in upfront fees. Furthermore, the bill strengthens the requirements for providers to have procedures in place to update student contact details and maintain assessment records. This is an important process if students are not here for the right educational reasons. The bill also establishes a national registration system to allow a more straightforward registration process for education providers who operate across jurisdictions—getting rid of red tape yet again. This amendment will not stop the regulator from taking compliance action against any or all of the provider's operations but it will reduce compliance costs for providers.

Like any growth industry, there are always a few cowboy operators who are happy to dig into others' pockets to make a quick buck rather than committing to protecting the great brand that is Australian education and to providing a great education service. This bill will make it more difficult for these cowboys to operate and provide greater protection to international students. It also ensures Australia can continue to stand tall as a destination of choice for overseas students and that the brand so carefully protected and nurtured over the years by past governments, continues to be a great brand overseas. I commend the bill to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

The Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011 is one of a suite of bills aimed at protecting overseas students when they enrol with Australian education providers. There is no doubt that Australia had become well regarded in international circles as a provider of high quality education. However, this reputation became tarnished in recent years. In 2010 there were about 470,000 overseas students studying in Australia. Of these, 227,000 were in tertiary education, 147,000 were in vocational training courses, 97,000 were in intensive English language courses and 24,000 were in Australian schools.

Foreign students, as we know, bring with them new ideas and different experiences, and they add greatly to the diversity and colour that is the Australian community. The greatest number of foreign students in 2010 came from China followed by India and Korea. These students also require an industry that includes a myriad of small businesses to provide support services to them. The value to the Australian economy was around $15 billion, which meant overseas students represented Australia's third largest export market. However, in recent years concerns about standards and safety saw this drop by an estimated $2 billion. Government data recently released identified that, in contrast to the increases in student numbers in the past decade, in 2011 there was a 9.4 per cent reduction in foreign students studying in Australia.

Tertiary foreign student numbers attending Australian universities saw a modest 0.8 per cent rise. However, in all other sectors significant reductions were measured. Vocational education and English language courses both recorded more than 17 per cent reductions in student numbers. Of particular concern has been the significant drop in new enrolments, down by 3.1 per cent. This indicates that while existing students are staying on to finish their courses, new students are looking elsewhere around the globe for their educational needs. It also presents a challenge for educational institutions that could well face low numbers of foreign students for the next few years, until the trend of declining new enrolments reverses.

Around half of the universities across Australia have a quarter of their student population coming from overseas, and some can reach close to 50 per cent of foreign students. For those institutions, and particularly for intensive English language campuses, which can be almost exclusively for foreign students, the next few years will be of particular concern. These concerns are not new. Earlier this year in this House we debated the Education Services for Overseas Students Amendment (Re-registration of Providers and Other Measures) Bill, which was also designed to protect and support overseas students studying in Australia. At the time we could already see that Australia's reputation and performance was being questioned. In that debate I told the House that there had been a 20 per cent drop in student visa applications, which was expected to cost the sector $1.2 billion and possibly 19,000 jobs. The debate today could well be seen as a confirmation of those facts and of the concerns at that time. Australia dropped from the No. 1 destination for Chinese students to the third most popular destination.

The world's educational establishments have become intensely competitive and this trend is not new. Long established and well-known universities have been marketing themselves around the world for decades. Members would have heard discussions about the value of an Oxford or a Cambridge education. Perhaps those with an American base would know the value placed on Harvard or Princeton degrees. These are not simply a tertiary qualification but a recommendation about the quality of the education that the graduate received. The same situation applies to other levels of education. In this competitive marketplace, Australia cannot afford to be left behind. Australia also cannot afford to be complacent about the treatment of foreign students when they visit our country to study.

The attacks on foreign students in recent years certainly did not help Australia's reputation, and, although not all were perpetrated by Australians, we must not tolerate a campaign directed against foreign students. It would help if all Australians were informed that these students are an income-earning industry. We have heard the figures; they provide jobs for Australian workers as well.

There is a question about the timing of the implementation of the proposals under this bill. Several universities raised concerns that rushing the required business restructure in order to comply with this bill might have negative impacts. That is why they have asked for a delay in implementation, a request the coalition supports. The amendment proposed by the coalition addresses this point.

The other issue of concern is the potential impact of these changes on those people who might seek permanent residency following their education. Recent reports in the media have identified that the immigration department could be flooded with applications for asylum from students whose study and bridging visas are about to expire. Tens of thousands of foreign students may well seek to try to extend their stays. This carries the risk of undermining the integrity of the immigration program. There was a 37 per cent increase in bridging visas last year, reaching some 92,000 in total. The government will need to be prepared for the potential impacts on the system.

These difficulties of visa applications can be highlighted by West Coast International College of English, an English language intensive course for overseas students, or ELICOS, college. West Coast International College of English is based in Bunbury in my electorate and is accredited for 36 visa-holding students. Run by Jenny Byatt, it is one of the smaller ELICOS colleges in Australia and is also the only one in Western Australia outside of Perth. Jenny has advised me that students seeking to study in her college frequently have problems getting visas, especially those from Thailand and Vietnam. Whilst the government may consider these to be high-risk destinations, Jenny assures me that she gets to know students personally and is certain that genuine applications have been rejected. This is an example of the pressure that the system places on applicants, on service providers and on the immigration department itself.

The department announced a review in March this year conducted by Michael Knight, and the student visa program review discussion paper is available on the department website. This review investigated the migration risk of student visa applicants and the demands on the department. It identified:

The rapid rise in international student numbers presented great challenges to DIAC officers, educational providers and regulators. A number of systems were strained. Ideally things could have been better. But it is usually the case that systemic changes tend to lag behind unprecedented growth in most human activities.

The report highlighted that generalisations which might cause problems were an inherent part of the current system:

The current student visa system consists of eight visa subclasses based on education sector plus a student guardian visa. The system manages risk by measuring immigration compliance performance of student visa holders by nationality against individual education sectors.

Such a system assumes that the risk of every student of the same nationality is similar. Anecdotal evidence suggests that high risk caseloads can develop in geographically compact areas of a country while other parts of the same country might be a lower risk.

Such a system also assumes that every provider within an education sector has similar risk attributes. Once again anecdotal evidence suggests that some institutions invest much greater effort in determining the academic suitability of the students to which they issue Confirmations of Enrolment or Letters of Offer.

Whilst it is obvious there is no perfect system, it is equally obvious that more can be done to ensure fairness and equity of access to international students while we maintain strong border controls and minimise migration risk. The adequate resourcing of the assessment process is certainly the best way to ensure just and timely outcomes.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the education services for overseas students bills. When I was growing up it was thought that Australia's economy was very much built on wool and wheat and, I would note as a Queenslander, mining was coming to the fore. That was certainly the case up at Mount Isa and other places out west, and my home town of Ipswich was very much built on the coalmining industry. But scarcely did people realise the transition going on in the Australian economy. The Hawke and Keating governments internationalised the economy and built on reforms of the Whitlam government, and the Howard government continued that process of the internationalisation of our economy. One thing that most people did not realise was the impact and the value that the international education sector would have for the Australian economy in the long term.

The growing number of international students in this country enrich the culture of our communities and make an impact not just in cities like Sydney, Melbourne and Brisbane but also in regional areas. Many of them study in regional campuses across Queensland and elsewhere and they make an impact on community life. It enriches our lives, it brings culture, it increases international understanding and friendliness and it provides opportunities in the lives of many locals to meet people from different cultures. It is also important for our international relations.

I recall just a couple of years ago when I was on a parliamentary delegation to South Korea that a topic raised repeatedly during conversations with politicians and other stakeholders there, including businesspeople, was our changes with respect to the international education sector in Australia and what impact that would have on South Korean students. They were quite reassured that the changes we were making were for the best motive and were aimed at improving the visa integrity of the system, making sure that those people who were coming to Australia would get a quality education, that there were no rogue providers of education and that the training and qualifications were in vocations that would enhance our economy. There were far too many people coming to this country who were studying courses that were unnecessary, as we had an oversupply for those types of jobs, but they were also not being trained or qualified to international standards or even to the standards we would want in our country in trades and professions that would benefit our economy.

The Baird revue provided the way forward in March 2010 and the federal Labor government agreed to begin a process of consultation and improvement. A number of recommendations were made and we have been undertaking the process of implementing those recommendations.

This industry is extremely important to the Australian economy. It is worth billions of dollars. There are more than 460,000 international students studying in this country on a regular basis. There are something like 120,000 Chinese students and about 70,000 Indian students. Go to the campuses of USQ in Springfield and to the campuses of UQ in Ipswich and you will see what I mean. It does not surprise me that those figures have been quoted here today in this place and elsewhere. I have heard those types of figures quoted on numerous occasions.

When I have been to awards nights at the UQ Ipswich campus, when awards are handed out I am struck by how many international students are receiving awards. They come here and go to great universities, like the University of Queensland. I say that as a graduate of that university at St Lucia. It is an internationally recognised university with courses including things like business and health sciences—and in my electorate we see people in South-East Queensland graduating as doctors, nurses and midwives from the University of Queensland, Ipswich campus.

USQ also benefits from international students. I have spoken on numerous occasions to people like Tony Sadler and Alan Rix from the University of Queensland and Doug Fraser, the director of USQ at Springfield. Indeed, I also attend a community consultation at USQ—as the member for Moreton does at Griffith University—where development plans for the university are looked at and discussions of student welfare are examined. The topic of international students and how they are integrated into the campus and community life in Springfield and in Ipswich generally is also looked at.

I want to commend those universities in my electorate—and universities like Griffith University, as the member for Moreton said—because I can see that every effort is made by the university senate, the staff, the teachers and the tutors, and other people in those areas in Springfield and Ipswich to integrate those students and to make them feel as welcome as possible.

It has been a tragedy and a great shame that some sectors of our society have not necessarily seen international students as being worthy of respect and affection. That is a shame. If you travel throughout Asia you will see that Australia is held in high esteem, and it does not matter which side of politics is in power in this country. You can see that when you travel through Asia. They respect Australia for our way of life. They want to come here to this country because our universities offer high-quality, internationally recognised degrees, whether it is arts or business at USQ or health sciences or medicine at UQ. They come here because they want to study. They recognise that Australia, like Canada and the United States, is a destination, a place where they can get educated. In fact, the burgeoning middle classes in places like India and China recognise that university degrees from UQ, USQ, Griffith and QUT in Queensland are well-recognised internationally.

In April 2011, the first phase of the amendments to the ESOS Act were enacted. These include better complaints handling, strengthening registration requirements and include a risk management approach to the regulation of international education. We did that because Baird found—and we also recognised this—that there were problems in the sector. We had some real pirates, some rogues, within the sector who were not providing a quality education. There were problems in the way they dealt with international students and took advantage of them.

The centrepiece of our response—and it is part of this legislation—has been the strengthening of the tuition protection to ensure students are better looked after in a timely and effective way, should their provider close. Sadly, in a number of locations around the country, people set themselves up, advertised on the internet and internationally that they could provide high-quality degrees, diplomas and other qualifications, and yet were rogues, pirates, crooks and charlatans. That damaged our international reputation because people went back with phoney degrees and phoney diplomas. They also closed at times, and we saw that in the media. Our reputation could be sullied that way, just as it could be sullied if we were not providers of iron ore, coal and other minerals.

Having students looked after—the international education sector—is just as important to our economy in the long term as the minerals sector is to Asia. So having students from, say, South Korea well looked after, well trained, cared for and respected studying and paying for tuition in this country at, say, USQ is just as important as those barges along the coast of South Korea going to places like the Pohang steelworks. Iron ore, coal and other minerals are there to be used in manufacturing in South Korea. Being a good provider of international education is just as important.

The reforms in this legislation comprise, as I said, the introduction of the Tuition Protection Service, which will incorporate a TPS director and advisory board, and oversee a student tuition fund and an online information and access service for overseas students. It will limit student refunds to only the unspent portion of upfront fees paid. Other changes include limiting the amount of prepaid fees a provider can collect at one time to one period—that improves the integrity of the whole process from a financial point of view—requiring non-exempt providers to keep initial prepaid fees in a special account until a student commences their first study period. We want to make sure there is financial integrity in the scheme.

Before I close and before we reach 7 pm I want to congratulate the University of Queensland in my electorate for receiving $440,000 for research. They have received it from the federal government to fund an innovative research project at the Healthy Communities Research Centre based at the Ipswich campus. The research will focus on how changes in urban biodiversity affect our health, and it is just one of many projects undertaken by the University of Queensland's HCRC, better known for its headline project, 'The Ipswich Study'. That is an important step forward. The University of Queensland received over $38 million for 120 different projects in that funding. I want to congratulate the University of Queensland and the University of Southern Queensland for the work they do in my electorate, and for the way they treat international students. I commend this legislation to the House.