Bills Digest no. 13 2006–07
Education Services for Overseas Students Legislation Amendment
(2006 Measures No.1) Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Financial implications
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Education Services for Overseas
Students Legislation Amendment (2006 Measures No.1) Bill
2006
Date introduced: 31 May 2006
House: House of Representatives
Portfolio: Education, Science and Training
Commencement: 1 January 2007
The Bill amends the Education Services for Overseas Students
Act 2000 and the Education Services for Overseas Students
(Registration Charges) Act 1997 to strengthen and clarify the
consumer protection aspects of the regulatory framework that
governs the provision of education and training to overseas
students.
The provision of education and training
to overseas students in Australia is a responsibility shared by
the Commonwealth and the State and Territory governments. The
States and Territories have primary responsibility for the quality
control of education providers and their courses and exercise this
through their processes of approving, registering and monitoring
providers and their courses.
The Commonwealth s interest is in protecting the reputation of
this $7 billion per year export industry(1), maintaining
the integrity of the migration program and protecting the interests
of overseas students as consumers.
The regulatory framework therefore involves Commonwealth and
State/Territory legislation, administrative oversight by the
Commonwealth Department of Education, Science and Training (DEST)
and the Commonwealth Department of Immigration and Multicultural
Affairs (DIMA) and State/Territory education and training
authorities.
The
Education Services for Overseas Students Act 2000
(ESOS Act) and associated legislation is the legal framework
governing the responsibility of education providers to overseas
students who come to Australia on a student visa in the higher
education, vocational education, secondary school or English
language sectors. The associated legislation is the Education
Services for Overseas Students (Registration Charges) Act 1997,
Education Services for Overseas Students Regulations 2001 and
the National Code of Practice for Registration Authorities and
Providers of Education and Training to Overseas Students (National
Code). (2)
The ESOS Act introduced substantial changes to the
Commonwealth's arrangements for strengthening the regulatory
arrangements of education services to overseas
students.(3)
The arrangements under the ESOS Act include:
- provisions for the registration of education providers and
their courses on the Commonwealth Register of Institutions and
Courses for Overseas Students (CRICOS)
- the compulsory membership by providers of a tuition assurance
scheme
- contributions by providers to an assurance fund to ensure that
there are funds to pay for student tuition in cases of provider
collapse
- reporting obligations on providers for example in relation to
disclosure of provider activities such as previous breaches or
breaches of associates, and in relation to student breaches
- a compulsory national code which sets standards and benchmarks
for providers and their courses in order to qualify for
registration and which serves to guide States and Territories in
their approval, registration and monitoring activities
- compulsory compliance with the national code, and sanctions for
being in breach of both the Act and the National Code, and
- Commonwealth powers to investigate providers; impose sanctions
and remove non bona fide operators from the industry.
Section 176A of the ESOS Act required an independent evaluation
of the operation of the Act within three years of Assent. The
evaluation commenced in May 2004 and reported in June 2005. The
evaluation team concluded that
The architecture of the quality benchmarks
represented by the ESOS framework is sound: standards for providers
of education and training that are mandatory and operate
nationally; a cooperative national regulatory model; the
characterisation of the student-institution relationship in
consumer terms; and the integration of export education and
migration policy.(4)
However the evaluation team made 41 recommendations to improve
the framework s effectiveness. Many of the recommendations require
changes to the National Code. Others require amendments to the ESOS
Act and related legislation. The amendments in the Bill are the
first stage implementation of some of the evaluation s
recommendations. Consultation is still taking place on the proposed
changes to the National Code. Those and other changes have been
flagged as amendments to be submitted in the spring sittings.
Financial implications
The Explanatory Memorandum states the Bill will be Budget
neutral and will not increase costs to the Commonwealth or the
education export industry. However there are possible financial
implications for education providers in the strengthened
regulations implemented by the Bill.
The amendments are of a technical nature and
relate to the credentials of education providers and the
strengthening and clarification of consumer protection aspects of
the regulatory framework.
The main amendments are usefully summarised at
page 2 of the Explanatory Memorandum. Some of the following
descriptions of the main provisions are based on this summary.
Only providers who are registered on the
Commonwealth Register of Institutions and Courses for Overseas
Students (CRICOS) are able to offer education and training to
overseas students. Providers must firstly satisfy state and
territory government laws. However the Federal Government retains
the final power to register a provider on CRICOS and must be
satisfied they comply with the ESOS legislation. Providers must
demonstrate they are fit and proper to be registered.
The ESOS Act evaluation noted inconsistencies in
interpretation of the term associate in the fit and proper person
regulations and recommended enhancing the fit and proper person
test (Recommendation 9).
Items 1, 5, 6, 7-12, 15-16, 20 and
23 of the Bill deal with extending the fit and proper test
to high managerial agents who represent the provider in relation to
the business of providing courses. Sections 9, 11, 17 and 83 of the
ESOS Act will now apply to high managerial agents, in the same way
these provisions currently apply to associates of providers.
Item 24 provides for automatic
suspension of a provider s registration where the provider no
longer meets the fit and proper test during their registration. It
allows the Minister to impose sanctions against a registered
provider if the Minister believes on reasonable grounds that the
provider is not fit and proper to maintain registration.
Item 26 implements
recommendation 14 of the ESOS Act evaluation by allowing for the
automatic suspension of the registration of a provider who fails to
pay the Annual Registration Charge (ARC) by the due date. The
suspension will be removed on payment of the amount owing, any late
payment penalty and the reinstatement fee.
Item 8 requires that the initial
registration charge be paid before registration. This requires a
consequential amendment to the Education Services for Overseas
Students (Registration Charges) Act 1997.
Item 25 requires that the
reinstatement fee is paid before the removal of the suspension of,
or a condition on, the registration of a provider. Item 25 provides
for notification and reinstatement procedures similar to those in
section 89, but the decision to allow removal of a suspension or
condition must now be notified to the provider.
A high managerial agent as defined in new section
5 means an employee, agent or officer of the provider with duties
of such responsibility that his or her conduct may fairly be
assumed to represent the provider in relation to the business of
providing courses. The Explanatory Memorandum gives examples as
officers with management responsibility, teachers, consultants and
principals of the provider. According to the Minister, extending
the fit and proper test to high managerial agents will prevent
former providers with an adverse history in the industry from
taking up positions of influence with other providers
.(5) The Minister states that in introducing these
amendments, my Department has been mindful of the need to avoid
unnecessary regulation .(6) However although the
extension of the fit and proper test may provide further guarantee
of the credentials of registered providers it may prove onerous for
large providers such as those in the higher education sector with
high staff numbers.
Item 13 implements
recommendation 10 of the ESOS Act evaluation by clarifying that
where a registered provider is involved in the delivery of a course
with another provider, course money may be received and disbursed
by one of the other providers, as long as there is an agreement in
writing which allows this. However, the registered provider is
deemed responsible, as if the money had been paid to the registered
provider.
Item 14 clarifies that the
Tuition Assurance Scheme (TAS) coverage now relates to each course
that a provider offers to overseas students.
Item 18 clarifies that, in the
event of provider default, a provider is relieved of its obligation
to offer a student a refund if the student accepts an alternative
course offered by the provider at their own expense, or a suitable
alternative course through their TAS. The student must accept the
offer in writing.
Item 19 requires that a provider
who is unable to meet their refund obligations inform the Secretary
of the Department of Education, Science and Training as well as the
ESOS Assurance Fund Manager.
Item 34 implements
recommendation 25 of the ESOS Act evaluation by extending the
Secretary s authority to give information obtained for the purposes
of the ESOS Act to tuition assurance schemes and persons listed in
the regulations.
These provisions are largely technical and should have a minimal
regulatory impact whilst strengthening the consumer protection
aspects of the framework.
Concluding comments
With the exception of the extension of the fit and proper test
to high managerial agents , the provisions in the Bill are largely
of a technical nature and result from recommendations made in the
evaluation of the ESOS Act.
- The economic benefits of international education to Australia
are now estimated to be around $7.5 billion of which $6.9 billion
is from spending by onshore students. See: Department of Education,
Science and Training, Annual Report 2004-05, p.113.
- See
Easy guide to ESOS on the Department of Education, Science and
Training website:
http://www.dest.gov.au/sectors/international_education/policy_issues_reviews/key_issues/esos/easy_guide_to_ESOS.htm
.
- For details on the background to these changes, see Bills
Digest, Nos. 62-66, 2000-01.
- PhillipsKPA and LifeLong Learning Associates,
Evaluation of the Education Services for Overseas Students Act
2000 (Australian Education International, Department of
Education, Science and Training, Canberra 2005), p. xxxiii.
- Julie Bishop, Second Reading Speech, Debates, 31 May
2006, p.7.
- ibid.
Dr Coral Dow
Social Policy Section
11 August 2006
Bills Digest Service
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ISSN 1328-8091
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