Bills Digest no. 59 2015–16
PDF version [680KB]
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.
James Griffiths, Social Policy Section
Leah Ferris, Law and Bills Digest Section
30 November 2015
Contents
The
Bills Digest at a glance
Purpose of the Bills
Structure of the Bills
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions—Streamlining Regulation Bill
Other provisions
Key issues and provisions—Registration Charges Bill
Concluding comments
Glossary
Date introduced: 17
September 2015
House: House of
Representatives
Portfolio: Education
and Training
Commencement: The
commencement date for each Schedule is provided for in section 2 of each Bill.
Links: The links to the Bills,
their Explanatory Memorandum and second reading speeches can be found on the
Bills’ home pages for the Education
Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015
and the Education
Services for Overseas Students (Regulation Charges) Amendment (Streamlining
Regulation) Bill 2015, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
What the Bills are
This Bills Digest relates to two Bills being:
- Education
Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015
(the Streamlining Regulation Bill)
- Education
Services for Overseas Students (Registration Charges) Amendment (Streamlining
Regulation) Bill 2015 (the Registration Charges Bill)
What the Bills do
- The
Streamlining Regulation Bill amends the existing Educational Services for
Overseas Students regulatory framework, including the Education Services for
Overseas Students Act 2000 (ESOS Act).
- With
the establishment of the Tertiary
Education Quality Standards Agency for higher education providers, and the Australian Skills Quality Agency for
vocational education and training providers, the Streamlining Regulation Bill
allows for greater clarity over ‘who does what’ in providing assurance for
Australia’s overseas education market.
- The
Streamlining Regulation Bill simplifies administrative arrangements. It allows
for the use of Ministerial directions in limited circumstances, provides an
internal review process, and enhances the role of the Tuition Protection Service (TPS)
Director to seek out, keep and share information with ESOS agencies as needed,
with resultant offences arising in the event of the provision of false or
misleading documents.
- The
Streamlining Regulation Bill also reduces existing regulatory requirements on
overseas education providers. These regulatory requirements were introduced by
the previous Labor government as part of reforms in 2010–11.
- The
Registration Charges Bill contains minor consequential changes to the entry to
market charge regime in the Education Services for Overseas Students
(Regulatory Charges) Act 1997.
How the Streamlining Regulation Bill works
- The
Bill creates a new concept, that of the ESOS agency. This ensures
each type of education provider can be properly approved by the appropriate
regulator. The ESOS agency is allowed to approve an education provider for a
period of up to seven years.
- The
Bill clarifies that the subordinate regulatory standards created under the ESOS
Act apply in the registration of providers and the monitoring of
registration compliance.
- A
new process of internal review is created so that providers may apply for an
administrative review of a regulator’s decision before the provider applies to
the Administrative Appeals Tribunal.
- The
Minister is granted new powers to give directions to the ESOS agency in regards
to their performance under the ESOS Act. This power is limited to ensure
the Minister does not interfere with the approval of a particular education
provider.
- Likewise,
the TPS Director is granted new powers to seek information from a provider
through a production notice, is allowed to retain documents for purposes under the
ESOS Act. These powers are supported by the creation of a new offence
involving the production of a false or misleading document.
- The
amendments remove existing aspects of the ESOS framework in relation to the
concept of a study period, the requirement for non-exempt
providers to hold student fees in a designated account, and the requirement for
providers to only receive 50 per cent of student fees at a time.
Why the Bill has been introduced
- The
Bills result from a 2014 policy commitment to reform the ESOS framework.
The purpose of the Education Services for Overseas
Students Amendment (Streamlining Regulation) Bill 2015 (the Streamlining
Regulation Bill) is to amend the Education Services for Overseas Students
Act 2000,[1]
(ESOS Act) and a number of other statutes to:
- clarify
the roles of regulatory authorities (ESOS agencies), as well as the Minister
and the Secretary, in the approval and monitoring of providers under the ESOS
Act
- ensure
the subordinate legislative instruments of the ESOS framework are taken into
account by decision makers and providers
- allow
for an internal review of decisions made by ESOS agencies, as well as a
recourse to appeal before the Administrative Appeals Tribunal
- provide
for Ministerial directions to ESOS agencies
- enable
the TPS Director to require the production of documents or information as may
assist with the performance of the TPS Director’s functions, and to retain
those documents for a set period
- create
a new offence should the document provided be false or misleading, with a
penalty of imprisonment for 12 months
- repeal
the concept of study period from the legislation, and the
associated requirement for providers to have written agreements with providers
stating the cost and duration of their study
- allow
students to choose to pay more than 50 per cent of their student fees up front[2]
and
- remove
the requirement for providers to place student fee revenue in a separate,
designated account.
The purpose of the Education Services for Overseas
Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015
(Registration Charges Bill) is to make minor consequential changes to the entry
to market charge regime in the Education Services for Overseas Students (Registration
Charges) Act 1997[3]
(ESOS Registration Charges Act).
The Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015 contains six Schedules:
- Schedule
1 streamlines existing provisions of the ESOS Act, the Education
Services for Overseas Students (TPS Levies) Act 2012,[4]
the National Vocational Education and Training Regulator Act 2011[5]
and the Tertiary Education Quality and Standards Agency Act 2011[6]
to allow for a more consolidated regulatory approach by ESOS agencies
- Schedule
2 creates a new process for internal review of decisions within the ESOS Act
- Schedule
3 amends the ESOS Act, the National Vocational Education and Training
Regulator Act and the Tertiary Education Quality and Standards Agency
Act to allow for Ministerial directions to be given to ESOS agencies in
certain circumstances
- Schedule
4 clarifies the role and powers of the TPS Director within the ESOS Act
- Schedule
5 specifies the deregulatory aspects of the proposed policy change within the ESOS
Act and
- Schedule
6 lists amendments in relation to transition and application of the changes
above.
The Registration Charges Bill has one Schedule the
amendments in which clarify the operation of the entry to market charge.
The ESOS Act and associated legislation is the
legal framework governing the responsibility of education providers towards
students who come to Australia on a student visa.
The ESOS legislative framework comprises the ESOS Act,
Education Services for Overseas Students Regulations 2001[7]
(ESOS Regulations), the National Code of Practice for Registration Authorities
and Providers of Education and Training to Overseas Students[8]
(the National Code) and the ESOS Registration Charges Act. The legislative
framework provides a nationally consistent approach to registering education
providers and sets out clear roles and responsibilities for providers wanting
to teach overseas students.
All approved providers are listed on the Commonwealth
Register of Institutions and Courses for Overseas Students[9]
(CRICOS). This is the official Australian Government website that lists all
Australian education providers to offer courses to people studying in Australia
on student visas and the courses offered—whether the course be in the nature of
schooling, vocational education and training (VET), English language
assistance, higher education, or other learning.
The principal objects of the ESOS framework are:
- to
provide tuition assurance, and refunds, for overseas students for courses for
which they have paid and
- to
protect and enhance Australia’s reputation for quality education and training
services and
- to
complement Australia’s migration laws by ensuring providers collect and report
information relevant to the administration of the law relating to student
visas.
Regulatory history
The single framework to safeguard overseas students was first
introduced by the Hawke government in the form of the Education Services for
Overseas Students (Registration of Providers and Financial Regulation) Act 1991.[10]
That Act was subsequently repealed and replaced by the ESOS Act.[11]
The history of the ESOS Act is one of ongoing
iterative reform. Following an independent evaluation in
2004–05, it was amended in 2006 and 2007 by the Howard government, which also created
a legislative instrument in the form of a National Code for providers.[12]
This was an attempt to set standards for the industry.
Following media exposés of unethical behaviour in the
sector, the Rudd government made further amendments in 2009.[13]
The 2009 amendments required the re‐registration of all institutions
registered on CRICOS by 31 December 2010, introduced two new registration
requirements to strengthen the education credentials of education providers,
and required providers to list the names of their agents and comply with any
regulations relating to them.[14]
In 2010, the government undertook to review the operation
of the ESOS Act. The review was chaired by the former Member of
Parliament, Bruce Baird, and resulted in 19 recommendations.[15]
The recommendations were implemented in stages, with three key tranches of
legislative amendments in 2010 and 2011.[16]
The changes included:
- a
single national register of all providers approved to offer education services
to overseas students
- a
risk-management approach to registration
- a
new Tuition Protection Service (TPS), paid through a levy on providers
- requirements
to place student fees in a separate account and to limit the amount of pre-paid
fees that may be collected, in order to make refunds to students more
convenient and reduce the financial exposure to the TPS and
- strengthening
record keeping obligations on providers.
These changes commenced in 2012.
Broad policy framework
The changes to ESOS should be seen as part of a series of
measures to strengthen Australia’s international education market and make it
more attractive to overseas students. These reforms take into account both its
export value for the Australian economy, and its cultural and diplomatic heft.
In the lead-up to the 2013 Federal election, the Liberal
Party announced its intention to establish ‘a new $100 million Colombo Plan
that will give Australian university students an opportunity to study in our
region to deepen our engagement with our neighbours’.[17]
Following the Coalition’s Federal election success, the incoming Minister for
Education, Christopher Pyne, referred to the New Colombo Plan in his first
speech to international education stakeholders, given in October 2013.[18]
Future policy commitments to streamline student visa
processing and develop a national strategy for international education were
also flagged at the time. The streamlined student visa processing was announced
in June 2015, with implementation by June 2016.[19]
A draft national strategy for international education has also been released
with a final strategy intended to be released in the second half of 2015.[20]
Basis of the policy commitment
In April 2014, Mr Pyne confirmed that the Department of
Education had been consulting stakeholders on changes to the Education Services
for Overseas Students framework.[21]
This was grouped with further reforms, such as streamlined student visa
processing, and reforming the governance of the Tertiary Education Quality and
Standards Agency (TEQSA), to reduce the regulatory burden on Australia’s
tertiary education sector and ensure it was not ‘at risk of being left behind’
in international rankings.[22]
Discussion paper
These consultations formed the basis of a discussion
paper, released on 1 October 2014.[23]
Submissions were open for a month. The discussion paper included the following
terms of reference for the review of ESOS:
- reducing
burdens on education institutions offering courses to international students by
ensuring government and statutory agencies request only the information they
genuinely need and use to ensure Australia’s education system is of the highest
quality and integrity
- ensuring
a more efficient registration process for education institutions by
streamlining domestic and international education standards and quality
assurance frameworks
- increasing
opportunities and flexibility for organisations to provide education in a
contemporary manner that meets the needs of international students and
- supporting
the student visa system.[24]
The discussion paper proposed 31 potential changes to the
ESOS framework, including the ESOS Act, National Code and various
Regulations which would achieve these aims.[25]
These included:
- streamlining
of decision making powers and removal of duplication or inconsistency across
regulatory agencies
- removal
of requirements to have a designated account and to not take more than 50 per
cent of tuition fees for a course before a student commences and
- reconsideration
of current statutory reporting timelines.[26]
Further consultation
Further submissions were sought in response to these
proposed changes, and further consultation was flagged in relation to a revised
National Code in late 2014 or early 2015.
A post-implementation review of the creation of the TPS in
December 2014 found it had ‘broad support’ from the industry while concerns
about ‘significant additional compliance workload’ as a result of its
introduction remained. The post-implementation review flagged the discussion
paper and associated processes to reform ESOS as a way of addressing these
concerns.[27]
Release of exposure draft
legislation
On 7 July 2015, the Department of Education and Training published
exposure draft legislation along with an explanatory overview on its website,
and laid out a month-long process for consultation.[28]
The Assistant Minister for Education and Training, Simon Birmingham, also formally
announced the release of the exposure draft legislation for consultation.[29]
The submissions in response to the exposure draft and the
preceding discussion paper have not been made publicly available on the
Department of Education and Training website.
Difference
The Bills which were introduced into the House of
Representatives on 17 September 2015 are not in exactly the same terms as the
exposure drafts. The substantive difference can be found in Schedule 5 to the
Streamlining Regulation Bill. The ESOS Act in its current form has a
prohibition on a student paying more than 50 per cent of their fees for a
course before the student has begun the course, save if the course is no more
than 24 weeks long.[30]
The exposure draft legislation contained a proposal which
would allow the student to request to pay more than 50 per cent, placing the
onus on the student or their representative.[31]
This was in line with options flagged in the relevant discussion paper. However,
the Streamlining Regulation Bill changes the duration of the exemption from 24
weeks to 25 weeks. According to the accompanying Regulatory Impact Statement,
this change reflects stakeholder feedback to the exposure draft legislation.[32]
Senate Standing Committees on
Education and Employment
The provisions of the Bills have been referred to the Senate
Education and Employment Legislation Committee (Education and Employment
Committee) for inquiry and report by 30 November 2015. Details of the inquiry
are available on the Committee’s website.[33]
Senate Standing Committee for the
Scrutiny of Bills
The Committee chose to make no comment on these Bills.[34]
No formal media release from the relevant non-government
party spokespersons or shadow ministry has been identified in relation to this
legislation upon its introduction to the House of Representatives.
In the second reading debate, the Shadow Assistant
Minister for Education and for Higher Education, Amanda Rishworth stated:
I will state from the outset that Labor offers reserved
support for this legislative package but does remain concerned with several of
the specifics of the bills ... We are absolutely willing to support reducing
unnecessary red tape, but what we do not want to see is the watering down of
protections for our international students and, indeed, of those protections
that would threaten international education, which is our big export industry...[The
ALP] does reserve its right to make amendments in the Senate if needed.[35]
Representatives of the Australian Greens, the Palmer
United Party and independent members did not make a formal contribution to the
debate in the House of Representatives according to Hansard.
Industry stakeholders are generally supportive of the
changes on the basis that they remove burdensome regulation from their work.
Rod Camm, Chief Executive Officer of the Australian Council for Private
Education and Training, said:
The proposed changes to Australia’s Education Services for
Overseas Students (ESOS) legislation will give Australia’s Education sector a
real chance. By reducing unnecessary regulation, providers will be able to get
on with the task of growing the sector and providing quality education to
students from around the world.[36]
Similarly, Anne-Marie Lansdown, Deputy Chief Executive of
Universities Australia stated that:
Compliance is now at a point where certain provisions are
actually limiting student choice and the capacity of education providers to
provide the best options for their students ...These bills address the concerns
head-on and will allow universities to focus on what they do best, delivering
an international education experience of uncompromising quality.[37]
Organisations representing students and their interests
have not been supportive of the proposed reforms in Schedule 5 to the Streamlining
Regulation Bill.
The National Tertiary Education Union argued the Bills
should not be proceeded with ‘in their current form’ as the existing
legislation provides ‘very important safety net provisions introduced in 2012’
which should not be removed.[38]
In their response to the initial discussion paper, dated
October 2014, the Council of International Students Australia (CISA) endorsed
the administrative and technical changes, but did not support the removal of
the 2012 requirements on providers.[39]
CISA further expressed a view that the reform process at that stage focussed on
the education providers and not on the students who were protected under the
ESOS framework:
ESOS is meant to be consumer protection legislation and
international students are the consumers defined within the Act. As with the
consultation process itself, the perspective of students seem to have not been
considered in detail.[40]
The cost of the system changes required to implement the
administrative reforms has been estimated at $0.4m.[41]
There is no financial impact associated with the clarification of the entry to
market charge.[42]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bills’ compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[43]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights examined
the Bill and stated that ‘[the Bills]... do not require additional comment as
they either do not engage human rights or engage rights (but do not promote or
limit rights)’.[44]
Overview
Broadly two key issues have emerged in the commentary and
policy basis which have still not been explicitly addressed by the Government
in these Bills or the accompanying Explanatory Memoranda:
- the
fragmented regulatory environment and
- the
proposed ‘audience’ for the reforms.
Education services for overseas students can cover a
variety of educational providers in different sectors—that is, schools,
vocational education and training institutions, or higher education
institutions such as universities. Those overseas students may be attending on
a full- or part-time basis, seeking a formal qualification or undergoing
English language training. The institutions they attend may be private or
public institutions in nature. Currently, each sector has a different
regulatory authority.
The amendments in Schedule 1 to the Streamlining
Regulation Bill attempt to clarify this by creating the administrative concept
of the ESOS agency for an educational provider.[45]
Rather than being a singular agency, proposed section 6C of the ESOS
Act prescribes the ESOS agency for each type of provider as
follows:
- for
a registered higher education provider the ESOS agency will be
TEQSA
- for
a registered VET provider the ESOS agency will be the National VET
Regulator (currently ASQA)
- for
an approved school provider the ESOS agency will be the Secretary
and
- for
a person or entity that provides an ELICOS or a Foundation Program, or for any
other provider or registered provider, the ASOS agency
will be determined by the Minister by legislative instrument.[46]
Where a provider falls into more than one
class of providers (that is, provides both higher education and school courses)
the Minister may determine what the ESOS agency or agencies will
be for that provider.[47]
Providers must apply directly to their ESOS agency for
registration, for renewal of registration and to add courses at one or more locations
to an existing registration.[48]
Item 11 of Schedule 1 to the Streamlining
Regulation Bill repeals the current definition of designated authority.[49]
Currently, in order to be registered to deliver education services to overseas
students an organisation must first be approved by the designated
authority. The designated authority ‘is determined by the sector and jurisdiction
a provider operates in’.[50]
For registered higher education providers the designated authority is TEQSA,
for registered VET providers the designated authority is ASQA and for approved
school providers the designated authority will be the Department of Education. The
creation of the ESOS agency concept, and the streamlining of the
current registration and monitoring of providers by vesting of powers directly in
ASQA and TEQSA as the relevant ESOS agency, means that these
agencies will no longer need to be classed as designated authorities. However,
the important role of the states and territories is retained in relation to
school providers, which will be classed in the revised ESOS Act as designated
state authorities.[51]
Key issue: possible inconsistency of
application
The ESOS agency concept simplifies the existing
fragmented regulatory environment rather than unifying it. Under proposed
section 7A of the ESOS Act it will be for the relevant ESOS
agency to decide whether a provider or registered provider is fit and
proper to be registered.[52]
Proposed subsection 7A(2) sets out those matters to which the ESOS
agency must have regard in making that decision, including, for instance,
whether the provider or a related person[53]
of the provider has ever been convicted of an offence, whether a
condition has ever been imposed on the registration of the provider (or related
person of the provider) and whether the provider (or related person of the
provider) has entered into bankruptcy or insolvency.
However, it assumes the adequacy of existing regulatory
arrangements, which may be an issue. For instance, following numerous media
reports into the private VET sector, the Senate Standing Committee on Education
and Employment (Senate Committee) undertook an inquiry into the operation,
regulation and funding of private vocational education and training (VET)
providers in Australia. Private VET providers are a subset of those offering
educational services to overseas students. In its report, the Senate Committee
found:
... there is every reason to doubt that ASQA [the national
regulator for VET] is fit for purpose, and that the regulatory architecture of
VET may need a revamp.[54]
ASQA provides a risk-management approach to its VET providers
and does not automatically audit them or assess the quality of their
educational offerings or performance of their staff. While this ensures a focus
on those providers with characteristics of high-risk, it also means regulators
have to constantly evolve their understanding of what these characteristics
are, and at times, may expose both the regulator and the student to an
inadequate understanding of the risk.
The Victorian Minister had previously raised concerns
about ASQA’s capacity to inform the Victorian government regarding its concerns
as to the fitness of certain private VET operators.[55]
The diverse nature of the education services sector would require the separate
regulators to work together and communicate adequately.
The effect of the Streamlining Regulation Bill is that those
providers offering VET courses will continue to be approved by ASQA, higher
education providers will continue to be approved by the Tertiary Education
Quality Standards Agency, and the Minister may determine, by legislative
instrument, the ESOS agency for an ELICOS, Foundation Program or
other provider of education services.[56]
If there are any issues with the regulatory capacity of these ESOS agencies,
this can be raised in the Parliament.
The ESOS agency for schools is the Secretary
of the Commonwealth Department of Education and Training.[57]
However, it is for the designated State authority to decide
whether an approved school provider is fit and proper to be registered. The Streamlining
Regulation Bill does not impose a duty on a designated State authority.[58]
The Streamlining Regulation Bill maintains a
risk-management approach in the regulation of providers and registered
providers. As each ESOS agency may interpret this risk-management
approach differently, as well as independently assess the relevant elements of
the ESOS framework in approving a given provider, there is scope for
significant inconsistency and quality issues in comparing providers. If a
provider is approved and listed on CRICOS, overseas students will simply know
that it complies with the ESOS framework—it may be possible for a provider to
do so and not provide a high quality of education, as completion rates or
objective auditing and assessment are not involved in ESOS approvals.
Key issue: compliance burden
The Innovative Research Universities (IRU) group has also
raised concerns with the fragmented regulatory approach. Each of its
constituent universities is also registered with the higher education
regulator, TEQSA. IRU argues that those institutions which have been regulated
by a given provider under their existing legislation should automatically have
approval to be registered as a CRICOS institution, rather than require separate
approval processes under the ESOS framework.[59]
This assumes that a given approved institution—say a
school, or a VET provider, or a university—does not require any further
assurance just because it is teaching overseas students. However, overseas
students may have different expectations regarding course information, quality
and refunds in case of institutional collapse. There may also be policy reasons
to consider the education services for overseas students sector separately,
because of the reputational damage to Australia’s economy more broadly. IRU’s concerns
go in part to the still fragmented nature of Australia’s education sector.
Ministerial directions
This could be addressed by the new power of Ministerial
direction contained in Schedule 3 to the Streamlining Regulation Bill.
Schedule 3 inserts proposed section 170C into the ESOS Act to
empower the Minister, by way of legislative instrument, to give a direction to
an ESOS agency in relation to its functions under the Act. In that case,
the ESOS agency must comply with the direction.[60]
However, the Minister is restricted from giving a direction about, or in
relation to, a particular provider.[61]
Section 159 of the NVETR Act is amended so that the National VET
Regulator is subject to a Ministerial direction under section 170C of the
ESOS Act.[62]
Section 135 of the TEQSA Act is similarly amended so that TEQSA is subject to
such a Ministerial direction.[63]
A direction made by the Minister is subject to disallowance and the Minister
may consult with the Immigration Minister about the giving of the direction.[64]
Key issue: school providers
These amendments allow a Minister to direct an ESOS agency
as to how it should perform its functions and help maintain consistency across
the different ESOS agencies. However, that does not overcome the inability of
the Streamlining Bill (for Constitutional reasons) to regulate school providers
in the same way as non-school ESOS providers. The requirement for the
Department to engage with the appropriate designated State authority for a
school provider would likely complicate monitoring and assurance.
The proposed ‘audience’ for the
reforms
The deregulatory provisions in Schedule 5 to the Streamlining
Regulation Bill remove key aspects of the previous Labor government’s reforms. Specifically,
the proposed amendments in Schedule 5 aim to:
- remove
the existing requirement on all providers to report all instances of student
default within five days
- amend
the current restriction on education providers receiving more than 50 per cent
of tuition fees for a course (if course longer than 24 weeks) before the
student commences the course
- remove
the requirement for non-exempt providers to maintain an account in which all
tuition fees paid prior to commencement are held (designated account) and
- remove
the definition of study period and removal of requirement to enter into an
agreement with every overseas student setting out study periods and tuition
fees.
Reporting defaults
Currently registered providers are required to notify the
Secretary and the TPS Director in the event that an overseas student or
intending overseas student defaults in relation to a course provided by the
provider.[65]
Where a provider fails to provide this information within five business days,
the Minister may impose sanctions for non-compliance (such as imposing
conditions, or suspending or cancelling a registration).[66]
Registered providers are also required to notify the Secretary and the TPS
Director as to whether a refund was provided to the student who defaulted
within seven days after the end of the provider obligation period.[67]
The Explanatory Memorandum argues that these notification requirements ‘are
burdensome and duplicative’.[68]
Items 14, 16 and 17 of Schedule 5 to the Streamlining Regulation Bill
have the effect of removing the requirement for providers to report on a
student defaulting in every case and instead provide that reports are only
required to be given where an overseas student, or intending overseas student,
defaults and there is a requirement under section 47E of the ESOS Act for
the provider to issue a refund. Section 47E of the ESOS Act relates to
cases where a student’s visa has been refused or where the provider has not
entered into a written agreement as required by the ESOS Act.
Tuition fees
Division 2 of Part 3 of the ESOS Act sets out the
requirements for providers in relation to tuition fees paid by overseas
students. Currently the legislation imposes some limits of the amount of
tuition fees a provider can receive from a student before the student commences
their course and requires providers to deposit all received tuition fees in a designated
account. Items 3, 7 and 8 of the Schedule 5 to the Streamlining
Regulation Bill will remove the restriction on a provider receiving more than
50 per cent of tuition fees for a course where the course is longer than 24
weeks. The amendments also allow providers to request students to pay
instalments on tuition fees at any point (previously providers had to wait
until two weeks before the course commenced).[69]
Concern has been raised about how this amendment interacts
in practical terms with another policy area. It has been pointed out that ‘the
ability for students to deposit substantial sums into their university accounts
may attract unscrupulous transactions and avoid the scrutiny of other
Australian agencies tracking fraud’.[70]
In view of this risk, it has been suggested that ‘scope should be given to
education providers to limit payment amounts’.[71]
Item 9 of the Streamlining Regulation Bill removes
the requirement for providers to hold all tuition fees received before a
student commences in a designated account.[72]
The Government has outlined how the proposed amendments will benefit providers:
Removing the requirement for a designated account will ensure
fairer competition between public and private providers of international
education, and enable them to invest the fees collected in improvements that
will enhance the quality and delivery of the course. It will also allow those
providers greater flexibility in managing their administration of the course.[73]
The Explanatory Memorandum notes that ‘while the
designated account requirement was introduced to reduce risk to the TPS, its
removal is countered by only minimal changes to the 50 per cent limit on the
collection of tuition fees before a student commences a course’.[74]
As the Streamlining Regulation Bill proposes to remove the 50 per cent limit on
collection fees (as discussed above) this statement is puzzling. In the event a
provider is unable to deliver a course, the TPS ensures students are either
able to complete their studies in a different course or with a different
education provider, or receive a refund of their tuition fees.[75]
While the ESOS agency can choose to impose additional safeguards in relation to
providers considered to be a high risk, the ultimate effect of the removal of
these provisions may be that the TPS is required to step in more often where
providers fail to deal with tuition fees payments appropriately and are unable to
refund those fees when required.
Written agreements
Under section 22 of the ESOS Act, providers are
required to enter into a written agreement with each student which sets out the
length of the study period of the course and the tuition fees for
each study period. A study period cannot be longer than 24 weeks.[76]
Item 6 of Schedule 5 to the Bill repeals section 22 to remove both of
these requirements.[77]
The Explanatory Memorandum notes that the provisions requiring the setting up
of a written agreement are already contained within the National Code and that
there is, therefore, no need for them to also be contained in the ESOS Act.[78]
While the Explanatory Memorandum specifically states that the requirement for
providers to disclose tuition fees and study periods will not be removed, the
National Code is a legislative instrument and therefore any amendments will not
undergo the same level of Parliamentary scrutiny as amendments to the ESOS
Act.[79]
The National Code also contains a definition of study
period, though it differs from the period prescribed under the ESOS Act.
The National Code defines a study period as a discrete period of study within a
course, namely term, semester, trimester, short course of similar or lesser
duration, or as otherwise defined by the registered provider as long as that
period does not exceed six months.[80]
The Explanatory Memorandum provides the rationale for preferring the definition
in the National Code being that the definition set out in the ESOS Act
(less than 24 weeks) does not always align with the periods of study offered by
overseas education providers.[81]
As CISA has pointed out in the discussion paper process,
these measures are based on a broad assumption that what is good for providers
under the ESOS framework will be inherently good for the students.
As there have not been significant industry failings since
the amendments made to the ESOS framework under the Rudd and Gillard
governments, it is possible to assume these regulatory measures were successful
in preventing further disruption to international students. However, without
clear evidence as to what they actually achieved and whether they changed
provider behaviour, it is difficult to ascertain what case should be made for
their retention or removal.
Internal review process
Schedule 2 to the Streamlining Regulation Bill introduces
a new internal review process in regards to certain decisions made by delegates
of ESOS agencies.[82]
Currently, section 176 of the ESOS Act lists those decisions
made by the Secretary,[83]
the TPS Director[84]
and the Minister[85]
that are subject to merits review by the Administrative Appeals Tribunal (AAT).
Item 7 of Schedule 2 to the Streamlining Regulation Bill repeals that
section.
Instead, item 5 inserts proposed Part 7A—Review
of Decisions into the ESOS Act. The new Part 7A sets out those
decisions which are reviewable decisions in table form.[86]
A provider may choose to have a reviewable decision which has
been made by a delegate of an ESOS agency reviewed internally.[87]
Where a provider has chosen to have a decision internally reviewed and is not
satisfied with the findings of the internal review, the provider can then seek
to have the internal review decision reviewed by the AAT.[88]
The Explanatory Memorandum states the amendment is intended to reduce the cost
and time associated with an immediate and direct appeal to the AAT.[89]
However cost and time are not the sole considerations in having a quality
assurance scheme. In its submission to the Education and Employment Committee
inquiry into the Streamlining Regulation Bill, the University of Sydney
suggested that the ‘internal review within the ESOS Agency be undertaken by a
separate by a dedicated unit to ensure transparency of process. Without this, any
legislative reference might serve as a token gesture’.[90]
Proposed subsection 169AE(1) of the ESOS Act
allows for the ESOS agency to either review the decision itself or to allow for
a delegate of the agency to review the decision.[91]
The review must be conducted within 90 days and the person conducting the
internal review may confirm, vary or set aside the original decision (in the
latter case, the person can make such other decision as he or she thinks
appropriate). The Explanatory Memorandum notes that these amendments have ‘been
requested by ASQA and TEQSA, in order to provide similar appear processes for
providers under the ESOS Act to those available in the TEQSA Act
and the NVETR Act’.[92]
Expansion of TPS Director’s powers
Schedule 4 to the Streamlining Regulation Bill amends the ESOS
Act to allow for the TPS Director to:
- make
a recommendation to an ESOS agency that enforcement action be taken against a
provider
- issue
a production notice to an education provider and
- have
a TPS officer assist them in their duties.
Item 3 inserts proposed paragraph 54B(fa)
into the ESOS Act so that the TPS Director is empowered to recommend
that an ESOS agency take one or more actions against a registered provider
where he, or she, believes that the provider might not be able to provide
courses or refund amounts to its students.[93]
Item 5 of Schedule 4 to the Streamlining Regulation Bill inserts proposed
subsection 83(1AA) to place an obligation on the ESOS agency to consider
any recommendation made by the TPS Director under proposed paragraph 54B(fa).
Currently if the TPS Director requires information about a
provider’s performance he, or she, is unable to issue a production notice and
must instead request a delegate of the Secretary to issue one on his, or her,
behalf. Item 8 of Schedule 4 to the Streamlining Regulation Bill
inserts proposed section 113A into the ESOS Act which provides
that where the TPS Director reasonably believes that an individual of a
registered provider has information or documents relevant to the TPS Director’s
functions under the ESOS Act, the TPS Director can issue a written
notice requiring the individual to give, show or make copies of the information
or documents.[94]
Entry to market charges
Under the ESOS Registration Charges Act a provider
who is a registered provider on 1 January of a year is liable to pay an annual
registration charge for the year.[95]
The Registration Charges Bill makes minor changes to the ESOS Registration Charges
Act by repealing and replacing section 6 which sets out the amounts that a
provider is required to pay by way of entry to market charges. The effect of
the amendment is to ensure that an education provider registered under the ESOS
Act pays all entry to market charges but is not charged more than once if
its registration period is less than two years and it seeks renewal.
The administrative changes in Schedules 1–4 to the
Streamlining Regulation Bill appear to be a useful update, although they do
highlight the often difficult nature of Australia’s regulatory system for
educational services. Quality concerns may be ameliorated by the increased
capacity of the Minister to ensure a consistent approach to regulation across
ESOS agencies.
Overall, measures in the Bills reduce the current
regulatory burden on providers, assuming quality will continue regardless. With
the capacity of regulatory agencies such as ASQA under current scrutiny, the
Bills represent a missed opportunity to establish a unified education services
sector.
|
AAT
|
Administrative Appeals Tribunal
|
|
ASQA
|
Australian Skills Quality Authority
|
|
CISA
|
Council of International Students Australia
|
|
CRICOS
|
Commonwealth Register of Institutions and Courses for
Overseas Students
|
|
ELICOS
|
English Language Courses for Overseas Students
|
|
ESOS Act
|
Education Services for Overseas Students Act 2000
|
|
National Code
|
National Code of Practice for Providers of Education and
Training to Overseas Students
|
|
NVETR Act
|
National Vocational Education and Training Regulator
Act 2011
|
|
TEQSA
|
Tertiary Education Quality Standards Agency
|
|
TEQSA Act
|
Tertiary Education Quality and Standards Agency Act
2011
|
|
TPS
|
Tuition Protection Service
|
|
VET
|
Vocational education and training
|
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Education
Services for Overseas Students Act 2000, accessed 27 November
2015.
[2]. Payment
of more than 50 per cent of student fees up front is currently prohibited.
[3]. Education
Services for Overseas Students (Registration Charges) Act 1997,
accessed 27 November 2015.
[4]. Education
Services for Overseas Students (TPS Levies) Act 2012, accessed
27 November 2015.
[5]. National
Vocational Education and Training Regulator Act 2011, accessed
27 November 2015.
[6]. Tertiary
Education Quality and Standards Agency Act 2011, accessed 27
November 2015.
[7]. Education
Services for Overseas Students Regulations 2001, accessed 27 November 2015.
[8]. Department
of Education and Training (DET), National
Code of Practice for Registration Authorities and Providers of Education and
Training to Overseas Students, DET website, accessed 27 November 2015.
[9]. Department
of Education and Training (DET), Commonwealth
Register of Institutions and Courses for Overseas Students, DET website,
accessed 27 November 2015.
[10]. Education
Services for Overseas Students (Registration of Providers and Financial
Regulation) Act 1991 (as passed), accessed 27 November 2015.
[11]. For
details on the background to these changes see: C Kempner and N Hancock, Education
Services for Overseas Students Bill 2000 [and other related Bills],
Bills digests, 62–66, 2000–01, Department of the Parliamentary Library, Canberra,
2000, all accessed 13 October 2015.
[12]. Parliament
of Australia, Education
Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill
2006 homepage, Australian Parliament website; Parliament of Australia, Education
Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill
2006 homepage, Australian Parliament website; and Parliament of Australia, Education
Services for Overseas Students Legislation Amendment Bill 2007 homepage,
Australian Parliament website, accessed 29 November 2015.
[13]. For
instance, N O’Malley, ‘Tenth
school for overseas students collapses’, Sydney Morning Herald, 7
November 2009, p. 5; H Gilmore and N O’Malley, ‘Review
to bring overseas students’ industry to account’, The Age, 14 August
2009, p. 9, accessed 29 November 2015.
[14]. For
an outline of these amendments see: C Kempner, Education
Services for Overseas Students Amendment (Re‐registration of Providers
and Other Measures) Bill 2009, Bills digest, 28, 2009–10, Parliamentary
Library, Canberra, 2009, accessed 13 October 2015.
[15]. B
Baird, Stronger,
simpler, smarter ESOS: supporting international students—Review of the
Education Services for Overseas Students (ESOS) Act 2000: final report
(Baird Review), report prepared for the Department of Education, Employment and
Workplace Relations (DEEWR), Australian Education International, Canberra,
February 2010, accessed 13 October 2015.
[16]. For
further information on the Gillard government reforms to ESOS, see C Kempner, Education
Services for Overseas Students Legislation Amendment Bill 2010, Bills
digest, 40, 2010–11, Parliamentary Library, Canberra, 2010; C Dow, Education
Services for Overseas Students (Registration Charges) Amendment Bill 2011 [and]
Education Services for Overseas Students Amendment (Registration Charges
Consequentials) Bill 2011, Bills digest, 32–33, 2011–12, Parliamentary
Library, Canberra, 2011; C Dow, Education
Services for Overseas Students (Registration Charges) Amendment (Tuition Protection
Service) Bill 2011 [and] Education Services for Overseas Students Legislation
Amendment (Tuition Protection Service and Other Measures) Bill 2011 [and]
Education Services for Overseas Students (TPS Levies) Bill 2011, Bills
digest, 95, 2011–12, Parliamentary Library, Canberra, 2012, all accessed
13 October 2015.
[17]. See
Liberal Party of Australia and The Nationals, The
Coalition’s policy for foreign affairs, Coalition policy document,
Election 2013, accessed 13 October 2015.
[18]. C
Pyne (Minister for Education), New
architecture for international education: opening speech to the Australian
International Education Conference: Canberra, speech,
9 October 2013, accessed 14 October 2015.
[19]. C
Pyne (Minister for Education and Training) and M Cash (Assistant Minister for
Immigration and Border Protection), Simplified
student visa process to boost Australia’s international education sector,
media release, 16 June 2015, accessed 11 August 2015.
[20]. C
Pyne (Minister for Education and Training), Harnessing
the knowledge boom: putting international education at the heart of Australia's
future prosperity, media release, 1 April 2015, accessed
2 November 2015.
[21]. C
Pyne (Minister for Education), Address
to the Association for Tertiary Education Management, South Australia,
speech, 9 April 2014, accessed 14 October 2015.
[22]. Ibid.
[23]. C
Pyne (Minister for Education), Education
Services for Overseas Students (ESOS) Review, media release,
1 October 2014, accessed 14 October 2015.
[24]. See
Department of Education, Reform
of the ESOS framework, Discussion paper, Department of Education,
Canberra, 30 September 2014, p. 5, accessed
14 October 2015.
[25]. Ibid.
[26]. Ibid.
[27]. Department
of Education, Tuition
Protection Service post-implementation review, report prepared for the
Office of Best Practice Regulation within the Department of Prime Minister and
Cabinet, Department of Education, Canberra, December 2014, pp. 27–8,
accessed 1 November 2015.
[28]. Department
of Education and Training (DET), ‘ESOS Bill
exposure draft,’ DET website, 7 July 2015, accessed
20 October 2015.
[29]. S
Birmingham (Assistant Minister for Education and Training), ‘Reducing
red tape for Australia’s international VET sector’, media release,
7 July 2015, accessed 20 October 2015.
[30]. For
the current prohibition, see Section 27, Education Services for Overseas Students
Act 2000, accessed 1 November 2015.
[31]. Department
of Education and Training, Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015: exposure
draft, schedule 5, item 13, accessed 1 November 2015.
[32]. Department
of Education and Training, Regulation
impact statement: Proposed changes to the Education Services for Overseas
Students framework, Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015, p. 25, accessed 1 November 2015.
[33]. Senate
Education and Employment Legislation Committee, ‘Inquiry
into the Education Services for Overseas Students Amendment (Streamlining
Regulation) Bill 2015 and the Education Services for Overseas Students
(Registration Charges) Amendment (Streamlining Regulation) Bill 2015 homepage’,
Parliament of Australia website, accessed 24 November 2015.
[34]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 11, 2015, The Senate, 14 October 2015, pp. 8–9, accessed
24 November 2015.
[35]. A
Rishworth, ‘Second
reading speech: Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015, Education Services for Overseas Students
(Registration Charges) Amendment (Streamlining Regulation) Bill 2015’,
House of Representatives, Debates, 15 October 2015, p. 11361,
accessed 2 November 2015.
[36]. Australian
Council for Private Education and Training, International
education policy change enhances industry quality, media release,
17 September 2015, accessed 1 November 2015.
[37]. Universities
Australia, Legislation
will cut red tape and strengthen international education, media
release, 17 September 2015, accessed 1 November 2015.
[38]. National
Tertiary Education Union, New
Education Minister Birmingham faces first real test, media release,
13 October 2015, accessed 1 November 2015.
[39]. CISA,
CISA
response to ESOS reform: reform of the ESOS framework discussion paper,
CISA, Melbourne, 31 October 2014, p. 6, accessed
2 November 2015.
[40]. Ibid.,
p. 2.
[41]. Explanatory
Memorandum, Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015, p. 7, accessed 3 November 2015.
[42]. Explanatory
Memorandum, Education Services for Overseas Students (Registration Charges)
Amendment (Streamlining Regulation) Bill 2015, p. 2, accessed
3 November 2015.
[43]. The
Statement of Compatibility with Human Rights can be found at pp. 9–15 of the
Explanatory Memorandum to the Education Services for Overseas Students
Amendment (Streamlining Regulation) Bill 2015.
[44]. Parliamentary
Joint Committee on Human Rights, Twenty-ninth
report of the 44th Parliament, October 2015, p. 1 [para 1.7].
[45]. Item
12 of Schedule 1 to the Streamlining Regulation Bill inserts the definition
of ESOS agency into section 5 of the ESOS Act.
[46]. Item
29 of Schedule 1 to the Streamlining Regulation Bill inserts proposed
section 6E which contains the definition of provider.
[47]. ESOS
Act, proposed subsection 6C(3).
[48]. ESOS
Act, proposed Part 2—Registration of Providers, inserted by item 32
of Schedule 1 to the Streamlining Regulation Bill.
[49]. Existing
section 7A of the ESOS Act which sets out the meaning of designated
authority is repealed by item 30 of Schedule 1 to the
Streamlining Regulation Bill.
[50]. Department
of Education and Training, ‘ESOS
Framework: Provider registration’, DET website, accessed
13 November 2015.
[51]. Explanatory
Memorandum, Education Services for Overseas Students Amendment
(Streamlining Regulation) Bill 2015, p. 11; Item 12 of Schedule 1 to the
Streamlining Regulation Bill inserts a new definition of designated State
authority.
[52]. Item
30 of Schedule 1 to the Streamlining Regulation Bill inserts proposed
section 7A into the ESOS Act.
[53]. Proposed
subsection 7A(3) of the ESOS Act defines a related person
of a provider or registered provider as an associate of the provider who has
been, is or will be, involved in the business of the provision of courses by
the provider, or a high managerial agent of the provider.
[54]. Senate
Standing Committee on Education and Employment, Getting
our money's worth: the operation, regulation and funding of private vocational
education and training (VET) providers in Australia, The Senate,
Canberra, October 2015, accessed 2 November 2015.
[55]. J
Ross, ‘VET
info withheld, Victoria claims’, The Australian, 26 August 2015, p.
32, accessed 3 November 2015.
[56]. ESOS
Act, proposed subsections 6C(1) (table item 4) and 6C(2).
[57]. ESOS
Act, proposed subsections 6C(1) (table item 3).
[58]. ESOS
Act, proposed section 7AA., inserted by item 30 of the Streamlining
Regulation Bill.
[59]. Innovative
Research Universities, Consultation:
Proposed ESOS Legislation: IRU Response, 7 August 2015, accessed
2 November 2015.
[60]. ESOS
Act, proposed subsection 170C(4).
[61]. ESOS
Act, proposed subsection 170C(2).
[62]. Item
2 of Schedule 3 to the Streamlining Regulation Bill.
[63]. Item
3 of Schedule 3 to the Streamlining Regulation Bill.
[64]. ESOS
Act, proposed subsection 170C(5).
[65]. ESOS
Act, section 47C.
[66]. See
Part 6, Division 1 of the ESOS Act, Division 1 of Part 6.
[67]. ESOS
Act, section 47H. Sections 47D and 47E set out the circumstances where a
refunded needs to be provided. Under subsection 47E(3) of the ESOS Act,
the refund must be paid within the provider obligation period which
is four weeks from the default day.
[68]. Explanatory
Memorandum, p. 84.
[69]. ESOS
Act, subsection 27(3).
[70]. University
of Sydney, Submission
to DET, Education Services for Overseas Students Amendment (Streamlining Regulation)
Bill 2015 and Education Services for Overseas Students (Registration Charges)
Amendment (Streamlining Regulation) Bill 2015: exposure drafts, University of
Sydney, p. 10.
[71]. Ibid.
[72]. Items
13, 15 and 18 repeal notes in sections 46D, 47D and 50C of the ESOS Act
as a consequence of the repeal of sections 28–32 of the ESOS Act.
[73]. Explanatory
Memorandum, p. 83.
[74]. Ibid.
[75]. Tuition
Protection Service (TPS), ‘Student
TPS overview’, TPS website, accessed 12 November 2015.
[76]. Subsection
22(3), ESOS Act.
[77]. Item
2 of Schedule 5 to the Bill repeals the definition of study period
from section 5 of the ESOS Act as a consequence of the repeal of
section 22.
[78]. Explanatory
Memorandum, pp. 81–82.
[79]. Ibid.,
p. 82.
[80]. National
Code of Practice for Registration Authorities and Providers of Education and
Training to Overseas Students, p. 29.
[81]. Explanatory
Memorandum, p. 82.
[82]. Appealable
decisions include: refusal of initial registration, refusal of renewal of
registration, refusal to add a new course at a location.
[83]. ESOS
Act, sections 9AB, 9AC, 9AD, 9AE, 9AF and 9AG.
[84]. ESOS
Act, section 53A.
[85]. ESOS
Act, sections 9AD and 9AF, subsection 46A(4), section 83 and subsections
89(2), 89A(2) and 95(3).
[86]. ESOS
Act, proposed section 169AB.
[87]. ESOS
Act, proposed sections 169AD and 169AE.
[88]. ESOS
Act, proposed section 169AG.
[89]. Explanatory
Memorandum, p. 4.
[90]. University
of Sydney, Submission,
op. cit., p. 7.
[91]. Proposed
paragraph 169AE(1)(b) provides that the delegate cannot be the same
delegate who was originally involved in making the decision and must be
employed in at least the same level of position as the delegate who made the
decision.
[92]. Explanatory
Memorandum, p. 70.
[93]. Subsection
83(3) provides that the following actions can be recommended: to impose conditions
on the registered provider’s registration either generally or in respect of any
one or more specified courses, or to suspend or cancel the registered
provider’s registration for any one or more specified courses.
[94]. The
information or documents must be provided/shown to a TPS Officer.
Item 2 of the Bill defines a TPS Officer as APS employee
in the Department who assists the TPS Director in the performance of the TPS
Director’s functions or a consultant engaged by the TPS Director under section
54L of the ESOS Act.
[95]. Education
Services for Overseas Students (Registration Charges) Act, subsection 5(1).
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