Committee Stage, Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011, Education Services for Overseas Students (Registration Charges) Amendment (Tuition Protection Service) Bill 2011, Education Services for Overseas Students (TPS Levies) Bill 2011
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (18:46): I thank Senator Rhiannon for her contribution. I do not think there is any disagreement here about the board needing to be representative. We have not actually specified in the bill the cohorts that would be represented, and this amendment, Greens amendment (4), seeks to add one particular group—that is, the ELICOS group—without actually considering the others.
We have not gone for something that is prescriptive—that says that there must be one representative of this and one representative of that. So I cannot support the amendment in its current form, in the sense that it just specifies one group and other groups will say, 'Well, why aren't we specified in the bill?' What I would suggest is that either I am going to have to oppose it and say that this is naturally what we will do, that my intention would be to have a cross-sector representative group, or, having looked at the amendment, I would be happy to support the amendment if the senator was prepared to move it with a full stop at the end of 'sector' and not put 'including providers of English language intensive courses for overseas students'—on the understanding that they, of course, would be one of the groups represented. But under this amendment only one of them is named and the others are not named. So the intent I agree with—that it be broadly representative—and, if the senator is prepared to drop that last bit out of the amendment, I will accept the amendment. That would give her a broad policy intent, which is to have recognised that we need a broader group with a range of experiences. But I do not think we should just name one group that ought to be representative without thinking about the overall balance.
So if the senator is prepared to do that, to put a full stop where the comma is before the last bit, I am prepared to accept the amendment; otherwise, I will have to oppose the amendment.
Senator RHIANNON (New South Wales) (18:48): I seek leave to amend Greens amendment (4) on sheet 7193 by deleting all words after 'sector' and replacing the comma after 'sector' with a full stop.
The TEMPORARY CHAIRMAN ( Senator Fisher ): The question is that Greens amendment (4), as amended, be agreed to.
Senator RHIANNON (New South Wales) (18:48): I would like to make a brief comment. Thank you, Minister, for making that suggestion as a way forward. You spoke about the different cohorts, and I thought that it might be useful to get on the record a clarification. I understand that you did specify the need for providers of English language intensive courses to be one of those cohorts. If you could share with us, so it is on the record, what those cohorts are that should be represented, I think it would be useful.
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (18:49): Thank you, Senator Rhiannon. The reason I objected to the last part of your original amendment is that we have not done that consideration and I was not able to be clear yet which groups ought to be represented—so I did not want to do that on that run. Clearly, your amendment, which will now become part of the bill and hopefully the act, provides for people having 'qualifications or experience relevant to the operations of providers from across the international education and training sector'. So it will be representative of the various sections across that—obviously, university, VET, private and public—but I do not want to try on the run to define those things.
I can give you an assurance that someone with experience in the ELICOS area would need to be part of that, and we will work our way through the group. But, clearly, by the insertion of this clause it has to be representative of the breadth of the sector, and I am quite happy to indicate that ELICOS is an important part of the sector and it will need to be part of that representative group.
Senator MASON (Queensland) (18:50): I again thank Senator Rhiannon. The opposition agrees that the minister should, of course, in appointing the board ensure that people appointed do have a great knowledge and understanding of the sector. So you are quite right, Senator Rhiannon. I am sure that the minister's undertaking is heartfelt, and the opposition, of course, will be supporting this amendment.
The TEMPORARY CHAIRMAN: The question is that Greens amendment (4), as amended, moved by Senator Fisher, be agreed to.
Question agreed to.
Senator RHIANNON (New South Wales) (18:51): by leave—I move Greens amendments (5) to (23) on sheet 7193 in globo:
(5) Schedule 3, item 2, page 90 (line 10), after "tuition fees", insert "and accommodation fees".
(6) Schedule 3, item 4, page 91 (line 1), after "tuition fees", insert "and any accommodation fees".
(7) Schedule 3, item 5, page 92 (line 12), after "begun the course", insert ", or accommodation fees in relation to a study period before the student has begun the study period,".
(8) Schedule 3, item 5, page 92 (line 25), after "begun the course", insert ", or accommodation fees in relation to a study period before the student has begun the study period,".
(9) Schedule 3, item 5, page 93 (line 6), after "tuition fees", insert "and accommodation fees".
(10) Schedule 3, item 5, page 93 (line 8), after "tuition fees", insert "or accommodation fees".
(11) Schedule 3, item 5, page 93 (line 23), at the end of subsection 29(4), add:
; or (d) the amount is withdrawn to make a payment directly related to the provision of accommodation to a relevant student.
(12) Schedule 3, item 5, page 93 (line 24), after "Tuition fees", insert "and accommodation fees".
(13) Schedule 3, item 5, page 94 (after line 10), after paragraph 30(a), insert:
(aa) accommodation fees for a study period for a course received by a provider, in respect of an overseas student or intending overseas student, before the student has begun the study period; or
(14) Schedule 3, item 6, page 95 (line 14), after "tuition fees", insert "or accommodation fees".
(15) Schedule 3, item 7, page 96 (line 3), before "The amendments", insert "(1)".
(16) Schedule 3, item 7, page 96 (after line 7), at the end of the item, add:
(2) The amendments made by this Schedule apply in relation to any accommodation fees for a study period for a course that are received, after Division 1 of Part 1 of this Schedule commences, by a registered provider, in respect of an overseas student or intending overseas student, before the student has begun the study period.
(17) Schedule 4, heading, page 97 (line 1), at the end of the heading, add "and accommodation fees".
(18) Schedule 4, page 97 (after line 3), before item 1, insert:
1A Section 5
(a) means fees a provider receives, directly or indirectly, from:
(i) an overseas student or intending overseas student; or
(ii) another person who pays the fees on behalf of an overseas student or intending overseas student;
that are directly related to the provision of accommodation to the student; and
(b) without limiting paragraph (a), includes any classes of fees prescribed by the regulations for the purposes of this paragraph; and
(c) without limiting paragraph (a), excludes any classes of fees prescribed by the regulations for the purposes of this paragraph.
(19) Schedule 4, item 5, page 98 (line 2), after "tuition fees", insert "and accommodation fees".
(20) Schedule 4, item 6, page 98 (line 4), after "tuition fees", insert "or accommodation fees".
(21) Schedule 4, page 98 (after line 8), after item 8, insert:
8A At the end of subsection 21(1)
Add "or any accommodation fees for a study period for a course provided by the provider".
(22) Schedule 4, item 11, page 99 (line 3), before "The amendments", insert "(1)".
(23) Schedule 4, item 11, page 99 (after line 5), at the end of the item, add:
(2) The amendments made by this Schedule apply in relation to any accommodation fees for a study period for a course that are received by a registered provider after this item commences.
Some of these issues were canvassed in the discussion that we had when we considered Senator Xenophon's amendment. The Greens have taken a somewhat different approach but it does deal with the same issue, which is largely about accommodation costs that international students incur when they are in our country.
The Greens do believe that this should be a key aspect of these bill s . What we are dealing with here is protection of overseas students to ensure their unexpended tuition fees are available for refund should their education provider default on course provision. W e are arguing that the protection does need to go further, because there is nothing in these bills to protect students when they pay other upfront substantial fees, such as accommodation fees to pro viders—and that does happen. The s e can disappear if there is a shonky provider. There have been examples of that—and, sadly, we know there will be further examples. A key issue here is that there needs to be some measure of protection in this legislation.
We propose amending the bill to afford prepaid accommodation fees the same protection as tuition fees. That is the question that the minister does need to answer here. Except for our item 11, where providers can draw down below the protected amount in order to make advance payments to accommodation suppliers , and may do so before a course commences, that protection does need to be in place.
I would put to senators that these amendments recognise the reality of paying upfront accommodation bonds and rent while ensuring the money is used only for accommodation, which is what the student has paid for. Again, the essence of this is about protecting the upfront money students have paid—in this case, in the main for accommodation. I f we are willing to put protection in place for tuition fees, why do we not give greater certainty and confidence to students who come here? As Senator Xenophon said, so many families make enormous sacrifice s for their children and their loved ones to come and study in this country. Surely we need to be rebuilding the reputation of our education services. At the moment, this legislation goes only part of the way to achieving that. If this protection is not put in place, it again suggests that the providers are having too much say in how this government brings forward legislation.
I would very much like to hear from the minister. Obviously I hope that the government will support these amendments. From previous comments made by Senator Feeney before Senator Evans arrived, it was set out that the issue of accommodation costs would not be picked up in the legislation. Why have we got two ways of handling the issue between tuition costs and accommodation costs if that is the way that the government is going to go?
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (18:55): I think the first thing to say, Senator Rhiannon, is that this is a policy response to the concerns about protection of tuition fees. That is the first answer. The second answer is: as I understand it, the issues you raise have not been raised in the debate around the bills in the committee inquiry, s o I have been quite surprised by Senator Xenophon 's and your focus on this. These are not issues that have been raised with me in recent times. It is of course factually the case that while there are some people who accept accommodation packages as part of the student's tuition and enrolment processes, the majority do not. This is not an issue that has been at the forefront of anyone's attention in recent times. We did, I understand, have one bad case where a provider with those sorts of arrangements in place did become insolvent.
This is not an issue that has been consulted on. We have had a consultative process with people and we have had the committee inquiry. We would now be saying, 'By the way, we are going to add in this major change to the legislation.' Normally people say to me, 'You have not consulted enough,' but if the parliament is going to say, 'Throw this in the mix as well' and 'By the way, it is also going to pick up those issues,' I think that is not a good way to do business. Secondly, the financial implications of this have not been costed. I do not know what this would cost the Commonwealth. I think this is not the appropriate response to a problem which you say exists but which has not been generally talked about nor generated concern.
I am obviously concerned that we get the best system we can in place. This is the last of a whole set of reforms responding to the Baird review and the terrible situation that developed in the international student area a couple of years ago. As you know, as immigration minister at the time I took a keen interest in these issues, because I think a lot of bad practice had developed with a small number of providers. We have done our best to clean it up both from the immigration end and the education end. I think things are vastly improved, but we have got to constantly be vigilant about these issues; because, as I said earlier, this is about 'brand Australia'. Every time there is a bad student experience it impacts on all providers and on Australia's international reputation. So as well as the impact on the student there is the impact on the international education sector.
One of the things we have done is to set up the Chaney committee, which is reviewing the international education sector to make sure we have got a more holistic view of how that sector is managed, of government's engagement with the sector and where we see that sector going in the longer term. It is a very large industry; it is a huge export earner for Australia, and we have never thought about it in those terms. I think that the rapid growth without any structure around the actual industry led to some of the problems we have seen. Hopefully the Chaney report will give us that context. I understand that Senator Feeney, on my behalf, gave an assurance about reviewing the impact of the issues around accommodation that you raise. I am happy to do that. If there is a genuine problem, we will address it. I indicated that I am happy to address any issue that is there, but this is not something that has been raised with me. It is not something that was raised beyond the Baird process or in the committee inquiry. So I am not inclined to say, on the run, that we ought to do this without consulting anybody—without clear evidence of a problem or what you suggest is the solution. I am happy to take the issue seriously and to see what we can do to analyse if there is a problem, what is the problem, and what might be a policy response. We will put the assurances we gave in place, and obviously I will find a mechanism for reporting back to the Senate about how that is going. If there is a problem, I am happy to address it.
Senator RHIANNON (New South Wales) (19:00): Minister Evans, could you inform the Senate when the review will report back, and any other aspects that you would envisage the review would take?
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:00): I am doing this a bit on the run because it was only today that I was informed that people saw this as a big issue. It is not something that anyone has been raising with me since I have been in the portfolio.
We will be able to do that by the end of the year. I am happy to set the wheels in motion. We have not had submissions on this and we have not had people raising it with us, but I will get the department to get out there. I just said to the department for Senator Feeney to represent me in saying we are happy to take it up, and if there is a problem we are happy to address it. I do not have an announcement in terms of the review, but I am happy to let you know.
We will put something in place that allows us to go out and test the waters, and to see whether this is a big issue, or what the aspects of the issue are. I will write to each of the senators with an interest in the matter when I have had a look at how best to do that. I am sorry I cannot be more helpful. As I said, this was raised with me this morning, but we have undertaken to do a review and I will write to you in the next week or two about how I intend to conduct that, once I have worked it out.
Senator XENOPHON (South Australia) (19:01): Firstly, I indicate my support for this amendment. Whilst it is quite a different approach to the approach in my amendment it still covers the same principle, in a sense; that is, what do you do in circumstances that go beyond where there is a loss of accommodation expenses, particularly prepaid expenses? I understand the government's position, and that was also traversed in my amendment with Senator Feeney, but my question to the minister is, is there any scope at the moment in this bill to cover a loss that a student may sustain as a result of prepaid accommodation expenses? In other words, is there any capacity for that student, who has paid accommodation upfront in addition to tuition fees, to receive some form of recompense or compensation?
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:02): The answer is no. It is not designed to pick up accommodation, air fares, medical expenses or any of the range of other expenses a student might incur in coming to Australia. It is designed as a tuition payments protection scheme. It does not pick those other matters up.
It is the case, though, that we have the capacity to make some decisions about a particular provider based on risk. That potential is there. One could conceivably make a decision that a particular provider or set of providers should not be accepting payment for accommodation because they are seen as being of risk, but I am not sure how successful or appropriate that would be. I am not suggesting it as a policy response, just that there is some capacity there. But no, the bill is not designed to pick up this question of accommodation.
As I said, it has not been raised with me in recent times and it has not been raised as part of the committee process, so it has come as a bit of a surprise to me that there is so much focus on it. I am happy to go out there and see how big the problem is. I have no idea, for instance, how many providers actually provide accommodation packages as part of that provision. I have no idea how many people have been affected in the past. It raises the question of what happens if someone then transfers to another provider. There is a whole lot about this proposition that you and the Greens are advancing that, quite frankly, I do not think we know enough about. I am unwilling to accept amendments when no-one has raised it with me and no-one has provided any evidence in recent times about this issue. I just do not think we have the factual understanding to move to implementing legislation regarding the issues being raised. As I have given an undertaking to do the review, if Senator Xenophon, Senator Rhiannon or anyone else has issues, examples or experiences they want to bring to our attention I would be happy to receive them, because that would give us some context.
Senator XENOPHON (South Australia) (19:04): I appreciate the minister's undertaking to look at this, but I think it is fair to say that it is not as though this matter is one that has come as a total surprise. When part of this tranche of bills was dealt with a year or two ago there was an amendment about the minister's discretion to deal with issues, which Senator Hanson-Young co-sponsored with me. It is not as though it has come entirely out of the blue, but I understand what the minister has said, and I agree with him about the Baird review process.
The intention for this amendment, as with my amendment, Senator Rhiannon's amendment and the Australian Greens' amendment, is to give a higher degree of certainty and comfort to overseas students in the event that something goes wrong. We cannot take it any further, but I can indicate again my support for this amendment.
Senator MASON (Queensland) (19:05): I assure both Senator Rhiannon and Senator Xenophon that the opposition is not opposing either of their amendments this evening reflexively—not at all. We are not doing it on behalf of education providers or anyone else. It comes down to balancing the regulatory and financial burden that providers would suffer versus the consequential projections for students and, indeed, the uncertainty of how much it would cost, and what the cost impost would be on providers.
It is really a matter of us not having the information. It is certainly fair to say that the proposal by Senator Rhiannon on behalf of the Greens is an extension of an insurance scheme for fees that is not provided in other, similar contexts. For that reason, the opposition will not be supporting this amendment.
The TEMPORARY CHAIRMAN ( Senator Fisher ) (19:06): The question is that amendments (5) to (23) on sheet 7193, moved by Senator Rhiannon, be agreed to.
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:08): I move government amendment (5) on sheet ZA281:
(5) Schedule 3 , item 5 , page 91 (line 23) to page 92 (line 6) , omit subsections 27 ( 3 ) and ( 4 ), substitute:
Limit on when remaining tuition fees may be required
(3) Once an overseas student begins a course, the registered provider for the course must not require any of the remaining tuition fees for the course to be paid, in respect of the overseas student, more than 2 weeks before the beginning of the student's second study period for the course.
This amendment is to do with the limit on when remaining tuition fees may be required. We think this will clarify the legislative drafting on prepaid fees. It is an issue that was raised with us, and we are seeking to address it. It provides that up to 50 per cent of total course fees, or 100 per cent for a course of 24 weeks or less, can be paid upfront at any time before the course commences. Once a student has begun a course, the provider cannot require the student to pay any further tuition fees more than two weeks prior to the second study period. If a student chooses to pay earlier, there is no requirement for the provider to return the tuition fees to the student and they would not be found non-compliant. This will protect the interests of students and reduce refunds flowing to the TPS without imposing unworkable requirements on providers.
The changes will give greater clarity to the sector in understanding their obligations. There was concern raised about how clear this was in the legislation. This is designed to give that clarity and to reassure people of what their obligations are. So it is just a response to feedback we have had from people with an interest. There is no change to the rules, as it were; it is just to make it clear.
Senator MASON (Queensland) (19:09): I thank the minister for clarifying that.
Question agreed to.
Senator RHIANNON (New South Wales) (19:11): by leave—I move Greens amendments (1) to (8) on sheet 7192 in globo:
(1) Clause 4, page 2 (line 18), omit "registered".
(2) Clause 4, page 3 (line 1), omit "registered".
(3) Clause 4, page 3 (line 10), omit "registered".
(4) Clause 5, page 4 (lines 29 and 30), omit paragraphs (4)(a) and (b), substitute:
(a) the provider's administrative fee component for the year (see section 6);
(b) the provider's base fee component for the year (see section 7).
(5) Clause 6, page 5 (line 2), omit "registered".
(6) Clause 6, page 5 (lines 5 and 6), omit paragraph (b), substitute:
(b) $2 multiplied by whichever of the following applies:
(i) for a registered provider—the total enrolments for the provider for the previous year;
(ii) for a provider who is not yet registered—the likely total enrolments for the provider for the year (assuming the provider becomes registered).
(7) Clause 7, page 5 (line 10), omit "registered".
(8) Clause 7, page 5 (lines 13 and 14), omit paragraph (b), substitute:
(b) $5 multiplied by whichever of the following applies:
(i) for a registered provider—the total enrolments for the provider for the previous year;
(ii) for a provider who is not yet registered—the likely total enrolments for the provider for the year (assuming the provider becomes registered).
Statement pursuant to the order of the Senate of 26 June 2000
These amendments are framed as requests because they are to a bill which imposes taxation within the meaning of section 53 of the Constitution. The Senate may not amend a bill imposing taxation.
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
As this is a bill imposing taxation within the meaning of section 53 of the Constitution, any Senate amendment to the bill must be moved as a request. This is in accordance with the precedents of the Senate.
Senator RHIANNON: These amendments deal with a failure in the Education Services for Overseas Students (TPS Levies) Bill 2011 to bring new providers into the TPS levy. What we have right now is a system where new providers are effectively exempt, and that really is a major anomaly for legislation that is supposedly bringing in a tighter regulatory framework for how this industry operates.
I put it to my fellow senators that these amendments are essential. New providers really are at greater risk of defaulting, leaving students high and dry. How this works is that the administrative fees we are dealing with here are set at $100 plus $2 per enrolment for the previous year. The base fees are set at $200 plus $5 per enrolment for the previous year. But when it comes to new providers, clearly there is not a previous year. So what is happening is that they are being left out. How the system works is that new providers seeking registration are in effect exempt from the $2 and $5 per student components because they do not have a prior history of enrolments. You would have to say this is an absurd contradiction in risk assessment terms. Again, I would be interested to hear from the minister. How did they miss this out? Surely it can be easily solved—and that is what our amendments attempt to do.
As I understand it, new providers must already provide projected domestic and overseas student numbers with their application for CRICOS registration. So our amendment to this bill would ensure that new providers are also charged per student using their projected likely total enrolments to complete the calculation. So it really can be sorted out quite easily. It is a serious anomaly; it leaves out new providers. We all know that, when businesses first get going, it is more likely that they will default, that they will in some way fold. We also know that these new providers have to put forward their likely total enrolments. So let us use that to bring them into the current system with regard to the setting of administration fees. I look forward to the minister's comments about this, because surely it is an anomaly that needs to be fixed up.
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:14): The government cannot support this request for amendment. I think I understand what Senator Rhiannon is trying to do, but we are not able to support it. This amendment effectively puts a cost on providers before they have registered or have any enrolments, and somehow we have to estimate how many enrolments they are going to get and reconcile that. I am not quite sure what Senator Rhiannon would be trying to achieve by this amendment.
We do require new entrants to the market to pay a $7,500 entry fee as part of their registration process, but we do not require them to pay the TPS levy until they are effectively enrolling students. That is the logic of it—they have to get registered by following the normal processes to provide assurance about themselves as a provider, but they are not required to pay the TPS levy until 1 January when they are registered.
I think that what Senator Rhiannon's amendment does is say, 'You've got to pay the levy when you do not have any students.' But it is not clear how you are going to estimate and reconcile that. The system provides that they start paying the levy when they have students, and I think that that is a fairly sensible proposition.
Senator MASON (Queensland) (19:16): I join the minister. What concerns me about this amendment is that there could be unintended consequences arising from it for providers, particularly small providers who are setting up. That is why the opposition cannot support this amendment.
Senator RHIANNON (New South Wales) (19:16): I think we can probably wrap this up fairly quickly, but I would like to hear from the minister because I understand that these new providers have to put forward projected enrolments. On the basis of that, why aren't they brought into the system with regard to administrative fees? They are not going to be penalised by this amendment which really does create a fairer playing field and make the TPS levy more effective.
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:17): As I understand it, the registration may set a capacity limit, but it does not require projections. We do not know how many students are going to enrol. There is a limit on capacity, but we do not have information about how many students are going to enrol. You are asking us to charge people on the basis of the number of students that they may enrol, but we do not know the number. That is the bottom line, so we do not see that we can agree to the amendment request.
I appreciate that you are trying to be constructive, Senator Rhiannon, but the amendment does not seem to us to be practical and we cannot support it. I would appreciate it if we could get the bill passed this evening, because I think that would facilitate the business of the Senate.
The TEMPORARY CHAIRMAN: The question is that Senator Rhiannon's requests for amendments, Nos 1 to 8 on sheet 7192, be agreed to.
The TEMPORARY CHAIRMAN: The question now is that the bills be reported.
Question agreed to.
Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011, Education Services for Overseas Students (Registration Charges) Amendment (Tuition Protection Service) Bill 2011 and Education Services for Overseas Students (TPS Levies) Bill 2011 reported with amendments; report adopted.
Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Science and Research and Leader of the Government in the Senate) (19:19): I move:
That these bills be now read a third time.
Question agreed to.
Bills read a third time.