Important reforms to international education (03/11/2011)

08 January 2013

international-students-smile.jpgThe Federal Government is pressing ahead with important reforms to the international education sector, says Stephen Jones MP.

INTERNATIONAL EDUCATIONis one of Australia's most important industries. It is our third-largest exporter earner, providing Australia with annual revenues of more than $16 billion.

The strength of Australia's international education offering is built on the strength of Australia's domestic education sector. The quality of the services we are able to provide to international students is possible because of the quality of our domestic educationour domestic education institutions go hand in hand with the quality of the education we offer to Australian students.

The international education sector makes a very substantial contribution to the health of our education system and is a major Australian economic and social success story.

I know of the importance of the sector because in my own region, the Illawarra, we have a highly successful university, the University of Wollongong. I am a graduate of that university and I have seen over the last 25 years how the international student sector has contributed to the university. Today it attracts students from more than 140 countries, and as of December 2010 the University of Wollongong had over 27,000 international students enrolled at its onshore and offshore campuses.

Not only that, the University of Wollongong is a major driver of regional development within the Illawarra. It is now one of the largest non-government employers in the region, with a total contribution to the regional economy exceeding $1 billion in 2010.

That compares very favourably with another sector that attracts far more attention, the tourism sector, which contributes around $700 million per annum to the local regional economy.

The University of Wollongong is a world leader in international education services, and like many other universities across the country it provides opportunities for international students to come to a safe and prosperous country, a beautiful region, and to benefit from our high educational standards.

Australia has one of the highest proportions of international students in our higher education system of any country in the world. International education has played a critical role, particularly in the region in assisting with 'soft diplomacy', and has enhanced Australia's interrelationships with our Asian neighbours.

However, despite this good news story there is no doubt that Australian international education has faced significant challenges in recent years. There has been unprecedented growth in the sector; between 2007 and 2009 the average annual enrolment growth in international education services was around 18 per cent.

This was driven primarily by VET sector enrolments, where the annual rate of growth exceeded 45 per cent in both 2007 and 2008. Had that trend continued we would have seen more than one million international students studying in Australia next year.

In and of itself that is not a bad thing, but it does put enormous stress on many of the ancillary services and requires mechanisms in place to ensure that we have quality standards in place.

The rapid expansion of the VET sector, in particular, was driven in large part by migration policy changes introduced under the previous government. During that timein a matter of just a few yearshundreds of so-called colleges were set up across the nation purporting to offer high-quality education services.

The reality, however, was that, while there were many good ones, many were offering purely migration outcomes rather than quality education services, and there was a backlash against this. The consequence of this unsustainable growth was that we saw the financial collapse of too many of these colleges, leaving students stranded and without the qualification that they had worked, studied and paid for.

The result of this unfettered and largely unregulated growth was significant damage to 'brand Australia' in the international education market.

The international education sector is now going through a period of readjustment after several years of unprecedented growth. Several factors have impacted on the sector in recent times, including the global financial crisis in some countries, increased competition in the education market, the high Australian dollar and changed student visa arrangements.

The Gillard government is committed to a sustainable, high-quality international education sector, and greatly values its contribution to the Australian economy.

Key to the government's program of reform was the work of the Baird review of the Education Services for Overseas Students Act. This review identified the need to restore confidence in the sector and to remove those providers who were not performing.

The government acted on the recommendations to protect the sector and to protect students.

The first step was to strengthen the registration criteria for international education providers and to demand the re-registration of providers under stronger criteria by the end of 2010. Those who could not demonstrateor who chose not to try to demonstratethat education was their principal purpose and that they had the capacity to deliver education services to a satisfactory standard were removed from the register. Some 1,100 providers met the criteria for re-registration and around 200 providers left the sector.

Around 20 per cent of VET providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students exited the system. That number was highest in Victoria, where almost a quarter of all providers did not re-register.

The government also introduced a risk management approach to the regulation of providers and extended the jurisdiction of the Commonwealth Ombudsman to include students of private registered providers.

Importantly, we strengthened the integrity of student visas by decoupling skilled migration from international educationan important cornerstone of our reforms which remains in place today.

Following the release of the Baird review on 9 March 2010, the government agreed to begin work on consulting and implementing a number of recommendations. In April this year, the first phase of amendments to the ESOS Act were enacted. This included better complaints handling, further strengthening registration requirements and introducing a risk management approach to the regulation of international education.

The bill before the House today is the second phase of the government's response to addressing the remaining recommendations made by the Baird review.

The centrepiece of the response is reforms to strengthen tuition protection to ensure that students are looked after in a timely and effective way should their provider close.

These reforms comprise:

  • the introduction of the Tuition Protection Service, or TPS, which will incorporate a TPS director,
  • a TPS advisory board, an overseas student tuition fund and an online information and access service for overseas students;
  • limiting student refunds to the unspent portion of upfront fees that have been paid by the individual student;
  • limiting the amount of pre-paid fees a provider can collect at any one time to one study period and requiring non-exempt providers to keep initial pre-paid fees in a special account, rather like a trust fund, until the student commences their first study period;
  • and, finally, requiring providers to strengthen their record-keeping processes relating to students' contact details and academic progress.

The other main reform being introduced is national streamlined registration and regulation, which will reduce duplication and effort as well as better targeting regulatory resources to improve monitoring and enforcement, providing greater support to providers operating across a number of locations.

Central to the legislation before the House today is the single agency, the Tuition Protection Service, to safeguard the interests of students if a provider closes.

It will be a single contact point for students, with one set of fees for providers and with greater accountability. All providers who offer international education will be required to contribute in a way that reflects the underlying risk of default.

The Labor government is delivering on the education and skills needs of this country. The government is commitment to skills training.

Skills training was the centrepiece of this year's budget, in which we announced a $3 billion investment in skills and training to address the skills shortages being experienced by industry.

Labor's budget investment placed industry at the centre of our efforts to target skills and training and respond to the pressures of the patchwork economy.

The bill before the House today is part of a broad matrix which demonstrates our commitment to skills and to the education sector. It demonstrates that we understand the interrelationships between our vocational education and training sector, our school sector and our university sector in the provision of high-quality education and training to Australian students, as well as the international offering that we provide to this most valuable export industry: the overseas education services market.

In conclusion, international education is and will continue to be an important driver of Australia's prosperity. It is an important part of the government's commitment to build a world-class education system.

This government's record investment, as well as our attention to ensuring we have the right regulatory framework to drive a quality agenda, will ensure that Australia will be in the forefront of the education system domestically and within the region in the years to come.

I commend the legislation to the House.

Speech to Parliament, 3 November 2011 - Second Reading - 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