House of Representatives

Second Reading Speech

Mrs Andrews (McPherson-Assistant Minister for Vocational Education and Skills)

I move:

That this bill be now read a second time.

The Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017 gives effect to greater student protection measures and strengthens the arrangements for governing quality in the higher education and international education sectors.

This bill is a further plank in the Turnbull government's ongoing efforts to protect students and taxpayers from the unscrupulous behaviour that we have seen in the vocational education and training (VET) sector and prevent unethical providers from emerging in the higher education and international education markets.

Australia's international education sector is one of the strongest in the world. The quality and integrity of Australia's education providers has seen education become our single largest service export industry, worth $21.8 billion in 2016. The Turnbull government is committed to building on Australia's success as a world leader in international education and is delivering on Australia's first ever National Strategy for International Education 2025.

The quality of our education services, and the quality assurance systems we operate, are critical in maintaining Australia's reputation internationally.

The government's higher education reform bill, introduced to parliament on 11 May 2017, will put the higher education sector on a more sustainable funding base into the future, and make the sector more transparent and responsive to student choice and market needs.

Our universities and non-university higher education providers will continue to flourish, to innovate, and to produce graduates equipped with the skills and knowledge they need to help Australia's businesses and economy grow and prosper.

However, we also have the unfortunate example of some unscrupulous providers in the VET sector to show what can happen if effective regulation and monitoring are not in place.

In the VET sector, unscrupulous providers were able to exploit students and the taxpayer for their own gain due to a funding system set up with minimal regulatory oversight.

VET FEE-HELP suffered serious design flaws that allowed unscrupulous providers and brokers to take advantage of vulnerable students, rip off taxpayers, and tarnish the reputation of Australia's high-quality training providers and the VET sector.

Many students in the higher education sector are not currently afforded the same protection from exploitation by providers, and higher education providers seeking to enter the sector are not subject to the same scrutiny as those in the VET sector. There is also opportunity in the international education sector to build on Australia's rigorous quality controls by delivering greater scrutiny of providers seeking registration to deliver education to international students.

The Turnbull government has decided to act now and apply similar measures in the higher and international education sectors to those recently enacted for VET to identify, monitor and prevent the sorts of unscrupulous behaviours by some VET FEE-HELP providers from tarnishing the reputation of Australia's international education and higher education sectors.

And of course, for the majority of providers who operate with integrity and in the best interest of their students, these measures will require little change.

Schedule 1 of the bill amends the Education Services for Overseas Students Act 2000 (the ESOS Act) to strengthen regulation and ensure our international education sector cannot become vulnerable to the actions of unscrupulous providers seeking to exploit students.

This bill enables the minister to make a legislative instrument setting out any additional matters for regulators to consider when assessing whether a provider is fit and proper to be registered to educate international students. This will allow the minister to adjust fit and proper requirements as needed, in response to emerging issues in the sector.

This provision will ensure the ESOS regulators are aware of the history of providers or individuals who have had action taken against them due to their unscrupulous behaviour, and who are now seeking registration in the international education sector.

For providers who are already registered, new provisions in the bill expand existing requirements that they notify the regulator of significant changes to their management or business practices. Providers must also notify the regulator where they become aware key personnel have any serious recent past convictions, or have had regulatory action taken against their previous approval to deliver government programs.

These provisions ensure individuals previously involved in dubious business practices will not go undetected if they move into influential positions within international education.

To expand the ability of the government to respond to emerging trends which indicate a potential risk to the integrity of the international education sector, this bill includes provisions that enhance the information sharing abilities of government agencies.

An enhanced ability to share information among enforcement agencies is a sensible, pragmatic action which will enable the government to monitor providers more effectively and proactively address identified concerns.

The measures in the bill also benefit prospective students by enabling information about the actions of education agents to be released to providers and the wider community.

Providers are already bound by a requirement not to use education agents who are dishonest or lack integrity in attracting prospective students to Australia.

This bill builds on that requirement by enabling the government to share information with providers about their agent's recruitment outcomes.

An additional measure in the bill allows this information to be published more broadly.

This will highlight the good work of the vast majority of agents, while providing greater transparency of the small number of agents who may not be providing good advice to students, resulting in poor outcomes for international students.

There are also minor administrative amendments to the ESOS Act to ensure providers have a 30-day timeframe to make late payments, in line with current government money collection practices.

This ensures the time frame for payment is appropriate, and that providers will not be automatically suspended due to non-payment.

Schedule 2 of the bill amends the Tertiary Education Quality and Standards Agency Act 2011(the TEQSA Act) to support the efficient operation of its regulatory regime.

The measures included in this bill are similar to those legislated in the VET sector last year.

The bill clarifies financial viability requirements and stipulates the extent of coverage of TEQSA's regulatory powers.

This bill introduces greater protection of Australian qualifications-requiring vocational education and training courses that lead to the awarding of diplomas, advanced diplomas, graduate diplomas and graduate certificates to be accredited under the TEQSA Act or under vocational education laws. There are also measures to enhance TEQSA's existing compliance capabilities, allowing TEQSA to implement more robust student protection mechanisms and more stringent application and reporting requirements on providers.

These include expanding the fit and proper person test for providers seeking accreditation, and expanding the scope of information TEQSA may consider when deciding whether or not to accredit a provider.

Additionally, TEQSA will require providers over a certain size to provide general purpose financial statements. To support this measure, the definition of a qualified auditor in the TEQSA Act has been amended.

The measures in this schedule also allow TEQSA to delegate its functions or powers to the chief executive officer.

The measures in schedule 3 amend the Higher Education Support Act 2003 to enhance the existing regulatory framework and mirror the sweeping changes made in the VET sector.

These reforms will only apply to bodies approved as higher education providers under section 16-25 of the Higher Education Support Act 2003, that is, non-university higher education providers. For practical purposes, this excludes universities operating in Australia. This reflects the fact that these measures are directed at reducing the risks to students and taxpayers associated with providers seeking to transition operations and/or students to the higher education sector following our reforms to VET student loan arrangements.

Separate arrangements under the government's higher education reform package will drive improved quality, transparency and accountability for universities.

The Department of Education and Training will continue to monitor applications, approvals and the amount and number of student loans accessed among all providers registered to offer FEE-HELP, and advise the government if there is a need to extend the measures in this bill.

By ensuring consistent standards apply to non-university higher education providers and private VET providers, we are preventing a transition to the higher education sector of the intolerable behaviour of a few unscrupulous providers we witnessed in the VET sector.

This bill allows the minister to exempt bodies established by a government, be it the federal government, or a state or territory government, from the body corporate requirements.

This is a minor amendment to correct a current anomaly, and will for example, allow organisations such as the Australian Federal Police and Bureau of Meteorology to deliver courses in their areas of expertise and offer FEE-HELP to remove the upfront tuition fees barrier subject to the necessary approvals.

This bill also introduces more rigorous tests for all providers applying to access FEE-HELP, similar to what was put in place last year in the new VET Student Loans program.

Under these measures, the minister can consider whether the provider has a proven history of successfully teaching the courses offered.

We are enhancing the fit and proper person test that providers are assessed against. Providers that fail to gain approval are excluded from reapplying for a six-month period.

For existing providers, those who currently access FEE-HELP, additional financial viability and transparency requirements are also included in this bill.

These arrangements are broadly consistent with requirements for VET Student Loans providers, legislated last year.

This bill provides scope for additional requirements around financial statements and providers' revenue sources to be included in the Higher Education Provider Guidelines as conditions a provider must meet to maintain their approval.

This schedule also applies student protection mechanisms currently available in the VET sector to students enrolled at non-university higher education providers.

The bill will prevent providers from creating barriers to withdrawal such as withdrawal fees.

If a student requests to be unenrolled, the provider must cancel their enrolment without requesting a punitive fee or binding the student in red tape until after the census date.

Additionally, cold-calling, the use of third-party contact lists and other unscrupulous marketing practices will be banned, as they are under VET Student Loans.

This bill will prevent the use of deceitful marketing, and apply penalties to those who fail to abide by these standards, consistent with the VET Student Loans arrangements passed by parliament last year.

Similar to requirements in place for VET Student Loans, we will ensure that FEE-HELP loans are only going to students who have requested them, and who are active and engaged in their course of study, and to those who are academically suited for the course in which they are enrolled.

Requiring providers to assess a student as academically suitable and limiting eligibility for FEE-HELP loans to those students who are genuinely studying will prevent vulnerable people from being signed up for courses they are not capable of completing and incurring debts they may not be in a position to repay.

In order to maintain eligibility for FEE-HELP at these higher education providers, students must also achieve and maintain a reasonable level of completion of units undertaken. The onus should be on both the provider and the student to achieve this-the provider to have high quality teaching and student support in place and the student to engage with the course requirements.

An important aspect of these changes is that they ensure non-genuine students, or those who were not eligible to incur the debt for academic reasons, are able to have their debts remitted.

The bill also triggers powers under the Regulatory Powers (Standard Provisions) Act 2014. This allows the department to monitor and investigate, and to apply enforcement provisions such as civil penalties, again mirroring arrangements for VET Student Loans.

This schedule also introduces measures to allow the Commonwealth to cap the amount of FEE-HELP assistance a provider is able to offer or restrict student numbers or courses for which they are able to offer FEE-HELP.

These measures will prevent artificial growth due to non-genuine student enrolments and allow the Commonwealth to act quickly if there is evidence that a provider is dishonestly trying to take advantage of the system.

Conclusion

Together, these vital measures represent an important insurance-and quality assurance-policy for our higher education and international education sectors, and are consistent with changes recently enacted in the VET sector.

The bill ensures that as we increase learning opportunities for overseas students and market opportunities for dedicated education providers, we also shut down opportunities for unscrupulous providers to harm the reputation of our education services.

By enhancing the protections in place for students, and strengthening the monitoring framework for international education providers and non-university higher education providers, we are avoiding another disaster like the failed VET FEE-HELP scheme. We will ensure that both the higher education and international education sectors maintain the highest standards of quality and integrity, for which we are internationally renowned.

I commend the bill.

Debate adjourned.