Andrew Leigh

I spoke in parliament yesterday about overseas students studying in Australia.

Education Services for Overseas Students (Registration Charges) Amendment Bill 2011, Education Services for Overseas Students Amendment (Registration Charges Consequentials) Bill 2011
Second Reading - House of Reps Hansard - 18 August 2011

The opportunity to study overseas is a unique one. I was fortunate myself to have the opportunity to study in the United States as an international postgraduate student. For me it was an invaluable experience. I learned about new subjects and to look at my own country with the perspective of an outsider. To adapt the cliché, Australia and the United States really are two countries separated by a common language. Cross-cultural relationships can have their advantages too, and my own international study experience gave me the life-changing opportunity to meet my wife, Gweneth.

It is important for Australia that we encourage international students to come here to study. International students are a vital part of our universities, and increasingly they are becoming an integral part of Australia's social and civic fabric. In my former career as an economics professor at the ANU, I had the privilege of guiding and supervising international students in their postgraduate studies, both masters students and PhD students. Drawing on the experience of students born overseas is something that I have continued through an internship program in my parliamentary office today. Only recently, Ruth Tay, an ANU economics student on a scholarship from the Singaporean government, worked with me analysing mental health policy and immigration policy. Those experiences and Ruth’s background opened my eyes to new perspectives on the issues. And I am sure Ruth will take back some of those ideas to her work in Singapore.

Teaching international postgraduate students, as an ANU economics professor, gave me the privilege of spending time with people from a wide range of backgrounds, cultures and perspectives. I learned a great deal from them, as I hope they did from me. Some examples were Cathy Gong, a Chinese student who completed her PhD in 2008 and has gone on to publish important work on education, intergenerational disadvantage and unemployment, working with NATSEM at the University of Canberra. Cathy and I, working Xin Meng, have even written a paper on intergenerational mobility in China.

Dinuk Jayasuriya, born in Sri Lanka, completed his PhD in 2010 and his first position was with the World Bank. He now works with the monitoring and evaluation operations for the World Bank's private sector arm in the Pacific. Dinuk’s research looked into issues such as microcredit and behavioural economics. Daniel Suryadarma, an Indonesian PhD student who works on poverty and the economics of education, is now a research fellow at the Australian National University. Students such as these have given a great deal to their fellow students and to the institutions in which they study. I expect they will all, over the course of their careers, make substantial contributions to the developing countries in which they were born. The contribution that these students make informs the issues that we are grappling with in this place.

The Gillard government is committed to ensuring the long-term sustainability of the international education sector. We want to protect Australia's reputation as a provider of international education that continues to attract and retain overseas students. My electorate of Fraser has a particularly large community of international students. There are 4,280 international students at the Australian National University and 2,481 at the University of Canberra. On top of this, the electorate of Fraser boasts campuses of the Canberra Institute of Technology, the Australian Catholic University and UNSW@ADFA. These students make a valuable contribution to local businesses, the local economy and academic research. They provide a kaleidoscope of cultural variety that we in the Fraser electorate enjoy.

In recent times there has been a slowing of growth in the sector that is related to the strong Australian dollar. Dutch Disease affects international education, as it affects tourism and manufacturing. But the fast and decisive action that this government took during the global financial crisis and our recognition of the Dutch Disease issues that can arise from a high Australian dollar have been important.

It is true—there is no getting away from it—that Australia is no longer as cheap an international education option as it once was, and that means that our higher education providers must compete on quality. Our sector is of high quality and we need to guarantee that it continues that way. We are placing higher fees and stricter requirements on new entrants into the international education market, and rewarding low-risk providers that have a proven track record of delivering quality education for international students. This bill ensures that our international education sector maintains its high reputation.

International education is an increasingly important part of the Australian economy. It is Australia's third-largest export. The number of international students studying here almost tripled from 2003 to 2010. The sector is now worth tens of billions of dollars to the Australian economy. I have already mentioned the factors that have influenced the sector in recent years. There are a number of challenges today—the stronger Australian dollar, the global downturn and increased competition in the global education market—but we have seen international enrolments in the Australian higher education sector continue to show modest growth.

The government is very focused on strengthening the regulation and consumer protection framework for international education. The sector is as diverse as the students in it. When we talk about the international education sector many people think of the private providers established to deliver training specific to the international market, but we sometimes forget that schools, TAFEs and public universities are also included in that sector. The range of education courses offered to international students includes everything from a year 12 certificate to a PhD. International students contribute enormously to the learning experience of local students in the classroom and outside the classroom. The diverse backgrounds that come into a lecture theatre make it such a rich experience.

Problems arise in the international student market when we start allowing high-risk providers into the market with little regulation or allow them to continue to operate when we know that they have a history of not meeting their regulatory requirements. It is in no-one's interest in this sector to have a market dominated by high-risk providers. Students are not offered certainty about the ongoing existence of their provider. Parents are not offered certainty about the investment that they have made in their child's education. We all know that the decision to invest in a child's education is a stressful one for parents. How much more so when your child is studying in a foreign country? High-risk providers mean that teachers and support staff do not have certainty about their wages, entitlements or job security.

The Australian education sector risks getting a poor international reputation if we allow high-risk players. It gets the reputation of not being a sector where we can provide students with a high-quality degree. Australia as a whole loses out. We place at risk our diversity and multiculturalism if we allow high-risk providers. So it is important that we ensure the sector is of high quality and that the messages that get out through word of mouth about higher education in Australia are uniformly good ones. We do not want to make it too easy for risky entrants to set up, because that can harm every provider. We are taking this important action to ensure that high-risk providers are faced with an additional requirement to enter the market. We do not want to promote and subsidise education providers if they are putting at risk the whole overseas student sector. In this process we want to recognise that we need innovation. We need to encourage providers to put in place new products and innovative products, but we want to distinguish between that and high-risk providers.

We want to ensure that we have new diversity in the market—much as we have seen, say, from the University of Melbourne's shift to a different style of undergraduate teaching—but we also want to ensure that that innovation does not threaten the sustainability of the sector.

The Baird review into the ESOS legal framework recommended that the government take a risk management approach to the sector, and the government agreed. By linking the risk level to the fee structure, the Gillard government is adopting a model favoured by insurance companies all over the world: the greater the risk, the greater the fee. The fee paid by a provider will be based on four indicators of risk. The first part is a flat fee—a charge that all providers pay to cover the administrative costs. The second tier is a size fee that covers the costs of ongoing regulatory activity based on the size of the task. It is a combination of a charge per student enrolment and a charge per registered course for each provider. Third, there is a compliance history fee imposed in circumstances where the minister has in the past 12 months taken action against a provider under section 83 of the ESOS Act for breaching the act, the national code or a condition on the registration. Fourth, there is an entry to the market fee. Evidence suggests that providers with a shorter history of registration present a greater risk and therefore a greater regulatory and supervisory burden. New providers will be charged a fixed fee for each of the first three years of registration.

There have already been several measures adopted by the Gillard government to promote and enhance risk management in the international education sector. These include introducing review systems and periods, enabling conditions to be placed on a registration when the provider is first registered, and strengthening the ability to take compliance and enforcement action.

The Gillard government is interested in providing rewards and incentives for higher education providers who demonstrate their ability to continue to provide high-quality, low-risk education opportunities for overseas students. Government-funded schools, TAFE colleges and public universities that accept international students will pay the lower fee structure in recognition of the lower risk that they present in this sector. These low-risk providers will pay the flat fee and the student enrolment component of the size fee. These low-risk providers will be exempt from the course component of the size fee as they are already subject to rigorous quality control processes through other government requirements for local students and courses.

Overall, there will be a reduction in the level of the annual registration charge paid by the sector as a whole. This is because the low-risk providers comprise a significant share of the market. The revised charging structure will result in a more sustainable international education sector through better protection of international students and an ongoing commitment to continual quality improvement. Providers representing a greater risk to the market, such as new entrants and those with a history of non-compliance, may pay more under the new arrangements. We make no apology for this. We want to create an international education system that provides incentives for providers to improve their performance and to continue to deliver great quality education.

The reforms that we are talking about today are a small part of a wider suite of reforms to the international education sector. This legislation addresses the annual registration charge component of risk management. It is the second package of reforms, and will be complemented by the third package later this year.

During my time as an academic, one of the first things I learned was that collaboration is essential to research. Sometimes the other experts in your field are from countries that are not your own. Sometimes the best person to assist you and guide you through your postgraduate studies is an expert on the other side of the world. Here in Australia we want to ensure that we are offering attractive options for international and domestic students—the best researchers, the best facilities, the best quality of outcome for any type of qualification.

I am enormously proud of the Australian higher education sector, and particularly those institutions in my electorate of Fraser, and I want to make sure all Australians feel that sense of pride. We want to make sure that the best people to guide others through their postgraduate research, to lecture the undergraduates or to offer hands-on vocational training are located here in Australia. We want to make Australia the best option for students who are looking to study overseas. I commend the bills to the House.