18.8.11 and 22.8.11 Education Services for Overseas Student (Registration Charges) Amendment Bill 2011 and cognate bill.

Mr HAWKE (Mitchell) (13:41): I join with my colleague the member for Herbert in his wise and profound remarks on the Education Services for Overseas Student (Registration Charges) Amendment Bill 2011 and cognate bill.

A government member interjecting—

Mr HAWKE: Good remarks! The member for Herbert and I have been compared to Waldorf and Statler occasionally in question time, but we are actually funnier than those two, I think. This is an important piece of legislation and I do want to join with the member for Herbert in what he was saying about the smaller providers. Quite often when this government acts, there is a series of unintended consequences to its legislation it does not consider. The small player is often ignored by this government. While it may seem appropriate from the recommendations of the Baird report to review registration fees as proposed by this bill, there is a lot of diversity in the smaller colleges. Colleges with small overseas student numbers are delivering courses to overseas students for reasons related to expanding their educational mission, broadening the cultural mix of their campuses and not necessarily for a commercial imperative. It can often be counterproductive to increase such costs for smaller providers. Because of the nature of higher education there is often a diversity of courses offered by particular colleges. It is not necessarily the case that increasing fees produces the best outcome. Some colleges, for example, register fewer than 20 foreign students and they will face a sixfold increase in registration fees. That is not a desirable outcome.

This sector, we are told, is our third largest export industry, earning up to $17 billion—that is, before the recent turbulence in the industry. It is an issue we have to take very seriously, because there is an expanding middle class in Asia and wealth being generated in many countries. The international student market is very competitive and it is a market that Australia certainly wants to access. It is the role of government to recognise and promote the inherent worth of international and transnational education. This parliament has a great role to play by recognising it and encouraging it for our nation. Our economic and strategic interests in the region mean that we should be seeking to do everything we can to promote an international education focus in Australia to make us a regional hub for international and transnational education.

We do not oppose this legislation and we see some worth in increasing the registration fees and charges. Of course, there is a subset of issues that I have spoken about in this place before in relation to the private service providers, and colleges in particular. I think the member for Herbert elegantly explained that the colleges in his area, small colleges closer to Papua New Guinea than Brisbane—a very important point—are often the unintended consequences of these blanket pieces of legislation that we pass here in Canberra—

The DEPUTY SPEAKER: Order! The debate is interrupted in accordance with standing order 43. The member for Mitchell will have time to continue his remarks at a later hour.

Mr HAWKE (Mitchell) (12:57): I welcome the chance to resume my remarks in relation to the Education Services for Overseas Students (Registration Charges) Amendment Bill 2011. At the time of the interruption of my last remarks I was speaking about the impact upon smaller colleges and enterprises in Australia today and the sometimes unintended consequences of government regulation where there is an inconsistent policy approach.

Since I have had the opportunity to do so I have been reading further papers from the Council of Private Higher Education Incorporated, which has put together a worthwhile paper in relation to this area. I would like to quote from their paper in relation to what the role of government is in the private education sector. The council says, 'The international education sector does not expect a direct subsidy of the type variously afforded industries such as manufacturing; but nor does it expect excessive charges, even under the mantra of full cost recovery. Above all, it does not expect unhelpful and unnecessary policy settings, inconsistency between different arms of government and sudden, politically-driven policy changes without full industry consultation.'

Amen to that. At the moment, of course, we do have inconsistent approaches between state and federal governments for this sector. We do have excessive regulation and, indeed, this government is moving us towards full cost recovery for the industry. Some people might ask, 'What's wrong with that?' Indeed in many cases I am a supporter of full cost recovery, and the fee restructuring that is going on here is not all bad. However, the inconsistency in policy approach from this government, including the handling of visas and the regulatory framework that has surrounded the treatment of international students, has meant a diminishing of this vital industry for Australia. Once again, I would endorse the role that this industry plays; it was our third biggest export industry a few years ago and totalled $17 billion in income for our country. It allows Australia to provide a great source of regional foreign policy in educating students from all across Asia. Most of those students, of course, return to the countries they come from, well educated by our country and looking forward to seeking high roles in their countries, with a high view of this country and the education services that we provide: a great outcome for all concerned. So I do think that government does have a role to provide a much more balanced regulatory framework—as the council calls for—one that is not inconsistent, one that does provide certainty for the industry and with proper industry consultation. I think that, if the government had consulted further on this legislation, it could be improved. I think that it is reasonable to say that colleges with fewer than 30 international students could benefit from a cap on the fees that are being charged. That is not something that would cost government a lot. With proper consultation I think that small and very small colleges, those struggling to survive and those that are working their way up to become large colleges, could have their fees capped. I do not think that that is unreasonable. With minimum consultation, the government could have ascertained that that would be a good idea and approach and that we could improve the quality of this legislation. I want to say again that the government often fails to consult adequately with industry sectors and I do think that that has led to the inherent weaknesses in the legislation that we see put before us in this parliament.

We know that if a college has less than five per cent of international enrolments this will unfairly penalise them financially. With fewer than 30 international students, or less than five per cent of enrolments, there is a very low risk here of any kind of trouble for the government and what with full cost recovery and the nature of the return for the government it certainly seems to be a strange policy setting. It probably has more to do with the nature of the government debt burden we have at the moment than anything else.

Of course this legislation comes out of the Stronger, simpler, smarter ESOS: supporting international students review conducted by the Hon. Bruce Baird. It had many recommendations, some of which the government has adopted, some which it has not. That review had a certain point of view. I think that some of its recommendations were worth while; I think that others unfairly burden this industry. It is heavily regulated. There are providers in this sector that have continued to hold the accreditation required by state and federal governments over many, many years without incident. They have been proven to be effective providers of education at tertiary level and for other courses and therefore they do not need the same level of regulatory burden or increased regulatory burden that we might be looking to target institutions that do not have such a good record or that do have problems. That is where government does have a role to play, but we have to find ways to target our legislation at the problem we are seeking to address and not to burden unnecessarily the entire sector with increasing regulatory burdens and costs without any due return.

I just want to make that point before finishing my remarks. Here in this place we have some great providers of overseas education. Indeed, we ought to be encouraging this industry to continue to do the job that it has done so well over the last decade. Certainly, this sector is suffering, not exclusively but in part, due to government action. This kind of regulation, while it may look inherently good on the surface, will not help in general with the policy settings that the government has put in place in this sector. We should seek legislation and regulatory reform that recognises those worthwhile institutions that have been accredited for a long time and that are providing a service in this space and not causing any trouble, and remove burdens as well as increase the amount of legislation or amendments that we are passing in this place. We should also seek to make the job of independent providers easier in Australia.