Education Services for Overseas Students (Registration Charges) Amendment Bill 2021 [and related Bills]
Introductory Info
Date introduced: 24 June 2021
House: House of Representatives
Portfolio: Education and Youth
Commencement: 1 January 2022
Purpose of the Bills
This Bills Digest covers four related Bills which propose
to revise regulatory cost recovery arrangements for overseas education.[1]
The principal Bill is the Education
Services for Overseas Students (Registration Charges) Amendment Bill 2021
(the Registration Charges Bill). This Bill amends the Education Services
for Overseas Students (Registration Charges) Act 1997 (Registration
Charges Act) to repeal and replace current charging provisions with a
framework to allow charges to be set in regulations.
The three related Bills, which include minor and
consequential amendments arising from the Registration Charges Bill, are:
These Bills are intended to give effect to the
Government’s 2021–21 Budget announcement that charging for regulatory
activities associated with overseas education would be simplified.[2]
Background
Current cost
recovery model for overseas education
The Australian Government regulates international
education through the Education Services
for Overseas Students Act 2000 (ESOS Act) and related
legislation, together referred to as the ESOS Framework.[3]
Under the ESOS Act, education providers in all
sectors (including higher education, English Language Intensive Courses for
Overseas Students (ELICOS), vocational education and training (VET), and
schooling) must be registered on the Commonwealth
Register of Institutions and Courses for Overseas Students (CRICOS) if they
deliver education to students in Australia on a student visa.[4]
CRICOS registration is handled by existing bodies, known for
these purposes as ESOS
Agencies. A provider’s ESOS Agency depends on its sector:
DESE is also responsible for a range of system-wide
functions, such as providing education and information about the ESOS Framework,
and managing CRICOS.[6]
To recover costs associated with these functions, DESE currently charges
non-exempt CRICOS providers an entry to market charge (EMC) to cover
initial registration costs, and an annual registration charge (ARC), calculated
based on student numbers and registered courses by location.[7]
The charges are a condition of registration under the ESOS Act, and are
imposed by the Registration Charges Act.[8]
The ARC comprises a $1,505 base fee, plus $10 per
enrolment per year, and $115 per course per location.[9]
The EMC is paid in three instalments over the first three years of registration,
totalling $17,342.[10]
Regulatory fee relief, provided as part of the COVID-19 response, exempted
providers from these fees in 2020 and 2021.[11]
Government schools, state or territory VET institutions,
and Table A providers are exempt from the EMC and ARC.[12]
Proposed cost
recovery model
Following the 2020–21 Budget announcement, DESE consulted
with the international education sector on a revised cost recovery model.[13]
The model, which was set out in a departmental consultation paper, proposes to:
- remove
the EMC for ASQA and TEQSA-registered providers, allowing those ESOS Agencies
to manage their registration cost recovery directly (ASQA and TEQSA cost
recovery is not dealt with in these Bills)
- replace
the EMC with $2,691 registration and $1,083 registration renewal fees for
schools
- replace
the ARC with a new CRICOS Annual Registration Levy (CARL) with three
components:
- Part
A—a modified version of the current ARC, to be paid by all CRICOS registered
providers, at a base rate of $440, plus $5 per enrolment, to cover DESE’s
system-wide functions
- Part
B—to be paid by all CRICOS registered school providers, at a set amount of
$116, to cover education and engagement with schools undertaken by DESE
- Part
C—to be paid by all CRICOS registered school providers with at least one
enrolment in the previous calendar year, at a set amount of $695, to cover
DESE’s oversight and management of these providers.[14]
DESE has developed these charges in accordance with the Australian
Government Cost Recovery Guidelines (the CRGs), to recover only the
efficient cost of in-scope regulatory activities.[15]
The CRGs generally require that non-government recipients of government
activities are charged for those activities.[16]
The Explanatory Memorandum to the Registration Charges
Bill indicates that ‘[n]o substantive issues were identified during the
consultation period that warranted changing the model.’[17]
As discussed in the key issues and provisions section of
this Digest, the Bills do not guarantee that the details of the model outlined
in the consultation paper will be implemented, since the amounts to be charged
are to be set in Regulations.
Committee
consideration
Senate Standing Committee for Selection of Bills
At its meeting of 23 June 2021, the Senate Standing
Committee for Selection of Bills deferred consideration of the Bills to its
next meeting.[18]
Senate Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
(Scrutiny of Bills Committee) commented on the Registration Charges Bill,
noting that this Bill:
Provide[s] the minister with broad discretionary powers to
exempt providers from the requirement to pay a charge by legislative instrument
in circumstances where there is no guidance on the face of the bill as to when
these powers may be exercised.[19]
The Scrutiny of Bill Committee requested the Minister’s
advice on why these broad powers in delegated legislation are considered
necessary and appropriate and whether the Bill could be amended to include at
least high-level guidance on when such exemptions might be provided.[20]
The Scrutiny of Bills Committee has repeatedly raised
concerns about inappropriately delegated powers in relation to Bills that are
in similar terms to the Registration Charges Bill. Most recently, in relation
to the Tertiary Education Quality and Standards Agency Amendment (Cost
Recovery) Bill 2021, it stated:
… significant matters relating to the collection and
administration of new charges and the review of related decisions should be
included in the primary legislation unless a sound justification for the use of
delegated legislation is provided …
The committee notes that a legislative instrument, made by
the executive, is not subject to the full range of parliamentary scrutiny
inherent in bringing proposed changes in the form of an amending bill.[21]
The Explanatory Memorandum to the Registration Charges
Bill states that the Regulations proposed in this Bill will provide flexibility
to ensure that only the cost of relevant activities under the ESOS Act
(and no more) is recovered.[22]
The Scrutiny of Bills Committee had no comment on the
three related Bills.[23]
Policy
position of non-government parties/independents
At the time of writing, no non-government
parties/independents have commented on the Bills.
Position of
major interest groups
Independent Higher
Education Australia (IHEA), which represents independent higher education
providers, has indicated:
- it
‘does not support the rigid application of the Government’s cost recovery
approach to higher education’, as the main source of revenue to fund charges
will generally be student fees, leading to an increase in study costs for
students to fund government activities[24]
and
- its
members have specific concerns about:
- uncertainty
about the impact of the proposed cost recovery model, especially in light of
simultaneous cost recovery changes currently being pursued by a number of other
agencies, including TEQSA
- maintaining
the existing Provider Registration and International Student Management System
(PRISMS) being subject to cost recovery—IHEA argues that improvements to PRISMS
are needed to reduce duplication and administrative burden
- the
possibility of duplication in charging and
- the
need for scaled fees in line with the size of providers.[25]
At the time of writing, submissions to the cost recovery
model consultation have not been published on the DESE website.[26]
Financial
implications
The Explanatory Memorandum to the Registration Charges
Bill indicates that the proposed arrangements will reduce charges paid by
providers by approximately $7 million per year in total, with effects on
individual providers varying depending on their size and sector.[27]
This reflects the expected reduction in charging by DESE under the Registration
Charges Act, as per the proposed cost recovery model, which these Bills
seek to enable. However, it does not factor in the proposed charges by ASQA and
TEQSA to replace the EMC as this is not dealt with by the Bills.
The Government has assessed that the other Bills have no
financial implications on the Commonwealth or on registered providers.[28]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bills’ compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bills are compatible.[29]
Parliamentary
Joint Committee on Human Rights
At the time of writing, the Parliamentary Joint Committee
on Human Rights had not yet considered the Bills.[30]
Key issues
and provisions: The Registration Charges Bill
Currently, sections 5 to 8 of the Registration Charges Act
specify ARC and EMC amounts, and indexation. Item 2 of Schedule 1 to the
Registration Charges Bill repeals these sections, and substitutes sections providing
for the imposition of the CARL, as well as the initial registration and
registration renewal charges for schools.
Unlike the current provisions, proposed sections 5 to 8
do not specify the amount or indexation arrangements for the charges. Instead,
the amounts, any indexation, and any exemptions of one or more classes of
provider would be in Regulations made by the Governor-General.
Prior to asking the Governor-General to make Regulations,
DESE intends to seek stakeholder feedback on a draft Cost Recovery Impact
Statement (CRIS) that will be consistent with the CRGs.[31]
Other provisions
The Cost Recovery Bill
Items 1 and 3 to 16 of Schedule 1 to the Cost
Recovery Bill contain minor consequential amendments to the ESOS Act, to
ensure that CRICOS registration is conditional on payment of the CARL and
(where applicable) initial registration and registration renewal charges for
schools, rather than the ARC and EMC, which are to be abolished by the
Registration Charges Bill.
The Cost Recovery Bill also contains (at items 17 to 19
of Schedule 1) new compliance audit provisions, to clarify
that a provider’s ESOS Agency is able to audit whether the provider is
complying with the ESOS Act, the National Code of
Practice for Providers of Education and Training to Overseas Students 2018,
and, where relevant, the ELICOS Standards 2018,
and Foundation
Program Standards. Adherence to these is already a condition of CRICOS
registration.[32]
Proposed subsection 112A(3) would require the
provider to cooperate fully with the ESOS Agency, and provide all reasonable
facilities and assistance, for the purposes of a compliance audit.
A note to this subsection clarifies that failure to adhere to these
requirements would be grounds for the ESOS Agency to take action under section
83 of the ESOS Act, which deals with sanctions for non‑compliance,
including cancelling a provider’s CRICOS registration.
The TEQSA
Charges Bill
The TEQSA Charges Bill also deals with a consequential
amendment arising from the Registration Charges Bill.
The Tertiary
Education Quality and Standards Agency (Charges) Bill 2021, currently
before the Senate, references the ARC and EMC to ensure regulatory costs are
not double counted by TEQSA for the purposes of cost recovery. More information
about this Bill is available in the Bills
Digest.[33]
The TEQSA Charges Bill (item 1) would remove the
references to the ARC and EMC if the Tertiary Education Quality and
Standards Agency (Charges) Act 2021 is enacted, but maintain the reference
to section 158 of the Tertiary Education
Quality and Standards Agency Act 2011, which allows for fees to be
determined by legislative instrument.
The TPS
Levies Bill
In addition to CRICOS registration charges under the Registration
Charges Act, CRICOS-registered providers are also required to pay a levy
for the Tuition Protection Service (TPS)
under the Education
Services for Overseas Students (TPS Levies) Act 2012 (TPS Levies Act).[34]
International students can seek
assistance from the TPS if their education provider is unable to fully
deliver their course of study. The TPS ensures the student is able to complete
their studies (including at a replacement provider) or receive a refund of
unspent tuition fees.[35]
Currently, calculation of the TPS Levy for CRICOS
providers is partly based on total enrolments, worked out by
adding together the number of enrolments of overseas students for each course
for which the provider is registered in the year.[36]
In a given year:
- each
student enrolled in a course of at least 26 weeks counts as one enrolment
- each
student enrolled in a course of 13 or more weeks, but less than 26 weeks,
counts as an enrolment of 0.5 and
- each
student enrolled in a course of less than 13 weeks counts as 0.25 of an
enrolment.[37]
These provisions are in section 5 of the Registration
Charges Act, which is to be repealed by the Registration Charges Bill.
Item 2 of the TPS Levies Bill inserts a definition
of total enrolments to the TPS Levies Act at proposed
section 4A. The definition is in similar terms as the definition currently
in the Registration Charges Act, but specifies that an enrolment is
counted only if the student is ‘undertaking’ the relevant course. According to
the Explanatory Memorandum to the Bill, this addition is intended to ensure
that students who enrol, but subsequently withdraw before the course commences,
or enrol but defer their studies for the year, are not included in calculating
enrolment numbers for the TPS Levy.[38]
Concluding
comments
This package of Bills proposes to replace the current
CRICOS cost recovery arrangements in the ESOS Framework with a framework that
will allow for a new cost recovery model to be implemented, largely through Regulations.
Although consultations undertaken by DESE on the revised
cost recovery model do not appear to have warranted any substantive changes to
the proposal, uncertainty remains about the impact of the new charges, given
the use of delegated legislation, and in relation to interactions with other
cost recovery changes which are also currently underway.