This Bills Digest replaces an earlier version dated 24 May 2024 to assist in early consideration of the Bill.

Key points

• The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (the Bill) amends the Education Services for Overseas Students Act 2000 (the ESOS Act) to introduce new measures aimed at improving the quality, integrity and sustainable growth of the international education sector.
• Several measures involve introducing Ministerial powers to regulate the provision of education to overseas students through:
  • pausing the registration of new providers and new courses by registered providers
  • limiting the enrolments of overseas students by provider, course or location, over a year
  • automatically suspending and cancelling specified courses on the basis of systemic issues, their value to Australia’s skills and training needs and priorities, or if it is in the public interest.
• Other measures relate to regulating student recruitment, provider and course registration and the provision of education, including:
  • new considerations for Education Services for Overseas Students (ESOS) agencies in determining whether a provider is fit and proper, such as if they control or own, or are controlled or owned by, an education agent/associate
  • requiring providers to deliver one or more courses exclusively to domestic students for two consecutive years to be eligible to apply for registration under the ESOS Act
  • providing for the automatic cancellation of a provider’s registration where a course has not been delivered to overseas students in a period of 12 consecutive months
  • providing for the automatic suspension of a provider’s registration when an ESOS agency or designated State authority determines that a provider does not meet the fit and proper test because it is under investigation for a specified offence.
• Some of the measures respond to recommendations or seek to address issues raised by reviews into the migration system and international education.
• Key stakeholder groups have responded with concern to the measures that would lead to limits on international student enrolments.
• The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 15 August 2024.

Introductory Info

Date introduced: 16 May 2024
House: House of Representatives
Portfolio: Education
Commencement: The later of the day after Royal Assent and 1 July 2024

Purpose of the Bill

The purpose of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (the Bill) is to amend the Education Services for Overseas Students Act 2000 (the ESOS Act) to introduce new measures aimed at improving the quality and integrity of the international education sector and new Ministerial powers to regulate the provision of education to overseas students.

Structure of the Bill

The Bill is comprised of one schedule with eight parts:

• Part 1 introduces new considerations for Education Services for Overseas Students (ESOS) agencies (see background section) in determining whether a provider is fit and proper, such as if they control or own, or are controlled or owned, by an education agent or associate. The provisions in Part 1 will also require providers to give information about ‘education agent commissions’ (defined in the Bill) upon request from the Secretary of the Department of Education (the Secretary), who in turn will have the power to give information to providers on student transfers by and commissions made to specific education agents (Part 2).
• Part 3 will provide the Minister for Education (the Minister) the power to determine, via legislative instruments, how initial applications for the registration of providers, and for registration of courses by registered providers, are to be managed by ESOS agencies. It also allows the Minister to pause the registration of new providers and new courses by registered providers.
• Part 4 will require providers to deliver one or more courses exclusively to domestic students for two consecutive years to be eligible to apply for registration under the ESOS Act. Providers that are listed in Table A of the Higher Education Support Act 2003 and providers that are seeking registration as standalone English Language Intensive Courses for Overseas Students providers or standalone Foundation Program providers will be exempt from the new registration requirement.
• Part 5 will enable the automatic cancellation of a provider’s registration under the ESOS Act where a course has not been delivered to overseas students in a period of 12 consecutive months.
• Part 6 provides for the automatic suspension of a provider’s registration when an ESOS agency or designated State authority determines that a provider does not meet the fit and proper test because it is under investigation for a specified offence.
• Parts 7 and 8 introduce new Ministerial powers to regulate the provision of education to overseas students. They include allowing the Minister, via legislative instrument and with the agreement of the Minister responsible for Vocational Education and Training (VET) to:
  • limit the enrolments of overseas students by provider, course or location, over a year
  • automatically suspend and cancel specified courses on the basis of systemic issues, their value to Australia’s skills and training needs and priorities, or if it is in the public interest.

Background

The international education sector

As outlined in Improving integrity in the international education sector: policy impact statement (the Policy Impact Statement), overseas students ‘contribute $30 billion to the Australian economy per annum and international education is Australia’s fourth largest export’ (p. 1).

Enrolments

The number of international student enrolments in the year-to-date to March has increased from 246,000 in 2005 to 741,000 in 2024. As can be seen from Figure 1 below, this growth has largely been driven by the higher education and VET sectors. In March 2024, the higher education sector represented 53% of enrolments and VET just under one-third.[1]

Figure 1     Year-to-date international student enrolments by sector as at March, 2005–24

Source: Department of Education, International student data for the year-to-date (YTD) March 2024, April 2024.

According to the Policy Impact Statement, there are 1,477 registered providers, including 67 public providers, of which 42 operate in the higher education sector (p. 5). About half of all enrolments are with public providers, but this varies from over 80% in higher education to less than 4% in VET.[2]

In 2022 (the latest data available), there were 6 universities with over 10,000 overseas students studying onshore:

• Monash University (19,290)
• the University of Melbourne (17,316)
• the University of Sydney (16,912)
• the University of Queensland (16,376)
• University of New South Wales (UNSW) (11,599)
• Royal Melbourne Institute of Technology (RMIT) University (10,872).[3]

The proportion that overseas students studying onshore made up of the total enrolments for each of these universities ranged from 15% for RMIT, to 30% for the University of Queensland.[4] The two public universities with the highest proportion of onshore overseas students among total enrolments, were the University of Queensland and Federation University (30%).[5]

In addition, there were over 50,000 overseas student enrolments onshore at private universities and non-university higher education providers, representing for this group of providers as a whole, over a third of total enrolments.[6]

Financial impact

The fees that overseas students pay form a significant part of the revenue for many providers. For example, in 2022 overseas student fees represented 25% of the total revenue of public universities, down slightly from 27% in 2019.[7] In 2022, these fees represented 46.8% of the total revenue of the University of Sydney, and over 30% of the revenue for UNSW, the University of Technology Sydney, the University of Melbourne, Monash University and the University of Queensland.[8] It should be noted that this includes revenue from offshore students as well as those studying in Australia.

Pre-COVID several regional universities also received more than 30% of their funding from this source, with Federation University relying on overseas student fees for 44.9% of its revenue.[9] The loss of overseas student enrolments has meant that the university’s total revenue fell from $408 million in 2019 to $287 million in 2022.[10]

In terms of totals, the Australian Bureau of Statistics reported that for the 2023 calendar year, international students paid $13.2 billion in fees to higher education providers and $2.7 billion in fees to vocational education providers.[11]

As noted above, most providers are in the private sector, particularly in VET, and there is little information about the extent to which many of them are reliant on overseas student fees. However, in 2022 over half the revenue of Torrens University was from overseas student fees.[12]

International developments

The post-COVID surge in enrolments has been experienced in other countries with significant numbers of international students. Both the United Kingdom (UK) and Canada have responded by introducing some limits on entry.

From 1 January 2024, international students commencing courses in the UK are not permitted to bring family members with them, with limited exceptions for those undertaking postgraduate research courses and those on government-funded scholarships.

Canada has imposed an intake cap on international students for 2024, which is a decrease of 35% on the 2023 levels. Caps have been established at the provincial and territorial level, based on population. Provinces and territories will then distribute the allocation among their designated institutions. Those applying for postgraduate courses or school level education will not be included in the caps. The measure will be in place for 2 years, during which time the Government will:

… continue to work with provinces and territories, designated learning institutions and national education stakeholders on developing a sustainable path forward for international students, including finalizing a recognized institution framework, determining long-term sustainable levels of international students and ensuring post-secondary institutions are able to provide adequate levels of student housing.

The ESOS Framework

The Australian Government regulates international education through the ESOS Act and related legislation, together referred to as the ESOS Framework.

Under the ESOS Act, education providers in all sectors (including higher education, English Language Intensive Courses for Overseas Students (ELICOS), 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 (ESOS Act, sections 8 and 14A).

ESOS agencies

CRICOS registration is handled by existing bodies, known for these purposes as ESOS Agencies (ESOS Act, section 6C). A provider’s ESOS Agency depends on its sector:

• higher education providers are handled by the higher education regulator, the Tertiary Education Quality and Standards Agency (TEQSA)
• VET and stand-alone ELICOS providers are handled by the national VET regulator, the Australian Skills Quality Authority (ASQA)
• schools are handled by the Department of Education (the Department).

The Department is also responsible for a range of system-wide functions, such as providing education and information about the ESOS Framework, and managing CRICOS.

Education agents

Education agents can play a useful role in international and domestic education systems, providing advice and assistance to students to help them choose between potential countries, institutions and courses. Students are not required to use an education agent and may apply directly to their preferred education provider. The Policy Impact Statement notes that, in 2023, there were ‘approximately 5,800 agencies and 23,000 individual agents’ (p. 5).

The 2022 Quality Indicators for Learning and Teaching (QILT) survey results for international students found 86% of overseas students reported using an education agent to help with their visa application or enrolment in Australia (p. 31).

Education agents are not directly regulated in Australia. Rather, ESOS agencies such as AQSA and TESQA monitor CRICOS providers to ensure their compliance with the ESOS Framework. For example, Standard 4 of the National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code), requires registered providers to ensure their agents act ‘ethically, honestly, and in the best interests of overseas students’. Providers log details of any relationship in the Provider Registration and International Student Management System (PRISMS).

2023 Nixon Rapid Review into the Exploitation of Australia’s Visa System

The Explanatory Memorandum states that the Bill ‘addresses issues identified in the Rapid review into the exploitation of Australia’s visa system (the Nixon Review) and the Government’s Migration Strategy’ (p. 1).

In October and November 2022, the Trafficked project led by 60 Minutes, The Age, and The Sydney Morning Herald reported allegations of visa rorts, sex trafficking and foreign worker exploitation. The Minister for Home Affairs established the ‘Rapid Review into the Exploitation of Australia’s Visa System to complement work that is already being progressed to address migrant worker exploitation, and to identify proposals for both systemic reform and discrete measures to prevent, deter and sanction individuals who seek to abuse Australia's visa system to exploit vulnerable migrants’ (p. 5).

As the Policy Impact Statement notes, the Nixon Review found ‘systemic integrity issues within the international education sector, including collusive and unscrupulous business practices between education providers, their agents and non-genuine students’ (p. 7).

In relation to the VET sector, the Nixon Review looked at recent operations and investigations that exposed ‘that non-genuine providers are colluding with disreputable agents to facilitate student visas’ (p. 16). The Review made the following recommendations:

Recommendation 13: Consideration be given to regulating onshore and offshore education agents used by Australian education providers.

…

Recommendation 14: Conduct a targeted compliance operation, focussed on assessing high risk private VET providers.

…

Recommendation 15: Conduct a targeted data matching activity to compare information holdings across Commonwealth agencies for private VET providers.

…

Recommendation 16: Education regulators to develop a broader set of systemic risk indicators for CRICOS registered education providers.

…

Recommendation 18: Should the implementation of recommendations 14 and 15 expose that exploitation of the visa system by non-genuine private VET providers is significant, Australia’s student visa policy should be reviewed, with a view to removing CRICOS eligibility for high risk providers and courses. (pp. 16–17)

Recommendation 18 includes as one of its implementation actions amending the ESOS Act.

In its response to Recommendation 13 of the Nixon Review, among other things the Government agreed to consider boosting data sharing activities and further measures to deter collusion between providers and education agents (p. 4). Both issues are addressed in Parts 1 and 2 of this Bill. The Government also stated it would consider expanding the remit of the Office of the Migration Agents Registration Authority (OMARA) to include education agents (p. 4). This aspect does not appear to have been adopted to date, possibly in view of the recent Australian National Audit Office report, which found considerable issues with OMARA’s operations.

2023 Review of the Migration System and 2023 Migration Strategy

Released in December 2023, the government’s Migration Strategy: Getting migration working for the nation. For workers. For businesses. For all Australians notes that existing commitments include:

• strengthening the ‘fit and proper person requirements that apply to VET providers’ in the ESOS Act
• ‘making education providers more accountable for their agents, through increasing provider reporting requirements’ (p. 64).

Part 1 of the Bill increases the ‘fit and proper’ test scope, as does Part 6 in respect to allowing ESOS agencies to determine that a provider is not fit and proper – and therefore will have their registration suspended – because they are under investigation for one of the specified offences.

Parts 1 and 2 increase the requirements for reporting and sharing of information about education agents between providers and ESOS agencies.

The Migration Strategy adds a new commitment to ‘Strengthen requirements for international education providers’ (p. 66). Towards meeting this commitment, the Migration Strategy states:

The Government will act to assist regulators as they address unscrupulous provider behaviour through further legislative change.

…

This work will be complemented by the development of an International Education Strategic Framework. (p. 66)

The Migration Strategy is itself informed by the March 2023 Review of the Migration System (the Migration Review, also known as the Parkinson Review). Although the Migration Review primarily focuses on visa settings, as well as the intersection of migration with the labour market, it does describe some issues relevant to the Bill:

• ‘the migration system creates incentives for non-genuine students and unscrupulous profit-seeking education providers’ (p. 106)
• profit motives mean some institutions prioritise enrolment numbers over learning outcomes, or to sell student visas as a way to work in Australia (p. 106)
• ‘clear evidence of systemic exploitation and the risk of an emerging ‘permanently temporary’ underclass, which included both overseas students and graduates.’ (Policy Impact Statement, p. 8).

2023 Joint Standing Committee on Foreign Affairs, Defence and Trade report on international education

On 19 October 2023, the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) tabled its interim report, titled Quality and Integrity – the Quest for Sustainable Growth’: Interim Report into International Education (International Education Interim Report).

In his second reading speech for the Bill, Minister for Education Jason Clare said that the amendments are also informed by the interim report of the JSCFADT.

The interim report found a range of issues affecting the international education sector, that included the following (Policy Impact Statement, p. 9):

• ‘instances of active collusion between non-genuine students, agents and education providers’
• ‘instances of education agents directing genuine students to take up unsuitable courses that are profitable for the agent in commissions and the provider in recruitment numbers’
• providers facing difficulty managing agents because the student recruitment market is ‘hyper competitive’
• providers, sometimes in collusion with agents, enrolling ‘non-genuine’ students into courses that they do not attend, and offering courses to overseas students only, which may be of poor quality.

This report also makes several recommendations relevant to the Bill.

Recommendation 13 calls for the government to:

… compel education providers to develop information channels across sectors to share credible information and concerns regarding education agents, entities and student movements to inform and support integrity in student recruitment and delivery of international education and to disrupt non-genuine students and other entities seeking to exploit the international education sector, the student visa system, and international students. (p. xxii)

Recommendation 26 calls for improvements to PRISMS so providers can access the full information available on education agents (p. xxvi).

Amendments in Parts 1 and 2 of the Bill require providers to give information about education agent commissions if the Secretary requests, and for the Secretary to have the power to give providers relevant information it has about an education agent, including about commissions paid.

Recommendation 14 calls for addressing ‘persistent and deep-seated integrity issues in the private Vocational Education and Training (VET) sector’ through firm action that could include:

…

• a pause for at least 12 months by Australian Skills Quality Authority (ASQA) in processing new provider applications for Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) registered VET providers, with limited exceptions for legitimate applications such as industry linked entities, high economic value proposals or those endorsed by state and territory governments
• requiring new providers seeking CRICOS registration to have operated and delivered to domestic students for at least 12 months
• suspension of recruitment of international students to CRICOS VET courses identified with persistent quality and integrity issues and/or of limited value to Australia’s critical skills needs, such as management and leadership courses
• automatic suspension of new international student intake for providers under serious regulatory investigation
• cancellation of a provider’s CRICOS registration if no training is delivered for a period of 12 months or more (pp. xxii-xxiii).

Part 3 of the Bill gives the Minister the power to impose a pause on new provider applications for the entire ESOS sector, not only VET providers. Part 4 addresses the second point, but instead of 12 months requires the provider to have delivered one or more courses to domestic students for 2 years. Parts 6 and 8 address the third and fourth points, although in the case of Part 6 the amendments are not limited to just the VET sector, and Part 8 gives the Minister the power, through legislative instrument, to suspend or cancel courses. The final point is addressed by Part 5.

Recommendation 23 calls for the government to require providers to, among other components, record the details of all education agents they use into PRISMS, and have written agreements with all education agents ‘or equivalents’. The report notes elsewhere that the National Code (Standard 4), while requiring written agreements with agents ‘that formally represent their education services’, does not apply to ‘situations where providers are approached directly by agents, or where informal ‘one off’ negotiations occur which do not have a formal agreement in place’ (p. 127).

Following on from recommendation 23, recommendations 24 and 25 call for consultation with the education sector to develop model clauses for these written agreements, and to use regulatory requirements to mandate minimum requirements in the agreements such as transparency and consumer protections on standard refund conditions and commissions charged to the student (p. xxvi). These recommendations are not addressed in this Bill.

2022 Education Services for Overseas Students (ESOS) Review

As part of the Australian Strategy for International Education: 2021–2030, the government undertook a review of the ESOS Act. Due to report in 2022, only the discussion paper is publicly available, and it includes some questions relevant to the Bill in relation to education agents:

8. What kinds of measures to increase the transparency of third-party arrangements could be effective in improving student and provider choice?
9. What are the effects of increasing transparency of agent commissions? Would transparency measures improve student and provider choice? Would they drive down high remuneration rates over time? What are other potential outcomes from increasing agent transparency?
10. What information, such as education agent performance outcomes, can the Government make available to providers to help them decide the agents with which to engage?
11. Should providers be required to have written agreements with all agents from whom they accept students, it could result in more information for students and improve data reporting on provider and agent activity. Are there any other positive or negative outcomes for students in this change?
12. What information should written agreements between agents and providers contain to protect providers and better inform students and government?
13. What is the potential impact on providers regarding increased administrative activity if they are required to monitor all agents? (p. 8)

2024 Australian Universities Accord

The Bill also comes in the context of the Australian Universities Accord, which conducted a 12 month review of the higher education section and produced the Australian Universities Accord: final report (Accord Report) in February 2024.

While the Accord Report suggests changes to housing provision in relation to international students (recommendation 23), it notes that ‘heavy regulation of international student numbers may also lead to unintended consequences’, such as restrictions disproportionately benefiting the higher-ranked Group of 8 universities which better attract international students (Accord Report, pp. 183–184). It may be that the provisions in the Bill that allow the Minister for Education to determine caps for international students according to institution, location or course (Part 7 of Schedule 1), are intended to allay these consequences.

2024 Draft International Education and Skills Strategic Framework

Shortly before the 2024–25 Budget, the government announced that it would introduce legislation to ‘set an allocation for the maximum number of new international student enrolments education providers can offer’ as well as ‘deliver important reforms to strengthen the integrity and quality of international education’.

The same announcement included the release of the Australia's International Education and Skills Strategic Framework: draft for consultation (Strategic Framework). The Strategic Framework has been developed in response to the integrity issues identified by the reviews mentioned above, and in the context of the Migration Strategy. It asserts the following:

Unmanaged growth in international education has seen a rise in integrity issues, compounded infrastructure pressures with insufficient purpose-built student accommodation for international students, and threatened the sector’s social licence and Australia’s reputation. (p. 5)

The Strategic Framework outlines some of the intended changes to the ESOS Act in this Bill, and their rationale. The Strategic Framework is to be finalised following consultations and released later in 2024.

International student cap

The Strategic Framework states that international education ‘can boost our future prosperity, help meet current and future skills needs, and strengthen our relationships across the world’ (p. 4). In particular, there is an emphasis on aligning ‘Australia’s onshore education and training offerings with our skills needs’ (p. 6). This suggests that there is an expectation that many students will remain in Australia post-study to meet Australia’s workforce requirements, rather than returning to their home countries.

The Strategic Framework makes consistent reference to managing the growth of the international education sector. It foreshadows the amendments contained in the Bill which will give the government the power to intervene against providers and courses with ‘persistent quality and integrity issues’ or where there are reasons to determine courses ‘have limited value to Australia’s critical skills needs’; and to ‘set limits on enrolments at a provider level, including within specific courses or locations’ (p. 15). It claims that the government’s approach will support confidence among stakeholders, the sector’s social licence, Australia’s skills needs and the viability of regional providers (p. 15). It will also give ‘crucial certainty to education providers about the size of the sector’ (p. 15).

The Australian Universities Accord: budget summary makes clear that a key focus of the government’s intentions in allocating student numbers relates to housing:

Universities will be able to enrol additional students above their initial international student profile where they establish additional, newly built supply of purpose-built student accommodation. (p. 15)

The Australian Universities Accord measure in the Budget includes (Budget measures: budget paper no. 2: 2024–25):

• $2.1 million over 4 years from 2024–25 for the Department of Education to develop and implement regulation that will require providers to build new student accommodation to support any increase in their international student allocation
• $2.6 million in 2024–25 to implement changes to PRISMS (p. 63).

Regarding limiting enrolment numbers, the Strategic Framework states that the ‘Government will work closely with the sector to implement this policy and establish transitional arrangements that support the sector to manage this change effectively’ (p. 16). It suggests that the process of setting enrolment number limits will involve creating international student profiles with individual universities that will factor in their supply of student accommodation and how much the enrolments meet ‘Australia’s skills needs’ (p. 16).

The questions for sector consultation in the draft Strategic Framework (p. 27) that relate to managing the growth of the sector include several questions that could inform the implementation of some of the processes covered by Part 7 of this Bill:

1. What factors should inform government’s approach to allocating international student enrolments across sectors, providers, and locations in Australia?
2. What considerations for government should inform the overall level of international students in Australia?
3. How will this approach to managing the system affect individual providers?
4. Should sectors other than higher education and vocational education and training, such as schools, ELICOS and non-award be included in approaches to manage the system for sustainable growth?
5. How should government determine which courses are best aligned to Australia’s skills needs?
6. How should government implement a link between the number of international students and an increased supply of student housing?
7. What transition arrangements would support the implementation of a new approach?

Other measures

According to the Strategic Framework, measures to expand and strengthen the ‘fit and proper’ test for providers (Parts 1 and 6 of the Bill) will prevent ‘collusion between education agents and providers’ and protect ‘vulnerable international students from exploitation and coercion’ (p. 10).

In conjunction with Part 1 of the Bill, Part 2 allows the Secretary to share information on education agents with providers, thereby fulfilling another objective in the Strategic Framework:

Increasing transparency of agent commissions and performance data will enable providers to better act on their responsibility under the National Code to ensure that their agents act ethically, honestly and in the best interests of students. It will also empower students through greater consumer awareness. (p. 13)

Part 1 of the Bill inserts a definition of ‘education agent commission’ which is also intended to allow the Minister to amend the National Code (Explanatory Memorandum, p. 2), and thereby fulfil the Strategic Framework’s call for a ban on agent commissions for onshore student transfers between providers, which should remove ‘incentives for unscrupulous agents and providers to ‘poach’ students’ and ‘reaffirms the provider’s key role to support and advise their students’ (p. 10).

The provisions that allow the Minister to stop applications for registration of new providers and new courses (Part 3) are intended to ‘support changes outlined in the Migration Strategy’ (p. 10).

In relation to the requirement that providers seeking registration must have delivered courses to domestic students for at least 24 months (Part 4), the Strategic Framework argues:

This demonstrates their commitment to quality education and closes a loophole for those providers seeking to solely target international students, often of a single nationality for profit and potentially to channel them into employment rather than study. (p. 10)

The Strategic Framework also ties this commitment to the process of cancelling a provider’s registration if a provider has not delivered a course to international students for a period of 12 months (p. 10).

Previous changes to student visa arrangements

A number of changes to student visa arrangements have already been implemented in response to some of the concerns raised by the above reviews.

According to the Department of Home Affairs, in 2023 the student visa program experienced increased demand but also increased use of ‘fraudulent documentation and information’ and attempts to use the program for other migration purposes, resulting in higher refusal numbers (p. 8). In August 2023, the government announced new regulation measures and scrutiny of the program. Visa grant rates have fallen from 87.6% in last 3 months of 2022 to 81.9% in equivalent period in 2023 (p. 48). This was largely driven by a lower grant rate for VET students already in Australia.

The Migration Strategy Action Plan included:

• increasing the English language requirements, which was introduced from 23 March 2024
• issuing a Ministerial Direction to implement visa processing priorities from 14 December 2023, giving priority to applications from students wishing to study at Evidence Level 1 institutions, which are deemed lower risk
• implementing a Genuine Student requirement from 23 March 2024 to replace the Genuine Temporary Entrant requirement (p. 2).

Changes were also introduced to the financial capacity requirements which took effect from 10 May 2024.

Government rationale

As mentioned above, some of the measures in the Bill respond to reviews which covered the international education sector. In the statement announcing the release of the Strategic Framework, the Government foreshadowed this legislation to ‘support the integrity and sustainability of the international education sector’.

In his second reading speech for the Bill, the Minister for Education, Jason Clare, set out the Government’s rationale for the proposed amendments in relation to ‘integrity and quality’ and ‘long-term certainty for the sector and sustainable growth over time.’

On the measures addressing education agents, the Minister said:

But what the reviews and sector feedback have told us is that we have a problem with collusive and unscrupulous practices between some agents and providers.

… to increase transparency around the operation of education agents, the bill requires providers to give information to the secretary on request about education agent commissions they have given, and strengthens the ability of the Secretary of the Department of Education or the relevant regulator to give information to registered providers about education agents.

Access to performance data about all education agents, not just agents they have an existing relationship with, will enable providers to make better informed decisions about who they choose to engage with.

The Minister argued that the measures in Part 3 to pause the processing of new applications for registration by ESOS agencies, will ‘improve the management of applications’. In relation to the new registration requirements to deliver courses to domestic students in Part 4, the Minister referred to the International Education Interim Report that found some providers ‘offering courses to international students only, which can be an indicator of poor quality’. For this change and the amendments to allow automatic cancellation of registration due to course inactivity (Part 5), the Minister also referred to recent amendments to the National Vocational Education and Training Regulator Act 2011 (NVETR Act).

On the power to make enrolment limits, the Minister stated:

I said earlier that we have to ensure that we manage the international education industry in a way that delivers the greatest benefit to Australia, whilst maintaining its social licence from the Australian people.

In keeping with the responsible approach from this government, the bill introduces powers for the Minister for Education to manage sector enrolments to deliver sustainable growth.

The Minister said the enrolment limits will take into account the relevance of courses to ‘Australia’s skills needs’ and the supply of purpose-built student accommodation.

Committee consideration

The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 15 August 2024.

Senate Standing Committee for the Scrutiny of Bills

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had yet to consider the Bill.

Policy position of non-government parties/independents

At this stage there has not been comment from non-government parties in relation to the Bill and the policy of setting enrolment limits for international students.

Position of major interest groups

Given that most of the other measures address recommendations or issues flagged in previous reports or were developed in consultation with the sector, it is the provisions that would allow the Minister to set caps on international students that have received the most response from sector bodies. Some reactions pre-date the publication of the legislation and came in response to the pre-Budget media release and announcement of the Strategic Framework.

Universities Australia

Universities Australia cautioned against the potential impact of the proposed changes on the international education sector. In a Universities Australia media release, Chief Executive Officer Luke Sheehy said:

We need certainty, stability and growth in a sector that serves the nation in so many ways.

Decades of careful and strategic work by universities and the Government has seen Australia grow to be a leading provider of international education. We can’t let this work go to waste.

...

We will be working closely with the Government to co-design the policy settings needed to give the international education sector a strong and sustainable footing from which to grow into the future.

Group of Eight

The Group of Eight (Go8) welcomed the measures to regulate for quality and integrity in the international education sector but expressed concern over the proposal to allocate international student numbers. A Go8 media release stated:

The [Go8] which educates one in three international students who choose to study in Australia strongly supports an international education sector that is underpinned by quality and integrity – anything short of that is unacceptable.

The Go8 supports Government measures to be introduced into Federal Parliament which underscores that intent.

...

The architecture already exists to manage issues around the volume, pattern and profile of international students and we have recommended the use [of] the compact negotiations – conducted by individual universities with the Department of Education – to develop targeted, nuanced programs and solutions that fit in with the circumstances of each State, Territory, institution and community.

International Education Association of Australia

The International Education Association of Australia (IEAA) acknowledged the government’s offer of consultations but warned of policy overreach regarding the proposed changes to the setting of international student numbers. In a IEAA media release, Chief Executive Officer Phil Honeywood said:

While stakeholder consultations are being offered, this latest measure will send all the wrong messages, yet again, of Australia’s reliability as a welcoming study destination country. Coming on top of the recently announced changes to financial capability requirements ($24K to $29K), visa processing slowdowns and backlogs, prospective students and our education agents will feel incredibly let down.

…

I will be arguing that there is a real danger of Government overreach in this new policy approach.

Business Council of Australia

The Business Council of Australia (BCA) called for carefulness and consultations with stakeholders around any limitations on the number of international students. A BCA media release stated:

The Government’s limitations on overseas student numbers need to be carefully calibrated through a consultation process with stakeholders to ensure Australia can continue to be a world-leading education destination.

National Tertiary Education Union

The National Tertiary Education Union (NTEU) asked for further clarification around how any decrease in international student numbers would affect university funding. An NTEU media release quotes the NTEU National President Dr Alison Barnes:

It’s clear the government takes the Universities Accord’s final report seriously, but we’ll need to see a much more ambitious response to properly address the deep problems in higher education.

…

We need the government to be upfront about what its plan to slow the growth of international student numbers means for university funding.

Already-stretched university staff simply can’t afford more funding cuts after a disastrous decade under the coalition.

Regional Universities Network

The Regional Universities Network (RUN) expressed concern over limiting international student numbers. A RUN media release stated:

RUN has concerns about the recent announcement of the draft International Education and Skills Strategic Framework and will work constructively with the Government to ensure that all universities are able to grow international student cohorts regardless of the size of their balance sheet.

Other commentary

Former ministerial advisor and current Australian National University professor Andrew Norton says that capping international student numbers is a ‘bad move’, and that based on his experience with bureaucratic allocation of domestic student funding, ‘actual enrolments are likely to be well below the capped level.’

Former Immigration deputy secretary Abul Rizvi has warned that the proposed cap on enrolments is a ‘recipe for chaos’.

Financial implications

According to the Bill’s Explanatory Memorandum, certain measures will have the following estimated negative financial impact over 2023–24:

• $3.8m for measures related to Parts 1 and 2 of Schedule 1
• $1.2m for measures related to Parts 3 to 6 and 8 of Schedule 1 (p. 5).

Part 7 of Schedule 1 is expected to cost $2.9 million in 2024–25 (p. 5).

There is no estimated financial impact for other years.

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 Bill’s 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 Bill is compatible.[13]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights had yet to consider the Bill.

Key issues and provisions

New ministerial powers

This section covers Parts 3, 7, and 8 of the Bill, which relate to increased ministerial powers to intervene in the ESOS sector, particularly through legislative instruments.

The most substantial and controversial amendments are those contained in Part 7, concerning setting international student limits. Setting international student enrolment limits is unprecedented. The Bill does not determine the limits but rather provides the Minister the broad power to do so in a general manner (down to classes of providers and classes of courses) via legislative instrument or in a more targeted and timely way via written notice to the provider. It sets out certain parameters about the scope and process for setting limits. For instance, the legislative instrument might determine a limit, or it might determine a mechanism for calculating the limit. However, the Minister will ultimately have the broad power to set limits as they see fit. Until it is understood what the limits will be for providers – which are expected to be determined through negotiations between the government and the sector, and the completion of the Strategic Framework – the impact of these measures remains uncertain.

Part 7: Enrolment limits

Part 7 of Schedule 1 inserts new measures that give the Minister powers to set the maximum enrolment numbers of overseas students for a provider or class of providers, or course or class of courses, over specified years. Part 7 inserts proposed Division 1AA – Limits on enrolments of overseas students into Part 3 of the ESOS Act (at item 47 of Schedule 1 to the Bill). Within new Division 1AA, the main measures are structured in the following way:

• setting total enrolment limits for a provider (proposed Subdivision B)
  • by legislative instrument (proposed section 26B), or
  • by written notice (proposed section 26C)
• setting course enrolment limits (proposed Subdivision C)
  • by legislative instrument (proposed section 26E), or
  • by written notice (proposed section 26F).

With these powers the Minister will be able to set enrolment limits from a range of different angles including:

• by new enrolments or total enrolments of overseas students
• by provider
• by ‘class’ of providers
• by year
• by course
• by ‘class’ of courses.

The Explanatory Memorandum states that the Minister will only exercise the power of setting either total enrolment limits or course enrolment limits by written notice when there is ‘a need for a specific provider to have a different limit than the course enrolment limit that is specified in the legislative instrument under subsection 26E(1)’ (pp. 61, 67). Factors for consideration may include the location of the provider and/or course, the number of other providers at a location and the availability of student accommodation. The Explanatory Memorandum also mentions that the power could be exercised in the event of one provider exiting the international education sector and defaulting on delivering education to accepted students, whereby the Minister could increase the limits for other providers capable of taking the affected students (pp. 61, 67).

Location

The inclusion of location as a potential factor in setting enrolment limits reflects concerns that have been raised about the concentration of international students in major metropolitan areas. The Accord Report acknowledged the general concern that international students might be contributing to housing pressures in Australia, and saw a need for ‘a planned and managed approach to determining the optimal size and composition of the higher education sector’ (p. 187). In October 2023, of the 911,000 international student enrolments across all sectors, 331,000 were in Sydney and 259,000 in Melbourne, between them representing nearly two-thirds of the total.[14]

The draft Strategic Framework argues that ‘Australian communities and international students each have much to gain from increasing the share of regional Australia’s international student enrolments’ (p. 21). In particular, it notes regional higher education institutions are well placed to offer courses in areas such as nursing (p. 21).

However, as noted in the International Education Interim Report, the concentration of students in the major cities ‘is because the young people coming to Australia to study are seeking to live in metropolitan areas and there is little that government policy can do to change these market preferences’ (p. 89). The Committee also heard evidence that the Commonwealth Department of Health ‘does not strongly support international students completing rural clinical placements’ (p. 89).

According to the International Education Interim Report, because of the difficulties in recruiting students to regional campuses, a number of regional universities have established campuses in metropolitan central business districts to attract international students and generate revenue (p. 90).

There is also limited accommodation available in many regional areas, with vacancy rates often lower than in the major cities. For example, a February 2024 report on the 10 locations with the lowest rental vacancy rates included the Sunshine Coast (0.58%), Adelaide South (0.60%) and Cairns (0.63%). The same report quoted the vacancy rates as 1.20% for Sydney and 1.15% for Melbourne.

While both the International Education Interim Report (p. 92) and the Accord Report (p. 187) advocated for an expansion of Home Stay models such as the Gold Coast Host for the coast program, it is unclear how much impact this would have. The QILT 2022 Student Experience Survey of international undergraduate students suggested that only 3.1% of students were in Home Stay accommodation, while 49.4% were in private rental accommodation (p. 29).

Total enrolment limits

Proposed section 26B provides that the Minister may set a total enrolment limit of overseas students for a provider or class of providers for one or more specified years by legislative instrument. The limit may relate to new overseas student enrolments or a combined total of new and ongoing overseas student enrolments (proposed subsection 26B(2)).

Proposed subsection 26B(6) provides that a class of providers may be specified by reference to any matter, including, but not limited to, any of the following:

 (a)  the kind of provider;

 (b)  the kind of courses provided by the provider;

 (c)   the location of courses provided by the provider;

 (d)  other circumstances applying in relation to the provider.

The Explanatory Memorandum gives as examples, ‘Table A providers’ (as per the Higher Education Support Act 2003), ‘newly registered providers’, or ‘higher education providers located in a metropolitan area’ (p. 55). However, the Minister is not constrained by these examples, and will have the power to impose limits on any class of provider as they see fit.

The legislative instrument may make ‘different provision’ – set different limits – according to classes of providers and/or years (proposed subsection 26B(7)). It may also exempt from the total enrolment limit (proposed subsection 26B(4)) certain courses that may be specified ‘by reference to any matter, including the location of the course’ (proposed subsection 26B(5)). The Explanatory Memorandum gives the example that the Minister could exempt courses delivered by a provider at a regional location from that provider’s enrolment limit (p. 56).

The legislative instrument must either specify the total enrolment limit or specify the method for setting the limit (proposed subsection 26B(3)). It must also be made before 1 September of the year before the year to which it first applies ((proposed subsection 26B(9)). If the instrument or a variation to an existing instrument applies to a registered VET provider, the Minister must seek the written agreement of the Minister who administers the NVETR Act.

Proposed section 26C allows the Minister to determine a total enrolment limit for a provider by giving the provider a written notice. This notice may also be given at any time and apply to any year (proposed subsections 26C(2) and (7)). Proposed section 26C is drafted in similar terms to proposed section 26B in how it sets out the scope for determining the total enrolment limits for a particular provider. For VET providers the Minister must again seek the written agreement of the Minister responsible for the NVETR Act. The Minister must also give a copy of the notice to the Secretary, and the ESOS agency for the provider if that is not the Secretary.

Course enrolment limits

The Accord Report raised concerns about high concentrations of international students at both the institutional and course level having a negative impact on the student experience for both domestic and international students (p. 183).

In 2022, 171,000 of the 449,000 international higher education students were enrolled in management and commerce courses.[15] This has led to a high concentration of international students in these courses at some institutions. For example, at both Charles Sturt and Central Queensland universities, international students represent over 90% of enrolments for management and commerce, where study is at least partially undertaken on an internal mode of attendance.[16]

Proposed Subdivision C of proposed Division 1AA of Part 3 of the ESOS Act contains provisions for the Minister to set course enrolment limits by legislative instrument for a class of registered providers (proposed section 26E) or written notice to a registered provider (proposed section 26F). In both cases the Minister may limit the number of overseas student enrolments for a course, or a specified class of courses, for a specified number of years.

For the most part the provisions in proposed sections 26E and 26F reflect the total enrolment limit provisions in proposed sections 26B and 26C respectively, but in relation to courses. For example, as with the total enrolment limits, the course enrolment limits that can be set for overseas students for a course with a provider can be in relation to the number of new overseas student enrolments or the combined number of new and ongoing overseas student enrolments (proposed subsections 26E(2) and 26F(2)). Also, while a legislative instrument must be made before the 1 September before the first year to which course enrolment limit applies (proposed subsection 26E(8)), the written notice to a provider can be given at any time (proposed subsection 26F(6)).

However, the provisions for setting course enrolment limits contain distinct differences from the equivalent provisions for setting total enrolment limits. The examples of matters by which a ‘class of providers’ may be specified in a legislative instrument include ‘the number of overseas students enrolled with the provider’ (proposed paragraph 26E(5)(d)). The Minister could therefore apply a course enrolment limit to all providers who are exceeding a certain number of total overseas student enrolments. Course enrolment limits can be set to differ not just by year but also by course and class of courses (proposed subsection 26E(6) and 26F(5)).

Penalties for registered providers who exceed enrolment limits

Proposed sections 26D and 26G set out obligations for registered providers (except exempt providers) to not enrol an overseas student for a course if it would result in the provider exceeding their total enrolment limit or course enrolment limit for the year, whether the limit is set by legislative instrument or written notice. In determining whether the provider has exceeded the total or course enrolment limit, students enrolled for the year in question prior to the legislative instrument being made or varied, or the written notice being given are to be taken into account (proposed subsections 26D(2) and 26G(2)).

Proposed Division 1AA—Automatic period of suspension for exceeding limits on enrolment of Part 6 of the ESOS Act (at item 49 of Schedule 1 to the Bill) outlines the suspension penalties for providers that exceed their total enrolment limit (proposed section 96) or course enrolment limits (proposed section 96A), and thereby fail to comply with proposed section 26D or proposed section 26G respectively.

Providers that exceed their total enrolment limit will have their registration suspended for all courses, except those that were originally exempted from the limit (proposed subsection 96(1)). If a provider exceeds their course enrolment limit, it is the registration of the course that is suspended. However, if the course enrolment limit is specified by reference to a location, the suspension of the course registration only applies for that specific location (proposed subsection 96A(1)).

As a consequence of suspension of registration, providers will be unable to enrol, or solicit or accept money from an overseas student for the suspended courses in relation to the year in question, or permit a student to commence such courses if they have not yet commenced (proposed subsections 96(2) and 96A(2)). The Explanatory Memorandum states that these provisions mean that a provider can still deliver courses to, or receive payments from, overseas students who have commenced before suspension or are enrolled for later years (pp. 70, 72). The Secretary must give notice of suspension in writing to a provider and the relevant ESOS agency if that is not the Secretary (proposed subsections 96(4) and 96A(4)). Suspensions end at the earlier of 31 December of the year of suspension, or when the Secretary gives written notice (proposed subsections 96(5) and 96A(5)).

Transitional arrangements

Division 2, Part 7 of the Bill sets out the application and transitional provisions for setting course enrolment limits and total enrolment limits for 2025 and for subsequent years. When making a legislative instrument that applies to 2025, the Minister must only set the limits in relation to the total number of new overseas student enrolments, thereby excluding the ability to set the limits in relation to a combination of new and ongoing enrolments for a given year. For 2026 and onwards, when limits can be set in relation to new and ongoing enrolments, only students who were enrolled with the same provider as new overseas students for 2025 or later, can be counted towards the combined number.

Part 8: Automatic cancellation of specified courses

Part 8 inserts proposed Division 1AB—Automatic suspension and cancellation of courses specified by the Minister into Part 6 of the ESOS Act, which contains provisions for the Minister to suspend and cancel one or more classes of courses. Proposed subsection 96B(1) provides that the Minister may specify courses for suspension and cancellation by legislative instrument if satisfied:

(a)   there are or have been systemic issues in relation to the standard of delivery of the courses included in the class; or

(b)   the courses included in the class provide limited value to Australia’s current, emerging and future skills and training needs and priorities; or

(c)   it is in the public interest to do so.

Proposed subsection 96B(2) provides for considerations that the Minister may have regard to in making the legislative instrument, such as whether the provider of the course is in breach of certain legislative provisions or policies, or completion rates of the courses. The Explanatory Memorandum reiterates and expands on possible reasons for exercising these powers, relating to ‘providers who deliver courses that do not result in quality education outcomes for students’, and where ‘there are inherent issues with the quality of course delivery’ (p. 78). Several examples that may identify a problematic course are indicated:

• low completion rates
• high transferal rates to and from the course
• delivered exclusively to overseas students (excluding ELICOS courses and Foundation programs)[17]
• low-cost courses susceptible to use by non-genuine providers.

However, proposed subsection 96B(3) provides that the Minister is not limited to the considerations outlined in the Bill. The Minister must consult with the ESOS agencies before making an instrument, and if the instrument specifies VET courses, the Minister must seek the written agreement of the Minister responsible for the NVETR Act (proposed subsections 96B(6) and (7)).

Once included in the legislative instrument, a course receives automatic suspension if 30 days after that instrument commences, one or more students are enrolled in and have commenced the course (proposed subsection 96C(1)). Providers with a course under suspension cannot undertake recruitment or admission processes for the course (proposed subsection 96C(3)). If no students are enrolled in and have commenced the course 30 days after the instrument commences, including if the course has been under suspension but the students have since completed or withdrawn, the course is automatically cancelled (proposed section 96D).

Suspension and cancellation of a provider’s registration of a course apply to all locations (proposed subsections 96C(2) and 96D(3)).

Part 3: Management of provider applications

The Ministerial powers in Part 3 of Schedule 1 to the Bill contain some similarities to those recently introduced to the NVETR Act 2011, which allowed the Minister to suspend initial applications for registration in the VET sector.[18]

Part 3 inserts Division 5—Suspension of applications for registration into Part 2 of the ESOS Act, which contains provisions for the Minister to, by legislative instrument, suspend:

• the processing of applications for registration
• the processing of applications to add courses to registration
• the making of applications for registration
• the making of applications to add courses to registration.

Currently section 9 of the ESOS Act allows for providers to apply to their ESOS agency ‘to be registered to provide a course or courses at a location or locations to overseas students.’ Section 10H allows for registered providers to apply to their respective ESOS agency, ‘to add one or more courses at one or more locations to the provider’s registration.’ Applications from school providers must be accompanied by a recommendation certificate from their designated State authority.

Proposed sections 14C and 14D allow the Minister to, by legislative instrument, suspend ESOS agencies from processing applications for registration, and from processing applications to add courses to a provider’s registration. The Minister can either determine that ESOS agencies are     ‘not required’ to deal with the specified applications – leaving the ESOS agencies the discretion to decide – or ‘must not’ deal with the specified applications (proposed subsections 14C(1) and (3) and 14D(1) and (3)).

The legislative instrument must specify the beginning and end day to which it applies, and not exceed 12 months. But it can include applications made before or after the commencement of the instrument or the provisions in the Bill (proposed subsections 14C(6) and 14D(6)), which the Explanatory Memorandum explains is to ensure applications are not treated inconsistently owing to the date when they were made, which could be abused by non-genuine providers (p. 34).

The legislative instrument applies to any ‘processing activity’ which is defined broadly to essentially cover any activities in relation to the ESOS Act (item 24 of Schedule 1). It can apply to all provider registration applications, or additional course applications, but it can also apply to classes of applications (proposed paragraphs 14C(6)(a) and 14D(6)(a)).

Proposed sections 14E and 14F allow the Minister to suspend, by legislative instrument, the making of applications for registration as a provider, and the making of applications to add courses to a registration. The conditions of the suspension reflect those of proposed sections 14C and 14D, in requiring a specific beginning and end date no longer than 12 months, and the ability to express the suspension in relation to classes of applications.

Importantly, legislative instruments made under sections 14C through 14F are not subject to disallowance. According to the Explanatory Memorandum, this is to avoid creating uncertainty for the operations and functions of ESOS agencies, and for providers, were the instrument to be disallowed after having commenced (pp. 32, 38).

Before making a legislative instrument under proposed Division 5, the Minister must consult with each of the ESOS agencies. If the Minister does not administer the NVETR Act, the Minister who does administer it must give written agreement.

Other provisions

Increased regulation

This section covers parts 1, 2, 4, 5 and 6 of the Bill. These parts contain provisions which address integrity concerns raised in the various reviews covered in the background.

Parts 1 and 2: Education agents

Parts 1 and 2 contain provisions that address the ways in which providers relate to, report on and are given information about education agents.

Provider and education agent relationships

Item 4 inserts a definition of ‘education agent’ based on activity rather than relationship to a provider, which the Explanatory Memorandum explains is because there is not always a formal agreement for the latter (p. 17). These activities are recruiting; providing information, advice or assistance; or ‘otherwise dealing with’; overseas students or intending overseas students. The definition excludes permanent employees of the provider. Item 4 also inserts a definition for ‘education agent commission’, based on an exchange of monetary or non-monetary benefit to an education agent in connection with the activities mentioned above.

The Explanatory Memorandum asserts that inserting the definition of education agent commissions will also allow the Minister to amend the National Code in a way that bans commissions to be paid by providers to education agents for onshore student transfers (p. 2).

Item 5 inserts two additional factors that ESOS agencies must have regard to when deciding whether a provider or registered provider is fit and proper. These factors involve the relationship of ownership or control between providers (and their associates) and education agents (and their associates) (proposed subparagraphs 7A(2)(gaa) and (gab)). Item 6 inserts a provision requiring providers to notify their ESOS agency when there is a new relationship or change in an existing relationship of ownership or control between a provider (or an associate) and an education agent (or an associate) (proposed subsection 17A(4A)). The notice must be given within 10 business days after the change occurs (proposed subsection 17A(4B)).

Proposed section 21B (at item 10) gives the Secretary the power to request information from registered providers about commissions given by or on behalf of the provider to education agents in connection to their recruitment of accepted students. This information can include monetary amounts, the value and description of non-monetary benefits, and the number of accepted students recruited by the agent (proposed subsection 21B(3)). The request must be in writing and specify the reporting period, method for providing the information – including using PRISM, required documentation, and deadline of at least 30 days from the request being given to the provider (proposed subsections 21B(2) and (4)).

It is an offence of strict liability for a provider to fail to comply with a request, with a penalty of 60 penalty units (proposed subsections 21B(7) and (8)) – reflecting other offence provisions in the ESOS Act in relation to giving information, record keeping and education agents.

Transparency on education agent activities

The provisions in Part 2 will allow the Secretary or the relevant ESOS agency to give more extensive information to providers about education agents.

Firstly, it inserts a paragraph that adds an additional purpose for which the Secretary or ESOS agency can give information to registered providers: ‘protecting and enhancing Australia’s reputation for quality education and training services for accepted students’ (proposed paragraph 175(3)(c)). Proposed subsection 175(6) provides for the information to include information relating to the number of provider-to-provider transfers or course-to-course transfers of accepted students that were ‘recruited or otherwise dealt with by an education agent’, or to education agent commissions in connection with the recruitment of accepted students. Item 23 allows for the Secretary or the ESOS Agency to give information to providers that may have been gathered prior to the Bill’s commencement.

Parts 4-6: Stricter registration requirements

Course delivery to domestic students

Part 4 inserts provisions that require a provider seeking registration to have first delivered a course to ‘students in Australia other than overseas students’ for consecutive study periods totalling at least 2 years. This requirement allows for a course to be delivered at multiple locations, and for normal study breaks to count towards the 2 years without interrupting the consecutive status (proposed subsections 11(2) and (3)). Proposed paragraph 11(1)(fa) exempts from this requirement ELICOS or Foundation Program providers (who cannot deliver courses to domestic students), Table A providers (who meet the eligibility criteria of the Tertiary Education Quality and Standards Agency Act 2011 to self-accredit courses), and registered providers.

Course delivery without substantial breaks

Part 5 inserts provisions whereby a provider’s registration is automatically cancelled if they have not provided a course at a location to an overseas student in a period of 12 consecutive months (the measurement period) on or after 1 January 2024. Approved school providers are exempted owing to their small and inconsistent overseas student enrolments.

The ESOS agency must give the provider written notice of the cancellation and also notify the Secretary, if that is not the ESOS agency (proposed subsection 92A(3)). Providers can apply for an extension to the measurement period no later than 90 days before it is due to end (proposed subsection 92B(2)). The ESOS agency can grant one or more extensions but only to a maximum total length of 12 months (proposed subsections 92B(5) and (6)).

Part 6 inserts provisions whereby ESOS agencies and designated State authorities, in considering whether a provider is fit and proper to be registered, must take into account whether the provider is under investigation for any offences under:

• the ESOS Act
• Divisions 270 (slavery and slavery‑like offences) or 271 (trafficking in persons) of the Criminal Code Act 1995
• section 590 of the Corporations Act 2001.

The Minister will also be given the power to specify additional offences via legislative instrument (proposed paragraph 7A(2AA)(d)).

These provisions are to be applied to new applications, existing applications, and already registered providers, regardless of when the conduct constituting the offence under investigation occurred (Item 44).

Concluding comments

Most of the regulatory changes in the Bill (Parts 1, 2, 4, 5 and 6) and the ministerial powers to suspend new registrations (Part 3) have been raised in numerous reviews and reports, and are likely to be supported by the sector and stakeholders. Some of the provisions reflect recent amendments to the NVETR Act and general efforts to address unscrupulous behaviour and practices affecting the integrity of the sector. The difference with this Bill is by applying it to all ESOS providers, it covers the higher education as well as the VET sector, and to a lesser extent, some schools.

Part 8, which allows the Minister to cancel courses, may receive more scrutiny as this is a much more interventionist and discretionary power. The scope for the Minister to exercise power is broad and vague, covering systemic issues in standard of delivery, value to Australia’s ‘current, emerging and future skills and training needs and priorities’, and the public interest.

The part of the Bill which has already received the most reaction and is a significant policy shift in Australia’s international education sector, is the Ministerial power to set enrolment limits on overseas students, in Part 7 of the Bill. Although the Minister may apply the limits in narrow circumstances, such as setting limits by classes of courses or by locations, they will have the power to apply it very broadly and with potentially serious repercussions. For example, if the Minister imposes a total enrolment limit on a provider which they exceed, the provider will have their registration suspended in all courses for all locations in that year. Across the sector overall, the setting of limits on enrolments has the potential to have a significant impact on the finances of providers, including public universities.