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2010-2011
The Parliament of the Commonwealth of Australia
HOUSE OF REPRESENTATIVES
EDUCATION SERVICES FOR OVERSEAS STUDENTS (REGISTRATION
CHARGES) AMENDMENT BILL 2011
EDUCATION SERVICES FOR OVERSEAS STUDENTS AMENDMENT
(REGISTRATION CHARGES CONSEQUENTIALS) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Tertiary Education, Skills, Jobs and
Workplace Relations, Senator the Honourable Chris Evans)
EDUCATION SERVICES FOR OVERSEAS STUDENTS
(REGISTRATION CHARGES) AMENDMENT BILL 2011
EDUCATION SERVICES FOR OVERSEAS STUDENTS AMENDMENT
(REGISTRATION CHARGES CONSEQUENTIALS) BILL 2011
OUTLINE
The Education Services for Overseas Students (Registration Charges) Act 1997 (the
ESOS Charges Act) operates in conjunction with the Education Services for Overseas
Students Act 2000 (the ESOS Act) with the aim of:
· ensuring only courses and providers of those courses registered on the
Commonwealth Register of Institutions and Courses for Overseas Students
(CRICOS) may offer or provide courses to students on student visas;
· ensuring that international students in Australia receive the education and
training for which they have paid;
· protecting the reputation and integrity of Australia's education and training
export industry; and
· strengthening public confidence in the integrity of the student visa program.
The Commonwealth recovers the costs of administering the ESOS Act through
compulsory registration fees charged to all providers wishing to be registered on the
Commonwealth Register of Institutions and Courses for Overseas Students
(CRICOS), which allows them to offer courses to overseas students.
The purpose of the Education Services for Overseas Students (Registration Charges)
Amendment Bill 2011 and the Education Services for Overseas Students Amendment
(Registration Charges Consequentials) Bill 2011 (the Bills) is to make amendments to
the ESOS Charges Act and the ESOS Act to provide for recommendations arising
from the review of the Education Services for Overseas Students legislative
framework, dated February 2010, titled Stronger, simpler, smarter ESOS: supporting
international students (the ESOS Review) conducted by the Hon Bruce Baird AM.
Key recommendations of the ESOS Review were, inter alia, for regulators to adopt a
risk assessment and management approach to the registration and ongoing monitoring
of education providers delivering courses to international students, including the costs
to apply at registration and through the period of registration; and that ESOS be made
stronger by ensuring resourcing levels for regulatory activities are adequate.
The Bills creates a new fee structure to replace the current charging structure for the
compulsory annual registration charge payable by all CRICOS registered providers.
The new base fee, the compliance history fee, charge per student enrolment and
charge per registered course is designed to cover the administrative costs of the
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registration process and reflect the size of any associated supervision, compliance or
enforcement activity needed to ensure that only reputable providers are permitted to
operate.
The Bills also introduces an entry to market charge payable for the first three years of
registration which will replace the current initial registration charge. The entry to
market charge is designed to recoup the additional costs associated with new
applications for registration and the additional supervision required by institutions
with a shorter history of registration.
FINANCIAL IMPACT
The Bills will have the following impact on the fiscal balance as registration charges
are collected from international education providers on a cost recovery basis. The
financial implications for the Commonwealth outlined below are appropriated back to
the department to administer the ESOS Act.
11/12 12/13 13/14 14/15
$6.5m $6.6m $6.5m $6.6m
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NOTES ON CLAUSES
For ease of description, this explanatory memorandum uses the following
abbreviations:
`CRICOS' means the Commonwealth Register of Institutions and Courses for
Overseas Students as provided under section 10 of the Education Services for
Overseas Students Act 2000
`the Amendment Act' means the Education Services for Overseas Students
(Registration Charges) Amendment Act 2011;
`the Amendment Bill' means the Education Services for Overseas Students
(Registration Charges) Amendment Bill 2011.
`the Consequentials Bill' means the Education Services for Overseas Students
Amendment (Registration Charges Consequentials) Bill 2011
`the ESOS Act' means the Education Services for Overseas Students Act 2000
`the ESOS Charges Act' means the Education Services for Overseas Students
(Registration Charges) Act 1997
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Education Services for Overseas Students
(Registration Charges) Amendment Bill 2011
Clause 1 - Short title
Provides for the Act to be cited as the Education Services for Overseas Students
(Registration Charges) Amendment Act 2011.
Clause 2 - Commencement
This clause inserts a three column table setting out commencement information for
various provisions of the Act. Each provision of the Act specified in column 1 of the
table commences (or is taken to have commenced) in accordance with column 2 of the
table and any other statement in column 2 has effect according to its terms.
Table item 1 provides that sections 1 to 3 and any other provisions of the Act not
otherwise covered by the table to commence on Royal Assent.
Table item 2 provides that that Schedule 1 commences on a single day to be
proclaimed, or if any of the provisions do not commence within 6 months from Royal
Assent, they commence on the day after that 6 month period expires.
A note makes it clear that these commencement times will not be amended by any
later amendments of the Act.
Clause 3 - Schedule(s)
Provides that each Act that is specified in a Schedule is amended or repealed as set
out in the applicable items in the Schedule and that any other item in a Schedule has
effect according to its terms.
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Schedule 1--Amendments
Education Services for Overseas Students (Registration Charges) Act 1997
Rebased annual registration charge
Items 1 and 6 amend the ESOS Charges Act to revise respectively, the annual
registration charge (under section 5 of the ESOS Charges Act) and the initial
registration charge (under section 6 of the ESOS Charges Act).
Section 5 provides for the annual registration charge. Subsection 5(1) provides that all
providers who are registered on 1 January of a year must pay the annual registration
charge for the year. Subsection 5(2) sets out the basis for calculation of the annual
registration charge. Section 6 sets out the initial registration charge payable by all
bodies seeking their first CRICOS registration under the ESOS Act.
Item 1 repeals and substitutes subsection 5(2) of the ESOS Charges Act to provide a
revised formula for calculation of the annual registration charge. Item 2 makes a
technical amendment for the purpose of Item 1.
Under this amendment, the annual registration charge is calculated by adding together
four components. The first component is a flat fee in the amount of $1,300 which will
be payable by all providers except by government and non-government schools that
wish to maintain a CRICOS registration but do not have any enrolled overseas
students. The second component is calculated by multiplying $10 by a provider's
`total enrolments' (as determined under subsections 5(3) and (4) of the ESOS Charges
Act) for the previous year. The third component is calculated by multiplying $100 by
the provider's total number of courses registered on 1 January of the year in which the
annual registration charge is to be paid. The fourth component, in the amount of
$1,000, is only payable by a provider against whom the Minister has imposed
sanctions for non-compliance under section 83 of the ESOS Act.
Item 3 amends the mechanism for determining the quantum of `total enrolments'
under subsection 5(3) of the ESOS Charges Act. Subsection 5(3) provides that `total
enrolments' for a provider in a year is calculated by adding together the number of
enrolments of overseas student for each course provided by the provider in the year.
Under this amendment, each student who is enrolled in a course of 13 weeks or more,
but less than 26 weeks duration at any time during the years shall count as 0.5 of an
enrolment; and each student who is enrolled in a course of less than 13 weeks
duration at any time during the year shall count as 0.25 of an enrolment.
Items 4 and 5 provide a mechanism for varying the amount of the annual registration
charge for those providers who represent a lower risk of defaulting on their
obligations. Currently section 5A of the ESOS Charges Act allows the annual
registration charge to be varied by a written instrument made by the
Governor General for which the Parliament must have passed a resolution approving
the instrument. Under these amendments, Items 4 and 5 repeal section 5A and,
instead, provide a regulation-making power to allow the imposition of the annual
registration charge to be varied for different classes of providers on the basis of their
risk profile. Under this proposal the regulations may exempt certain classes of
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providers from the requirement to pay all components of the annual registration
charge, and/or to prescribe a lesser amount of the annual registration charge to be paid
by certain classes of providers.
New entry to market charge
As part of the broader rebasing of the annual registration charge, Item 6 substitutes
the initial registration charge with the entry to market charge. The entry to market
charge will be generally imposed on those providers seeking their first registration,
and on those providers whose registration has been cancelled or, in some cases,
expired. The entry to market charge will be payable annually by registered providers
in each of their first three years of registration. Currently, before becoming registered,
a provider must pay the initial registration charge. Under this proposal, a provider will
pay: $7,500 at the time the provider first becomes registered; $5,000 on the first
anniversary of the day on which the provider was registered; and $2,500 on the
second anniversary of the day on which the provider was registered.
Item 6 also provides a regulation making power to exempt those providers from the
requirement to pay the entry to market charge. Those providers to be exempted would
be publicly-funded providers who present a significantly lower risk of defaulting on
their obligations under the ESOS Act such as publicly funded providers (ie, Table-A
providers under the Higher Education Support Act 2003 and, TAFEs), and
government schools. The rationale for the exemption from the entry to market
payment is based on the evidence that the likelihood of publicly-funded institutions
closing or defaulting on their obligations is extremely low compared to some private
providers. On this basis, such bodies require far less supervisory activity under the
ESOS framework, and accordingly should be charged a reduced or lesser amount.
Item 12 makes a minor consequential amendment for the purpose of Item 6.
The amendments made by Items 1 and 6 provide that both the revised annual
registration charge (under new subsection 5(2)) and the entry to market charge (under
new section 6) will be indexed in accordance with section 7 of the ESOS Charges Act.
Items 7, 8, 9, 10 and 11 make technical and consequential amendments for the
purpose of the indexation arrangements made under Items 1 and 6.
New regulation making power
Item 13 repeals section 9 and confers a regulation making power on the
Governor-General. Under this amendment, the Governor-General may make
regulations prescribing matters required, necessary or convenient for the operation of
or giving effect to the ESOS Charges Act. Any such regulations would be legislative
instruments under subsection 6(a) of the Legislative Instruments Act 2003. Section 9,
which provided for transitional arrangements to deal with the commencement of the
ESOS Charges Act in 1997, is now a redundant provision.
Application provisions
Item 14 is an application provision aimed at avoiding unintended consequences of the
amendments made by this Act. Subitem 14(1) provides that all of the amendments
made by Schedule 1 to the Registration Charges Amendment Bill, except the
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amendments made by Item 6 (in relation to the new entry to market charge) and Item
13 (in relation to the new regulation making power in favour of the
Governor-General) shall only apply on or after the first 1 January that occurs after a
day to be fixed by Proclamation, or six months after the Amendment Act receives the
Royal Assent, whichever is the sooner.
Subitem 14(2) provides that the amendment made by Item 6 shall apply in relation to
any recommendation made by a designated authority for a State under section 9 of the
ESOS Act on or after the first 1 January that occurs after Schedule 1 commences.
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Education Services for Overseas Students Amendment
(Registration Charges Consequentials) Bill 2011
Clause 1 - Short title
Provides for the Act to be cited as the Education Services for Overseas Students
(Registration Charges Consequentials) Act 2011.
Clause 2 - Commencement
This clause inserts a three column table setting out commencement information for
various provisions of the Act. Each provision of the Act specified in column 1 of the
table commences (or is taken to have commenced) in accordance with column 2 of the
table and any other statement in column 2 has effect according to its terms.
Table item 1 provides that sections 1 to 3 and any other provisions of the Act not
otherwise covered by the table to commence on Royal Assent.
Table item 2 provides that Items 1 to 6 of Schedule 1 commence at the same time as
Schedule 1 to the Education Services for Overseas Students (Registration Charges)
Amendment Act 2011, which commences on a single day to be proclaimed, or if any
of the provisions do not commence within 6 months from Royal Assent, they
commence on the day after that 6 month period expires.
Table item 3 provides that Item 7 of Schedule 1 commences on Royal Assent.
Table item 4 provides that Items 8 to 17 of Schedule 1 commence at the same time as
the provisions covered by table item 2, which commence on a single day to be
proclaimed, or if any of the provisions do not commence within 6 months from Royal
Assent, they commence on the day after that 6 month period expires.
A note makes it clear that these commencement times will not be amended by any
later amendments of the Act.
Clause 3 - Schedule(s)
Provides that each Act that is specified in a Schedule is amended or repealed as set
out in the applicable items in the Schedule and that any other item in a Schedule has
effect according to its terms.
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Schedule 1--Amendments
Education Services for Overseas Students Act 2000
Summary
The Consequentials Bill makes necessary consequential amendments to the ESOS Act
to implement the rebased annual registration charge within the ESOS framework. The
Consequentials Bill also makes other amendments to harmonise ESOS with domestic
regulators and the existing quality assurance frameworks.
Explanation of the changes
Rebased annual registration charge: consequential changes
Items 1, 2, 3, 4, 5, 6, 8 and 9 make consequential amendments for the purpose of Item
6 of the Registration Charges Amendment Bill. Among these amendments, Item 3
repeals the definition of initial registration charge. This concept is superseded by
three new definitions: entry to market charge (inserted by Item 1), first entry to
market charge (inserted by Item 2) and second or third entry to market charge
(inserted by Item 4).
Determination of the registration period
Item 7 repeals and substitutes subsections 9(10) and (11) of the ESOS Act to clarify
the apparent discretionary aspect of the Secretary's determination of a provider's
registration period. New subsection 9(10) will require the Secretary to specify a
period of registration at the time she or he registers a provider, and that the period
specified be more than 2 years, but not more than 5 years.
Item 7 also inserts new subsection 9(10B) to avoid the situation where a registered
provider's registration may expire as a result of the delay between the
recommendation being made by a designated authority that a provider be re-
registered, and the Secretary deciding whether to re-register the provider. Under this
provision, the provider's registration is taken to continue until the Secretary makes his
or her decision.
Lastly, new subsection 9(10A) has been included to make clear that the operation of
new subsection 9(10), demarcating the Secretary's determination of a provider's
registration period, does not limit the Minister's power to cancel a provider's
registration during the initial two years of a provider's registration.
Entry to market charges: liabilities and obligations of registered providers
Item 10 repeals and substitutes section 12 for the purpose of the new entry to market
charge (as inserted by Item 6 of the Amendment Bill). Currently, section 12 requires
the Secretary to give a written notice to each provider who is liable to pay the initial
registration charge. Under this amendment the Secretary must give each provider a
written notice setting out the amount of the first, second and third entry to market
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charges they must pay. A notice must be given at least 30 days before each the
respective first, second and third charges become due for payment. The table under
new subsection 6(2) of the Registration Charges Amendment Bill sets out the time
when each of the three entry to market charges become due for payment.
Should the Secretary fail to provide the written notice, new subsection 12(3) clarifies
that a provider is still required to pay an entry to market charge.
Item 11, which inserts new section 23A into the ESOS Act, imposes upon all
registered providers who become liable for payment of a second or third entry to
market charge an obligation to pay the charge. Item 12, which inserts new paragraph
90(1)(b) into the ESOS Act, includes a failure to pay a second or third entry to market
charge (as imposed by new section 23A) as a ground for automatic suspension of a
registered provider's registration (under subsection 90(1) of the ESOS Act).
Items 13 and 14 vary the amount of the reinstatement fee under section 171 of the
ESOS Act. Subsection 171(1) of the ESOS Act requires a registered provider to pay a
reinstatement fee before a suspension of, or a condition on, the registration of the
provider is removed under subsections 89(3), 89A(3), 90(2) or 94(2) or (4). Under this
amendment, the amount of the reinstatement fee will be $500 for the first calendar
year, and thereafter, for each later year, the amount of the reinstatement fee shall be
indexed in accordance with subsection 171(5) of the ESOS Act.
Items 15 and 16 amend sections 172 and 173 of the ESOS Act respectively to include
failure to pay a second or third entry to market charge as a ground for imposition of a
late payment penalty (under subsection 172(1) of the ESOS Act) and as a recoverable
debt due to the Commonwealth by court action (under subsection 173(1) of the ESOS
Act).
Application provisions
Item 17 is an application provision aimed at avoiding unintended consequences of the
amendments made by this Act. The application arrangement made by subitem 17(1)
deals with new subsection 9(10) of the ESOS Act (inserted by Item 7) which concerns
the requirement that the Secretary must specify a period of registration at the time she
or he registers a provider, and that the period specified must be more than 2 years, but
not more than 5 years. Subitem 17(1) provides that new subsection 9(10) shall only
apply to registrations that occur after this Act receives Royal Assent.
The application arrangement made by subitem 17(2) concerns new subsection 9(10B)
of the ESOS Act (inserted by Item 7) which deals with the situation where a
registered provider's registration may expire as a result of the delay between the
recommendation being made by a designated authority that a provider be re-
registered, and the Secretary deciding whether to re-register the provider. Subitem
17(2) provides that new subsection 9(10B) shall only apply to a registration that is due
to expire after this Act receives Royal Assent.
The application arrangement made by subitem 17(3) concerns new paragraph
171(4)(a) of the ESOS Act (inserted by Item 13) which varies the amount of the
reinstatement fee imposed under section 171 of the ESOS Act. Subitem 17(3)
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provides that the new amount of the reinstatement fee shall only apply in relation to a
suspension of, or a condition imposed on, the registration of a provider on or after the
first 1 January that occurs after commencement of the Amendment Act, which will be
a day to be fixed by Proclamation or six months after the Amendment Act receives
the Royal Assent, whichever is the sooner.
The application arrangement made by subitem 17(4) shall only apply to the
amendments made by Schedule 1 (except the amendments made by Items 7 and 13) in
relation to any recommendation made by a designated authority for a State under
section 9 of the ESOS Act on or after the first 1 January that occurs after
commencement of the Amendment Act, which will be a day to be fixed by
Proclamation or six months after the Amendment Act receives the Royal Assent,
whichever is the sooner.
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