The PRESIDENT (10:01): Does any senator wish to have that question put?

Senator RYAN (Victoria—Assistant Cabinet Secretary) (10:01): by leave—I made a statement in the Senate on 26 November 2015 regarding notice of motion 964, moved by Senator O'Neill. The statement I made was correct based on the advice I had received at that time. I have subsequently been advised that there are in fact documents recording contacts between the Australian government and the New South Wales government concerning the old Gosford Public School site. This is the first opportunity available to me to correct the record, and I take this opportunity to do so. These documents will be released in accordance with the motion agreed by the Senate last week. The minister will write to the President of the Senate regarding timing of the release of the documents.

Senator JACINTA COLLINS (Victoria) (10:02): Labor is opposed to the Australian Crime Commission Amendment (Criminology Research) Bill 2015. In the words of one of the former ministers in this area whom I have discussed this bill with, it simply is not a good fit. The purpose of the bill is to amend the Australian Crime Commission Act 2002, or the ACC Act, and repeal the Criminology Research Act 1971, or the CR Act, in order to merge the Australian Institute of Criminology into the Australian Crime Commission.

The bill comprises two schedules. Schedule 1 makes amendments to the ACC Act. The purposes of the amendments in this schedule are to enable the merged agency to continue to carry out the Australian Institute of Criminology's research work; to share criminological research and information with any person, including the private sector; and to carry out commissioned research. Schedule 2 repeals the Criminology Research Act to abolish the AIC as a statutory agency. The Australian Institute of Criminology, or the AIC, was established in 1973 under the CR Act. As a Commonwealth statutory authority, the AIC is regulated under the Public Governance, Performance and Accountability Act 2013. Staff of the AIC are generally engaged under the Public Service Act 1999 but may also be employed or engaged by the AIC for a particular project.

According to the AIC 2013-14 annual report, the AIC:

… has served as Australia's national research and knowledge centre on crime and justice for more than 40 years, undertaking and promulgating new research, monitoring and analysing crime trends, and providing advice to inform legislative, policy and practice change.

The independent status of the AIC has meant its output is not only robust, but trusted by government, law enforcement and justice agencies across the nation and—

I should stress from the evidence the committee received—

internationally. Much of the AIC's work falls under the Commonwealth Government’s strategic research priorities, in particular, the priority themes of 'living in a changing environment', 'promoting population health and wellbeing' and 'securing Australia's place in a changing world'.

A Criminology Research Advisory Council, established under the CR Act in 2011, advises the Director of the AIC on strategic research priorities, communications and the Criminology Research Grants Program. The advisory council consists of nine members, who represent the Australian government and all states and territories. This composition ensures that the areas targeted for research funding reflect both national and state and territory priorities. The Criminology Research Grants Program, managed by the AIC, is funded by the Commonwealth and state and territory governments. The Director of the AIC approves a series of research grants each year, taking into account the recommendations of the Criminology Research Advisory Council. The program funds research that has relevance to jurisdictional policy in the areas of law, police, judiciary, corrections, mental health, social welfare, education and related fields.

The Australian Crime Commission commenced operation on 1 January 2003. It has its origins in the April 2002 Council of Australian Governments leaders summit, which agreed that a new national framework was needed to meet the challenges of multijurisdictional crime. It replaced and combined the strategic and operational intelligence and specialist investigative capabilities of the National Crime Authority, the Australian Bureau of Criminal Intelligence and the Office of Strategic Crime Assessments.

According to its latest annual report, the aim of the ACC is:

Reduced serious and organised crime threats of most harm to Australians and the national interest.

To achieve this aim, the ACC has a range of special coercive powers such as the capacity to compel attendance at examinations, the production of documents and the answering of questions, similar to a royal commission. The ACC also has an intelligence-gathering capacity and a range of investigative powers common to law enforcement agencies, such as the power to tap phones, use surveillance devices and participate in controlled operations. Like the AIC, the ACC is regulated under the Public Governance, Performance and Accountability Act, and staff of the ACC are engaged under the Public Service Act.

With that background, the 2014 Commission of Audit, announced by the Abbott government and released in February 2014, made a number of recommendations, including that:

A consolidated crime intelligence capability would also better support law enforcement operations …

The Commission of Audit did not suggest the possibility of the AIC merging with the ACC but proposed that consideration be given to moving the AIC to a university. This, perhaps, would have been a better framework to maintain the independence.

Prior to the 2015 budget, there was media speculation that the two bodies—the AIC and the ACC—would merge, and at the time Labor's shadow minister for justice, Mr Feeney, wrote to the minister requesting a briefing. However, the minister noted that the government was yet to make a decision regarding the proposed merger and so would not be offering a briefing at that time. Following the 2015 budget, the Minister for Justice announced the appointment of the ACC's CEO, Chris Dawson, as the newly appointed interim director of the AIC. At that time, Minister Keenan indicated that the government was considering whether the AIC should be placed within the ACC, but at that date no final decision had been made. The minister said:

In the interim, the ACC and AIC will continue to exist and operate as separate entities, while working together on expanding existing relationships.

Finally, on 25 September this year, the minister announced that the AIC would be placed within the ACC to boost research capability at the nation's criminal intelligence agency. The AIC is to be incorporated into the ACC as an independent research branch known as the Crime and Justice Research Centre, the CJRC. The minister stressed that the merger is not about cutting costs or personnel of either agency; it is about creating a unified workforce incorporating staff of both agencies.

The minister has stated that this merger brings together Australia's national criminal intelligence and research capabilities under one banner, and that having a unified resource of this type will enrich our national understanding of criminal activity, including serious and organised crime and terrorism, allowing police, justice agencies and policy-makers at all levels of government to adopt a more effective, efficient, evidence based response to crime.

Under the proposed merger, the AIC will carry its research functions over to the ACC, including its ability to undertake commissioned research. The AIC's corporate functions will be merged with those of the ACC. The position of AIC director will be abolished.

The Senate Legal and Constitutional Affairs Committee recently undertook an inquiry into this bill and the committee received correspondence from various stakeholders raising concerns about the proposed merger. As a result, Labor believes that the Australian Institute of Criminology's functions—which are to promote justice and to reduce crime by conducting criminological research, and communicating the results of that research to the Commonwealth, the States and the community—are best undertaken by an independent agency that can guarantee the independence of the work undertaken.

Further, the independence of the AIC has ensured that the programs for awarding grants and engaging specialists has been, and has been seen to be, independent and robust. As discussed in Labor's additional comments to the Legal and Constitutional Affairs Committee report, we believe that any positives that have been secured through the merger of the AIC and the Australian Crime Commission—such as access to classified data—can be secured through legislation and/or interagency agreements, and does not require a full merger.

The continued integrity and independence of criminological research in Australia is vital for both the quality of research but also the public trust in crime statistics. It is not in the public or the national interest for such statistics to ever be perceived to be anything less than completely accurate and compiled by independent and skilled professionals.

Labor senators continue to have concerns about these aspects of the bill. The appointment of the ACC CEO Chris Dawson as the interim director of the AIC in July 2015 raised concerns about there being an impending takeover of the AIC. Mr Dawson, appearing before the committee twice—first in his capacity as interim director of the AIC and then as director of the ACC—raised some concerns about the impact of the government's merger on the independence of his office.

We recommend that the Government further consider the concerns raised by stakeholders during the public hearing, and in the submissions received by the committee regarding maintaining the integrity and independence of the research currently undertaken by the AIC, including maintaining funding and access to datasets, and maintaining public access to data, research and library resources of the JV Barry Library operated by the AIC. If it were to proceed with a merger, amendments to the minister's second speech and explanatory memorandum to the bill would help to address these concerns by committing to writing the verbal assurance given by the government regarding these matters.

Further, Labor believes that the government should consider establishing a statutory advisory body similar to the existing AIC council to advise the ACC board on setting the criminological research agenda and priorities and allocation of grants. It is clear that this bill is not about improving government service delivery. It is about defunding services and that will result in reduced capabilities. As recently as last week, Prime Minister Turnbull's appointment as Secretary to the Department of Prime Minister and Cabinet, Martin Parkinson, warned against degrading the abilities and organisational memory of our Public Service through outsourcing and redundancies. The government would do well to heed this advice.

We do not think the merger of these two agencies—or a takeover, as has been suggested by some—is a good fit. Therefore, Labor will oppose the Australian Crime Commission Amendment (Criminology Research) Bill 2015 in its current form.

Senator McKIM (Tasmania) (10:14): The Australian Crime Commission Amendment (Criminology Research) Bill 2015 seeks to repeal the Criminology Research Act 1971 and amend the Australian Crime Commission Act 2002. This bill abolishes the Australian Institute of Criminology as a statutory agency and merges its functions into the Australian Crime Commission to form a research branch, within the Australian Crime Commission, to be called the Australian Crime and Justice Research Centre.

The Australian Institute of Criminology has a long and proud history of undertaking and publishing world-class criminological research. John Vincent Barry, a lawyer, Supreme Court judge and pioneer of criminology in Australia, advocated for many years for the establishment of a national institute of criminology in Australia. His efforts came to fruition in 1970, when it was announced that such an institute was to be formed. The JV Barry Library, which is the most comprehensive library based collection in the field of criminology and criminal justice in Australia, was named after John Vincent Barry in recognition of his early work in this area.

The exact reasoning for this merger is still unclear. The Commission of Audit proposed that consideration be given to locating the AIC in a university. How we have ended up here, with a bill to merge the AIC with the ACC, is something only the government can adequately explain. I note that in the second reading speech in the other place, Minister O'Dwyer stated:

The Government sees great opportunity in combining the resources of the AIC and the ACC to provide Australian law enforcement agencies with central access to a consolidated and comprehensive criminal research and intelligence resource.

Having a unified resource of this type would significantly enhance support for law enforcement and bolster Australia's response to serious and organised crime.

The Greens have concerns that this is, in fact, much more of a takeover than a merger and will result in functions of the AIC being lost or subsumed. The first function of the AIC in the Criminology Research Act 1971 is 'to promote justice and reduce crime.' Nowhere in this legislation does it say that one of the functions of the Australian Crime and Justice Research Centre will be to promote justice and reduce crime. In fact, when that is compared to the first function of the ACC in the Australian Crime Commission Act 2002, which is:

… to collect, correlate, analyse and disseminate criminal information and intelligence and to maintain a national database of that information and intelligence—

it is clear that we are dealing with organisations that have very different aims and very different functions. It seems bizarre to be merging two agencies which have very different aims and very different functions, particularly as the minister has stated that this merger is not about reducing costs.

Promoting justice and reducing crime is really important in Australia. A 2011 AIC report found the cost of crime in Australia is approximately $47.6 billion. This bill provides no guarantee that when the AIC becomes part of the ACC the depth and breadth of research currently undertaken by the AIC will continue. That was a common theme in many of the submissions to the Legal and Constitutional Affairs Legislation Committee. We heard on that committee from Professor Rick Sarre, president of the Australian and New Zealand Society of Criminologists, who stated in his evidence to the committee:

There is no doubt at all that the membership of our organisation would be with the maintenance of the status quo. I am very happy to say that.

The committee also heard from the acting director of Griffith Criminology Institute, Professor Janet Ransley, who stated in evidence to the committee:

I think once you put this research function in a law enforcement agency there is a capacity for it to be perceived as co-opted by law enforcement. It will lose that aura of independence. That would be a great shame for Australia.

The committee also heard concerns around the intent of combining the research function of the AIC with the law enforcement function of the ACC, whilst maintaining the current board structure of the ACC. Those concerns essentially were that the merger or the takeover, whilst maintaining the current board structure of the ACC, would diminish the research program currently undertaken by the Australian Institute of Criminology. Again I will quote from Professor Janet Ransley, who stated in evidence to the committee:

The ACC board, as it is currently constituted—by my understanding—comprises largely law enforcement-related personnel from the states and territories and federal agencies. I think that is an inappropriate body to be setting research directions as we would understand criminological research. I think it does show a lack of understanding about the distinction between law enforcement-related intelligence gathering—which is a legitimate and important function—and criminological research, which is about understanding the underlying factors that contribute to and worsen or reduce crime. I think that is not a great solution, to have the board—as currently constituted—directing research. I think it would result in a diminution of the research function, and it would be a disaster, actually.

The Crime Prevention Council submitted to the committee that the AIC has been highly respected and valued as a source of sound research and advice. The council further submitted that the diminution of its research, publications, overseas assistance and conference-organising functions would have an adverse effect on Australia's criminal justice influence and role in the region. Civil Liberties Australia, in their submission to the committee, said that they believe 'domestic crime issues may be neglected given the national priorities of the ACC'. Professor Rick Sarre, the president of the Australian and New Zealand Society of Criminology, stated in his evidence to the committee on that issue:

If you are looking at crime prevention and bringing safety and security to our communities, anti-terrorism is one arm, and the sort of intelligence gathering that the ACC has done so well for so many years is another arm. But, if you are talking about community development and you are talking about education, health, housing, welfare—all those sorts of things—and the things that the sociologists and psychologists are telling us are the grave risks to our community development, an intelligence-gathering body is not likely to engage in that sort of behaviour.

It is fair to say that when these matters were put to representatives of the ACC at the committee hearings they indicated to the committee that they were aware of the concerns that had been raised. But it is worth noting that, in general terms, none of the concerns that were raised with the committee have been addressed in this legislation. It will be interesting to hear whether the minister is prepared to make any further statements on these matters during the debate here in the Senate today.

The Greens certainly believe that the domestic crime issues that were referred to by Civil Liberties Australia and Professor Sarre are very important for Australia. They include things like parole supervision and reoffending, preventing youth offending and reoffending, how we deal with people in the justice system with mental illness, and drink-driving prevention—just to name a few. These are many of the issues that no doubt all senators would hear about regularly in the so-called law and order debate in this country. These are bread-and-butter law and order issues. Ultimately, if we as a parliament want to reduce crime in Australia—and, of course, if you reduce crime there are fewer victims of crime and Australia will become a safer place—then we need to better understand why people commit crimes and, importantly, understand what strategies and responses we can put in place to reduce the level of crime in this country and to make Australians safer. That is a core function of the AIC, and that is one of the functions that will be placed at risk should this legislation pass through the parliament.

We have concerns relating to the future research direction of the ACC. Currently the AIC has an advisory board, the Criminology Research Advisory Council, which is made up of members from the states, territories and Commonwealth. This board advises the Director of the AIC on strategic research priorities. Should this legislation pass, the Criminology Research Advisory Council will no longer be a statutory body. Evidence was given that there is consideration being given to reconstituting that council in some form and having an advisory body exist within the ACC. However, it is worth pointing out that, if that is not detailed in legislation, it would be simply the stroke of an administrative pen to dissolve any new body. As we have heard, Professor Sarre and Professor Ransley both gave evidence to the committee outlining concerns in this area.

Fundamentally, the Greens believe that, should this bill pass, there is a significant risk that broad-ranging criminological research that focuses on understanding the causes of crime, recommending crime prevention strategies and informing policymakers will take second place to the law enforcement needs of the ACC—and I will place very firmly on the record that the Greens understand the law enforcement argument here around the ACC, and nothing we are saying should be taken to be critical of that law enforcement function. We have heard that one of the justifications for this legislation is around things like access to datasets and the JV Barry Library. Those concerns have been articulated, and the Greens have no reason to believe that those concerns are unfounded, but we would make the point very strongly today that concerns like that can be addressed through administrative actions, such as potentially an MOU between the ACC and the AIC, and that effectively, if those are the concerns that are driving this legislation, we are taking a sledgehammer to a walnut here by proposing what has been sold to us as a merger but what the Greens fear is more of a takeover of the AIC by the ACC. So we will be opposing this legislation.

Senator BACK (Western Australia) (10:28): I rise to support the Australian Crime Commission Amendment (Criminology Research) Bill 2015 and add my words to those of previous speakers. We would all share the principle in this parliament and throughout the wider community that every effort must be made to contain, diminish and, of course, reduce the impact on victims of crimes, to bring those responsible for crime to account, and to reduce the massive impact that crime has in our community. Figures of $36 billion a year were mentioned. I think Senator McKim a moment ago mentioned the figure of $47.6 billion. So I lend my voice to any move that is likely to lead to better understanding of crime and study of crime in this country and, of course, all of those efforts to prevent it in the first place or to identify those responsible, bring them to account and reduce the impact on victims and on the community. As the minister in the other place said in her concluding remarks:

This bill implements an important consolidation of Australia's criminal research and intelligence capabilities. With the merger of the AIC into the ACC, the ACC will be better able to fulfil its role as Australia's national criminal intelligence agency, supporting and informing the efforts of law enforcement agencies around Australia.

Similarly, the new Australian Crime and Justice Research Centre in the ACC will continue to prepare and disseminate world-leading criminological research which informs our understanding of the trends and developments in crime and justice.

We have heard differing views on whether or not there is likely to be a diminution in the role of criminological research in this country. I would urge and hope that there will not. What I would think will be is a part of the thought process behind this move of merging the AIC into the ACC: that we end up with far more effect in terms of the work of the ACC without in any way reducing the effectiveness of criminological research. It will bring together two of the nation's leading authorities on crime and justice under the one banner.

The overall objective, of course, is to create a unified workforce that will incorporate the staff of both agencies to the mutual benefit of not only the Australian community but of the staff them themselves—and I will come back to the impact on staff in a few minutes. The prediction and the advice to government is that this type of unification of the resources will significantly enhance support for law enforcement in this country, bolster our response to serious and organised crime and help us to better understand the causes and the research mechanisms by which we can prevent major crime in this country. And, of course, we would expect to see enhanced evidence supporting a proactive and targeted response to crime by all of Australia's law enforcement agencies.

The staff are critically important to the move being undertaken. Their wellbeing has been a prime consideration throughout the development of the proposal. And there will be significant benefits to the staff of both agencies: the simple fact of being able to work more collaboratively in a closer environment and the capacity to be able to move within the organisation—as one in the research space sees the desire to further their own career progression, for example, in the actual work of the ACC. And, again, the ability of people whose main focus has been the responsibilities of the Crime Commission and who may actually develop an interest in the research space being able to move seamlessly, either permanently or on a project-by-project basis, into the research space must surely be of enormous benefit to the staff.

Equally, it has been important to provide the staff with a degree of certainty, as there have been questions about the possible co-location and merging of the two. That, of course, will happen should this legislation be passed. The question has been asked—and quite fairly—whether the independence of AIC research will be compromised in any way as a result of this merger. The understanding that has very clearly being given to me is, 'No, there will be no diminution on the impact of research.' The AIC would carry its research functions over to the ACC, forming the Australian Crime and Justice Research Centre, headed by a senior criminologist and research specialist. I have no doubt that those with a keen interest in this space will be watching carefully to see how that process of selection is undertaken, to make sure that we do indeed have the services of an internationally-acclaimed criminologist and research specialist.

The ACC and the AIC agreed on this structure following consultation with the AIC's stakeholders. It is important to understand that. State and territory justice agencies, external criminology researchers and they themselves have emphasised—as indeed has been quoted by others this morning—the need for the AIC group, or the now Australian Crime and Justice Research Centre, to remain an independent research unit within the ACC. I have heard nothing and seen nothing that indicates a desire of government in any way to reduce either that independence or its excellence. In fact, I hope and expect we will see an enhancement of the research activities as a result of closer cooperation.

The Crime and Justice Research Centre's priorities will continue to be influenced by an advisory body similar to the current Criminology Research Advisory Council. The question of whether or not there will be a diminution as a result of that body no longer being a statutory body has been asked. I, for one in this place, would want to make sure that at all times there will be that level of independence and excellence. Should there ever be a case where that body's independence or its excellence is in any way diminished, I for one and others in this place would want to know about it, we would want an explanation from government and we would want a correction to that, so important is the issue.

There will be a broadening to include police representatives to reflect the important role the ACC plays in Australian law enforcement. There may be some who would say, 'Is that going to adversely impact the independence, excellence or direction of research?' Again, I certainly hope that it would not and that in fact it would only enhance, focus and act as a conduit for those police and other representatives to take back to their organisations a better understanding of the direction of research being undertaken and, indeed, the outcomes of research.

There is always a question in these cases: is this in some way an attempt to actually reduce funding? With the scourge of the increase in crime in this country and the impact of crime on the Australian community, both in physical terms of victims and in terms of the budget, one would hope there would not be a reduction of research funding. One would hope that in this merger we would actually see a greater focus on the need for supporting research. There will be an ethics committee to oversee the activities of the Australian Crime and Justice Research Centre, as indeed an ethics committee currently oversees the role of the AIC.

Where are the benefits for both? I expect that there will be and I expect that the minister, if need be, would expand on them. AIC staff should have better and further access to classified information available now to the ACC agency members. If that informs their research activities, if it gives them guidance in the directions in which research ought to be undertaken or if, indeed, there is the plea that they require further funding, the fact that they should have access to classified information should be of benefit. It will enable them to develop better informed and targeted research to be of greater value to law enforcement and justice agencies. Again, you would think that nobody in the Australian community—nobody of law-abiding nature, anyhow—would argue with that objective. A merger will provide ACC with a specialist research capability that will support the development of evidence-based responses to serious and organised criminal threats. It should be able to do so more seamlessly and more quickly and be able to respond in a very much more effective and efficient way.

A merger, should the legislation be passed, will provide significant opportunities to the staff of what are now the two agencies by providing diversity in the type of work they can undertake and the professional opportunities available to them. I made mention of that earlier in my contribution. I can very firmly see the benefits to staff in a merged organisation where they can move to those areas in which they develop interest and in which they may want and be able to go on with higher qualifications and then from the ACC side, should they then have undertaken that research, to look at the value and the benefit of that person in their career coming back into the law enforcement side so that they can give greater effect to that work.

I want to conclude my comments by talking about one area in which I know the ACC is active, and in which I understand AIC undertakes significant research. It is what some are referring to as the pandemic—not the epidemic—of crystal methamphetamine in this country. In 2014, as a result of surveys it was estimated that 2.5 per cent of all Australians over the age of 14—that is, half a million people—had used methamphetamine at least once during that year.

I will put that into perspective by comparing it to other countries. The 2.5 per cent of Australians 14 years and older who had tried methamphetamine at least once in a year equates to 0.5 percent in the United States, Britain and Canada—countries to which we are often compared. That means that five times the number of people in our country in 2014 had used crystal methamphetamine—an illegal drug. Therefore we have in Australia—anecdotally we know this—a very severe issue. It is an area in which the ACC is active. Hopefully the AIC, reformed, would also have the resources to undertake the necessary research.

I will drill a little further into this issue. In Victoria, the Coroner's office reported in 2010 that one in every 25 drug related deaths was due to crystal meth or ice. Two years later—in 2012—the Victorian Coroner's office reported that the number was one in 10. Last September, the Medical Journal of Australia published a study of the Turning Point Alcohol and Drug Centre that showed a 318 per cent increase in hospitalisations from 2010-11 to 2011-12—in one year—in Melbourne as a result of issues associated with overdose and use of crystal methamphetamine. That figure of 318 per cent surely points to a greater need for a greater emphasis and better coordinated activity in our crime research, crime prevention and crime treatment, in order to reverse this evil trend.

A study undertaken by the Institute of Criminology of detainees in police stations around the nation found that 61 per cent of those held in the Kings Cross Police Station in Sydney tested positive to methamphetamine, 40 per cent held in Brisbane City Police Station tested positive to methamphetamine, and 43 cent of those in the watch house in my home city of Perth tested positive.

I will conclude with the words of the Acting Chief Executive Officer of the Australian Crime Commission, Paul Jevtovic. In a forward to a report, The Illicit Drug Data Report 2012-13, which was released about 15 months ago, he wrote

… with its relative accessibility, affordability and destructive side-effects, crystal methylamphetamine is emerging as a pandemic akin to the issue of ‘crack’ cocaine in the United States.

In this place we share the view of the wider honourable community of this country that the use of illicit drugs and the crime that stems from that—the need to fund such an addiction by stealing or through some other means—must be addressed and attacked.

The bill that we see today has the objective of bringing together the national criminal intelligence analysis and research capabilities of the AIC, the Australian Institute of Criminology, and the ACC. I realise the reservations that have been expressed by the previous speaker and from eminent and highly regarded specialists in this field, criminologist Professor Rick Sarre, from the University of South Australia, amongst them. The point I want to make is that those cautions should be listened to. They should be addressed. From a risk point of view, we must ensure that none of the capacity of the AIC is lost in the merger with the ACC.

When we are facing the issues that we are, in this country, the closer the levels of collaboration between those parties who have a responsibility to the community, through this place, must surely be examined to see where the greatest of benefit lies. If there are risks of the independence of the research arm and if there are risks associated with the direction that research takes or, indeed, the quality of international collaboration, then those issues must be addressed. In the meantime, my own experience and background tells me that the more closely agencies of this type work together the better the outcome should be for the Australian community. I urge that this legislation be passed by this place.

Senator XENOPHON (South Australia) (10:46): I want to reflect on Senator Back's very thoughtful contribution relating to the Australian Crime Commission Amendment (Criminology Research) Bill 2015. I agree with him that the impact of illicit drugs and substance abuse is a very significant issue for this nation. Interestingly, today, the youth survey commissioned by Mission Australia indicated that amongst young people one of their most significant concerns was alcohol abuse and illicit drug abuse. In particular, there was a real concern about crystal methamphetamine. Having known people who have been affected by the scourge of crystal meth—constituents who have been impacted by it and have come to see me—we are not doing enough as a nation.

I find it unconscionable that there are decent families around this country who are having to take out loans, mortgage their homes and cash in their super, in order to get a loved one into a rehabilitation program that may cost $20,000 or $30,000 either here or overseas. There are a number of reputable services around the country and also, apparently, services in Chiang Mai, in Thailand. There is something wrong in a nation as wealthy as Australia when families who are on average wages, who are battling with their bills already—because they do not want to see their loved one, whether it is a son or daughter, a father or mother, a husband or wife, have their life destroyed by crystal meth—are desperately trying to get them help and there is no real help from state institutions or government funded help, or it is minimal and piecemeal. It is a big issue, but it is not the issue that we are dealing with today.

I do endorse Senator Back's comments about the concern and impact of substance abuse of illicit drugs on crime in this country, but the issue here is whether the Australian Institute of Criminology and the Australian Crime Commission should merge. I think if Sir Humphrey Appleby were in this room he would say, 'This proposed merger is a courageous move, but I am not quite sure whether it makes sense.' Merging a criminal investigation organisation, with strong powers to compel testimony and gather intelligence from real world criminal networks, such as the ACC, with the Australian Institute of Criminology, a research body that carries out self-directed as well as commissioned research, raises some serious questions. The government says it is revenue neutral which, in the current climate of growing budget deficits, raises the question of why it is being done.

The Australian Institute of Criminology fulfils a very valuable role in Australia: providing objective analysis and research on criminal trends and statistics across Australia and transnationally. I first came to rely on the Australian Institute of Criminology as a state member of the South Australian state parliament, in the legislative council. I relied on its research back in 1997 with their landmark work, Who's holding the aces—a report into the frightening link between compulsive gambling and crime. The expert authors looked at the types of offences committed, the socioeconomic groups involved in gambling and sought to understand the reasons behind compulsive gamblers' behaviour and the wider effect on the family structure.

Of course, as a Western Australian senator, Mr Acting Deputy President Sterle, you do not have the scourge of poker machines in your pubs and clubs. They are confined to the casino—to Jamie Packer's casino at Burswood. Obviously, they are driven by the nature of the product, if you like—the design of these machines, that actually is dangerous. They actually hurt people because they are designed to addict and to cause enormous harm.

So since that time I have been impressed by the work of the Australian Institute of Criminology. Now the government wants to merge it with the Australian Crime Commission. This is a heavy-hitting organised crime investigation body with powers akin to a standing royal commission—and that is appropriate. It absolutely appropriate that we have a body such as the ACC to deal with organised crime and with criminal elements where you need to have significant, broad and continuing powers to deal with the scourge of organised crime.

The merger involves removing the role of the director of the Australian Institute of Criminology and I am deeply concerned that it will also remove the effectiveness of the merged body to carry out independent and effective research. Senator Back, in his very thoughtful contribution, talked about the need for greater cooperation. I agree with him. But this is not cooperation: this is a takeover. This is co-option—this is basically taking over the Australian Institute of Criminology. The concern I have is that this will mitigate and reduce the effectiveness of the Australian Institute of Criminology in this country. We do need to have a body such as the AIC which is truly independent. I do not have a problem with it being directed to undertake Crime Commission research, and it could be directed to from time to time by the minister or by the ACC, for instance. But just to have it merged so that we no longer have a director of the Australian Institute of Criminology concerns me.

The director is usually an academic with a strong research record, and the AIC is also assisted by an advisory council. Under the merger the CEO of the ACC and its board will assume these roles, although there is no requirement for any of these people to be criminologists. There is a big difference between research into criminal behaviour and looking at societal trends, and also to give an objective, balanced view as to what we can do to reduce the impact of crime—to reduce crime and to look at the causes of crime. I am all for being tough on crime, but we need to be tough on the causes of crime. And in order to understand those we need a robust and truly independent body such as the Australian Institute of Criminology. I am worried that by being subsumed with this proposed merger—which, by the way, is revenue neutral—we will lose that opportunity.

How can the government guarantee that the priorities and mission of what is now the AIC—the Australian Institute of Criminology—will not be subordinated to the objectives of the Australian Crime Commission? I suggest that there is no guarantee. My understanding—and I am sure that the minister will shake or nod her head accordingly—is that this is being driven by the Minister for Justice, the Hon. Mr Keenan. It is his bill. I suggest respectfully to Minister Keenan, with whom I have had a very constructive and good working relationship, that this is not the right way to go about it. I suggest that this has not been thought through. I suggest that by going down this path we will reduce our ability to look at the causes of crime. The ACC's role is to deal with criminal organisations. I think that the AIC's role is to look at the causes of crime also and to look at it in a broader context than the ACC would.

Of course we all want the most effective criminal investigation bodies possible. The ACC—the Australian Crime Commission—does important work, and should be funded and structured to continue this work. But I am concerned that its priorities will supersede the separate and distinct role of the Australian Crime Commission.

I am very happy to talk to Minister Keenan as to how there can be a greater synergy between the two bodies. But I think that, whatever concerns the government has, it is really throwing out the baby with the bathwater. I think that this particular bill will be retrograde; it will be counterproductive in the fight against crime. You need to have an independent, robustly independent research body such as the Australian Institute of Criminology. I believe that this move, revenue neutral as it is, will actually set us backwards in the fight against crime and that is why I have real reservations in supporting this. I cannot support the second reading of this bill but I am open to having further discussions with the government in terms of further coordinations between the two bodies. But let us not get rid of a body that has served us well. Let us keep its robust independence in order that we can combat crime most effectively in our nation.

Senator FIERRAVANTI-WELLS (New South Wales—Assistant Minister for Multicultural Affairs) (10:55): The Australian Crime Commission Amendment (Criminology Research) Bill 2015 brings two of the nation's leading authorities on crime and justice, the Australian Institute of Criminology and the Australian Crime Commission, together under one banner. Australia's law enforcement and justice agencies are increasingly dependent on accurate research, information and intelligence to ensure that our officers on the ground, at our borders and in our intelligence agencies can do their job. Accurate research, information and intelligence are also essential to do deliver evidence based crime prevention strategies and effective justice policies that benefit the Australian community. A combined agency with strengthened research capability will be able to provide a better evidence base for our agencies to identify the patterns and associations that can detect, disrupt and undermine those who seek to keep to do our communities harm.

I would like now to turn to some of the specific points that were raised in the debate and address some of these points. Firstly, why does the government want to merge the AIC with the ACC? We believe that this will bring two of our leading authorities under the one banner. Whilst the proposed merger is expected to produce small savings over the forward estimates, can I assure the Senate that is not about cutting the costs or personnel of either agency; it is about creating a unified workforce incorporating the staff of both agencies.

We believe that there are benefits for both agencies and significant opportunities. By merging the two bodies, AIC staff would have greater access to classified information. This would enable them to develop better informed and targeted research that will be of greater value to law enforcement and justice agencies across Australia. It will also provide the ACC with a specialist research capability that will support the development of evidence based responses to serious and organised criminal threats. It will also provide significant opportunities to the staff of both agencies by providing a diversity in the type of work they can perform and also provide professional opportunities available to them.

We believe that the merger will assist in producing independent research that can inform policymaking by combining the expertise capability and data information holdings of the AIC and the ACC. This will significantly enhance support for law enforcement in counter-terrorism efforts and bolster Australia's response to serious and organised crime. The Australian Crime and Justice Research Centre will work closely with ACC, particularly on issues such as a common interest such as illicit drugs and crime prevention. Of course this will increase the value and relevance of the research, providing an enhanced evidence base to support a proactive and targeted response to crime and policy development by all law enforcement and justice agencies.

We believe there will be minimal risk only to both agencies. We believe it will be business-as-usual and there may be some minimal disruption but only during the transition process. Both have established a joint dedicated change management team to help manage this risk. Of course the government consulted in relation to the preparation of this bill with the two bodies in question and with the Attorney-General's Department, but we also consulted with states and territories through the Criminology Research Advisory Council and the ACC board throughout this process.

I will particularly address some comments that were made by Senator Collins and Senator McKim about consultation with external criminology researchers on the bill. We worked closely, as I have indicated, with the Attorney-General's Department and the two bodies to develop this bill for parliament's consideration. The AIC has a close working relationship with its stakeholders, including external criminology researchers, and it provided feedback from these stakeholders throughout the development of the merger process. The proposal also takes into account public statements made by criminology researchers and concerns this group proactively raised with the government. For example, the AIC provided feedback from the criminology research community that, should a merger proceed, the AIC should continue to carry out world-leading criminology research and remain an independent research unit within the ACC. Taking this feedback into account, the bill provides for the AIC to carry all of its research functions over to the ACC. Furthermore, the AIC's researchers will form a new research branch at the ACC—the Australian Crime and Justice Research Centre—which will be headed by a senior criminologist and research specialist.

Earlier I mentioned the minimal impact on staff. I can assure the Senate that staff wellbeing has been a primary consideration throughout the development of this process and, as I have indicated, it will open up opportunities for staff. We particularly wanted to make this point, and I note that in correspondence from Minister Keenan to the shadow minister, the Hon. David Feeney, it was specifically noted that the merger will not result in significant job losses and that this bill is not about cutting the staff or functions of either agency. It is about leveraging their strengths to ensure that we are using existing capability as effectively as possible to achieve the best outcomes for the Australian community.

I will now go particularly to the issue of the independence of research, which has been raised by both Senator Collins and Senator Xenophon. Will the proposed merger impact the independence of the AIC's research? The answer, simply, is no. As I have indicated there will be the new branch of the ACC, the Australian Crime and Justice Research Centre, where an ethics committee will oversee this centre's activities, as one currently does for the AIC. The department, the ACC and the AIC agreed on its organisational structure following specific feedback from AIC stakeholders that the AIC needed to maintain the capability to produce independent research. Whilst the centre's research priorities may become aligned more closely with law enforcement's high-level priorities, such as illicit drugs or transnational crime, this operating model would ensure that the centre will not be subject to undue influence by law enforcement industries. The centre's priorities will also continue to be influenced by an advisory body similar to the current Criminology Research Advisory Council.

I want to focus now on comments raised by all speakers in relation to this, particularly about the AIC's research, and state that the centre would continue to carry out the AIC's three main work streams, which are: statistical monitoring programs, fee-for-service research and thematic research on crime and justice priorities. In relation to its thematic research on crime and justice priorities, the research centre will work closely with the rest of the ACC, particularly on issues of common interest. Research staff will also have access to ACC-sensitive law enforcement information, enabling the centre to carry out confidential research on specific issues for the ACC and law enforcement and justice agencies. The research centre will also have access to the same data sets that are currently available to the AIC, and the researchers will also be able to access all of the AIC's data sets. I will state that the ACC Act contains strict provisions governing dissemination of ACC information, not only to other government agencies but also to the private sector. Of course this is appropriate, given the sensitive information and intelligence that the ACC currently handles. Whilst this is appropriate for the ACC's existing operations, following a merger it will be important that the ACC can make AIC research available to other criminology researchers and to the broader Australian community, as it currently does.

In recognition of this, the bill inserts a new information disclosure provision into the ACC Act to enable the ACC to share and publish criminological research and information in the same way as the AIC currently does. This will ensure that criminological research will not become subject to the strict information disclosure regimes that apply to other types of ACC information. The JV Barry Library would also be maintained, and the merger agency will continue to provide public access to its holdings on an appointment basis, as the AIC currently does. As part of the proposed merger the AIC has also begun digitising parts of the JV Barry Library to improve public access, and this process will continue after the merger. In addition to publishing research, the merged agency will respond to specific data requests from researchers in the same way as the AIC currently does, and each request will be assessed on a case-by-case basis.

In response to a comment from Senator Xenophon, the merged agency will respond to specific data requests from researchers, as I indicated, in the same way as the AIC currently does. Each request will be assessed on a case-by-case basis, with the level of detail provided subject to ethical and privacy considerations. In the unlikely event of a disagreement between researchers and the merged agency, researchers will be able to escalate the matter to the CEO, as is currently the case for the AIC. If the dispute cannot be dealt with in this way, researchers have an appeal mechanism. Furthermore, the ACC is subject to the Commonwealth Ombudsman's jurisdiction, so the Ombudsman can investigate complaints as well. As is currently the case, researchers can also seek access to unpublished reports through the freedom of information process.

Senator McKim in particular asked about the library. I think that issue has been addressed. Senator Collins asked a question about the government's decision not to move the AIC to a university, as was suggested by the National Commission of Audit. Merging the AIC with the ACC presents a unique opportunity that would not be available if the AIC was moved to a university. By merging the two bodies, AIC staff will obtain greater access to classified information. I have addressed some of those issues previously.

I now turn specifically to the schedules to the bill and address particular comments raised by both Senator Collins and Senator Xenophon in relation to the continuation of the Criminology Research Advisory Council. The government consulted closely with the Criminology Research Advisory Council in developing the proposal to merge the AIC with the ACC. The advisory council advised that it may wish to maintain a role in the merged agency but that this role does not need to be enshrined in legislation. Following a merger, the ACC board will assume responsibility for providing strategic direction to the ACC about its new research functions and for determining the ACC's criminological research priorities. However, in doing so, the ACC CEO proposes that the board take advice from the non-legislated research advisory committee. That research advisory committee is intended to perform a similar role to the current Criminology Research Advisory Council, with expanded membership to include the enforcement agencies. This will ensure that justice agencies continue to play a central role in determining the Australian Crime and Justice Research Centre's priorities.

In relation to the non-legislated research advisory committee, on 20 November 2015, the Criminology Research Advisory Council agreed that the new non-legislated research advisory committee would consist of the advisory council's existing members plus two law enforcement representatives and a representative from the Australia and New Zealand Society of Criminology. These changes are intended to broaden the range of stakeholders that will provide advice on crime and justice research priorities.

The ACC CEO proposes that the non-legislated research advisory committee will meet twice a year, with one meeting focused on research priorities and another on criminology research grants. That research advisory committee will still play a role in advising the CEO on criminology research grants through a grants subgroup. The subgroup will consist of research advisory committee members who provide a financial contribution to the grants fund. These arrangements will create a strong and independent committee structure to provide advice to the ACC board on the Australian Crime and Justice Research Centre's research priorities.

I think that addresses the key points raised in relation to this bill. In conclusion, I reiterate that the proposed merger is not about cutting the staff functions or cost of either the AIC or the ACC. It is about leveraging strengths of both agencies to achieve the best research and intelligence outcomes for the Australian community. With the merger of the AIC into the ACC, the ACC will be better able to fulfil its role as Australia's national criminal intelligence agency, supporting and informing the efforts of law enforcement agencies around Australia. Similarly, the new Australian Crime and Justice Research Centre in the ACC will continue to prepare and disseminate world-leading criminological research, which informs our understanding of the trends and developments in crime and justice. In this way, the bill delivers on the government's commitment to tackle crime and keep our community safe.

Debate adjourned.

Senator SMITH (Western Australia—Deputy Government Whip in the Senate) (11:14): At the request of the Chair of the Education and Employment Legislation Committee, Senator McKenzie, I present the report of the committee on the provisions of the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and a related bill, together with documents presented to the committee, and move:

That the report be printed.

Senator KIM CARR (Victoria) (11:14): I would like to speak to that motion. I want to speak to the motion that the report be printed. That is the proposition before the chair, is it not?

The ACTING DEPUTY PRESIDENT ( Senator Sterle ): It is, Senator Carr.

Senator KIM CARR: Thank you very much. It may be somewhat unorthodox to speak to such a motion, but not quite as unorthodox as for the government to bring in a report in this manner—a report which then goes to a bill on which the government wishes to bring off a debate immediately. It may well be unorthodox as well given this importance of this issue. This is a bill that goes to our third largest export industry, and it is important, therefore, when we consider the report of a Senate education committee on this industry that senators actually get time to read the report, because it is more than likely that senators will not be aware that this report is being tabled and that people are seeking to have it printed so that the government can then bring on this bill.

This is a bill which, as I say, has quite considerable and far-reaching implications. The Senate committee has looked at this bill, having had the matter referred to it a little over a month ago, on 15 October. The report is based on the work of some 27 submitters, for a bill which has a start-up date for the private sector of the middle of next year. Yet the government wants to bring this bill in immediately after consideration of this report—a report most senators will not even know has been tabled.

I am particularly concerned that senators have the opportunity to look at the Labor Party's additional comments in regard to this report, because it goes to quite significant issues about the government's attempts to deregulate aspects of this industry. Given the government's experience in deregulation in higher education, this is a matter I would have thought would be of some interest to senators and would not be allowed to slip through without consideration of the issues involved.

This is a bill that seeks to reduce the level of regulation, particularly for private colleges operating in the international area. International education, as I have indicated, is of such vital concern. If there had been no problems here, one could reasonably expect that, upon discussion with the opposition, these matters could be dealt with in the manner which the government may well be proposing. But that has not happened, because there have been some 54 colleges that have gone belly up in one form or another since 2007.

There will be those that say, 'Well, that's all ancient history.' Of course, we know that that is not ancient history, because since the new organisational principles came into play just a couple of years ago a range of colleges have gone belly up in one form or another. I repeat that there was the case just in September of this year of the Gold Coast Language School, which on 29 September this year, because of business failure, was obliged to close. On 6 August of this year, I understand the St Stephen Institute of Education was deregistered. Symbiosis, on 6 August 2015, was deregistered. They are particularly significant colleges because they are at the centre of fraud charges by the Australian Federal Police because of their involvement with Australia Post.

These are not incidental questions. They go to the very heart of the integrity of our international education system. I could go back to 13 July of this year, when the Melbourne Senior Secondary College lost its registration because of gross abuses of the international education student body that it had enrolled at the school without providing the proper services that were available to them. On 12 April 2013, Ivy Business College was obliged to close for enrolling students and not providing qualified teachers to actually teach them. On 10 December 2013, the Sydney Technical Institute had its renewals rejected. On 22 November 2012, Milton College fell over because of business failure. On 10 December 2013, Ashmark Institute also lost its registration.

So these are quite serious matters which go to the very heart of our education system, because they affect our international reputation. But it is not just there. I might also draw your attention, Mr Acting Deputy President, to Careers Australia recently being the subject of considerable notoriety. They had some 590 students. They have been involved in the VET FEE-HELP scandals. Phoenix College, which was deregistered recently, had 40 international students. Unique International College, which was recently deregistered, had 400 students. There was the case of action pending in regard to Cornerstone Investment, which was a college that had a capacity to enrol over 900 students. There is the Australian Institute of Professional Education, which has a capacity to enrol nearly 4,000 students and is subject to action at the moment.

Cornerstone and Empower were trading in different names but were essentially the same entity. They received some $46 million in VET FEE-HELP assistance but only managed to graduate five students. I have complained in the past about the $100,000 degrees, but I have argued that in the VET FEE-HELP area we have seen examples of million-dollar diplomas. We now have a situation where we are looking at diplomas costing the better part of $10 million, where a college has $46 million of receipts from the Commonwealth but graduates only five students. That is at least a situation where you have to say their productivity is very high when it comes to rorting.

I put to you, Mr Acting Deputy President, that these are the types of issues that should be studied carefully. If we are being asked to consider further deregulation in the international student area, we should consider carefully the implications of that. This is not a new problem. We know that these are matters that have dogged the development of the ESOS Act, the subject of the bills inquiry. The history of the current act is one of ongoing iterative reform—that is, piecemeal reform. It is a bit like tax avoidance, where the taxation department has to constantly move to close down loopholes that emerge from very clever people who are in the business of constantly refining the way in which they rip off the tax system. In international education, there is a similar type of problem, but here the consequences not only are ripping off the taxpayer—the rest of us—but involve reputational damage to the whole country.

This is our third largest export industry. This is an industry that has profoundly far-reaching economic consequences. I will go around the country. In Victoria, this is an industry worth $5.6 billion; in New South Wales, $6.7 billion; in Queensland, $2.7 billion; in South Australia, $1.1 billion; and in Western Australia, $1.3 billion. This is an industry of profound significance, but, as we have seen on so many occasions, it has required a series of exposes, usually concerning unethical behaviour, to force the regulators to tighten up legislation, to change their administrative practices and to acknowledge that there are dishonest people in this world.

We have seen a series of changes. I have been involved with this question now since the beginning of the ESOS Act, which was back in the early stages of the 1990s. We have had repeated exercises to clean up abuses. Of course, the most savage were in 2006 and 2007, under the Howard government, where—and this followed an independent review in 2004 and 2005, from my recollection—amendments needed to be made. Then we had the extraordinary developments that occurred just prior to Labor coming to office. There needed to be further amendments made in 2009. The 2009 amendments required the re-registration of all institutions in the country, so serious were the claims. And then, of course, further changes were made following the Baird review, where there were some 19 recommendations. A further three tranches of legislative amendments were made in 2010 and 2011. They went to the issue of regulation of the providers and to a so-called risk management approach to registration—and we have seen how well that has served us! They went to the Tuition Protection Service, which was paid for by levies on the various colleges. There was a requirement to place student fees in a separate account to limit the amount of prepaid fees that could be collected, in order to make sure that refunds were actually available if a college went belly up. There was also a requirement to strengthen the record-keeping obligations of providers. All were necessary changes at the time.

This government has now proposed further changes to wind back some of those arrangements, and that is essentially the proposition in this report. There is an opportunity here for us to study the details. We will be moving amendments because, while many of the changes the government is proposing are nothing particularly out of the ordinary, the fact remains that ASQA—and I have made the claim on occasions that they are a body that have not been able to track a bleeding elephant through snow, on good evidence—themselves in 2012 said that they thought about five per cent of colleges that they viewed had serious issues of noncompliance. I understand that in recent statements they have made a claim that the number has grown to 10 per cent. When people tell me that they have actually taken action against colleges, I say it is the tip of the iceberg. That is why it is so important for us to consider these matters in the proper context of the way in which this industry actually operates.

The Federal Police have laid charges relating to fraud in the vocational education sector against three individuals just in this year. An extremely high level of proof is required for a fraud allegation. For the police to charge proprietors with that crime suggests that it is incredibly serious. In the case of the Australia Post affair, it is quite clear that the charges were warranted. Yet we are being asked to consider a bill which winds back the government regulation when it comes to the protection of students and the way in which their fees are paid.

For those reasons, I want to draw attention to this report. I trust that senators have the time to read it and to appreciate just how critical these questions are in terms of their being treated appropriately and with the necessary time.

I understand that the government will bring on this bill for debate pretty much after I sit down. There are a number of speakers who will be heard today but there needs to be time to consider the amendments, and I will be making an appeal to the crossbenchers to actually look at the detail here. Do not be swayed by people who will run up to you, particularly private colleges, and say, 'Listen, we don't want anyone looking over our shoulder. We've got to cut red tape. We've got to reduce the level of compliance.' I say there is plenty of evidence to suggest why we need red tape, why we need proper quality assurance and why we need to protect this industry from the unscrupulous. They abound and, unfortunately, are to be found in so many cases across the country.

Internationally, people look to the Commonwealth of Australia to assure them that the quality of the education provided by our international education providers is sound. They also look to us to ensure the proper probity arrangements are in place. People across the world who send their students, their young people, to this country do not expect us to turn away and say, 'We're going to streamline the regulations. We're going to have a risk management approach to these questions, and if things go wrong they are isolated incidents.' We have had too many 'isolated incidents' for us to take this matter lightly, and a number of the submitters to this committee report make the point that there needs to be careful consideration—this is too important just to take a cavalier attitude. While reasonable changes can be supported—I think the government has argued that there are better ways of dealing with the national code and there may well be ways we can address some of these regulatory questions in a more effective way—in the case of students' protections I am not persuaded that the government has taken the necessary measures, and I am particularly concerned about the student protection service and the designated accounts.

The explanatory memorandum of the bill explains that the provision is to remove the designated account requirements. As part of these arrangements, introduced only in 2012, it says:

… non-exempt (private) providers are required to maintain an account in which all tuition fees paid by students prior to the course commencing must be kept until the student starts the course. Removing this requirement will be of significant deregulatory benefit to non-exempt providers, creating a more level playing field between public and private providers and encouraging competition and innovation in the sector.

I know what sort of competition they will create. I know what sort of innovation; it may well be a race to the bottom. The purpose of the designated account is to provide a source of funds for students should colleges go wrong.

I simply make this point: in 2009 the problems were so great that if this fund had not existed there would not be the money available to refund students at that time. There were other assurance schemes in place prior to 2012, and it is important that there be sufficient reserves available so that students are not left in the lurch. That is why, for instance, the TAFE directors opposed the removal of the designated funds. The TAFE directors said:

In the current environment where there is so much public concern surrounding the actions of some less reputable private education providers, TDA feels it imperative that the requirement for retaining pre-paid student fees in a ‘designated account’ remains.

That is a proposition that I believe this Senate should take very seriously.

Of course we know that with limits on the collection of prepaid fees retained that the removal of the requirement to hold fees in the designated account reduces the risks of default and provides opportunities for us to be able to put real meaning behind quality assurance and student protection when it comes to colleges that are not able to meet their obligations to the students they have enrolled.

So I would urge the Senate to give very, very careful consideration to this bill. And that is why the government trying to slip in this little stunt should be clearly identified for what it is.

Question agreed to.

Senator KIM CARR (Victoria) (11:35): I would like to say a few words on the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges Amendment (Streamlining Regulation) Bill 2015, quite independently from what I have just said! Hopefully by now senators might actually be reaching for the detail of this report. And if senators are not reaching for it, maybe their staff might be so they can actually look at the detail of it.

Labor does not oppose the goal of streamlining all of the different aspects. We have to acknowledge that circumstances change. As I have indicated, a bit like tax avoidance, one has to recognise that there are different circumstances that need to be met. But we strongly urge the government to revise this package, because its presence in this form is likely to aggravate the problems the bill has sought to resolve. In particular, Labor has great doubts about the effect of removing the requirement that private providers must hold tuition fees paid before the commencement of a course in a designated account. I will be moving amendments to strip that provision from the legislation.

We also have concern about the consequences of lifting the prohibition on the provider receiving more than 50 per cent of the tuition fees before a course begins. While we do not oppose the measure outright, we have doubts about how it will actually operate. It will be a challenge to the regulators to ensure that provisions are not abused. These bills take us down a path that has become, regrettably, all too familiar under this government. Under the guise of cutting red tape and removing supposed burdensome regulation the proposed legislative change opens the door to further abuses. This is what happened in the ill-considered attempt to change the Tertiary Education Quality Standards Authority.

In that case, fortunately, the undermining of TEQSA was prevented because the government accepted criticisms of the bill that Labor had made, and amended it accordingly. The government in this case has no interest whatsoever in looking at the perhaps unintended consequences of their folly.

I hope the government will, however, demonstrate a willingness to consider the bills before the chamber. The question arises: why does the government keep trying to dismantle robust regulatory frameworks for the provision of educational services? The answer can only be that the government's ideological preference for private provision blinds it to the abuses that manifestly occur when there is inadequate regulation to maintain standards and protect students.

Last year's TEQSA bill risked repeating that lamentable history of the Howard government, when a flood of shonky providers threatened to undermine the reputation of the entire international education industry. Some senators will remember the saga of Greenwich University, which was a scam degree factory operating out of Norfolk Island and which the Howard government allowed to run rampant for four years. It is not the only example of dodgy practices—merely the most bizarre.

Between 2008 and 2011, 54 providers of educational services for overseas students collapsed, affecting 13,000 students and triggering a major crisis in the industry. The effect on reputable providers, who do strive to maintain standards and treat students fairly, of course meant that they were often overwhelmed by the avarice and corrupt practices of the shonks and the sharks. When that practice came to light, it tainted the entire industry, the good with the bad. It is a familiar story and one which is being played through in the VET sector around the country today. That is why when Labor came to government we established the higher education and VET regulators, TEQSA and ASQA, and instituted the Tuition Protection Service and other protections for international students. We cleaned up the international education industry in this country and saved Australia's reputation as an education provider.

That is a reputation that must be protected. I remind senators that the provision of international education services brings some $18 billion a year into the Australian economy. I have indicated that it is the third largest export industry after iron and coal. It is probably the largest in Victoria. Any harm to Australia's reputation as an education provider will stem the flow of students into this country and will of course cause enormous damage to our export capacity.

I should also point out that it is important that we actually learn the lessons of history here. Senators will be aware that this is the experience of the Howard government. International students continuing to be exploited by education providers and by employers is an ongoing problem which we need to address. The Australian taxpayer and the students are defrauded. Sometimes even public agencies have been implicated in that exploitation. Only three months ago a joint operation in Melbourne by the AFP, the Australian Borden Force and ASQA resulted in three men being charged with serious migration and workplace exploitation offences. I have indicated that that was the operation on the St Stephen Institute of Technology, owned by Baljit Singh and Rakesh Kumar; and the Symbiosis Institute of Technical Education, owned by Mukesh Sharma.

Foreign students were lured to Australia with promises of receiving working visas or permanent residency after completing their courses at these colleges. Once they arrived, however, no education service was actually provided. Instead they were subcontracted to work for Australia Post, sorting and delivering packages for below-award wages. Mr Singh was a labour-hire contractor for Australia Post, which has since severed its relationship with him. But it is appalling that such an arrangement could ever have begun. Although the colleges are alleged to have provided no training, they charged international students fees of up to $10,000 as part of this scam. The St Stephen Institute was one of the higher education providers granted access to streamlined visa processing under the 2014 budget measures and their subsequent deregulation measures. They were provided special entry provisions to allow people to work as subcontractors for Australia Post and to be ripped off, and students were paying $10,000 for the privilege.

Streamlining visa processing is, of course, another one of those deregulation measures for individual students. It reduces the paperwork—there is no doubt about that—but it also increases the responsibilities for education providers. This is why Labor when we were in government did not approve streamlined visa processing from non-university providers. We were concerned that to do so would risk a revival of the shonky practices of the Howard era. Our concerns have been vindicated by the St Stephen Institute.

Senators will also be familiar with the media reports of the scandalous behaviour of underpayment of foreign students employed by the 7-Eleven chain of convenience stores. Employees at 7-Eleven stores were paid $12 an hour to work in one of the most dangerous retail jobs in the country. Convenience stores experience an average of three robberies a week.

Adele Ferguson, who covered the 7-Eleven stories for Fairfax and the ABC, also exposed underpayment of the delivery drivers for the Pizza Hut fast food chain. Drivers hired by Pizza Hut franchises were paid $6 a delivery, with two deliveries per round trip. Drivers had to provide the car and pay full maintenance, fuel and insurance. They were hired as contractors, although this was clearly a scam. They were, in effect, employees of the franchise. Madam Acting Deputy President Lines, your committee has highlighted this particularly scandalous behaviour. But they were not even paid according to the enterprise agreement. This kind of arrangement is a classic trap for international students.

In the case of the 7-Eleven workers they are typically reluctant to complain because they are afraid of being penalised for infringing their visa obligations. The government has recently passed up an opportunity to provide greater protection for foreign students. It rejected Labor's amendments to the Migration Amendment (Charging for a Migration Outcome) Bill 2015 which were passed by the Senate last week. Those amendments would have extended the bill's provisions to include people on student visas and working holiday visas as well as 457 visas. They would have included protection for whistleblowers who exposed the conditions of businesses like 7-Eleven and Pizza Hut. The amendments would have also prevented vulnerable people such as international students being hired as sham contractors, because they would not have been able to obtain an Australian Business Number. Of course, they could only be hired as staff under regular conditions of employment where their conditions under their student visas could have been checked. But the government rejected these safeguards being included in the migration bill.

So it is more urgent now that we redraft this current bill that is before us. It does not take a great deal of imagination to see how the removal of the need for providers to hold fees in a designated account is an absolute gift to the disreputable private providers. You might as well tell them to take the money and run. The operators of St Stephen Institute of Technology would have loved to have been able to operate under the regime that these bills would introduce. The government, apparently, does not lack the imagination there, does it? It does not take any lack of imagination to see that happening. This sector, however, understands the implications only too well.

In its submission to the Senate inquiry—and I quoted this this morning in consideration of the printing of the report—TAFE Directors Australia stated:

In the current environment where there is so much public concern surrounding the actions of some less reputable private providers, TDA feels it imperative that the requirement for retaining pre-paid fees in a designated account remains.

Government Education and Training International, an agency of the Tasmanian government, commented, in its submission:

The designated account ensures private providers are able to guarantee consumer rights of students in times of provider failure … the designated account should remain to provide this protection in the more vulnerable private sector.

The Tuition Protection Service, while acknowledging the view of those who want to remove the designated account obligation, argued that that remains, 'an area of potential risk for the TPS', which 'would prefer the retention of this integrity measure'.

The TPS submission noted that the worst outcome would be the abolition of the designated account obligation together with removal of the existing limits on prepaid fees which, of course, is exactly what this bill proposes to do. So the body set up to provide the protection is telling us, 'Don't do it.' And the worst outcome would be exactly as this government is proposing: that it be done.

By itself, the amendment to prepaid fee limits has the arguable merit of giving students greater choice and flexibility. That will be the government's case. But abolishing the designated account requirement is dangerous and, in combination with the removal of the prepaid fees, is in fact pernicious. Defenders of the abolition of the requirement have argued that it is not needed now because we have an Overseas Student Tuition Fund and that should fulfil the role of the previous account. That is exactly what the fund was not designed to do. It was envisaged as a last resort—not as a right; as a last resort. If it had operated this way, then—as I have said in the previous discussion—in the events of 2008 to 2011 the fund's resources would not be able to cope. I suppose then that we would have recourse to the government again? So private providers would be bailed out by the government—is that the argument? And the real assurance scheme is going to have to be the Commonwealth budget? These are people who are making money out of students. You should ensure that there are proper consumer protections in place. As I said, this fund, the Overseas Student Tuition Fund, was envisaged as a last resort instrument.

Some may object that the majority of providers are not shonks and sharks—I have heard this argument once or twice before—and they do not exploit students the way I have suggested. Of course that is true, but the problem in this industry is not the majority it is the minority. The problem in this industry is the rotten apple in the barrel which always ruins the whole barrel. The regulation framework has not been set in place because of what the compliant majority do. It exists because of what the rorting minority do—the ones that actually damage this country's reputation and do such harm to students that they rip off. What the shonky minority does is that it destroys this industry. That is why this is so important.

We acknowledge there are some aspects which could always been improved—I do not know a scheme that could not—and eliminating any duplication between the work of TEQSA and ASQA and other agencies through an aligning of reporting of registration requirements is more than reasonable, but the abolition of essential regulatory requirements, such as the designated account, will not result in streamlining; it will be opening the door for the crooks.

The system will not flow more smoothly, because the rorts will come thick and fast. The government's ideological obsessions for deregulation and for privatisation are clouding its vision in all sectors of education. It refuses to see that admitting private providers to contestable funding under the proposed deregulation of higher education will mean the degradation of Australia's world-standard public university system. It has had early warnings in that regard. We have seen what has happened in Victoria with the TAFE system after the introduction of contestable funding in the VET sector. But still the government will not see this. And we see the crisis that has now developed with VET FEE-HELP. But the only interest that the government have is in tinkering at the edges of these problems so they can say, 'We've dealt with that,' and move on.

I will have a lot more to say when the relevant sections of the bill come before the chamber in the committee stage, but, with respect to the bill before us now, the wilful blindness of this government needs to be called to account. Despite the continuing media reports about rorts and exploitation of international students, the government is intent on making life easier for the rorters themselves. For the sake of the international students in Australia and for the sake of Australia's international reputation, we will be urging this government to reconsider these measures.

When these questions are put to the chamber, I trust that senators will have had an opportunity to read the minority report, the additional comments that the Labor Party has presented, in regard to this legislation. This is not an area in which we should act in haste, particularly given the start-up date for private providers is the middle of next year. What is the urgency here? Why is it necessary for the government to try to pull stunts like we have seen this morning, in terms of bringing on the committee report early, and then attempt to ram this legislation through? Why is it necessary to behave in this way unless there is a blind obsession with deregulation for the sake of deregulation, no matter what the evidence to demonstrate that there are colleges out there that pose an unacceptable risk to this nation's reputation and an unacceptable risk to students who enrol in good faith, only to find that they are used and abused in a manner which is unconscionable, even to the point now where the ACCC has had to take action against some of these crooks? Their own regulators should have moved much more rapidly to deal with this question in a timely way, to prevent these people regaining registration, in some cases, or being registered at all, in others. The circumstances are clear, the evidence is abundant and I trust that senators will consider these matters carefully given the long-term consequences— (Time expired)

Senator SIMMS (South Australia) (11:55): I rise to speak to the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015. The Australian Greens have long supported the protection of Australia's reputation as a provider of world-class higher education and training. From 2008 to 2011, a number of international students were left without either alternative placements or refunds when multiple education providers went out of business, so the then Labor government recruited Bruce Baird to lead a review into the ESOS legislation. Senator Carr has touched on some of the aspects of that review.

The Baird review found that there were untenable amounts of risk in the system for international students. Given this, it recommended a change in regulation and the creation of a risk management framework to protect international students from exploitation and to protect students from the risk of being left without either a refund or a qualification in cases of provider bankruptcy or market exit. To achieve this, it recommended the introduction of the Tuition Protection Service, which would assist international students to complete their qualification by finding alternative placements or, at worst, reimburse them in cases where providers went out of business.

The bill before the parliament today would unwind many of the regulations around the Tuition Protection Scheme that were put in place by the Labor government in response to the Baird review. These include the ending of the requirement of providers to hold student fees in a 'designated account' until course commencement; the removal of the 50 per cent cap on the up-front costs that are chargeable for longer courses; the removal of the concept of a 'study period'; and the lowering of reporting obligations for student defaults.

The minister, along with some other voices within the sector, now says that he has renewed confidence in the sector and that these regulations are just unwarranted red tape. The Australian Greens do not agree with that. Just last week another major provider in the VET sector, Vocation Limited, went into administration, leaving potentially 12,000 students in limbo. I ask the minister: how on earth can he have confidence in such a system, in such a sector? The Liberals are great at talking about removing red tape. When it is about protecting students, they want to remove red tape, but we know what happens when they take away the red tape: they roll out the red carpet for the shonks and those who are going to exploit vulnerable students. It is all part of the Liberal Party's obsession with a deregulation agenda. We have seen it being rolled out in our higher education sector across the board. We know that, if they win the next election, they are going to revive their plans to deregulate the university sector as well, potentially opening students up to huge amounts of exploitation and saddling them with lifetimes of debt, through skyrocketing HECS fees. That is the agenda of the Liberal Party when it comes to education in this country: 'Let's remove the red tape that actually protects students and let's leave them at the mercy of the market.' That is their agenda.

The Greens are not the only sceptics here. Here is an excerpt from the NTEU submission to the committee inquiry into the bill:

Supporters of the proposal to remove the designated account and 50% rules as a way of reducing provider compliance costs and red tape argue that it is justified as the international sector is more stable than when the current provisions to TPS were introduced in 2012. While we acknowledge that there have certainly been improvements, supporters of the changes argue that the RIS is premised on the assumption that the risk of circumstances (that is, the turmoil the sector experienced over the period 2008-2011) which was the catalyst for these and other changes is now very low or non-existent. However, given the recent evidence of widespread problems within the private vocational sector … we are concerned that both the Government and the sector are seriously underestimating the current levels of provider risk.

I repeat:

seriously underestimating the current levels of provider risk. As such the assumption that it is fine to pull back on regulatory protections is being made under a false premise.

Indeed, the Australian Greens agree that this decision is based on a false premise. Due to the problems within the VET FEE-HELP scheme, as identified in the recent Senate inquiry into the for-profit VET sector, there are more questionable providers than ever before. This is a scandal. Indeed, the Prime Minister has described it as such. Yet apparently the minister still has faith and confidence in this sector. It is our belief that the minister and the government have got their priorities completely wrong here. They need to sort out and tidy up this sector. They need to stop trying to pass the buck. We know that it was the Labor Party that brought in this system, but ultimately it is the Liberals that are in government and they need to try and find a solution.

Of course, the Greens have been advocating for many years that we should be cutting off funding to for-profit providers and redirecting funding back to TAFE. The government should be focusing on fixing this sector before they start going down the path of deregulating further, cutting away red tape, as they call it, and exposing students to huge amounts of risk. That is precisely what the government will do if this is legislated for today. That is precisely what will happen today if this legislation passes. We will be exposing students to more risk when we have not even solved the problems within the sector.

If the problems within the VET FEE-HELP scheme were to be fixed, it is quite possible that providers who rely on rorting the VET FEE-HELP system would struggle to stay afloat. After all, that is their business model. Many of the for-profit providers have an international student component to their business model so there is a structural risk to these international students' qualification and tuition if there is not appropriate regulation. What happens to those students and who carries this risk?

Given the problems identified here, it is the position of the Australian Greens that now is not the right time to pursue the deregulatory agenda contained within the bill. Now is not the time to be deregulating this industry further when we have rorts and scams endemic within this sector. Now is not the time to be saying: 'Let's remove the protections and let's expose students to even more risk.' It would be reckless and irresponsible to do so. It would pose too great a risk to students and Australia's international reputation as a world-class tertiary education provider. So the Greens will not be supporting this bill. We encourage other senators in this place to join us in our opposition to this bill.

Senator McKENZIE (Victoria) (12:03): I rise to speak in support of the government's Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015. We have over 2½ million international students studying in our great country. It is, as Senator Carr said, one of our great export success stories. In my own home state of Victoria we are keenly aware of the benefits of a vibrant and efficient international education system, but we are also aware that it is where issues arose and risks were exposed. As a result, we are keenly aware of the importance of having an appropriate regulatory environment for international education so we can continue to provide a world-class education to students from around the world, and particularly those in our immediate region, who seek to have all the great things that Australian higher education can give them.

International students studying at our institutions are provided with a new way of learning. Rather than focusing on rote learning, there is a lot more team work and collaboration. There are team assignments et cetera, which they do not necessarily have exposure to in their own education systems. That is in addition to the personal friendships that they make. Many of them build fabulous friendships. We have heard time and again that the relationships that are formed through studying and working together can often lead to some fantastic outcomes once people get out into their professions and become leaders. I look at the Old Colombo Plan, and indeed the New Colombo Plan, in terms of delivering on all that international exchange can provide both for the exchangee and the exchanger.

International education also provides over 130,000 jobs in Australia. It is a very significant industry. The Deloitte report, looking at where is our competitive advantage as a nation post the mining boom, identified international education as one of the top five industries that are going to provide an economic underpinning for our nation going forward. So it is very important to get the settings around this right. We are not the only place where students can choose to study. We are No. 3 behind the UK and the US. It is a highly competitive environment. Canada wants more—everybody wants more—of the international student pie, so we have to get the settings right.

There is a complex interrelationship between the various arms of government that impact on a student's decision as to where they are going to study. It is not just about the reputation of the higher education institution. It is about the visa settings, post-education and pre-education, the value of the dollar and the distance from their home. So there are a whole range of issues interplaying here. That is why I am incredibly pleased that our government has chosen to approach international education from a strategic perspective. We set up a council—a group, if you like—and we got the ministers responsible in all those different areas, as I said, to come together for the first time and start to have a national conversation around where we are going to focus with international education.

When I went to uni and sat on a university governing council, international students were seen as the cash cow. International students were seen as the way for higher education institutions to underpin their balance sheets. That is not an educative process. International students were wrongly viewed as a way to make up for successive governments' shortfalls in funding for higher education institutions. Our government has gone back to the drawing board and has put trade, education, foreign affairs and immigration in the same room and has said, 'How can we focus on building this industry from a strategic perspective and really deliver outcomes, not just for our institutions and our local economies but also for our regions and for the very students who choose to study at our fabulous institutions?' So well done; because it is an incredibly international competitive environment.

The amendments to the Education Services for Overseas Students Act—or, as we are all calling it here today, the ESOS Act—will have the practical effect of reducing certain unnecessary regulatory burdens currently placed on education institutions. This legislation will also improve the quality and reputation of Australia's international education industry whilst maintaining protection for students. The contributions of Senator Carr and Senator Simms went to that very important issue. We do not back away from that at all. As you will see later in the week with our VET FEE-HELP bill, we are very, very focused on ensuring that international students and domestic students are protected in our educational systems. At the end of the day, if we do not protect students, they do not have to purchase international education from us; they can go somewhere else—and they will. This is a highly mobile population. We on this side of the parliament are very well aware of that. So any amendments that we are making to the Education Services for Overseas Students Act will absolutely have that at the forefront.

We want to get the settings right to protect students so that they and their families can have confidence that, when they study here in Australia at one of our fabulous institutions, it will be a high-quality experience. We want the best possible experience for those who choose to study here in Australia—out of all of the places in the world that they could choose to study in. We want it to be enriching and valuable to their personal lives and, indeed, to their professional lives over the course of whatever they do. Ultimately, we want to protect those students who are far away from home studying in a place where English is their second language or, in some cases, their third and who are far away from their usual support structures. We want to have integrity of process and an education system that reflects the fair society we endeavour to always have in this country. The Prime Minister has made it very clear that we are a government that is focused on fairness, and fair principles underpin the changes that we have put forward as part of this legislation.

In his contribution, Senator Carr made consistent reference to dodgy providers. I know through the work of the committee that you chair, Madam Acting Deputy President Lines, and which I am the deputy chair of, that this is an experience and an issue that we are very, very aware of and I know that we are both committed to ensuring that students, whether they are domestic or international, are not subject to unethical practices that seek to take advantage of a person's disadvantage. As I said, the VET FEE-HELP bill is coming through later on this week, and I am looking forward to both the Greens' and the ALP's support for the measures to crack down on those dodgy providers so that we can continually get more and more integrity into our system. We know how serious the VET scandal is. We know that the former government did not mean for these unintended consequences to occur as a result of their legislation. But the reality is that that is how these unethical operators have chosen to treat students—and we are not going to have truck with it. So we really do look forward to your support.

Senator Carr also spoke about reputational damage to our nation and damage to our third-largest export. Senator Carr, we do need to learn the lessons from history. That is exactly what these bills seek to do. They seek not to burden providers with unnecessary regulation but to allow them to be as flexible as they need to be and as flexible as our students need them to be; to be connected to industry; and, at the end of the day, to be focused on outcomes so that the student experience is fulsome and valid for them. We are not a do-nothing coalition. We have identified the cheats of the industry and the blind-eye mentality of the previous Labor government. We know that they were allowed to get away with it under the previous government, and we say to the Australian public that it will not happen again. Vulnerable students will never again be able to be taken advantage of in a heinous way. Never again will taxpayers' money be used to prop up crooked operators who tarnish our valuable and vital international education industry.

We need a comprehensive scheme—and this is the world's most comprehensive student protection scheme; absolutely—but we need it to be targeted on where the risk is. We need it to be focused on where it can give the most benefit to the international students and to those providers who employ over 130,000 Australians in our communities and provide such a significant contribution to our economy. They need to be able to be freed up from the unnecessary regulation whilst keeping the regulation that will benefit in terms of protecting students.

Senator Carr went to the process of consultation. These bills have come as a result of extensive consultation with international education stakeholders. As I have said, our government has been talking to stakeholders in international education for a very long time. Very early in coming to government we recognised this as one of the key pillars of our economy going forward and pulled together the right ministers who have been focused on getting a strategic vision for our nation in this space. We are across the detail. That is why we know what changes to make and where to make them. That is what is important.

Our Department of Education and Training was even congratulated by the Council of International Students. I noticed that, while Senator Carr was very keen to talk about the TAFE directors—who, might I say, have a bit of a conflict of interest in the comments they made around designated accounts—the Council of International Students, the very people this legislation seeks to protect and who we congratulate on coming, congratulates the department for its 'commitment to ensuring that student voices' are heard. In turn, the reforms are very well tailored to solve the real loopholes and problems. They conscientiously seek to add and continually improve the legislation that underpins the successful operation of our international export industry.

The coalition has acted on the plethora of negative evidence about the scheme and delivered this suite of bills to rectify the highly embarrassing problem. We will be tabling our report to this legislation later in the day. It was a really interesting set of submissions that we got. I wanted to briefly read some of the submissions to our committee that support the amendments the government is putting forward.

The Australian Council for Private Education and Training said that the amendments:

Are common sense regulatory reforms that align the domestic and international regulatory frameworks and clarify and confirm the roles of the regulators.

They will reduce the overlap and duplication that has been apparent. And there is overlap and duplication. While those on the other side do not see that as an issue, here on this side we recognise that when you duplicate and overlap what you actually do is waste time. And what you do for organisations that are focused on providing education is you cost productivity; because, while you are filling out all those forms for two different regulators, you are taking your eye off the prize. What you should be doing is providing a quality educational experience for international students in this country.

The Overseas Students Ombudsman said:

The OSO transfers certain complaints to the TPS, where it is better suited to deal with those complaints. This includes complaints about provider closures and complaints about an unpaid refund following a student visa refusal, where the TPS can pay the refund directly to the student.

The Department of Immigration and Border Protection noted that the amendments reflect Australia's visa program. They said:

Increasing the flexibility of education providers to claim more than 50 per cent of tuition fees upfront complements Australia's student visa framework, in which some students are required to show that they have sufficient financial resources to cover course fees, living expenses and travel costs in order to obtain a student visa. The financial requirements for student visas are designed to reduce the risk of international students experiencing financial hardship while in Australia and ensure that international students have adequate financial support for the duration of their studies.

Another inquiry that the committee is looking at goes to working visas. We heard about the shonky practices of 7-Eleven. In certain countries it was promoted that you would have no problems at all in Australia as an international student getting a job. You really did not need to worry too much about having enough money in the bank account to cover your full costs because you could always get job. What we have seen is those students absolutely exploited over a long period of time with respect to that. They are having to take on work that is not appropriately or legally renumerated, which is a great shame. We need to ensure that the legislation surrounding and regulating international students' education does complement our visa program.

Australian Government Schools International noted that often it is not the students themselves who are responsible for paying for their courses but parents, governments or other organisations, all of whom might prefer the option to pay all fees up-front upfront. Their evidence is that 'removing the restriction on payments of 50 per cent of tuition fees provides parents and students with greater choice and flexibility'. Here on this side we understand that flexibility, particularly in education, is fundamental.

When I went to uni to study science in Melbourne, I had to be there from nine to five. It was not a 20-hour a week course. I had to be there on campus. I had to move away from home if I needed to et cetera. Going back to study as a mature age student the flexible options were fantastic because by then I was a parent of many young children—fabulous young adults now—and I needed the flexibility. I was living in regional Australia, so I needed the flexibility afforded by online options and indeed studying on weekends or studying at night—being able to fit into my own life. That increasingly over time is exactly where higher education has had to position itself in order to meet the expectations, not just of international students, but also of our domestic student cohort. Funnily enough, it fits in with our government's focus on having an agile economy that meets the demands of our citizenry and our economy.

Universities Australia also noted that parents would prefer to make payments of more than 50 per cent and, because of the difficulty of getting funds out of some countries due to internal unrest or restriction, some parents would prefer to make tuition payments up front rather than leaving large sums of money in students' everyday accounts in Australia. That is a very sensible common sense approach to the reality of what we are dealing with, that these people are not growing up in the very comfortable leafy suburbs which the Greens represent or even in the suburbs the Labor Party represents. These students come from places where the stability of financial institutions and the stability of the wider society cannot be guaranteed.

The Independent Schools Council of Australia and the Australian Council for Private Education and Training also made positive comments. The report will be handed down later today. Obviously, as a government senator, I am incredibly proud of the legislation which seeks to get the balance right between protecting students and growing our industry.

Senator O'NEILL (New South Wales) (12:23): I rise to put remarks on the record as a Labor senator in regard to Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015. 'Streamlining regulation' is the part which first caught my attention and I worry about what that might mean for who gets the benefit and who ends up paying the cost. One of the things we have seen on occasion after occasion since the election of the Abbott-Turnbull government is days where they have heralded great advances for the nation in terms of cutting red tape. In the midst of their haste to cut red tape—which is also sometimes very necessary regulation to ensure that people have the safety and protection against very powerful interests that would exploit them—we have already seen this government throw the baby out with the bathwater on more than one occasion. That is why we need to pay close attention to this legislation and to watch carefully what it is the government say they are seeking to do and what the unintended consequences of them, in their haste, pressing forward may end up costing those who need the protection of regulation that this government seem too hastily ready to remove from too much legislation.

Let us have a look at what ESOS is—the term we use for 'education services for overseas students'—and why it is such of an important debate for our country today. The fact that international education is our highest earning service in terms of export means that this bill requires incredible scrutiny. We know that the Education Services for Overseas Students Act 2002 and the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 were instrumental in establishing obligations on Australian institutions to make sure that international students received services of a high quality.

This is an area where students have not always been guaranteed access to high-quality education nor access to processes that were transparent and enabling and gave them a right to ask questions about the quality of the services they were receiving and to ensure that funds they provided for courses were being properly spent and well allocated to their education. The ESOS Act was established to make sure that tuition assurance and refunds for overseas students were available.

I want to make some remarks on Labor's amendment, foreshadowed by the minister in the chamber this morning, which will go to the fifth schedule in the act, talking about the need for providers to keep fees in a separate account. It goes to the first principle of why the act was established in the first place. Sometimes, like the great romances people might have, they might start off wonderfully but when things start to fall apart, there needs to be a way for there to be redress, where a parting of the ways can be done in a way which does not unduly benefit one over the other. Sadly international students often arrive with a language disadvantage and a language set of practices that do not enable them to fight big institutions and perhaps because of a lack of understanding about the processes in Australia, they were required by legislation to have greater protections wrapped around them.

The other role of ESOS when it was established was to protect and enhance Australia's reputation for excellence in education and training services. I know there has been sufficient commentary already about the critical demand for providing assurances of the quality of the experience people are going to have when they come to university in Australia. The foreshadowing of changes to the VET legislation, which in my view are way too late, by a very tardy government in regard to the VET sector, contrast markedly with their haste to change things with this legislation and their haste particularly in their early period of government to get rid of protections from all sorts of legislation. We want to make sure that this significant industry, this significant enabler of learning right across the globe, which we are a part of, maintains its standards and improves constantly on those standards in a highly competitive environment.

The role of ESOS originally was also to ensure that educational institutions report information that is necessary to support the administration of immigration laws in regard to student visas. That was a critical part of it. Labor will always look at this legislation making sure that there is due regard given to that dimension of it. I put on the record my incredible concern about the exploitation of students who are on student visas who are now a part of the conversation in the public place about the 7-Eleven franchise chain. I know that the Acting Deputy President, in her role as the chair of the Education and Employment References Committee, is leading a very significant inquiry into the practices of a company that has decided that the exploitation of student workers for their own purposes is a ripe ground for growing their business in the most unethical way.

Here we have students coming to university—clearly intellectually capable students, though they might lack a degree of cultural knowledge about what a fair wage is in Australia—who have been engaged by franchisees. With their wages being paid by head office—let's not let head office off the hook, as well—those students have had their visa status used against them. This plays into other action from the government, and is why our looking very carefully at this piece of legislation is so important. Those very students who are going to be disadvantaged by the 7-Eleven chain continuing this practice are the students who are desperately in need of this government giving them a visa amnesty. Yet we have a government that refuses to do that.

So students can be vulnerable in a number of ways, not just in their interactions with the institutions at which they seek to study but also in terms of exploitation of the fact that they are on a visa, and a visa with very specific restrictions. This visa says they are allowed to work for no more than 40 hours over a two-week period, and when they have broken that arrangement—often unknowingly, by coercion by their employer—they find themselves in a situation where they have no power. They are just looking for a little income to feed and clothe themselves and to pay for the necessities for their study so as not to be a burden on their families back home, and they are being exploited.

So it is not all good news in this sector. I have had students say to me: 'I thought that I would come to this country and that I would find a fair and free democracy; that my wages would be safe.' Yet what we are seeing is wage fraud being perpetrated on these students. So before we start throwing out regulation—because this government said that they are going to come in and cut regulation, as if that is going to absolutely transform the lives of every person in the country in a positive way—we need to give it the due scrutiny it deserves.

Why do we need this universal protection scheme? I guess the Tuition Protection Service provides both a universal and a streamlined approach to placing or refunding students when their educational institution cannot meet its obligations. This reality, the Tuition Protection Service, came into being because we had revelations of an incredible inadequacy of supervision in the sector that, in the period of 2008 to 2011, led to 54 educational institutions closing and over 13,000 international students being affected by those closures. One of the big problems is that only 11 of those 54 educational institutions were actually able to meet, or partially meet, their refund obligations. We should not forget that. The legislative change undertaken by the Gillard government in the last parliament was significant and effective in redressing that big problem. At the time there were three tiers of tuition protection: there were providers who were meeting their obligation to students; there were the tuition assurance schemes; and there was the ESOS Assurance Fund. The ESOS Assurance Fund is a critical part of schedule 5 in the piece of legislation that is being put here today.

When that ESOS Act of 2012 came in to deal with risk—and this is where Labor's concerns with this particular piece of legislation lie—it was to support the viability and the sustainability of that tuition protection scheme. To ensure that, there was a limit on the amount of course fees that could be collected by the educational institution. Basically they could not take the money and run, which is what we saw happening. The limitation was to make sure they could not collect more than 50 per cent of the total fees for courses of more than 24 weeks duration prior to a student commencing the course. It was very clearly aimed at reducing potential refund liabilities for both the educational institution and the tuition protection scheme. It also required stronger record keeping of student contact details and of academic progress to make sure that students did not just land in the country and disappear off the radar, with the money being held by the institution and no servicing of that student's education occurring. They were the reasons for the changes in 2012.

Let's come to where we are now. What we have in this piece of legislation is a call from the federal government to change this legislation one more time on the strength of 27 submissions from organisations. In principle, Labor does support the streamlining of regulatory and reporting requirements as much as they can be improved, once the sector has settled in response to Labor's original intervention with the 2012 legislation. But I have some concerns about the changes that are being proposed by the government here.

There are two parts. The first part, if we look at this explanatory memorandum, is all about streamlining registration and monitoring providers with the purpose of lining up reporting requirements and registration periods. The first response to that is that it sounds okay at first blush; if we can use new technologies in new ways that make transparency still achievable but with a lower impact on the people who have to enter, monitor and report the data, then essentially Labor would support that. This is consistent with the review of reporting requirements for the universities that was put forward by PhillipsKPA, which was one of the critical documents that was commissioned as part of Labor's consideration of the 2012 amendments to the bill. It was commissioned in August 2012 and released in 2013.

But there is a second part of the government's deregulation agenda embedded in this bill, that wants to remove a range of requirements that really affect the providers. While we have some support for those, we have concerns about the way in which that may be open to interpretation and that it may lead to a loss of security of funds for students who find themselves departing from an institution.

Some of the proposed provisions we see from this government really leave Labor senators with some concern around the removal of the requirement to report all instances of a student default, the definition of what a study period might be and the requirements for providers to enter into agreements with each overseas student, setting out the study period and the tuition fees payable for each student period. The government says that it is better to deal with this through a national code. But Labor have concerns not only because of the scale of the exercise that is undertaken and the value of the industry that is at risk if we get this legislation wrong; also the project of revising the national code is something that is being undertaken right now by the government. Without the clarity of what that national code looks like, there are probably some questions we should ask about what the current legislation might allow because it is going to draw on the code for some of its strength.

In regard to the measure amending the restriction on education providers receiving more than 50 per cent of tuition for a course before the student commences the course if it is longer than 24 weeks, Labor understand the arguments that have been put that the change is going to give students the ability to pay more. But what does that mean in practice and what does it mean to ensure that students are genuinely freely choosing to do that, and where is the point at which we can get some oversight of whether there is coercion?

If I could go to the explanatory memorandum and look at the facts about one of the arguments being put by the government that there is regulatory failure and that they need to change it because students have limited choice on payment options. The data they source tell us that only seven per cent of students, on average, made a significant prepayment of more than one semester at their time of enrolment. Granted it does go on to say that there is significant variation by sector, with ELICOS students paying 44 per cent in advance compared to only four per cent in the higher education sector and five per cent in the VET sector, the problem here is that students really should be able to pay everything up-front. This is an imposition by not allowing them do something administratively simpler and to get the discounts that are available when you pay up-front. But if seven per cent is the number of students who are going to get the benefit of that then I wonder how broad that general claim really is and how valid that argument really is.

That is my constant concern with this government. I have just seen them do so many dodgy things and try to sneak through advantages for those who already have the most while kicking those who have the least when they are down. I do raise some concern about that.

As I said earlier in my remarks, when students commence their studies in Australia—and tens of thousands if not hundreds of thousands of students now have come through and have had wonderful learning experiences in this country under different regimes and taken back an advantageous view of Australia's tertiary sector—we all know that, from time to time, things do come to tears, things do fall apart. That is why, with reservations, Labor will support this legislation. But we will seek to amend it specifically with regard to the student's capacity to have clear sight of the money that should be rightly theirs if their course, for any reason, does not proceed, or if they become unwell and they cannot proceed, that the money that they have paid up-front, even if it is only seven per cent, should be available for them to have access to.

We cannot allow the situation to occur, once again, where the failures of tertiary institutions were so significant that hundreds of thousands of students were negatively affected. The impact on those individual students is something that I am sure they still keenly feel and that their families still keenly feel. Their families often go without a great deal to enable one particularly gifted child the opportunity of studying in Australia. Families who have been disadvantaged by that investment falling over need great protection.

While supporting this legislation in principle and the capacity of technology and new systems to improve and streamline the way in which students might be enrolled and their fees taken, Labor will make sure—and we will seek the support of the crossbenchers—in our amendments that the money that needs to be there when things fall away, when it all ends in tears and the milk is spilt—

Senator Xenophon: When things fall apart.

Senator O'NEILL: A great title for a novel—that students and their families who are investing in them and their futures can access a fair and timely response and secure the funding return that is their just due.

Senator XENOPHON (South Australia) (12:43): I have a short contribution to make in respect of the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015. I support the second reading of this bill but I do have a number of concerns in relation to the bill, in particular the removal of the requirement for private providers to keep fees paid by students in a designated account—a matter that was raised by Senator O'Neill. I will address my concerns shortly but, to begin with, it is important to reflect on the importance of international education to Australia and to my home state of South Australia—and, indeed, the home state of our education minister.

International education activity arising from international students studying and living in Australia contributed $18.2 billion to our economy in 2014-15. This is an increase of 14.2 per cent on the previous financial year. In fact, I hope it increases even more with a lower Australian dollar. May the Australian dollar go below 70c as soon as possible because the low Australian dollar is good for our higher education sector in terms of overseas students. It is terrific for our manufacturing sector, and it is very important that, if the dollar keeps going down even a bit further, that just makes us so much more competitive with other countries.

Looking at the economic contribution in more detail, the higher education sector generated $12.5 billion in export income, with the VET sector generating $2.9 billion in earnings. In my home state of South Australia, export income generated from international education last year amounted to $1.127 billion—so $1,127 million. According to statistics sourced from the Department of Education and Training's website, in 2014, there were 249,990 overseas student enrolments in higher education in Australia. In the vocational education and training sector, there were 149,785 overseas students. Unless my maths is wrong, we are talking about 400,000 overseas student enrolments in either the higher education or the vocational education sector.

The Department of Education and Training has also released a research snapshot in relation to international students studying science, technology, engineering and maths, or the STEM subjects, in Australia. The research revealed:

In 2014, 31.5% of all postgraduate research students at Australian higher education institutions were international students. Even higher proportions were in STEM fields, including Engineering and Related Technologies (54.2%), Information Technology (51.6%) and Agriculture, Environmental & Related studies (45.6%) …

Given the importance of international education activity to Australia's economy and Australia's reputation abroad, it is essential we have a framework in place that ensures its administration and regulation is appropriate and robust. The Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015, the bill that we are now debating, seeks to amend a number of acts that regulate the international education sector. These amendments will create education services for overseas students agencies, who will have direct responsibility for education providers' registration and for monitoring education providers' compliance with their obligations under the various acts. Education services for overseas students agencies will include the Tertiary Education Quality and Standards Agency and the Australian Skills Quality Authority. By clarifying that these two bodies have direct responsibility for registering providers and monitoring compliance of providers, this bill creates more certainty in the education sector about who is responsible for what.

This bill also makes a number of amendments to the Education Services for Overseas Students Act 2000. The first relates to decisions made by the education services for overseas students agencies. Under the current legislative framework, decisions made by the Tertiary Education Quality and Standards Agency and the Australian Skills Quality Authority can only be appealed in the Administrative Appeals Tribunal. This bill will allow for internal review of decisions made by these agencies. It will help to ease the caseload of the AAT by giving providers and ESOS agencies the ability to reach an agreement between themselves in the first instance. If that means fewer lawyers being involved or less legal work being done then so be it. I can say that as someone who still has my practising certificate—primarily for pro bono work, I should say.

The measures I have just described are some of the more straightforward measures in the bill. It is important to note that concerns have been raised in relation to a number of other measures. For example, in its submission to the Senate Education and Employment Legislation Committee's inquiry into this bill, the National Tertiary Education Union raised concerns about the proposal to remove the requirement for overseas education providers to keep prepaid student fees in a 'designated account', the matter that Senator O'Neill referred to previously. The government argues that forcing education providers to keep prepaid fees separate in a designated account limits the provider's competitiveness and its ability to invest in innovation in order to improve its operations. However, additional flexibility is not necessarily always a good thing, as we have seen from the collapse of some providers in the VET sector and private colleges. By the way, the overwhelming majority do terrific work, but if private providers collapse then that can leave students in the lurch and damage our international reputation as a quality higher education and vocational training provider. In relation to their opposition to this provision, the NTEU, the National Tertiary Education Union, pointed to the ongoing volatility of the private education market—although I would like to think that some of the reforms that Senator Birmingham, as education minister, is proposing to the VET sector will alleviate or deal with some of those concerns. That is why I welcome Senator Birmingham's bill in relation to this, which I understand we will be dealing with tomorrow. The NTEU are concerned that these changes will:

weaken protections for overseas students studying in Australia, and

threaten to undermine international reputation of Australia's tertiary education sector.

That is a direct quote from their submission. The Tasmania University Union argues that requiring providers to keep fees in a separate account serves as an accountability measure. In their submission to the Senate Education and Employment Committee, the TUU wrote:

If students do not start a course they initially enroll in, it is essential that they be refunded their payment. The requirement that Universities have a separate account for the funds paid by overseas students prior to commencing their course streamlines the process of checking that students have been refunded.

Removing this process not only removes transparency from the use of overseas students fees; but also increases the work involved in overseeing refunds.

I think there are a number of good points made there by the TUU.

This bill also seeks to remove the requirement that providers not be allowed to charge more than 50 per cent of tuition fees up front for longer courses. The government believes this improves flexibility for students or their sponsors, especially those who may be studying here on a scholarship and may be able to cover the course cost up front. There are concerns that, by removing the 50 per cent cap on student fee contributions prior to a course starting, we may see pressure being placed on students to pay more than 50 per cent of fees, even though they are not required to do so by law.

I spoke earlier about the significant contribution international education activity makes to the Australian economy. In order to enhance this contribution, it is imperative that we have systems in place to encourage overseas students to be here, particularly in areas of low population and economic growth. It is an issue on which I hope to engage with the Minister for Education and Training, with Assistant Minister Colbeck and, indeed, with Immigration Minister Peter Dutton. I think that there is a compelling case in regions and states with low population growth and low economic growth—in particular South Australia and Tasmania, because we are below the Australian average for population growth and economic growth. South Australia, sadly, has one of the highest unemployment rates in the nation. It is a position that we do not want to be in. We face much greater challenges in employment with the demise of manufacturing in the automotive sector at the end of 2017 unless there is some urgent work done to claw that back, to keep car manufacturing in South Australia.

I believe that there is a compelling case for students in low-population-growth areas and regions to have an incentive to study in those regions. That could be that they are allowed to work a bit longer, allowed to stay a bit longer, than in other states. I think that would act as an incentive for those students to study in those low-population-growth, low-economic-growth areas. That is a matter for another time, but I would like to think that it is something that will receive bipartisan support. I know that in South Australia I have had discussions with opposition leader Steven Marshall, who has shared these concerns, and spoken to state government ministers, Labor government ministers, who similarly, I believe, would like to see more international students in my home state.

So, while I support the measures in this legislation insofar as they relate to education and overseas student agencies, I do have reservations about the other deregulatory measures being pushed for by the government. I would like to have an opportunity to engage further with the government, the opposition and my crossbench colleagues in relation to those measures. But I think it is important that we support the second reading stage of these bills and then see what can be drawn out of the committee stage in terms of any necessary amendments or sensible compromises.

Senator LINES (Western Australia) (12:53): I would just like to start by putting the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015 in the context of the sorts of changes that the Turnbull government is seeking to put across all aspects of education in our country, whether it is early childhood education and care, primary school, secondary, TAFE or other education. In that concept, there is one word that links all of those services together, and that is 'deregulation'.

We have heard the concerns of the sector in relation to deregulation. Last week in this place, Labor asked the minister a number of questions about the casualisation of the early childhood sector. We saw in the media a couple of weeks ago comments that Minister Birmingham made previously about moving to a voucher system in primary schools. Imagine that: a voucher system, completely deregulating our primary school sector! We have seen the sorts of concerns and indeed the explosion of private colleges in the TAFE area, and we have seen in Victoria the Victorian government move to take back 8,000 TAFE qualifications.

And now we have seen—and we have fought in this place and in the wider community—the Turnbull government's deregulation of the university sector. We spent most of last year fighting their moves to introduce $100,000 degrees. Despite them trying to say that we got it wrong, that has now been shelved, but it has not gone away. It is still their intention to introduce $100,000 degrees, just not yet, because they have not got the support for it. Labor from day one, along with the National Union of Students and a whole range of other community organisations, has opposed that move, and thankfully crossbench senators and the Greens also do not support the deregulation of universities, which would make it incredibly expensive and prohibitive for a range of Australian students to attend university.

Those opposite can shake their heads, but deregulation is the key word from the Turnbull government when it comes to education, whether it is early childhood education and care—and I must say I was appalled last week to stand in this place and hear about early childhood education and care. We all know the critical impact that early education has on children from the ages of nought to three, and what did we hear from the Turnbull government? We heard 'business models' and 'profit'. How disgraceful. There was no mention of quality.

Again, we see in this place the impact of the government's proposal to deregulate international students. It is important to acknowledge that international students are big business for Australian universities. This is one thing I have learnt in all of the inquiries that we have done across the university sector, whether they were into the government's disgraceful attempt to introduce $100,000 degrees or this latest move by the government to deregulate. International students are big business, but they should not just be big business. We should be proud of the country being able to offer quality educational services to all who seek them, whether it is our own local students or it is international students.

What should be at the forefront of that experience of people coming to study at university in Australia is quality: proper, quality courses that change people's lives. I can say from my own experience as a very young mature-age student—I went to uni as a 26-year-old, and I went to Murdoch University in Western Australia—that that was a life-changing experience. That is what we want higher education to be. We want it to change people's lives, to give them greater opportunity. That is really what we want to do.

Unfortunately, we know that that requires our universities to be transparent, and it requires regulation. It does not happen on its own. It is not a trickle-down effect. It does not happen because nobody is watching, and it will not happen if we continue to deregulate our higher education sector. Of course, it should be regulated to the highest standards. The privilege to go and study at a higher education institution should be made available to many people in our community, whether they are international students or not. That should be an opportunity that is open to all. But it should be a proper opportunity, a life-changing opportunity, a life-enhancing opportunity.

That needs good, strong regulation—of course, not overregulation. That is not what Labor is calling for. It needs regulation to make sure that, when international students pay funds, those funds are protected and that universities act with great transparency and act in a proper way in relation to international students, because they are big business. Certainly, when we held the inquiry into the government's shelved $100,000 degrees, university after university told us that international students were a significant part of their student body. It did not matter if they were a rural or regional university or, indeed, a university based in our capital cities: international students were very much a core of their student bodies. We want to make sure that that core is protected—and, of course, our reputation.

We want to keep and indeed enhance our reputation as a country which is open and transparent, a country where students can come without fear of being ripped off and without fear of paying a lot of money and not getting a quality course or indeed not getting a degree at the end that is worth very much. Those are very important and they are also important to Australia, to continue as a leading country in terms of international students. We have world-standard universities and we have quite a small university body, which reflects our population, and we do want to keep that at world standard. We can name the universities which are competing at world standards and which are very highly ranked, but I think that all of our universities are at a world-standard level. So we want our reputation to be upheld. We want that quality and our reputation to grow and we want to continue to be held at a particular level.

International students make a significant investment, as do their families when sending a child overseas. Not only do they have to pay fees but that child also has to be supported either through working or through continuing to be supported at home. Families make a significant decision when they choose an overseas university, and we want them to keep choosing Australia so we have to have the highest standards. We have to have a quality educational service, and in order to get there we need regulation. It will not happen without regulation.

When Labor was in government we commissioned a review of reporting requirements for universities and, of course, Labor does support, in part, some of the streamlining of regulation. We do not want to see students and universities overburdened by regulation, but we do want to see very clear protective regulation in part. And some of that streamlining of the regulations is outlined in the bills, as recommended in that report—a report which Labor commissioned.

The second part, though, relates to the government's deregulation agenda. As I said at the outset, in early childhood education and care right through to higher education the government's keywords in those areas are not quality, protection for students or even cost, surprisingly. It is 'deregulation'.

As Labor has said, and as you will hear other Labor senators say in this place, that is a danger, as it seeks to remove a range of requirements that affect providers and were indeed partly introduced in response to the last major crisis in the international colleges in 2008 and 2009. None of us in this place, no matter where we come from, want a return to that—where our international reputation, particularly in relation to Indian students, was well and truly on the line. We had some awful protests. We had Indian students allegedly being bullied. We had collapse after collapse, with shonky operators taking the significant funds they received from international students and fleeing. We do not want to see that, because that is not the sort of country we are. We are not a country that promotes shonks and we are not a country that allows people to rip students off in that way. That is not who we are as a country. And of course, that was significant damage to our reputation. Partly, that collapse occurred because we did not have the regulation in place.

We do need to keep updating regulation. It is probably not appropriate to say that regulation that applied in 2008-09 is going to lead us forward from 2016 onward. It does need to be something we continue to review, because regulation can become a burden if it no longer matches what is being provided. But regulation in and of itself is required because none of us in this place want to go back to what we saw in 2008 and 2009. And we know already that in the era of international education we must have proper regulation that protects students who come here in good faith.

When you choose a university it is a very exciting time. You make the choice and you make your decision about what sort of degree you want to pursue, and it sets your career opportunities up for the future. It is a very exciting time, so we want to make sure that the highest standard of regulations are in place so that that decision made by the international student and their family is made in an environment they can feel comfortable in. We want to make sure they know they will get the highest-quality education and will be secure in the knowledge that they are not going to get scammed or ripped off by a shonky operator or someone taking advantage of them.

It is very confusing when you come to Australia from another country. You arrive and everything is different, and you may have English as a second or third language. It is an environment where we need to welcome students, and we need to be able to say to them confidently, 'We have good, strong regulation in place that's going to protect your interests. It's designed to protect you as the international student.' It is us saying in another way how much we value that international student and their family making that often-difficult decision to send their child overseas to study.

When Labor were in government we initiated in response to those college collapses in 2008-09 a range of reforms, including the creation of the Tuition Protection Service. Alarmingly, some of the requirements in this bill seek to remove those protections that Labor put in place.

We have seen another form of exploitation of international students in this country with the appalling and shocking exploitation of students by 7-Eleven. We heard in evidence that students were getting paid $12 an hour. The Shop, Distributive and Allied Employees Association, the union in the retail sector, told us that they had calculated for one of those international students that he was working for about $5 or $6 an hour. That is shameful, and I am not suggesting for one minute that anyone in this place thinks that is okay, but it does demonstrate that where international students are concerned there is a market for some who are unscrupulous to exploit them. In the 7-Eleven case, we have already heard in evidence just from the Fels panel that they have done underpayments for 101 students, and that amount of underpayment is more than $2 million. I think people perhaps do not appreciate that these are low-paid jobs. These are jobs where students are earning about $20 an hour, so, to get to an underpayment of around $23,000 per student, which is what the Fels panel is telling us, is a staggering underpayment.

We have also heard, in relation to 7-Eleven's international students, how they were forced to work more than 20 hours a week, breaching their visa conditions, putting at risk their university career and degree, putting at risk all the money their family had got together to enable that student to come to Australia to study—all of that put at risk because a dodgy company chose to exploit them. We know that in the area of visa workers for international students the current regulations we have are not enough. We certainly want to see a beefing up of regulation there.

Of course I am not suggesting for a moment that our universities are behaving with some of the unscrupulous practices we have seen from 7-Eleven and others—Pizza Hut just last week. These are all going on now. But it does clearly demonstrate that international students are seen by some as big business. Obviously, where there is a lot of money out there, we do see elements of exploitation. In the cases of 7-Eleven and Pizza Hut, there has been shocking exploitation of international students.

That damages our reputation. It may not be about the quality of the educational experience the student is receiving, but nevertheless people reading the story—particularly a student looking at Australia as a market to come to to study next year—will take it into account. 'Gosh, I've got to work to look after myself, and I'm entitled to work 20 hours a week, but it seems that I'm going to be exploited.' That is bad for everyone. It is certainly bad for our reputation overseas and it is bad for our universities to be caught up in that kind of story. If there is no story—if people have a good story about the quality of their educational experience in Australia and a good story about not being exploited at work—that in and of itself promotes Australia as a destination that is safe and welcoming to come to. So we do not want to see that kind of thing. We know that, if we want to retain our reputation and our world-class systems, international students need more protection, not less.

Labor certainly wants to put on the public record in the Australian parliament that these bills before the Senate today remove or weaken student protections. We want that loud and clear. We do not want there to be any mistake that Labor thinks that this is additional protection for students. We do not. We absolutely believe and want on the public record that these bills remove or weaken student protections. These bills will not, as the government states, give international students more protections; they will give them less. We are very clear about that. It is wrong to argue, as the government will, that all deregulation is good. We can look back at the events of 2008 and 2009 to see the perils of not having enough regulation in place, of getting the settings wrong. None of us in this place want to go back to that situation. It is there for us to learn from, but it would seem that the government has not learnt or is not listening, because the current bills will weaken protections for international students. That history of 2008 and 2009 shows us that regulation is needed.

We do not want to see scams and rip-offs of international students. We see in the visa area that without adequate protections students are vulnerable. International students are big business, and some unscrupulous operators will take advantage. We do not want that. It is bad for all students. If there is a scam around an Australian university, that affects not only international students but also the local students who have a choice about what university they go to. 'No, I won't go to University X, because they've had all that horrible scam of international students.' It affects us all. We want a quality, well-regulated system that protects international students.

Senator SINGH (Tasmania) (13:13): The Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 really has two main parts. The first part is streamlining of the regulatory and reporting requirement. The opposition does give its support to that part in itself. However, the second part relates to the government's deregulation agenda in higher education and seeks to remove a range of requirements that affect providers and that were largely introduced, in fact, by Labor when in government in response to the last time we had a major crisis in the international education sector, which followed the collapses of colleges in 2008-2009 in particular. That is the part the opposition has grave concerns about, will move amendments to and will ask the government to reconsider.

When we talk about the international education sector, the international education market, we need to recognise the importance of quality—the importance of safeguarding that quality and having strict standards in relation to that quality. We know that this is an incredibly important part of the Australian economy. I understand it is second to coal and iron ore in terms of how important it is to our economy and worth some $18 billion a year. So, over and above the economic benefits that we know the international education market has, we need to ensure that, we as a country, stand proud in what we deliver and what we provide. Regulation is so important, because we know that there are those out there who, unscrupulously, will take advantage of any loophole they can find and offer dodgy courses which will lead, unfortunately, to the outcomes that we saw during the Howard era.

I want to draw on a little bit of history, though, in talking about the safeguarding of overseas students who come to study in Australia. This idea of a single framework to safeguard overseas students was first introduced by the Hawke government through the Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991. It has had quite a reform journey since that time, and quite rightly so, because we are not talking about an education sector that is static or a time period that is static. Regulations must change as circumstances must change, so perhaps the protections that were provided back in 2009 or in 2012 may not be appropriate for international students in 2016. That is why the opposition takes a very constructive approach to looking at what is needed for the international student sector.

This issue, though, of standards and of safeguarding quality, I have to say, is dear to my heart. I am the daughter of someone who migrated to Australia as an international student. It was the attractiveness of the standards and the quality education that Australia provided then, in the 1960s, which made Australia a drawcard for my father, as it did for so many other people, so many other overseas students at that time.

And it has continued to be. Australia has been, certainly, right up there with a number of other countries in the world as a place to come and study and receive a quality education and a quality outcome in that process. But, unfortunately, we have had some hiccups over the last number of years. It is for those reasons that Labor, when we talk about offering international students a pathway for the future, stand very firm on the need to have 'safeguarding quality' as a key to maintaining our high reputation. Why do we do that? Because if we value every human being as equal to ourselves then we would want the same standards provided in higher education to those students coming from overseas to study here as we would want for ourselves. We would not want those students being exploited. We would not want those students to receive a watered-down degree, or have watered-down protections in relation to the fees that they have paid and the educational outcomes that they have then received in return.

That is why this kind of ideological zeal that this government has in relation to deregulation is just so wrong-ended. It is completely wrong-ended. It is fine to want to reduce some red tape. We all understand that. We all understand the importance of streamlining something to make things easier and run more efficiently for students, as well as for those education providers, but, to me, talking about deregulation speaks of weakening those necessary and effective protections for overseas students that are needed now more than ever.

We do not want in this place—and I am sure I speak for all senators—a repeat of what occurred during the Howard era with all of those terrible scams that were put out through those colleges operating at the time, which, as we know, culminated in not only a major economic crisis but also an educational crisis with the international education enrolments collapsing at that time. I think it was, if we look back, an issue of naivety on behalf of the Howard government at that time, which Labor, when it came into government, had to fix up in a fairly major way. Between 2008 and 2011 we saw 54 colleges collapse and 13,000 students affected, of whom only 312 students got refunds from their educational institutions.

Since then, there has also been the saga of Greenwich University, where a scam degree factory operated out of Norfolk Island, which the Howard government allowed to run rampant, I understand, for some four years. It was not only an example of dodgy practice—it was really quite a bizarre situation.

I think that the efforts of all of the reputable providers who strive day in, day out, to maintain high standards, treat students fairly and with dignity are tainted, unfortunately, when there is some dodgy education provider in the mix. That is a shameful thing—when we know that there are so many good education providers out there whose reputations get damaged in the process.

Unfortunately, there have been too many familiar stories in this space, though. It is that concern that I certainly have. I know that Senator Lines also touched on issues to do with the recent sham with contracting arrangements at 7-Eleven. We saw something similar with Australia Post as well recently, with international students being exploited. Even though we are aware of some of these cases—7-Eleven, educational colleges, Australia Post—it raises the question of how many scams or exploitations of international students we are not aware of. This is only what is being reported and what has been found out. We know that there could indeed be a number of reports that go hidden, and in that sense we are left in a cloud of secrecy.

So I do raise the importance of the additional comments that were provided in the Senate committee report on this bill. They went into some detail as to what Labor's position is—the fact that we support the positive elements of this bill but that we want the government to reconsider those provisions that we do not see as reasonable. Anything that is reasonable, of course, we would support, but we have that anxiety, as I mentioned, about the potential consequences of the deregulation agenda of this government.

If I can reiterate the position that Senator Carr spoke of here and that our shadow assistant minister for higher education spoke of in the other place: we are absolutely willing to do what is necessary in relation to reducing red tape, but we do not want to see the watering-down of protections for international students, which would threaten international education, which, as I said earlier, is one of our biggest export industries. So we reserve the right to make those amendments here in the Senate in that regard.

Any harm to Australia's reputation as an education provider will really stem the increasing flow of students into this country and the flow of export income along with them. I am sure the government understands the importance of that, if nothing else—the importance of this market to our bottom line in relation to our economy. We know the freedom that is available to students globally now and that they shop around and look at what is the best and most affordable education on offer to them. Australia may not always be their first port of call, but we want them to make the choice about coming to Australia and being educated here on the basis of quality, on the basis of safety and on the basis that they are not exploited—that they are able to come here and live safely, comfortably, in a supported, multicultural community and come out of it at the end with a really decent quality education and an enjoyable experience as a student whilst here. That is what we would want for our own sons and daughters if they were to travel overseas and study in an institution in another country, and I cannot see why we would want anything less than that for international students coming here to Australia.

On the basis of that, Labor will support in essence the main first part of this bill, but we certainly will be moving amendments in the committee stage and making very clear the reasons why this bill is flawed in its second part. We have shown over the years that we were able to clean up the mess of the Howard government and ensure that we did not get a repeat of the collapse of this educational sector with the closure—the necessary closure, of course—of those colleges and the withdrawal of enrolments. We want to ensure that in this country we have a proud, well-functioning, properly regulated international education market that continues to provide billions of dollars to our economy. The only way we will do that is by ensuring we have good legislation, with good regulations that help make that happen, and a positive attitude to our approach to international students in this country.

Senator FAWCETT (South Australia—Deputy Government Whip in the Senate) (13:27): I also rise to make a contribution on the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015. This is an important industry for Australia. The senators opposite are calling on us to be positive about this. We are very positive about this sector. It is in fact, as a number of reports show, probably one of our largest inbound industries in terms of capital. It is about third after iron ore or coal. Nationally there are over 420,000 students who choose to come and study in Australia, from over 193 different countries. Not only does that provide work for our educational institutions but, as someone who is involved in our foreign affairs, defence and trade committees and efforts, I believe it is an incredibly good expression of soft power and soft diplomacy, getting people to come here to experience Australia. Overwhelmingly, those people go home to their own countries with a positive experience of Australia.

In fact, a survey of students was done just recently by the University of Adelaide, in my own home state, and overwhelmingly the students said that South Australia was a great place to come because it felt safe, things were close, the people were friendly and the standard of education was good. So they went home with a very positive view of Australia. As we have seen from things like the original Colombo Plan and now the New Colombo Plan, which has been a particular initiative of the Minister for Foreign Affairs, Julie Bishop, those ties matter. Those long-term interactions with people of other countries, both the students and their families, and their employers in the future, matter because we actually build understanding between people who are going to be conducting business transactions and building relationships that will affect our economy as well as theirs.

To answer Senator Singh's comment, we are very positive about international students and education because it contributes a lot both now and into the future. In South Australia in particular it is an area that has been growing significantly. In the last year alone there has been about 8½ per cent growth in the sector. We have gone from just over 28,000 students studying in South Australia to now nearly 31,000 students in South Australia. In terms of the value to our economy, over $1 billion a year is brought into the South Australian economy. Depending on which reports you read, the estimates are that over 7,000 jobs are directly or indirectly created as a result of international students choosing to study in South Australia. That is a very positive thing for us. It is not guaranteed though. We cannot always assume that that is going to occur.

If we look at cost, for example, in a recent survey that was done of over 5,000 students from 15 different nations, two key things were identified. The first was that Australia was not necessarily the cheapest place. In fact, for these 5,000 students who were surveyed across a range of courses we were one of the most expensive places. It was estimated that, on average, around $42,000 was required by the time they paid fees and paid for their support—things like accommodation, transport or just living in South Australia. Given that people have consistently said that South Australia is a cheaper place to live compared to many other spots in the world then clearly a lot of that comes down to fees. In Singapore, for example, it was nearly $3,000 a year cheaper than in Australia to live and study. In the USA it was some $6,000 a year cheaper. This is an international market where students can choose, or parents can choose, with their children, where they entrust their children to go and study. If price is an issue—and it is certainly something that is reflected in the studies—the more expensive it is for our providers to provide education then the attractiveness of Australia as a place to be doing business is reduced.

The second key finding was that, for these 5,000 people who were surveyed, the perception was that Australia was no longer the highest in terms of quality. I think we are about No. 5 in terms of quality. Clearly, we should be seeking to help our providers in these sectors reduce their costs and focus on putting their effort into the quality of education as well as the experience for the student, so that the story that goes home to prospective students and families who may be looking to send their children here is that Australia is a safe and friendly place and that it offers quality education and affordable education.

Government policy does matter in terms of affecting those things and affecting demand. Deloitte Access Economics highlighted in one of their reports that between 2010 and 2012 there was about a 19 per cent decrease in the value of the international student sector due to changes in Australia. They said in their report that those changes were due to a number of things. Three in particular came down to government policy, which was a tightening of skills requirements. In 2010, occupations like hairdressing and cooking were removed from the skills occupation list. The number of people who were applying for visas fell from over 31,000 in 2008-09 to 693 in 2010-11. Regarding the temporary stay requirement, in 2011, students were required to prove that they were temporary residents and had no intention to stay permanently. The impact of the genuine temporary entrant requirement resulted in the acceptance rate falling—in this case from India—from 90.8 per cent in 2007-08 to only 49.6 per cent in 2010-11. There was also a crackdown with new visa requirements that allowed students who studied at bachelor level to stay for up to four years after they graduated. But because this only applied to people at university, the demand for VET subsequently decreased.

Some of those measures are valid, although at the moment there is significant debate around visas and whether we should have further reform of visas, given that some of the people who are here studying as international students and who are keen to remain are studying in areas where there are recognised shortages and skills. If Australians are not choosing to do that study and get the qualifications and we have businesses suffering as a result because they cannot attract a skilled workforce then it appears logical that if someone has chosen to come and study in Australia and pay for their education and then wants to remain and work in that sector and contribute back to Australia's economy that is something we should be encouraging.

The point I make here is that government legislation does make a difference. That is why it is important that the changes we make in this sector value what this brings. Speaking as a South Australian, I am clearly keen to make sure that South Australia retains the value that it currently has and, in fact, grows. I think the state government has set a target of around 34,000 people by 2017 as something it would like to see. We need to make sure that legislation we bring forward does, in fact, help these providers to deliver a better quality of education at a lower cost.

The reforms that have been proposed in the Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015 are enablers to do just that. These reforms, as you would expect, have been developed with considerable consultation with the sectors and with overseas students, particularly their peak body, over the last couple of years. Their peak body has indeed made submissions to the Senate inquiry that was conducted into these bills.

The reforms in schedule 5 of the bill are going to deliver some $76 million worth of savings to providers just through reducing red tape and duplication. As I highlighted, we are in a competitive environment, and parents have a choice as to where they encourage their children to go and study. As we have seen, Singapore and the US are both significantly cheaper on a per annum basis than Australia. So the net effect of being able to reduce the cost to providers, by some $76 million each year, will go some way to helping them to make sure that Australia remains an attractive place for people to send their children. That also means that, rather than duplicating efforts and dealing with red tape, these providers can spend more time improving the quality of the education that they are delivering. The Council of International Students, who were one of the groups consulted, indicated in their submission to the Senate inquiry that they do not see that this bill in any way weakens student protections. In fact, they welcomed aspects of the bill, such as the flexibility in terms of being able to provide more than 50 per cent of their course fees up-front if they wish to.

I will go through some of the particulars of the bill, but I thought it was important to set that broad context first. It is important for Australia, and it is particularly important for South Australia. We value it and we recognise that it needs to be affordable and quality, and one of the ways to achieve that is to get rid of unnecessary duplication and red tape. That is the target of this bill, with some $76 million of savings. It has not been done in isolation; it has been done in consultation both with the providers and, importantly, with the international student body, who are the people who are directly impacted by this. So, for those who wish to criticise the bill, it is important to recognise this does have broad support from the people who are impacted by it.

Schedule 1 of the bill goes to streamlining registration, monitoring and quality assurance processes for education providers to provide a more seamless system. This means that the providers under the ESOS Act will be aligned with their domestic registration. So, rather than having to register twice, there will be the one process that deals with both their domestic and international markets—which seems to a logical person just to make sense. The requests for information for providers will also be reduced, with external regulatory bodies being able to use information collected for domestic registration in registering providers under ESOS. When I speak to small business in Australia, many sectors, including the education sector, tell me that one of the most frustrating things is having to provide the same information multiple times to different government departments or, in some cases, to the same government department but for a different purpose. Any legislation that we can provide that means that they only have to provide the information once is just good governance let alone a benefit to providers.

Schedule 2 looks at internal review of decisions. This saves time for providers by giving them access to an internal review process for decisions taken by the regulators. It provides the option to avoid lengthy appeals processes through the Administrative Appeals Tribunal when an internal review may in fact be a better way to resolve issues and to save time and resources. Importantly, in terms of consistency, the ESOS Act becomes consistent with domestic legislation for providers.

Schedule 3 looks at ministerial directions. It allows the minister to direct an agency to focus on a particular issue in the sector. Whether it is, for example, academic misconduct or cheating, they can direct the agency to look at that issue without having to actually identify a particular provider. That provides a good balance in being able to focus their effort without being seen to unfairly disadvantage any particular provider.

Schedule 4 looks to increase the powers of the Tuition Protection Service director to support quality assurance in international education. As I said in opening and setting the context, that survey of 5,000 students and their families found that quality was one the determining factors that they take into account when choosing where to come for their study. The TPS director, who is someone who is often privy to information about the activity of providers, plays a vital role in making sure that the providers meet their obligations to students. If the TPS director sees issues that are not being rectified by providers, they can go to the regulators with recommendations that allow them to take quick action against the poor practices of particular providers. That is another way of making sure that we have a system in place that works with providers and, if need be, directly with the regulators in a targeted way to lift the quality of what is being provided. Schedule 5 goes to other amendments, which is where we see the $75.9 million in savings for providers annually. As I said, this is going to be a significant boon in terms of making the sector cost competitive.

Some of the practical issues that have been raised and are now reflected in the bill go to things like removing student default reporting. Currently, providers have to report within five days if they think a student has defaulted. But some of the reports indicate that there is sometimes uncertainty as to whether it is a genuine default—that is, a student has in fact chosen not to turn up at all for a course—or whether there has been a problem with transport or getting into the country or establishing themselves and turning up on the day. Whilst information still has to be provided, the reporting time frame has been extended to 31 days to enable them to ascertain whether or not it is a genuine default as opposed to reaching a conclusion within the first five days. Both providers and students indicated that they felt that time frame of five days was too short. Examples provided included an illness that might have prevented a student from turning up. For students under 18, clearly the welfare of that student and the duty of care of the provider to have an interest in the welfare of the student is important. So a reporting requirement of 14 days remains where the student is under 18. That measure around the student default reporting and refining their system saves some $16 million annually for the students.

One of the areas that the student peak body for international students particularly supported was allowing students to have more choice in how much of their fees they paid up-front. Currently, the bill restricts providers from collecting more than 50 per cent of student fees up-front. This bill allows students to pay more if they wish. What that means is that, if there are favourable exchange rate conditions or other reasons it suits the student or their family to pay up-front, then they have the option to do that. Short courses continue to be exempt from this requirement and the definition has increased up to 25 weeks which better reflects short-course enrolment patterns. Again even this small change to better reflect what actually occurs on the ground is a saving of $1.2 million annually.

The last area in here that has a significant saving for the sector is the removal of the designated account. At the moment—unlike domestic providers who can use the fees that are paid to invest directly in the innovation and developing of their product, their facilities and the quality of the course—international students have to hold prepaid tuition fees in a designated account, which means that they cannot use it. Public providers, such as universities, TAFEs and government schools, do not have to do that. Having private providers able to invest this money into the quality of the course means that they can act in the same way as public providers do. There will still be the ongoing financial viability checks to make sure that they are a fit and proper person to run the course and have the flexibility, but the estimates are that this will save some $27.7 million annually making them more cost effective and increasing competition.

As I said at the start, this is an important sector for Australia—over 420,000 students for South Australia and more than 30,000 moving towards a target of 34,000 by 2017. It is worth more than a billion dollars to our economy. We need to get the settings right so that they remain cost competitive and they can focus on providing a quality education. I welcome this bill and we will be supporting it.

Senator CANAVAN (Queensland—Nationals Whip in the Senate) (13:47): It is also a great pleasure to rise to support this particular piece of legislation and associate myself with the comments of my colleague Senator Fawcett, who was right to say it is extremely important that we maintain the competitiveness and cost-effectiveness of our university sector if we want it to maintain its position as a very attractive place for international students to come to study. I certainly want to maintain that position.

It is one of the largest export earners in our country. It has huge upside potential to grow, particularly with the growth to our north in the Asia-Pacific region. Like many of our export industries, it stands in a uniquely geographically determined area that can benefit from the rise of Asian countries and the increasing numbers in the Asian middle class. Of course, those people, as they go to the middle class, want a better education for their children—they are no different to Australians—they want a better future for their grandchildren and they will look to other areas of the world to make sure that they can receive the best education possible so that they can live up to that potential.

I do think education is somewhat different in that it faces different challenges and risks than other sectors that are similarly exposed to that Asian growth—for example, in agriculture where the rise of an Asian middle class will certainly drive uptake of premium Australian products. As people seek to define themselves by the clothes they wear, the cars they drive and the food they eat, they will look to countries like Australia, which are known to produce premium food, to seek those needs. While that phenomenon will be there—people will look to higher quality education—another thing will happen in parallel to the increasing economic growth and sophistication of Asian economies, and that will be the improvement of their universities in Asia. Their universities will increasingly become some of the better in the world as they invest in their own institutions, as their economies become stronger and more able to invest in higher education to a similar extent than we can in this country.

That will create both opportunities and challenges for our university sector. The opportunity will be there because there will be increased demand from both numbers of students in Asia and also the willingness to pay for a good-quality education from Asia. There will also be increases in supply of high-quality education in our region, particularly in Asian countries and that will make it more difficult for our domestic university sector to compete.

Just to labour on this point a little bit, in a particular ranking released earlier this year—there are different measures of world university rankings—the 2014-15 rankings reported that two Asian universities are now in the top 25. The University of Tokyo and the National University of Singapore are now within the top two of the 25, compared with only one last year and none in 2011-12. Five years ago there were no Asian universities in the top 25 in the world and now there are two. I have not got this particular ranking in front of me for all universities, but the last time I looked there were no Australian universities in the top 25 at all. We usually have one in the top 50.

In the top 50 there are six East Asian universities—from Japan, Singapore, Hong Kong, China and South Korea. Now in total 24 of the top 200 universities in the world are in Asia. That is just a small demonstration of what is occurring in our region and why it is so important that we continue to support a strong, competitive and cost-effective sector here in Australia so that we can maintain its position as a strong magnet for students to come here and study. A key part of that is making sure that the regulatory burden on our university sector is not over burdensome, and is not put in place to an extent which would limit or inhibit its ability to compete with those Asia-Pacific universities.

This bill is not going to be a panacea for all those risks and challenges but it has make some important changes that will improve the competitiveness of our universities the changes that will reduce the amount of the overlap, duplication and red tape imposed on that sector. Senator Fawcett has usefully outlined what some of those changes will be. To put them in context, they stem from changes to the broader regulation of our higher education in about 2012, by which time the Commonwealth government had two type to agencies—with the Australian Skills Quality Authority and the Tertiary Education Quality Standards Agency—to provide overall regulatory oversight of the quality and standards of our tertiary sector. It was an important development to make sure those standards were maintained across the country.

Those standards were in place for domestic students but of course they had an impact on the quality and standards of university courses for all students around our country. However, because we lifted the bar on the standards and oversight for domestic students, they had not been aligned with the regulatory standards we had in place for overseas accreditation. This is what this bill seeks to align. The education services for overseas students have different regulatory standards and different agencies covering that sector. This bill seeks to align those with the high domestic standards we now have in place. For example, we will allow only one designated agency to be in charge of both overseas and domestic students' accreditation—the TEQSA and the ASQA. We will allow the internal appeals processes of those bodies to deal with any complaints that may arise from the teaching of overseas students, instead of having to go to the and more costly and convoluted Administrative Appeals Tribunal. That will save red tape and costs. We will allow the minister to direct TEQSA and AQSA in regard to the accreditation arrangements for overseas students, just as the minister can for domestic students, and we will also expand the functions of the Tuition Protection Service, which functions as the director of that service, which is in place to help protect overseas students and the quality of their studies.

All of those changes would appear to be supported by the opposition, at least in the recently tabled Senate committee report into this bill. They did not see opposition from Labor senators on that committee. I welcome that support. The Greens unfortunately, in their dissenting report, have rejected all of those changes and have not proposed any alternative scheme. The Greens have harped back to the fact that a lot of these things were put in place in the 2009 review conducted into the sector, conducted to make sure that there were high standards for overseas students. What they have ignored is that since 2009 we have put in these other agencies—AQSA and TEQSA—to improve the standards of domestic arrangements. We have somewhat brought the domestic standards and obligations up to what was deficient for overseas students. So there is no need now for specific overseas student regulations. That is something the opposition has accepted and I welcome that.

The review which led to the changes in this bill was commissioned in May 2013 by the then Labor government. It obviously did not report until after the election and this bill seeks to put in place some of the recommendations, although further consultation was conducted on those recommendations and we now have this bill. So largely supported by the two major parties in this place is a constructive attempt to streamline regulations in this sector. There are some other amendments that are smaller in nature but do nonetheless provide substantial savings of up to $76 million for the sector. Reporting time frames for complaints will no longer be just five days but will be 31 days. Students will be allowed to pay up front in full for their fees if they so choose. At the moment the up-front fees are capped at 50 per cent. While that cap will remain—that an institution cannot ask for more than 50 per cent up-front payment—if a student so desires to pay more than 50 per cent of his or her fees up-front, they he will be allowed to do so—a sensible change which allows students to have that choice. If, say, they feel the exchange rates are attractive or they would like to make the payment while their parents are willing to do so and not after their marks come back, that is a fair and reasonable change which again I believe will be supported in the Senate committee report from the opposition. There will also be removal of the strict restrictions on regulations of the study period which students must cover—at the moment, 24 weeks. We will make that more flexible.

My understanding of the Senate committee report is that the only matter of disagreement is what is called the designated accounts at the moment. So private overseas student operators must maintain a designated account for the fees and funds provided by overseas students, to put into what seems to be a trust account at the moment—I do not think that is a term in the legislation—whereas other public institutions do not have to do that when they are offering the services. Obviously some are not really competitively neutral between the public and the private sectors and this bill therefore seeks to remove that anomaly to make sure that public and private providers are at the same level.

Senator Kim Carr: Where are the crooks?

Senator CANAVAN: The problem with the Labor Party is that they seek crooks everywhere and they just want to put regulation on everyone, including on the people doing the right thing. Why should we seek to impose more regulation on those providers doing the right thing rather than to clamp down on those doing the wrong thing? We should be rooting out the people who do the wrong thing, not putting up the cost for our entire university sector. That is what Labor are proposing to do. They are ignoring the fact that we have increased standards in universities since 2009. They are ignoring the fact that the vast bulk of our education providers have a good name and provide good services. By opposing this motion, they are dragging our tertiary education sector through the mud by somehow saying that there are sharks everywhere. Will what kind of message does that send to overseas students?

An opposition senator interjecting—

Senator CANAVAN: Yes, Senator, you know a lot about sharks, I know. What sort of message is that sending when most of our education providers do the right thing? They provide excellent services and we should get behind them and support a more streamlined regulatory structure for our tertiary education. (Time expired)

The PRESIDENT: Order! It being 2.00 pm, the time for debate is interrupted.

Senator RUSTON (South Australia—Assistant Minister for Agriculture and Water Resources) (17:15):—by leave—I move:

That senator Carr replace Senator Dastyari on the Economics References Committee for the committee's inquiry into Australia's steel industry, and Senator Dastyari be appointed as a participating member.

Question agreed to.

Senator RUSTON (South Australia—Assistant Minister for Agriculture and Water Resources) (17:17): I move:

That this bill may proceed without formalities and be now read a first time.

Question agreed to.

Bill read a first time.

Senator RUSTON (South Australia—Assistant Minister for Agriculture and Water Resources) (17:17): I seek leave to move a motion to exempt this bill from the bills cut-off order.

Leave granted.

Senator RUSTON: I move:

That the provisions of paragraphs (5) to (8) of standing order 111 not apply to the bill, allowing it to be considered during this period of sittings.

I table a statement of reasons justifying the need for this bill to be considered during these sittings and seek leave to have the statement incorporated in Hansard .

Leave granted.

The statement read as follows—

STATEMENT OF REASONS FOR INTRODUCTION AND PASSAGE IN THE 2015 SPRING SITTINGS

SOCIAL SERVICES LEGISLATION AMENDMENT (FAMILY PAYMENTS STRUCTURAL REFORM AND PARTICIPATION MEASURES) BILL

Purpose of the Bill

From 1 July 2016, this Bill will remove family tax benefit Part B for couple families (other than grandparents) with a youngest child aged 13 or over.

Reasons for Urgency

Passage in Spring is necessary to allow the significant system and customer communication changes to be completed in time for implementation from 1 July 2016, as intended.

Senator RUSTON: I table a revised explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

SOCIAL SERVICES LEGISLATION AMENDMENT (FAMILY PAYMENTS STRUCTURAL REFORM AND PARTICIPATION MEASURES) BILL 2015

This Bill will introduce a package of new reforms that helps us support families while encouraging parents' participation in the workforce.

This Bill will supersede measures stalled in the Senate, including:

Maintaining FTB payment thresholds where savings were estimated at $525m;

Maintaining FTB payment rates where savings were estimated at $1b;

Limiting FTB Part B to families with children under six where savings were estimated at $1.8b; and

Revising the FTB end of year supplements to their original value of $600 and $300 per year, where savings were estimated at $1.3b.

This present Bill anticipates withdrawal of the measures relating to FTB from the 2014-15 Budget and to instead propose changes which focus squarely on the principles of structural reform of the social welfare system by simplifying the payment structure of the FTB system. At the same time, the Bill provides more assistance to families when they need it most, and it is fiscally responsible.

The measures in this Bill have been introduced in order to make sure the Jobs for Families package, introduced in the 2015-16 Budget, is fully paid for. This package contains the required savings to offset the additional investment in the childcare package which, as well as helping families and encouraging workforce participation, also represents substantive reform of a complicated, inflationary child care system.

In this Bill, the government is increasing the fortnightly payment rates of Family Tax Benefit Part A by $10.08 for each FTB child in a family aged up to 19. This has the effect that around 1.2 million lower income families (including income support families) who receive Family Tax Benefit Part A for around 2.2 million children – will now receive higher fortnightly payments from 1 July 2018. The increase in their fortnightly payments will help families better manage their day-to-day budgets by providing them with timely, regularised assistance when they need it the most.

We will also provide an additional $10.44 per fortnight for under-18 year old Youth Allowance recipients who are living at home, bringing the payments to the same standard rate as a Family Tax Benefit Part A child aged between 13 and 19.

Aligning these two rates of payment, is itself a much needed part of the reform process to align the large variety of payment rates where possible. These alignment reforms will avoid confusion for families, and make sure there is no financial incentive for an FTB child to leave full‑time secondary study to claim Youth Allowance.

Importantly this alignment reform will also flow on to people who are on a disability support under the age of 18, special benefit and ABSTUDY.

These alignment changes are based squarely on the McClure reform recommendations; they simplify the system making it easier for parents and their older children to navigate the system in order to get the assistance appropriate to their circumstances.

The Bill will introduce a new rate structure for Family Tax Benefit Part B, and make other amendments to the rules for Part B, from 1 July 2016.

Firstly, the maximum standard rate will increase by $1,000.10 per year for families with a youngest child aged under one. This will provide more choice for families when their children are very young.

Family Tax Benefit Part B will be limited where a family's youngest child is aged under 13. This supports the Government's broader participation agenda which is central to the child care reforms introduced in the 2015-16 Budget and strongly supports the policy imperative that families be encouraged and enabled to re-enter the workforce as their children begin secondary school.

A new Family Tax Benefit Part B rate of up to $1,000.10 per year will be available for single parent families and grandparents with a youngest child aged 13 to 16.

The Government also recognises that Grandparent carers take on a big responsibility when caring for their children, yet are less likely to be working and more likely to be retired. Family assistance, it is acknowledged, helps grandparent carers meet the cost of raising their grandchildren. Similarly, we also recognise that sometimes it is difficult for single parents to transition into work even when their youngest children are into secondary school, and this is why we are applying different payment assistance for these categories once the relevant children turn 13, providing them with some additional appropriate assistance while they prepare to re‑enter the workforce.

This Bill will also provide for the phase-out of both the Family Tax Benefit Part A supplement and the Family Tax Benefit Part B supplement.

The Part A supplement will reduce to $602.25 a year from 1 July 2016, and to $302.95 a year from 1 July 2017. The Part B supplement will reduce to $302.95 a year from 1 July 2016 and to $153.30 a year from 1 July 2017. Both supplements will then be withdrawn from 1 July 2018.

The Family Tax Benefit Part A and B supplements were introduced at a time when, under the Howard Government, the surplus anticipated in the 2004-05 Budget paper was $13.6 billion and it was contemplated that a substantial use of the supplements would be used to offset potential Family Tax Benefit overpayments arising from underestimation by recipients of FTB of their annual income. In the near future, the Australian Taxation Office is introducing a single-touch payroll system, a system which will allow for accurate fortnightly reporting of income, which measure in 2018‑19, will significantly reduce the problem of Family Tax Benefit debts.

The fundamental and critical reform component inherent in the changes now proposed is that the measures reduce the number of supplements in the system. One of the biggest frustrations of the social security system expressed in the report by Patrick McClure, entitled "A New System for Better Employment and Social Outcomes", is that there are far too many payments and supplements – in fact there are some 20 main payment types and 53 supplements (that second figure has been reduced from 55 because the government has already removed the Seniors Supplement and the Low Income Supplement). This measure will further reduce the amount of supplements in the system (as will the associated reform measures in child care).

In summary, this package of Family Tax Benefit and dependent youth measures enhances support for families with their day-to-day living expenses and so helps them support their children from birth through education and the transition to independence. This increase in day to day support has been achieved through reforming the supplements and increasing fortnightly payments including aligning the rates of reduced youth payments.

Together, the revised package demonstrates the Government's commitment to assisting families:

providing additional assistance to families when they need it most;

supporting family choice to spend more time with their children when they are very young if they wish to do so;

recognising that families still have caring responsibilities when their children are in secondary schooling and that the most vulnerable families in the secondary schooling years, such as grandparent carers, should receive some additional support during a child's adolescent years.

At the same time these reforms will improve the sustainability of family payments ensuring we can achieve three important goals:

1. continue to assist families in raising their children over the long-term;

2. fund the Child Care reforms designed to enable and encourage greater workforce participation; and

3. continue a deservedly needed process of simplifying FTB, consistent with the recommendations of the McClure review which highlights the unworkability of a system that maintains 20 main payment types with in excess of 50 supplement categories.

Senator MOORE (Queensland) (17:18): As we have just heard, the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 comes back to this chamber in yet another incarnation. As we know, since the budget in 2014 the government has been trying to convince the community and senators that the best way to raise money is to take it off the low income families in this country and to affect family payments. We have had a series of attempts to bring the legislation to this chamber. Only a few weeks ago we had the first incarnation of the family payments structural reform and participation measures bill 2015. The bill that came before us had a range of processes around attacking family tax benefit for low income families.

In terms of the process, it was duly sent off to the Senate Community Affairs Legislation Committee where we had a very short time frame—in fact, in my experience in this place it was one of the shortest time frames—to consider a very detailed piece of legislation. We did so, because that is what committees do in this place. As always, when we go to the community, particularly community organisations, and seek their help when we are considering pieces of legislation in the community affairs area, they respond. Even with the very short time frame we had, 19 submissions came forward, all talking about the bill and all opposing the bill. That is not unusual in that the people who care most about legislation are those who are concerned about it and think it will be negative. But, again, when it comes to the government's proposals on family tax payments and the linking of family tax payments with the child care package, there is a degree of threat that if the family payment legislation is not passed, the child care benefit package will not be able to be introduced. What happens is that people then react. People are concerned about how they will be impacted and how people who are already on fairly limited budgets will react to further reductions in their entitlements.

One thing that was most clear to our committee when we were considering the bill was that we had very little information from the department on which to consider the impact of this legislation. There was no modelling put before us. When we asked for circumstances we were told in the committee process that if we gave the department information on the kinds of families we were concerned about they would give us back information on how they would be impacted. I just want to put it on record that I do not think that is good enough. I have been working on this committee for many years, with other members of the committee, and we have built up great respect for members of the various departments with which we have been dealing. We have been able to realise the commitment and knowledge that they have on the issues and their real desire to provide information to senators both in the Senate estimates process and in committee inquiries to help us get a full picture of the situations we are considering.

But I am finding that that is not happening as openly as it has in the past—and it is not just me. Sometimes you begin to doubt whether it is only you who is feeling negative or concerned about the process, but I want to put on record the evidence that was given by the CEO of UnitingCare, Ms Lin Hatfield Dodds, when she came to our inquiry. She said:

It is paramount, we think, that the impacts of any reform are thoroughly and transparently assessed prior to changes being implemented that might result in adverse impacts on the most vulnerable members of our community.

It is therefore with concern that we note, in relation to the bill—

which was the previous bill—

that the government appears not to have released substantive evidence to highlight the impact of its proposed changes on families. It is our view that, in the absence of data sets and evidence to support or explain the measures in the bill, UnitingCare Australia is unable to support the proposed reforms.

That is the reaction that we heard from a number of the organisations who came to our inquiry and it was also the reaction from members of the committee.

This is not a new process. We have been looking at attempts to adapt the family tax benefit program for two years now. As I said, there has been great discussion and debate. We then had the bill come before us and, again, there was not open modelling about what would happen. In fact, we got more information from the Bills Digest from the Parliamentary Library, which did come forward with information on how this bill would operate and some of the impacts. It was not in a submission from the department but, nonetheless, we got the information from the Bills Digest.

I want to put on the record, that whilst this bill has now been split and Labor will be supporting the one element of the bill that is actually the new bill that is front of us, I do think that it is very important that, when discussing where we are this afternoon, we put this in context and explain what the bill was last week before this agreement had been reached. The bill that was before us at that stage—the one that we took to the committee to consider—was looking at significant cuts to family tax benefit A and family tax benefit B for people across a range of different situations. For family tax benefit A there were going to be very major cuts to people's entitlements. In the previous bill, 1.5 million families were scheduled to lose FTB A supplements—a cut of $726 per child every year—and 300,000 of those families would not get the increase to the FTB A per child amount.

I do not like the term 'carrot and stick'—I always think the stick is much bigger than the carrot—but the actual encouragement in that bill was that there was going to be an increase, though we did work out that the balance was not there. Even though the increase of $1,000 had been widely publicised as a positive element, the element had not actually been worked through as to how many people were going to be better off as opposed to those who were not. We were not able to get that data in detail. What we did find, though—and what was particularly worrying in that approach—was that there was a particular focus on sole parents and grandparent carers.

Extraordinarily confronting evidence around FTB cuts was given to the committee by people who come to see us very regularly from the National Council of Single Mothers and their Children. I want to put on record the comments that were made by Ms Terese Edwards, from the National Council of Single Mothers and their Children. She submitted:

What I do know is that it does not make sense to me, or to the sole parents that I am speaking on behalf of, that these two measures are linked.

These two measures are the child-care enhancement measure and the reductions to, particularly, FTB B. Ms Edwards continued:

We know that the families who will be the biggest losers are families who have children who are 13 and older. They will not be accessing child care.

That is because there is no effective child care, except some elements of outside-school care, for children who are over 13. It is one of the big gaps in our system that, for young people over 13, there is no effective process to provide support to those families. I am not saying that that is peculiar to this government; it is just a fact. It has been the case for a long time that, if you have a child over 13, there is no effective care for them, particularly when we are encouraging people to get into the workplace. Ms Edwards went on to say:

So it seems like one group is going to go through an absolute depth of despair and harm to pay for an investment in another group. The first time that this was linked was after a couple of failed attempts to get this measure through. It does not make sense to me for it to be linked at all.

That was certainly the position that Labor senators took.

In the other place, Jenny Macklin, our shadow minister, who has been working in this area for a long time, put some quotes into her contribution around the situation of grandparent carers. This is something that our committee was particularly focused on, because we have done a lot of work in the area of grandparent carers. Grandparent carers had contacted her and the department saying, 'How will I manage if I lose $100 a fortnight?' That was a quote from Marlene Lamb, a constituent from the electorate of Petrie, who contacted Jenny and spoke about her 12-year-old granddaughter who was going to turn 13 very soon. Marlene, the grandmother, had been looking after her granddaughter for a long time, and the proposed cuts at that time were going to have a significant impact on the family and on the way that they were going to be able to survive.

We need to understand that these amounts can be seen to be small when we are talking about the end-of-year bonus payment—which was on the target line before we made the change to the bill this afternoon—but, during the committee's inquiry, it was put on the table that the original reason for the end-of-year bonus was that there were concerns around people being able to fully budget and do the returns that they needed to do with the taxation department. At one stage with the FTB A process debt that could be incurred with the taxation department, and that bonus payment was there to mitigate that process.

The department's evidence was that with the new changes with technology to make it easier for the two systems to operate—the taxation system and the family payments system—there would not be that difficulty in making in sure that you did finalise your accounts in the right way, and that you would be able to know where you were with you family tax payments. We accept that statement. Except that there was absolutely no trust from the community, nor from the committee, that a verbal guarantee that the system would operate well would be able to be fulfilled.

Whilst the academic argument about why there would be no further need for an end-of-year bonus was clearly on the table—that was that—and was accepted, what people like Ms Lamb in Petrie were saying was that the reduction of that amount of money, which was now built into her budget, would have significant impact on the single-parent family's grandparent parent budget because that money was used immediately to provide the kinds of services in their family that were so important, such as the purchase of school uniforms and the purchase of end-of-year processes—the kinds of things a bonus cash budget payment was very useful for. It was important for those families that their need was identified, and that there was some understanding from their government that we are not talking about people for whom these amounts of money are insignificant. These amounts of money make a real difference in the survival budgets of people raising children.

Through the process of our committee, we took evidence from ACOSS and the welfare rights group as always. ACOSS did raise particular concerns about the impact on parents who were trying to raise children and the costs that do go up. I do not think that there is any doubt that there has been significant evidence over many years that you do not have a reduction in the costs of raising children just because they turn 13. We have significant evidence—and I know the department has significant evidence, which they presented in previous inquiries—that indicates that it is no cheaper to have a child at 13 or 14 than it is to have a child at seven or eight, or even as a newborn.

The reasoning provided by the department and the government was that the FTB payments would be reduced so that there would be a greater incentive for people who are receiving that payment to then go and seek work and go into the workplace. That is the linkage with the argument that was presented to us for why there would be a reduction in the payments. There was some push-back from the evidence that we received, on the day of the committee hearing, about how difficult it is when you are trying to seek work and continue to raise children. And, whilst it may be seen that there would be an extra financial incentive to seek work, because you have had your FTB payments removed, in terms of whether that actually provides you with any greater skill or any greater ability to find work, there was some scepticism in the evidence that we received.

It certainly could be seen that the theory of the evidence is real—the theory that if you remove a payment that will be more than incentive for someone to go out and seek employment. I will not use the standard statement that is made many times in this argument about what the best form of welfare is. Nonetheless, when you are trying to balance the various responsibilities that you have, particularly in the case of children over 13, for whom there is no really firm child care available, it does not seem to add up how it will work if you are going to link these two things.

We had no evidence before us that any element of the previous legislation, or in fact with the current legislation before us, denied the fact that we need to ensure that when people are able to seek work they should be able to do so. There was no organisation or individual who rejected that premise. What they did question was how this particular bill would enhance that opportunity. What they wanted to do was ensure that the element of fairness, which has been quoted significantly by the minister, would be sensed by the people who were most in need of the support of their government—to raise their children and to balance that child-raising responsibility with the need to seek work.

In terms of the new bill—and I am not even sure whether it has an absolutely new title—which is the one that relates particularly to partnered families with children over 13, it has not been an easy decision for the Labor Party to support the recommendation that we would cease the payments of people in that situation. We did have concerns raised by people who came to our inquiry around that element.

It is really very important that as we move forward with the legislation we understand that there needs to be close monitoring of the change that may go forward after the bill is passed and what exactly the impact will be on families, and that there is no automatic assumption that there will be this natural link between the reduction of the payment and the ability to seek work.

I ask that the department provide information to us that would show how they are going to monitor that process; whether we are going to have data that will show the impact; how families who will have their family payments changed will be traced; what support they will receive in returning to the workplace, which is the intent of the legislation; and how the department is going to work with the organisations who are in the field, who are working all the time with families who are finding it tough and who are working with families legislation. We would like to get some information back from the department about how that is going to interact. Where families with children over 13 will lose family tax benefit B, how will that be monitored to see where the link will be with increased employment? And how will we know families in that situation have the support they need to find the work which we all know the government is seeking that they should have?

We will be supporting this new legislation but the new legislation needs to be considered with what has gone before, with the various attempts the government has made to make changes and also to ensure that we know there will not be ongoing attacks on family payments in the system, particularly not when there is put forward this immediate link between having to cut this element of family payments in order to pay for the child care package. That is not being seen by the community or in fact by people on this side of the chamber as an automatic link and the way we should be proceeding in these arguments about true fairness in our community.

Senator SIEWERT (Western Australia—Australian Greens Whip) (17:38): I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 in its new form, although I will be referring to elements of the bill considered by the Senate committee which tabled its report 20 minutes ago. The Greens will not be supporting this bill, the same as we would not have supported the previous bill which the Senate committee considered. We will not be supporting another bill when comes in if the government attempts to bring in the measures they cut out of this bill.

The previous unamended version of this bill was simply another attempt at the government's cruel budget cuts to family tax benefits it has been trying to get through in the last two budgets. We opposed those cuts then and, having examined these in detail, we oppose these cuts and the cut in the bill we have just been just talking about and to which Senator Moore was referring in her contribution just then. Many of the points she made apply to the very measure that the ALP am now going to support, it seems, through the chamber. The cuts are still crawl, they are still unfair and they still impact on those who need support the most. Before the Community Affairs Committee had even reported on the previous elements of this bill, the government and Labor had agreed to a watered-down version of the cuts which focus on couples or partnered families with children over 13. As I said, we will be opposing these cuts.

In the second reading speech in the other place, the Minister for Social Services several times mentioned supporting families. This is typical of the government. They talk about a bill which enhances support but what they are really doing is taking away support and resources from those most vulnerable people in our community, from the families who really do need this support. I cannot see have can call it supporting when they you are taking money out of the pockets of some of the most disadvantaged members of our community.

The bill as originally introduced would have been a $4.8 billion cut to supports that the government provides for the family tax benefits system. Slashing family tax benefit B would have cut support to thousands of Australian families including single parent families, grandparent carers and low-income coupled families who are going to be significantly affected by the agreement that the Labor Party and the government have come to. One of the key features in the original bill was that the government would cut family tax benefit for all carers with children over the age of 13 and then put a little bit back in for single parents and grandparent carers.

The government seems to have learnt little from the last attempt at doing this with cuts to grandparents and single parents. Even so these were supposedly less harsh, it is very clear that they were cuts to vulnerable people who are supporting children. Also they have forgotten that it still damages—and even the current measures agreed to by the government and Labor hurt other carers—grandparents, who are not the only people in this country beside children's' parents who care for children. The government seems to have forgotten that. While I am really pleased that they are finally paying attention to grandparent carers because for so long they have ignored them, they now seem to forget there are foster carers and in particular kinship carers. Grandparent carers are fewer in number than other kinship carers but we do not seem to worry about kinship carers. I will come back to that issue in a moment but I do not want anyone to think for a minute that I am not really pleased that at least grandparent carers are being acknowledged now and that there is a modicum of attention paid to them. But there are a whole lot of other carers who are supporting children in this country.

The government's decision to cut a payment as children grow older runs counter to all the evidence. In our inquiry hearing, departmental officials referred to the cost-of-children table being used to calculate child support. This was brought up by Terese Edwards from the Council for Single Mothers and Their Children, who very clearly said that on one hand the government is implying a child costs less when they are 13 because they are cutting the payments but, on the other hand, through child support, they acknowledge that children cost more once they turn 13. This reflects the fact that children cost more as they grow older. Similarly, the government's own McClure report said:

The costs of children increase markedly at key points in the lifecycle, such as starting primary school, starting secondary school—

around 12 and 13—

and entering the final two years of secondary school.

The report recommended that a new payment to cover children's' costs should be higher for older children. That is what the experts have told the government, but it does not take an expert to know. I consider myself an expert. I am a mother of a slightly older child but I was the mother of a teenager. I can testify to the fact that sometimes they go to sleep one day, but when they get up the next day you have to buy them a different sized shirt or shoes, not to mention the fact that you can never keep food in the fridge unless you have put a lock on the fridge. Their activities are more expensive and again, I am an expert on that. All up, the evidence clearly shows that children cost more once they turn 13.

The government has argued, wrongly, that part of its goal is to force people into the workforce. The National Foundation for Australian Women—who were, in fact, emailing people today—said that the proposed cuts to family tax benefit A and family tax benefit B are not likely to have any positive impact on female workforce attachment. They will hit hard in identifiable regions with high concentrations of low-income families and lack of employment opportunities—outer suburban areas of capital cities and in the regions.

The coalition has form in claiming that cuts will improve workforce participation. That was the rationale when they were moving people from the parenting payment for single people, which effectively cut their payments and forced thousands of single parents into poverty by living on Newstart. The evidence shows that an approach like this will not work, but this government appear not to care about the evidence or about what their cuts will do to families. They are continually cutting payments from the most vulnerable. But simply bullying people will not mean that they can find work; simply cutting out their supports and making it harder for them to raise children will not mean that the jobs are there for people to be able to find work. As the National Foundation for Australian Women points out, the areas where this will hit hardest are, in fact, those where people are less likely to be able to find work.

During our Senate inquiry we heard evidence from a range of groups and organisations about the impact of this bill. Down Syndrome Australia provided valuable evidence to our inquiry. They spoke about the challenge that people with an intellectual disability can face in transitioning from one school environment to another, and the risks involved in cutting supports to a family during that period. We received submissions from single parents who have already been impacted by successive cuts by both the Labor government and the Liberal government, when they were forced from parenting payment single on to Newstart. These cuts forced thousands of single parents onto Newstart and left many struggling in poverty as they were trying to look after their children. Cutting family tax benefit B to single parents would be another cut to an already vulnerable group. As Ms Terese Edwards, on behalf of the National Council for Single Mothers and their Children, told our inquiry:

Sole parents have borne the brunt of successive cuts. They are completely ill equipped to manage any further reductions.

I also want to thank Ms Edwards for highlighting how essential family payments can be to victims of domestic violence, and would like to quote what she said to the inquiry:

With regard to family and domestic violence, our survey of single mothers impacted by family and domestic violence stated that family payments are essential—not just helpful, not just good but essential—when they exhausted their savings and borrowed money.

She continued:

We also heard from families about the ongoing cost to protect themselves, the cost of continuously leaving and running, and the cost of extra medical support, counselling et cetera.

Ms Edwards highlighted very clearly the impact of the cuts to family tax benefits that the government were planning to make, and are still waiting in the wings to make. The cuts the government want to impose have real impacts, and it is incredibly important that we be aware of and recognise what these cuts mean to members of our community.

The government's proposals to cut family tax benefit A and B supplements—which they are still planning to do—will be a massive hit on support for families that rely on them. Again, we received evidence to the inquiry of the value of these supplements. No matter what the government says they were originally intended for, and I will go into the issues around IT in a minute, this money is real money to real families. This is, in fact, something that you could almost think that the government were trying to hide, and I will speak more about that in a minute. But the family tax benefit supplements are a significant amount—$726 on family tax benefit A and $354 for family tax benefit B. When you are only on a little bit of money, that is an awful lot of money, particularly when it comes in as a bulk payment. There are lots of things that you can do with that money.

The minister may have no idea about this, but this is something that makes a real difference to those who are struggling. It is something they can rely on because they know it is coming; they know they can pay those bills that come in at that time. They know they can perhaps pay for that white good that has broken down and has needed repairing for ages, or for the car repairs or the car insurance. We heard in our inquiry about the very practical needs that the supplements are meeting. As I said, some families are able to meet larger expenses like car registration or replacing products that have broken down. These can be major challenges when you are struggling as a family and, as I said, every dollar literally counts.

Another issue in the government's original proposal is that it relies on IT systems that are not yet in place. This is where, in fact, we had another discussion about—surprise, surprise—the ineffectiveness of myGov. The government argued that the Australian Taxation Office's one-touch system would allow people to estimate their income more accurately. They also said that because of that the need for the end-of-year supplements would be removed, but the IT system the government is relying on does not yet exist. After consulting with stakeholders we understand that the government has delayed its rollout because of the practical challenges of implementing the system. We have heard from multiple witnesses in our inquiry about the problems they are encountering with the Department of Human Services' computer system and the myGov site. The government may be delaying the IT system, but they wanted to start these cuts and roll them out, potentially before the IT system was actually up and running. Because of the damage these cuts would do and their impact on the most vulnerable in the community, we oppose these cuts. We opposed them in the bill that we were originally sent and we will oppose them when they come back.

Since the bill was introduced, but before our rapid Senate inquiry—and Senator Moore has highlighted that it was a very rapid Senate inquiry; it was not even a full day—and before that even had time to report, the government had amended their own bill. They negotiated with Labor for a smaller impact, to cut out some of those measures that I have just spoken about, and will cut family tax benefit B to couple families whose children are aged 13 and over.

We know from Senate estimates that there are 76,000 families that would lose family tax benefit B when this measure is legislated. There are about 25,000 families with a family income of less than $40,000. ACOSS estimates the poverty line for a couple with two children at $840 a week. In annual terms, that figure is around $43,000. This legislation will cut family tax benefit B support to thousands of families, coupled families, who live below the poverty line.

We are also concerned about kinship carers and other groups who may not receive an exemption in the way that grandparents will. Departmental officials told us that where kinship carers receive family tax benefit B but are not grandparents there will be no special consideration. They will simply lose the payment as the child turns 13. These are kinship carers who are in the same place as grandparent carers. The difference is that maybe they think grandparent carers might not go back into the workforce—and there was some discussion about that—but kinship carers will. You have to remember the nature of the care that they provide to the children who are in their care. More often than not, these children will be very damaged, coming from very traumatic circumstances, whether it is because of the outright of their death of their parents or some other reason that children have to go into care.

The inquiry into out-of-home care that the Community Affairs References Committee recently carried out showed really clearly that children are traumatised and damaged by the circumstances which lead to their care. Kinship carers go above and beyond when they are looking after these children, and here is the government saying: 'We don't care. They can have the cuts as well.' Kinship carers face a unique set of circumstances. If the government has the wit to address the issues for grandparent carers, surely they can address the issues around kinship carers. These cuts will hurt the most vulnerable in our community and this is an issue we are deeply concerned about.

I said I would touch on transparency and the impact of these cuts. As was discussed by Senator Moore earlier, the government could not tell us. When we asked for the figures, they said they could do cameos. Those cameos conveniently did not cover all family types and did not cover some of the essential impacts on families. It is unfortunate, to say the least, that the government cannot provide us with the detail. I am particularly concerned that this reflects a failure by government to uphold the standards that are essential to our democracy if it is to function effectively. It is essential in a well-functioning democracy that citizens be able to trust the government and that it be open and honest about its policies, and try not to hide information from citizens or from the institutions that are intended to hold government to account. Where a government tries to hide information, it can have a corrosive effect on the trust that is essential in our society.

I am disappointed that the government have not been fully transparent about the impact of these cuts. In a press release announcing these changes, the government included cameos that were supposed to show the impact of these cuts, but they included the impact of the childcare changes because they are linking the childcare changes to these changes. If you have a child over 13, it is very unlikely that you will be accessing child care. Again, I will speak as a parent of a child who used to be a teenager: you could not get child care for after-school care when a child was in high school.

So the government are taking from this group of parents, as Ms Edwards pointed out, and giving to another group of parents. Do not pretend that the overall benefit is going to be to everybody who will be cut off family tax benefit B because they it will not. The low-income couples are going to be losing money as a result of these cuts that are about to pass this chamber because the government and the opposition are in agreement. They are definitely going to impact on one group of parents to the benefit of another. Did anybody ask those low-income parents who are going to lose this money whether they think that this a good idea? No, you did not ask them. We asked at the Senate inquiry. Unfortunately, we did not have the time to ask individuals but we certainly asked organisations, and I have had emails about it.

People are clearly very annoyed and concerned that the most vulnerable in our community will, yet again, pay for cuts to the budget where the government are too gutless to face up to big business and properly address tax evasion which is where they could be saving money and where they could be dealing with revenue. Instead, some of the most vulnerable members of our community, those on low incomes, are the people who will bear these cuts.

So it is absolutely fallacious to put out cameos that imply that these families are going to be better off when quite clearly they are not going to be better off. And the government did not include a whole lot of other variables in those cameos. I am sure the government was able to model the impact that this would have because others have managed to do it. Others have managed to work out how much families will lose. It is all very well, sorry, for Labor to say that they want to monitor this. The government cannot even tell us the bottom line when they are actually presenting this. So how can they monitor it when they do not know or will not admit what the baseline data is in the first place? The Greens will not be supporting this bill.

Senator CANAVAN (Queensland—Nationals Whip in the Senate) (17:58): I will make a very brief contribution on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015, as I am a very strong supporter of the need to ensure that our tax system does not reflect the costs of growing and raising a family. The principal way we do that in this country is through the family tax benefit system. However, I am also very much of the view that we have a responsibility to manage our nation's finances in a responsible way. We are far from balancing our budget at this time.

I disagree with Senator Siewert that, somehow, we can simply outsource the budget repair task to some component of the community. It is completely impractical actually that, somehow, big business, in her words, could do that. We all have to tighten our belts to do that. I am prepared, notwithstanding my general support for a supportive family tax benefit system, to support the legislation which responsibly seeks to save money for our budget, for our country, and this bill certainly does that, delivering savings of more than $4½ billion. If we did not do that, that would be a bad thing for Australian families because that would mean our children and our grandchildren would have to pay back the money that we are spending today on parents.

I principally want to say that at the heart of any family tax benefit system, and at the heart of those changes, should be what is best for children. I think the way we can generally get the best outcomes for children is to ensure that parents have the most flexibility in the choices they make for their children, because in the vast majority of cases it is the parents, not government, who are in the best position to decide what is best for their child. My wife and I, I think, are on the same team when it comes to that. I hope my family is on the same team. Sometimes I think my kids are on a different team, but it depends what game we are playing. We try to make decisions together.

One thing I am concerned about—notwithstanding my general support for this bill—is the difference in the relative costs between raising a child yourself and outsourcing at least some of that care to formal childcare or educational means. The budget underlined that relative cost difference very graphically this year when it produced cameo tables showing that a family on $100,000 a year with two children and with two people in the workforce—both parents working—pays a lower amount of tax, to the tune of $23,500, than a family on $100,000 with two children and with just a single income earner. So for two families with two kids and the same amount of household income, $100,000, the single-income family ends up taking home $79,500 and the double-income family actually ends up with $103,500 after tax with family benefits and child care. So there is a $23,500 difference a year for families with the same starting point, the same household income. I think that is blatantly unfair. It is a new car a year for the double-income family, and it has to have, of course, very distorting impacts on what decisions parents make. I think it is very important, as I said, that we try to let parents make their decisions, without socially engineering those decisions through the tax system or otherwise. It is extremely important when children are very young. That is not a view I have come to only through my personal experience; the evidence is stacked far in favour of allowing parents to look after their own children, particularly when they are young. The OECD did a report in 2007 saying:

Taking stock of the evidence … it seems that child development is negatively affected when an infant does not receive full-time personal care (breast-feeding issues aside …) for at least the first 6 to 12 months of his/her life.

The Productivity Commission in 2009, in its Paid parental leave report, said

Most of the more recent evidence tends to support the view that the use of non-parental care/child care (usually necessitated by maternal employment) when initiated within the first year of a child's life can contribute to behavioural problems and, in some contexts, delayed cognitive development …

They have a range of scientific studies showing that. So I think it is very important we promote parental care at those young ages, and that is why I have been a strong advocate for ensuring that parents have assistance if they choose to make that decision so there is not this relative cost difference between the choice to look after your own child and the choice to put them into child care.

I am proud that the National Party, as part of the coalition agreement with the new Prime Minister a matter of months ago, succeeded in obtaining an additional $1,000 for families with a child below the age of one who currently receive family tax benefit B. It certainly does not completely remove that $23,500 gap, but it is a step in the right direction, the direction of making sure that this system is based on what is best for the children, not the costs for the parents involved.

I certainly agree with Senator Siewert that sometimes the older your child gets the more they cost. I have a child of 10 and also one of one year old, and the one-year-old does not need cricket pads and does not demand computer games and all these other things that the 10-year-old does. But I also recognise that the care requirements that the one-year-old places on us and the opportunity costs of not being able to go into the workforce or do other things with our lives are much, much greater. The one-year-old cannot look after himself, and that, of course, comes at a cost to a parent who decides to stay out of the workforce to do that.

So I am very proud that the National Party have stood up for the stay-at-home mums and dads of this country. They do the most important work in this country. They might not get paid the most, but I do not define people's contribution to our nation by how much is in their pay cheque every fortnight. It is my firm view that, while my wife is staying at home looking after the kids, she does much, much more important work than I do—and it is work. When I have to stay home and look after them, it is much harder work than we do here in Canberra, and we should do as much as we can to support that decision, not to penalise it. I am proud that in this bill we move at least partly in that direction.

Senator O'NEILL (New South Wales) (18:04): I rise to make some remarks on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. I just want to take the opportunity, with this piece of legislation before the chamber this afternoon, to indicate that Australians generally understand and appreciate the contribution of those who raise a family. Certainly it does cost. It is a very important contribution to raise a healthy family that is able to participate fully in the community, and it does take money to make that happen.

One of the things that I am very concerned about with this particular government is its entire attitude to the need for families to have some security about the funding that they are going to receive and also the outrageous way in which it has attacked the family tax benefit A and B schemes since it has come to power. We cannot forget that in its first budget, that horror budget of Mr Abbott in 2014, this government, which now claims to articulate a point of fairness as part of its policymaking, started out by wanting to take $8.5 billion from family tax benefits. The reason I really want to participate in this debate is that people might be listening and might pick up different parts of the debate along its journey, and the reality is that that $8.5 billion worth of cuts would already be a reality if it were not for the passion and energy of people on this side of the chamber, with support from the crossbenches, who prevented the worst excesses of what this government wanted to do. So, when government members stand up and start to act like they want to be the friends of families, I think it is important to record in the Hansard, in this speech, that this is a government that cannot be trusted with family benefits A and B, nor can it be trusted when it starts to use the language of fairness, because fairness is simply not a part of its DNA.

Indeed, in her remarks in the other place, Shadow Minister Macklin indicated the only reason that the government were pulling back from cuts of $4.8 billion as recently as just last week. This is how she expressed it:

Today the government are admitting they cannot get these cuts through the parliament. Australian families now want to know what this Liberal government are going to do next. Are they still committed to these cuts or will they be abandoning them forever? It is time … for this Turnbull government to come clean with Australian families. Next week—

she was referring to this week—

is the last week of the parliament before Christmas. It is time for this Prime Minister to give families the certainty that they will not be faced with another round of cuts in 2016.

It is a fact that it is only continued resistance and opposition from the Labor Party that have prevented the whole of the community being incredibly negatively impacted by the values choices of who the government want to support and who they are ready to hurt.

On the other side, in the government, people are more than willing to impact negatively on families. There are large businesses, multinationals, which we know from much evidence before the Senate are avoiding any taxation at all in this country. This government chooses for big businesses to keep their taxation dollars in their corporations and was ready to slug every Australian family across the country and claw back $8.5 billion from families.

Let us talk about the new changes to child care. First of all, child care was taken away from education, its natural place, and put with social security. I can put on the record that I spoke with people in the great state of New South Wales who were subjected to a diatribe from Minister Morrison about his view of child care and the shameful way in which he completely ignored the responsibilities of childcare workers to support families and to engage in education rather than childminding, slowly driven at pushing people to jobs. Can I say that, if you live in regional or rural Australia, finding those jobs that we keep hearing about that people are being pushed towards is a pretty hard thing to do. In addition to that, where those jobs do exist in regional and rural Australia, particularly in the retail and hospitality sector, this government is going after those workers and trying to take money away from them as well, getting rid of penalty rates and imposing terrible restrictions on people in the workplace.

Can I make a couple of remarks also around the argument that is being put by this government in its various iterations, with regard to this particular policy area, that it can only deliver childcare changes if it makes these sorts of cuts. That is a modesty skirt, really, for a shameful attack on families. Labor rejects this entirely. Senator Sinodinos actually said in budget estimates that there is only one reason that this government has decided to link child care with cuts to family tax benefits, and that is for political purposes. Those are his words: 'They're linked for political purposes.' This is what we see from this government all the time: an attempt to pull the wool over the eyes of the Australian people and to damage families, to hurt families, as much as it possibly can while propping up the other end of town.

In terms of child care, let us just get on the record a couple of points that the shadow minister for education, Kate Ellis MP, made today. One is that one in four families stands to be worse off under the government's childcare changes. So here they are saying, 'We're making these changes because we're going to really improve child care,' and the reality is that the impact is that one in four is going to be worse off under the government's childcare changes. I think the shadow minister was right in indicating that a methodology of the government is that they choose sound bites over substance every single day, and they are simply not putting the facts on the table. I was listening to the contribution of Senator Moore, who pointed to some very significant evidence that the committee had acquired and also the importance of the information that was in the Bills Digest about the way in which the piece of legislation that is before us needs to be given very close scrutiny moving forward.

I want to close my remarks by indicating that, if the beneficiaries of these cuts are to be childcare providers and the families who need to seek child care, we have many, many more questions that need answering before we can trust this government. After 21 months of waiting, three different ministers and the rising out-of-pocket fees that have happened on this government's watch, parents still have no idea about how that change is going to impact them. The modelling on that, which the government is not releasing, is akin to the kind of deceptive behaviour, the hiding of information, that so characterises this government at every turn.

In closing, I would like to just indicate that Labor will support this particular piece of legislation. But we will continue to fight for fairness for families and to prevent the worst excesses of a government that pretended to be the best friend of families but continues through its legislation at every turn to demonise families and to make it harder for families to raise children healthily and well. In doing that, it is wasteful in the way that it is distributing the money across the economy and across our community needs.

Senator XENOPHON (South Australia) (18:13): Family payments are a complicated policy area. It is therefore unsurprising that the changes proposed by the government in the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 have been subject to appropriately intense scrutiny in the media and most particularly by those who would be most deeply affected by them. This particular social services legislation amendment bill contains three schedules. I note that the government has amendments to this bill, which I will address shortly, but for the sake of clarity I will spend a short time going through each of the three schedules.

Schedule 1 of the bill seeks to increase the family tax benefit A fortnightly rate by $10.08 for each family-tax-benefit child aged up to 19. That amounts to an additional $262.80 per child per year for families with children eligible for this payment. It also modifies the methods used to calculate the maximum rates of youth allowance and disability support pension in order to ensure that there is no financial incentive for an FTB child—for want of a better word—to leave full-time secondary study to claim youth allowance. These changes will take effect from 1 July 2018, two years later than the cutbacks proposed by this bill.

Schedule 2 of this bill relates to payment rates for family tax benefit part B. It is also the schedule the government's own amendments relate to. In its original form, schedule 2 provided that from July 2016 a new tax structure will apply to family tax benefit part B. It also makes amendments to the rules relating to part B payments. The explanatory memorandum provides the following summary of the changes to family tax benefit part B proposed by the bill. It will increase the standard FTB B rate by $1,000.10 per year for families with a youngest child aged under one, and introduce a reduced rate of $1,000.10 per year for single-parent families with a youngest child aged 13 to 16. The current FTB part B rate for children in this age range is $2,737.50, so there is a significant difference. Schedule 2 of the bill will also extend the $1,000.10 rate to couple grandparents with an FTB child who is aged between 13 and 16. Finally, schedule 2 will remove family tax benefit part B for couple families other than grandparents when their youngest child is aged 13 or over.

Schedule 3 of the bill relates to the family tax benefit part A and part B supplements. It proposes to reduce the part A supplement from $602.25 a year from 1 July 2016, and $302.95 a year from 1 July 2017. The part A supplement would then be withdrawn completely from 1 July 2018. Schedule 3 also proposes to phase out the family tax benefit part B supplement. It will do this by reducing it to $302.95 a year from 1 July 2016 and to $153.30 a year from 1 July 2017. The part B supplement would then be withdrawn completely from 1 July 2018.

I have set that out, and it is my 'readers digest' version of the bill, because there is a lot of confusion about how these benefits interact and how they will impact on others. I have been getting many calls from constituents in relation to this. The amendments will remove schedules 1 and 3 from the bill. These schedules relate to changes to the family tax benefit part A rates and the phase-out of the family tax benefit part A and B supplements. The government is also amending schedule 2 of the bill to remove the amendments that would increase the standard rate of FTB part B to $1,000.10 for families with a youngest child aged under one. This amendment also removes the changes that would see single-parent families with a youngest child aged between 13 and 16 have their FTB part B payment reduced from $2,737.50 to $1,000.10.

As a result, the bill before us today only deals with the proposal to remove family tax benefit part B for couple families other than grandparents with a youngest child aged 13 or over. The withdrawal of this payment will occur on 1 July 2016. The supplementary explanatory memorandum sets out what that will mean. It also states that the expected savings to government from the measures in this amended bill will be $525.5 million over the forward estimates. The government has amended this bill significantly, and that is welcome. I think that what the government put up last year in the budget was draconian. It was unfair and it would have caused an enormous amount of damage to families. These changes do involve some cuts, and that does concern me. It is, however, positive that approximately 3,900 grandparent carers will continue to access FTB part B when the youngest child in their care is between 13 and 18 years old, and it will help to ease the enormous financial strain facing grandparent carers.

In South Australia, Grandparents for Grandchildren SA is a wonderful community organisation that John and Denise Langton established a number of years ago. I remember it well because I worked with them for the establishment of the organisation when I was a South Australian member of parliament. They have explained to me the additional burdens that grandparents have in relation to this. Without the help of people like John and Denise and many others, thousands of children would be worse off. And I think it is a good amendment in relation to this.

In relation to the bill before us, it is my understanding that the opposition supports this bill in its amended form, and therefore it will pass. I support the measures in this bill as amended. I reserve my position in relation to the measures that have been omitted by the amendment, including the proposed changes to FTB B rates for single-parent families as well as the phase-out of the FTB A and FTB B supplements. I do welcome the government shifting its position from seeking to cut benefits at the age of six, moving it up to 13. I call that the 'Macaulay Culkin' amendment because I feel that it would have meant many kids would have been left home alone because of the severe financial pressures it would have placed on those families. At least that is a small mercy in relation to the scheme of this bill.

So I support the bill and I am looking forward to what the government's position will be in relation to other aspects of this, because I do not want to see single parents, particularly, in effect have to subsidise the government's childcare package. So I think that there is still much work to be done, but this is at least a significant improvement on what was proposed last year.

Senator FIERRAVANTI-WELLS (New South Wales—Assistant Minister for Multicultural Affairs) (18:20): The Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 will introduce a package of reforms that will assist in supporting families while encouraging parents' participation in the workforce.

Following amendments made in the House, the changes in the bill focus on structural reform of the welfare system by targeting family tax benefit part B payments, which are designed to support families on single incomes, to better balance the work and caring responsibilities of families with the least capacity to increase workforce participation. The bill will remove eligibility to FTB part B for couple families other than grandparents with a youngest child aged 13 or over. This limitation is consistent with this government's broader participation agenda and supports the policy imperative that families be encouraged to enter or re-enter the workforce when their children begin secondary school and become more independent.

As noted, the remainder of the savings proposals will be reintroduced as part of a new bill. After constructive consultations with the Senate crossbench and senators, the government will ensure that single parents aged over 60 years and grandparent and great-grandparent carers with a youngest child aged 13 to 18 years will be eligible to receive FTB B at the standard rate. However, single-parent families and grandparents with a youngest child aged 13 to 18 years will continue to be eligible for FTB part B. This acknowledges the role of grandparent carers, who are less likely to be in the workforce, and helps with the cost of raising their grandchildren. The bill similarly recognises the difficulties encountered by single parents in transitioning into work and so provides additional, appropriate assistance while they prepare to re-enter the workforce.

The level of financial support provided by FTB part B is higher for families with the youngest child aged four and under, in recognition of the higher need for parental provision of direct care of children, and reduces when the youngest child turns five, moves into compulsory education and gives primary carers greater capacity to move into the workforce or increase their workforce participation. Where a youngest child has reached the age of 13, the government considers it appropriate to expect primary carers to engage in the workforce or increase their workforce participation.

While this measure will reduce the assistance to couple families once their youngest child turns 13, they will retain eligibility for income support or social security payments for themselves and assistance for dependant children through FTB part A or youth income support payments.

In summary, this package supports better targeting of FTB part B to families with one main income that have more limited capacity to enter the workforce or increase workforce participation. The reform demonstrates the government's commitment to families by supporting family choice to spend more time with their children when they are very young if they wish to do so and recognising that some of the most vulnerable families, such as grandparent carers and single-parent families, have limited capacity to increase workforce participation as their children age. They should receive support during the child's adolescent years. At the same time, these reforms will improve the sustainability of the family payments system by ensuring that we can achieve three important goals: (1) continue to assist families in raising their children over the long term, (2) fund the childcare reforms designed to enable and encourage greater workforce participation and (3) better target support to those who need it move. The bill also makes it clear that great-grandparent couple families as well as grandparent couple families will not be affected by the initiative introduced in this bill.

I conclude my comments by noting comments made by Minister Porter today in a media release. He states:

When we first announced the FTB reforms, we said we were willing to listen to sensible observations. I thank the senators for their engagement and we will continue to talk to them to work towards securing the passage of this important bill.

The DEPUTY PRESIDENT: The question is that the bill be now read a second time.

The DEPUTY PRESIDENT (18:31): As no amendments to the bill have been circulated, I shall call the minister to move the third reading unless any senator requires that the bill be considered in Committee of the Whole.

Senator FIERRAVANTI-WELLS (New South Wales—Assistant Minister for Multicultural Affairs) (18:31): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Sitting suspended from 18:32 to 19:30

Senator PAYNE (New South Wales—Minister for Defence) (19:31): I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill, which I understand were circulated in the chamber earlier today.

Senator CONROY (Victoria—Deputy Leader of the Opposition in the Senate) (19:31): I rise to address Labor's support for schedules 1 and 3 of the bill. Labor also supports the government's proposed amendments that would ensure that schedule 2 of this bill does not proceed at this point in time. In light of the government's decision with respect to schedule 2, the opposition will not be moving the amendments to the bill circulated on sheet 7753 and 7754 at this time.

Schedule 1 of the bill will affect changes that will enhance the Veterans' Vocational Rehabilitation Scheme, or VVRS, and the Veterans' Entitlements Act. This will mean that an amount equivalent to the permissible earnings for special and intermediate recipients will be disregarded for VVRS participants when determining whether the person's reduced daily pension amount should be increased and will give them the same benefit from permissible earnings as is received by a non-participant of the VVRS.

Schedule 2 of the bill was intended to streamline the appeals process into a single pathway for a reconsideration or review of an original determination under chapter 8 of the Military Rehabilitation and Compensation Act.

Schedule 3 of the bill will expand the war graves regulation-making power under the Defence Act 1903 to include graves of service dependants buried in Terendak Military Cemetery in Malaysia.

As we said, Labor supports schedules 1 and 3 as sensible and welcome measures, but it does, however, have concerns with measures proposed in schedule 2. The goal of improving the manner in which determinations of the Department of Veterans' Affairs are managed was identified in an important report undertaken by the previous government—namely, the Review of military compensation arrangements. The review was accepted by Labor's former veterans affairs minister, the honourable Warren Snowdon, in May 2012. While this report was cited by the current government as justification for schedule 2, we would do well to recall the report's recommendations. In particular, I draw senators' attention to the following parts of the report:

17.91 If no cost awards are available under the single path, members pursuing claims for peacetime service (who do not have access to merits-based legal aid) are put at a disadvantage. Currently, the availability of the second path allows this to be taken into account.

17.92 Implementation of a single path would therefore require rethinking the current position in relation to costs and legal aid.

… … …

17.94 However, the Committee’s preference is to have a full costs jurisdiction for all MRCA applicants at AAT level. This would allow legal and other representatives to assess the merits of cases and pursue them on a ‘no win, no fee’ basis.

Labor's then Veterans' Affairs minister, Mr Snowdon, accepted the report's recommendations as they pertained to establishing a single appeals pathway for our veterans. Labor continues to support the ideal of establishing a single appeals pathway for our veterans, but that single appeal pathway must achieve certain key policy goals. It must be fair. It must present both the DVA and individual veterans with the opportunity of procedural fairness. It must be appealable on fair terms. It must aim to lessen the time that veterans spend bogged down in an appeals process. Labor is not convinced that these important goals have been met in schedule 2, as presently drafted.

We thank the Minister for Veterans' Affairs for his constructive approach with this bill and willingness to listen to the concerns of Labor, the crossbench and other stakeholders. We commend the course of action to the chamber.

Senator LAMBIE (Tasmania) (19:34): I rise to contribute to the in-committee debate on the Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015. When the minister replies, I will seek clarification and confirmation on whether schedule 2, clause 9B has been omitted from the amended version of the legislation. It appears that the contested and controversial schedule 2 will be scrapped by this government. There are many nervous veterans who would like to hear the words from the minister, personally.

I have no objections to schedule 1 and schedule 3 of the proposed government legislation. Schedule 1—$0.7 million over the next four years—will expand the range of services available under the Veterans' Vocational Rehabilitation Scheme, the VVRS, and make changes to the way certain periods of work undertaken as part of the VVRS, income earned from that work and periods of unemployment affect the rate of disability pension and/or service pension paid to participants. As a matter of fact, I welcome that. I congratulate the government for doing that. That is a wonderful thing. I know that there are a lot of veterans and families who are very appreciative of that.

Schedule 3, relating to the graves of dependants of member of the Defence Force—at a cost of $1.8 million over four years—allows the Minister for Veterans' Affairs to amend Regulation 31 of the Defence Force Regulations 1952 so as to provide for the repatriation of the remains of service dependants buried in the Terendak Military Cemetery in Malaysia.

However, I do have concerns and suggestions for schedule 2 and specifically clause 9B which I strongly oppose. This provision, as it stood in the unamended legislation, undermined and weakened veterans' fundamental legal rights and decreased their chances of appealing bad decisions made by the Veterans' Review Board. The provisions, which would have harmed our veterans, relate to the legal costs, which can be awarded to veterans by the Administrative Appeals Tribunal for successful appeal applications to decisions made in the Veterans' Review Board. Under the current system, costs can be awarded to veterans should their appeal to the higher authority, the AAT, be successful. That right to access costs would be taken away from our veterans should this legislation be passed in its original form, or indeed in an amended form which was leaked to me. It was there in black and white at clause 9B, which read, on the version that found its way into my office somehow:

After subsection 357(6) Insert

(6A) if in any proceedings, the Tribunal varies or sets aside a reviewable determination made by the Board, the Tribunal must not make an order under subsection (2) or (4) in favour of a claimant in relation to the costs of those proceedings if:

(a) In the course of the review by the Tribunal, the claimant provided to the tribunal a document relevant to the review, and

(b) The tribunal is satisfied that, at the time when the Board made the reviewable determination, the Board did not have the document, nor was the document reasonably available to the Board; and

(c) The Tribunal is satisfied that, if the Board had the document at the time when the Board made the reviewable determination, the Board would have made a determination more favourable to the claimant than the reviewable determination.

Translating that legal speech into easily understandable English, it means that, if the veteran introduces to their legal process new information as part of their appeal in the form of a doctor's report, supporting statements from former ADF colleagues, witness statements from family and friends, medical statements from GPs outside the defence system, personnel files from Defence, summons documents or psych documents, then that veteran will have to pay for their legal costs, even if the veteran wins their case before the independent appeals tribunal. This provision was clearly designed to deter veterans from appealing decisions made by the Veterans' Review Board.

Who would appeal a bad decision if you would be forced to pay for the legal costs no matter what the outcome of the legal proceedings? That is exactly where we were heading. Most fair-minded Australians would expect that, if an independent judicial tribunal found in favour of a claim by one of our veterans, that veteran's legal costs would be reimbursed. It was not the veteran's fault that a wrong decision was made in the first place, so why should they be forced to pay extra for what was essentially a government mistake?

Without the amendment, it would have made things significantly harder for the veteran and their personal legal team to subject the Veterans' Review Board decision-making process to independent scrutiny. While the government likes to peddle the mistruth that the Veterans' Review Board is a fair and independent body, the simple fact is: veterans are not allowed to take their solicitors into those hearings, and many of the members of the VRB are legally trained. I do not see where the fair playing ground is in that. We have a situation where, quite often, the veteran and his or her advocate, who do not have official legal training, walk into a room full of government representatives who have official legal training. To rub salt into what has become a gaping wound, the public servants who serve on these government bodies, should they have a grievance and want to appeal before the AAT, will be able to be awarded legal costs should their appeal be upheld. It is a shocking example of where public servants are being treated better and given more legal rights than our veterans.

Before I close, I would like to broadly comment on the state of affairs within Veterans' Affairs. I had high hopes when the old minister, Minister Ronaldson, was replaced with the new minister, Stuart Robert. Those high hopes lasted for about five minutes into my first and likely my only meeting with Minister Robert. It is clear from the tone and attitude of the new Minister for Veterans' Affairs that, despite the fact he is a veteran himself, his loyalty is to the Liberal Party and not his former comrades, certainly not the diggers from non-commissioned ranks. That is for sure. I raised a couple of very important veteran cases with the new minister, and his dismissive and misleading comments shocked me to the core.

The only hope I have for justice to be delivered to veterans who have been betrayed, bullied and ignored by successive governments is for a royal commission to finally be established. We will get there in the end. A royal commission would give thousands of veterans a chance to put their hands on a Bible, tell the truth and lift the lid on the dysfunction, endemic corruption, abuse of office, misconduct and cover-up from the highest levels of Defence and Veterans' Affairs. It will take a massive backlash from the public to force this government into establishing a royal commission, but I am confident that, when the stories of veterans like Marcus Saltmarsh, SAS Trooper Evan Donaldson and Jordan Woodruff, just to name a few, are properly told, the white-hot anger from the Australian people will be felt, even by politicians who think they are untouchable in this reinforced and insulated building.

In closing: when the minister replies, I seek clarification and confirmation from her that schedule 2, clause 9B, has been omitted from this amended version of the legislation.

Senator WHISH-WILSON (Tasmania) (19:41): Mr Temporary Chairman, I was going to see if the minister wanted to respond to Senator Lambie with that confirmation. Perhaps you could get her to do that in a second. I will just say a few quick words. The Greens have been working constructively with all parties, especially in recent days, on this legislation. We have met with stakeholders. It does concern me how much influence a couple of legal firms have had in what we are discussing here today. There are other stakeholders, and the Greens have not been lobbied by any veterans' groups around this legislation, which I find quite interesting. Nevertheless, I think there seems to be a unity ticket on the fact that we need a simplified single pathway for veterans' review. That seems to be acceptable to all stakeholders. However, we are not going to be voting on that tonight, I understand. That will come back next year. It has been sent off to committee. I have read those reports. I think it is time to be constructive and actually get an outcome for veterans, rather than just attacking the government, which I see all the time.

We do understand that this is complicated, that there is history and a lot of individual cases, but I do believe the intent of this was to actually make this easier for veterans groups. I am glad that Senator Lambie insisted this went away to committee. The committee certainly made some constructive recommendations, including, as was mentioned earlier, the potential to award legal costs through the AAT stage. That is something the Greens actually approached the government with during the week, about an amendment. I think the government had already prepared amendments to that particular aspect of this bill, but that will be dealt with at some stage in the future. The Greens are quite happy to vote for amendment (3), opposing schedule 2, and to support amendments (1) and (2).

Senator LAMBIE (Tasmania) (19:43): I have got a packet of questions to ask, so, Minister, if you are happy to remove schedule 2 out of the whole mix—I know you have got a lot of legislation you want to get through in the week—I am happy to move it along and we will take the fight up next year. I am happy to do that.

Senator PAYNE (New South Wales—Minister for Defence) (19:44): Let me see what I can do to help. You will see on sheet JC277 government amendments (1), (2) and (3), the result of which will be the removal of schedule 2, in its entirety, from the legislation that we are considering now. I seek leave to move amendments (1) and (2) together.

Leave granted.

Senator PAYNE: I move government amendments (1) and (2) on JC277:

(1) Title, page 1 (lines 2 and 3), omit ", military rehabilitation and compensation".

(2) Clause 2, page 2 (table item 3), omit the table item.

Question agreed to.

Senator PAYNE: The government opposes schedule 2 in the following terms:

(3) Schedule 2, page 8 (line 1) to page 9 (line 9), to be opposed.

The TEMPORARY CHAIRMAN ( Senator Williams ): The question is that schedule 2 stand as printed.

Question negatived.

Senator PAYNE (New South Wales—Minister for Defence) (19:45): Let me make a few remarks in summary and indicate to the chamber, the shadow minister and other representatives in the chamber that the government does intend to come back in 2016 with schedule 2, which will enable further discussion of the issues raised by Senator Lambie, Senator Whish-Wilson and Senator Conroy with respect to the provisions of that schedule. However, they are not part of this discussion tonight in any way, shape or form now that those amendments have been carried.

May I make just a few summing-up remarks. The bill before the chamber gives effect to two veterans affairs' 2015 budget measures that benefit the defence and the ex-service community. These benefits begin with enhancements to the Veterans' Vocational Rehabilitation Scheme operating under the Veterans' Entitlements Act. These enhancements to the scheme will expand the range of services available to include medical management and psychosocial services. These additional services can further assist a participant's recovery through comprehensive, individually tailored rehabilitation interventions that include treatment monitoring and case management, pain management, family education and counselling to assist a participant to adjust to their disability.

Further enhancements to the scheme will result in recipients of the special rate or intermediate rate of disability pension being able to retain more of their pension and a more favourable pension adjustment regime for participants who start the scheme but experience prolonged absences from the workforce. These enhancements to the scheme are designed to encourage participation of more eligible veterans and members so that they are able to benefit from the substantial long-term health benefits that are associated with rejoining or remaining in the workforce.

Finally, the bill will amend the Defence Act to enable the repatriation of the remains of eight service dependants buried in Terendak Military Cemetery in Malaysia if requested to so by the families of the deceased. A change in government policy in January 1966 meant that, whilst most veterans killed in action in Vietnam were repatriated to Australia for burial, 24 were in fact buried in the Terendak Military Cemetery in Malaysia. On 25 May this year, the former Prime Minister offered to repatriate the remains of these and a number of other Australian servicemen and service dependants buried in the Terendak Military Cemetery. These amendments will enable the War Graves Regulations made under the Defence Act to authorise the repatriation of the eight service dependants if requested to do so by their families.

These 2015 budget measures contribute to this government's commitment to recognising and meeting the needs of current and former members of the Australian Defence Force and their families. I thank members of the chamber for their consideration of this bill and their constructive discussion of those parts of the bill which have currently been excised, and I seek the support of the chamber.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.

Senator PAYNE (New South Wales—Minister for Defence) (19:49): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator CANAVAN (Queensland—Nationals Whip in the Senate) (19:50): While I was finishing my first stint on this bill I believe I was speaking about the Labor Party's opposition to one element of the bill. The bill does a number of things. There are five schedules to the bill. There are a number of component parts to the fifth schedule. The first four schedules simply streamline the regulatory arrangements that cover tertiary education institutions providing services to overseas students. They do so in a way that is consistent with the additional regulation and oversight that has been put in place for institutions providing services to domestic students. The first four schedules to the bill are seemingly non-controversial, and certainly in the Senate committee government and opposition senators agreed with those four elements. The Greens opposed all, and I commented on the Greens' contribution in my earlier remarks.

There are four component parts to the fifth schedule. The fifth schedule is all about saving money for our higher education sector. We estimate that ultimately it will deliver savings of around $76 million a year if this red tape is reduced, including reducing reporting time frames for student default and allowing overseas students to pay more than 50 per cent of their fees up-front—not requiring them to do so. We have to be careful and keep in mind that that cap will still be in place and that an institution can only require 50 per cent of the fees to be paid up-front, but it will give students the choice. Finally, it will remove some of the arbitrary restrictions on the study period for overseas students. Those elements are agreed to, or seemingly broadly agreed to.

The only matter of contention between the government and the opposition at the moment relates to an issue around what is called the designated account. I will quote from the Labor senators' report on this bill, which defines a designated account. It says:

The designated account requirement was one of a range of measures introduced by the former Labor Government following the Baird Review of 2009. Together these measures have been successful in stemming reputational damage that had the potential to severely undermine Australia’s international education sector.

The designated account requires institutions to put aside or to hold a certain amount of the funding or fees provided to them by overseas students in case there are allegations of fraud or underperformance. It is held almost in trust, if you like, and provides overseas students with that protection.

What the Labor senators' report fails to take into account—in what is only a few paragraphs of analysis, it must be said—is that since 2009 there has been a whole series of regulations and protections put in place, particularly in the domestic student sector. I did wax lyrical earlier about the Australian Skills Quality Authority and the Tertiary Education Quality and Standards Agency. These new bodies have put in place greater restrictions, greater oversight and greater regulation to cover the standards in place for domestic students. This legislation expands those protections and regulations to overseas students. Therefore, after lengthy consultation and review—a review established by the former Labor government before the 2013 election—the government has concluded that these designated accounts are not needed if we were to apply this whole new regulatory structure to our overseas students market.

Again, it is about protection and reducing red tape. Protections will be in place as a result of this legislation, including the expansion of powers for the Tuition Protection Service director, which provides protection for overseas students specifically. We feel that those protections are sufficient and that the existing arrangements introduce an uneven playing field between private and public operators. It is only private institutions providing services to overseas students that must put aside these designated accounts. That of course increases their costs, because they have the cost of keeping working capital aside that could otherwise be deployed in their business. That holding cost increases their cost of running their business and makes them less competitive relative to public institutions that do not need to hold these designated accounts.

These designated accounts do not specifically provide any protection or oversight to overseas students; they are simply a safety net in case something goes wrong. I am firmly of the view that we should absolutely make sure that institutions that are not providing quality services are penalised and are held to account and, indeed, have to make rectification and restitution in the case of students not getting a good deal. But these current arrangements are imperfect because they are imposed on the entire education sector, including those institutions that do the right thing and offer high-quality services. Surely, we would not maintain that a majority of Australian education institutions are doing the wrong thing. But that seems to be some of the insinuation from the other side—that they are all suspect and we must have this overbearing and over-burdensome imposition on these institutions. I do not hold that view. I think we have a very high-quality education sector.

The whole purpose and objective of this legislation is to make sure that the sector maintains its competitive and high-quality services, particularly for the growing Asian region. I do not believe that we should tar the entire sector with a brush saying, 'We must impose these onerous obligations on all of you because we suspect that you might be doing the wrong thing.' I think most of them are doing the right thing. Sure we are always going to have bad apples that we need to root out, but this particular approach and this particular regulation is not the way to do that. The way to do that is to have in place proper accountability mechanisms and proper dispute resolution mechanisms—which this bill strengthens as well. We need to focus on bringing costs down and increasing the competitiveness of our sector, so that we can continue to provide a high-quality education sector and expand the exports that our education sector provides.

As I said, while we have a very competitive and very attractive higher education sector right now, we must be alive to the challenges, because there are institutions in other countries becoming better and lifting their standards—and, indeed, possibly doing that from an easier perspective, because they are not at the frontier like our institutions are. So we must always strive in that environment to stay one of the best places for overseas students to get a higher education degree.

Senator COLBECK (Tasmania—Minister for Tourism and International Education and Minister Assisting the Minister for Trade and Investment) (19:57): Firstly, I thank all honourable senators for their contributions to this debate and recognise the common perspective across the chamber on this legislation, regardless of political persuasion, is to ensure that there is a high-quality education system in this country that, as Senator Canavan has quite rightly said, is held to high-quality standards and to ensure that protection for students is maintained as part of that process. That is where this piece of legislation goes to.

The Education Services for Overseas Students Amendment (Streamlining Regulation) Bill 2015 and the Education Services for Overseas Students (Registration Charges) Amendment (Streamlining Regulation) Bill 2015 amends the Education Services for Overseas Students Act 2000, or ESOS Act. These bills deliver on the government's commitment to cut red tape and free up education institutions to invest in their growth and future success while maintaining Australia's stringent student protections. The bills are an important element of the national strategy for international education currently being finalised by the government. They will further strengthen the fundamentals of our education system by ensuring Australia maintains the highest standards through best practice quality assurance.

As honourable members would be aware, and as a number of senators have acknowledged during this debate, international education is Australia's largest services export. It outstrips personal travel. It is by far our largest non-resources export, directly and indirectly employing over 130,000 people both in our cities and in our regional areas. The latest figures from the Australian Bureau of Statistics show export income from international education at a record high of $18.8 billion in 2014-15. To support future growth we need to have in place a long-term strategy to build Australia as the world's pre-eminent destination for international students. That means getting the fundamentals right and that is what the government argues these bills do.

The amendments to the ESOS Act through these bills remove unnecessary, and importantly duplicative, regulation to provide significant savings for education institutions, estimated at $75.9 million a year. This will allow education institutions to invest in innovation so they become even more competitive globally. By reducing the complexity in a number of areas, the changes in the bills will free up education institutions to focus on their core business of providing quality teaching and learning, ensuring the future sustainability of this important sector.

The bills have been developed in close collaboration with international education stakeholders over a considerable period of two years, including education institutions and peak bodies across all sectors—international students, national quality assurance agencies, state and territory agencies, the Department of Immigration and Border Protection and the Overseas Students Ombudsman.

Through our consultations on these reforms, stakeholders strongly endorsed a robust ESOS framework. They know that our reputation for quality is critical to the continued success of Australia's international education system. But they also believe some of the regulation we have in place imposes unnecessary costs without effectively addressing risk or benefiting students. This government is committed to upholding world-class standards in international education. We need to target regulation effectively and appropriately so that our quality assurance agencies—the Tertiary Education Quality and Standards Agency, TEQSA, and the Australian Skills Quality Authority, ASQA, can focus on the highest risk practices, and stamp out any poor practices, in the international education sector.

The first key streamlining measure in the bill makes minor amendments to the current restriction on education institutions receiving, or any student from paying, more than 50 per cent of their tuition fees before the course starts. Currently the only exemption from this restriction is for a short course of less than 24 weeks duration. The amendments will provide increased flexibility for students, or the person responsible for paying on their behalf, to manage their fee payments. It will enable them to take advantage of favourable exchange rates and have the convenience of paying only once if they choose. Importantly, students cannot be compelled by these amendments to pay more than 50 per cent of their tuition before their course starts if they do not wish to. The short-course exemption on collecting prepaid tuition fees will be increased slightly to 25 weeks to better reflect enrolment periods and to respond to feedback from education stakeholders. However, the government will retain the 50 per cent restriction on the collection of fees in all other cases so the original important protections remain in place.

The second streamlining measure removes the requirement for certain education institutions to hold all tuition fees paid by students before they start their course in a designated account. Under the current provisions this requirement only applies to private institutions. It is a costly and unfair impost on more than half our international education sector, simply because their main source of funding is not from the government. It limits their competitiveness and their ability to invest in innovation and focus on their core business of providing education. It does nothing to reward those private institutions who do the right thing and who add so much to Australia's reputation for quality.

By removing the requirement on these providers to hold tuition fees in a designated account, education institutions will have greater operating flexibility. However, they will have the same obligations to protect students and pay the relevant levies through the Tuition Protection Service. The Tuition Protection Service will continue its important role in placing students on alternative courses and provide refunds where a provider ceases to operate, just as it does now. Where the regulators have concern about a provider's financial viability, conditions still may be imposed on the provider's registration at any time.

The third streamlining measure reduces reporting requirements on education institutions relating to information about students who default on their course—commonly referred to as a 'student default'. During consultations, stakeholders told the government these requirements were unnecessarily burdensome, disproportionate to risk and did not allow enough time for students and institutions to resolve issues and confirm that a default had actually taken place. This has the unintended consequence of students being at risk of inadvertently breaching the conditions of their student visa. Consequently, the streamlining regulation in the bill removes the requirement to report a student default and instead relies on other legislative provisions that require reporting of changes to a student's enrolment. However, the amendments retain the shorter reporting time frame of 14 days for certain information relating to students under the age of 18. This is to ensure the safety and wellbeing of this more vulnerable age group.

The fourth streamlining measure removes the concept of a short course as being less than 24 weeks. Again, during consultations stakeholders told the government this requirement was extremely burdensome. Many education institutions were forced to change their course structures and administrative arrangements to accommodate this requirement.

Other elements of the legislative framework already require a study period of up to six months and require providers to have a written agreement with each international student. The written agreement must set out the student's course details, tuition fees and conditions of refunds. These requirements protect students by preventing any unilateral changes by institutions to a student's study periods.

These reforms do not water down protections for international students or compromise our quality assurance settings; they improve quality by ensuring regulation is clear, importantly that it is targeted and is appropriate. This is central to ensuring the global competitiveness of Australia's educational institutions.

Today the Senate Education and Employment Legislation Committee handed down its report into the ESOS bills and the majority committee confirmed the government's position. The amendments do not water down regulation; they target it more effectively. I note the Greens' recommendation that the Senate reject these bills and claims that they unwind many of the protections of the Tuition Protection Service. I want to say quite clearly that this is not the case. I believe that has been reflected in my presentation today. These bills have the support of stakeholders and, most importantly, they have the support of international students.

I welcome the Labor senator's recommendation in support of streamlining reporting and regulatory requirements, which ease the red tape burden on educational institutions and assist the regulators to target any poor practices. In noting the Labor senator's recommendation not to support the removal of the designated account, I reiterate that this proposal does nothing to weaken protections for international students. Students will continue to be protected by the Tuition Protection Service, arguably the world's best student protections in international education, and I pay credit to the opposition who established the process when they were in government in 2011-12.

Private providers already pay a higher premium under the tuition protection service. All providers' financial viability is assessed by the regulators ASQA and TESQA. The regulators can impose conditions on a provider at any time when they have concerns about financial viability. In the Senate committee majority report 'International Students and Stakeholders', the majority all support this amendment to ensure regulation is effective and well targeted.

The measures in these bills align the ESOS Act with the domestic quality assurance frameworks. Most significantly, they remove the previous reliance on government delegations for regulation which stems from the time when states and territories performed the quality assurance roles now largely performed by our national regulators. The ESOS Act will now ensures that ESOS agencies, TESQA and ASQA, and the Department of Education and Training have direct and clear responsibilities. The bills also ensure the states and territories retain their important role of assessing and recommending schools for registration by the Commonwealth under the ESOS Act. The result will be less administrative complexity and more emphasis on getting the regulation right as ESOS agencies TESQA and ASQA will have more time to focus on targeting poor practices in international education and take action against high-risk education institutions.

Institutions will benefit from streamlined administrative processes, saving them time and money. To ensure the appropriate oversight of TESQA and ASQA responsibility as ESOS agencies, the bills will now allow the minister to direct an ESOS agency in the performance of its functions under the ESOS Act. Stakeholder consultations on the bills identified the need to align the ability of ASQA and TESQA to take equivalent action under the ESOS Act. Consequently, where an institution's registration or course accreditation under domestic framework ceases, the ESOS agency will now be able to cancel, suspend or otherwise impose a condition on that institution's registration under the ESOS Act. This will ensure that regulatory action is robust and consistent between the ESOS and the domestic frameworks and improved transparency and equity for the institution against which the action is being taken.

Other measures will strengthen the operation of the Tuition Protection Service by enhancing the powers of its director and ensuring it has a more direct role in supporting the quality and integrity of international education. Powers will be vested directly in the Tuition Protection Service director to allow him or her to issue production notices to obtain information about education institutions suspected of being unable to meet their obligations to international students. The TPS director will also be able to make a recommendation to an ESOS agency about enforcement action that should be taken against an educational institution and this must be considered by the ESOS agency. These changes are all about supporting quality unambiguously to allow regulators to take action quickly against poor practices in international education.

The changes to the ESOS Act significantly reduce complexity and cut red tape without compromising Australia's strong student protections or our reputation as a world-class destination for international students.

Extensive consultation on these reforms, as I indicated earlier, over a period of two years has reiterated the strong support they have from the international education sector and the benefits that will flow to providers and students. I thank the international education sector for their genuine and constructive commitment to improving the ESOS framework and for supporting quality. I also thank members who have spoken in the debate and support the government's ambition for Australia to lead the world in international education. I commend the bills to the Senate.

Bills read a second time.

Senator KIM CARR (Victoria) (20:14): by leave—I move:

(1) Schedule 5, item 3, page 78 (line 15), after "the course.", insert "The provider must keep those fees in a separate account."

(2) Schedule 5, item 9, page 79 (lines 13 and 14), to be opposed.

(3) Schedule 5, item 13, page 80 (lines 4 and 5), to be opposed.

(4) Schedule 5, item 15, page 80 (lines 8 and 9), to be opposed.

(5) Schedule 5, item 18, page 80 (lines 21 and 22), to be opposed.

Could I indicate that in voting for these positions, if senators wish to support these amendments, they will be voting 'yes' for the first amendment and voting 'no' for amendments (2) to (5). I will put them as two separate blocks.

First of all, could I ask the minister a simple question: you mentioned that the savings for these measures for colleges will be $75 million. Is that per year or over the forward estimates?

Senator COLBECK (Tasmania—Minister for Tourism and International Education and Minister Assisting the Minister for Trade and Investment) (20:15): That is per year.

Senator KIM CARR (Victoria) (20:15): In speaking to my amendments, can I indicate that savings of $75 million in an industry worth $18 billion per annum are quite small—quite small indeed—and the costs of getting this wrong may well be considerably more than $75 million to the affected colleges, particularly in the private industry operating within the international community.

In speaking to support these proposals I think it is worth reminding the government that its rhetoric about regulators operating in a robust manner—being able to act quickly to stamp out poor behaviour—flies in the face of lived experience. I am very concerned about the fitness for purpose of our regulators in higher education. I am very concerned as a result of the direct evidence that is presented to us almost on a daily basis.

Today, Vocation has announced that this college is closing up shop. There is no money in the bank and students are being sent on their way. How long has the government known how serious a situation Vocation was in? How many hundreds of millions of dollars have been paid to Vocation and its various subsidiary arms? Why did it take so long for the government's regulators to see the problem that the Senate committee managed to identify quite quickly, and that newspaper columnists seemed to be able to identify quite quickly? Our regulators, the minister says, acting in a 'robust' manner, can act quickly—but, of course, that is certainly not the case.

If you take the situation with regard to the Australia Post example, the principals of two of the international colleges directly involved with that have now been charged with fraud. One of them had a streamlined visa approval—a streamlined visa approval—to channel people directly into these rorts, while the other college recently had its accreditation re-established without a site visit from the regulator. So it is a bit hard to have confidence in the regulators, given the evidence that we see before us on a regular basis. When the government says: 'We are moving these measures to deregulate this industry still further' then, faced with the evidence that is before us, I am always going to be concerned. This is particularly so when we are looking at a measure that was only introduced three years ago by the previous government to secure the moneys that students paid in advance of starting their course.

I will go through the detail of that in a moment, but I remind the minister as to why that fund was established. In principle, it was established to weed out the fly-by-night operators in international education—those colleges that did not have the resources to be able to fund a proper program; those colleges that lived from hand to mouth and had to use the deposits of students to fund their operating expenses. They are the people we do not want to see operating in this industry.

Let me go through the detail. The Tuition Protection Service and the OSTF only came into existence on 1 July 2012 to assist and support international students on student visas whose education providers were unable to complete the delivery of their course of study. The creation of this body and the Overseas Student Tuition Fund was a direct outcome of the Baird review. The Baird review arose because of the widespread malfeasance in this industry. The review said:

Adequately and appropriately supporting students in Australia is at the heart of the sustainability of the sector.

Further, the review found:

The recent dramatic growth in students coming to Australia, alongside the increase in vocational education and training (VET) providers offering a narrow range of courses linked to migration outcomes and sourcing students from a limited number of countries, has increased the risk of closures. This has put considerable pressure on the current tuition protection framework, with fears it is unsustainable. Consultation with key stakeholders and independent actuarial advice has informed the recommendation to replace the current arrangements with a single tuition protection service.

The review noted the inadequacies of the previous arrangements:

Recent provider closures and a lower rate of TAS placements have resulted in increasing calls upon the Fund with the potential to deplete the Fund's reserves, thereby diminishing the Fund's capacity to respond to future provider default events as required.

But when the TPS was set up by the Labor government of the day, the government said:

The centrepiece of the Amendment Bills is reform to strengthen tuition protection to ensure students receive tuition they have paid for or, as a last resort, a refund.

It is important to note, I might say, Minister, because it is so easy to forget just three years on. The explanatory memorandum said:

To further protect students, the pre-paid fees amendment is proposed to require all providers who do not receive a recurrent government funding to place pre-paid course fees for the first study period into a designated account. This account can only be drawn down when the student's first study period begins. By keeping pre-paid fees separate to day-to-day operating expense accounts, refunds will be more accessible before the student commences.

The minister introducing this legislation, the former member for Kingsford Smith, the Hon. Peter Garrett, said:

This will stop providers from using pre-paid fees for operating expenses … and encourage more sustainable business models.

Together with limiting refunds, this will mean providers are better able to meet their student refund obligations and there is less recourse to the TPS.

The defenders of abolition suggest that it is not needed, and as the minister stated in his summing up remarks, because the overseas student tuition fund fulfils the role of the designated accounts. That is simply not the way in which the designated accounts were designed to operate nor is it the way in which the overseas student fund was designed to operate. It is envisaged as a last resort not as a right. I repeat the point that I made in the second reading debate: if it operated in that way then the crisis that engulfed the industry between 2008 and 2011 would have seen the funds completely depleted.

So the evidence is really clear here of what happens if you are negligent in this regard. The designated account was intended to be the first level of protection for students in the event of provider closure. I want to repeat this: we simply cannot afford an industry that has operators in it that live hand to mouth, that have to dip in to the deposits of students to maintain their operations. That cannot be the way in which we encourage this industry to prosper. I am sure the sector understands the implications of this. If you say to most of these private providers, 'Would you like access to the students' money ahead of time?' of course they are going to jump at it, they are going to jump all over it. They are the same people who jumped all over this government for the last two years when it came to VET FEE-HELP. They are the same people who rip off students and undermine all the good providers.

The Tuition Protection Service in its statement, while acknowledging there will be those who want to remove the designated accounts obligation, argue it remains 'an area of potential risk for the TPS'. These are the people you are relying upon who are telling the Senate that this is an area of potential risk. The Tuition Protection Service say that they would prefer the retention of this integrity measure. I trust senators will note the opinion of the Tuition Protection Service. Their submission noted that the worst outcome would be the abolition of the designated funds obligation together with the removal of existing limits on prepaid fees. That, of course, is precisely what this bill is doing. While we have deep reservations about this, we are not moving an amendment on that but we do say to the government very bluntly that we are awake to this and are very anxious about how that will operate.

In its submission, the TAFE Directors told us:

In the current environment where there is so much public concern surrounding the actions of some less reputable private education providers, TDA feels it imperative that the requirement for retaining pre-paid student fees in a ‘designated account’ remains.

The NTEU said:

Supporters of the proposal to remove the designated account and 50% rules as a way of reducing provider compliance costs and red tape argue that it is justified as the international sector is more stable—

We have seen the evidence of that. That is just not the case that the sector is stable. Yes, it might be more stable than the crisis of 2009, but I would have thought most earthquakes would be than those events. I do not want to see those events ever return.

The NTEU went on to say:

While we acknowledge that there have certainly been improvements, supporters of the changes argue that the Regulatory Impact Statement (RIS) is premised on the assumption that the risk of the circumstances (that is, the turmoil the sector experienced over the period 2008 to 2011) which was the catalyst for these and other changes is now very low or non-existent. However, given the recent evidence of widespread problems within the private vocational sector … we are concerned that both the Government and the sector are seriously underestimating the current levels of provider risk. As such, the assumption that it is fine to pull back on regulatory protections is being made under a false premise.

Ged Kearney, President of the ACTU, advised the committee:

We oppose the removal of these provisions because they unnecessarily weaken protections for overseas students studying in Australia and threaten to undermine the international reputation of Australia’s tertiary education sector.

In light of the continuing evidence of predatory behaviour and exploitation of vulnerable students in the private for-profit vocational training sector, as documented in the recent Senate Committee report into this subject, now is not the time to be complacent about the need for such protections.

Even the Tasmanian Department of Education, the Liberal Tasmanian government, a government to which you are related, Minister Colbeck, as I understand, told us:

The designated accounts ensures that private providers are able to guarantee consumer rights of students and times of provider failure … The designated account should remain to provide this protection in the more viable Private sector.

So Labor maintain that the abolition of the designated account requirement is, in fact, dangerous. It has only been in operation for three years. It is the interaction of the designated account in the ESOS Act and the OSTF which has yet to be tested. The removal that this government is pursuing is blind ideology. Their assumption that the private sector should be treated the same as the public sector is wrong given the long and repeated history of failure by the shonky providers within the vocational education system.

This measure is grossly premature and grossly irresponsible. We would urge the Senate to support the propositions I have moved today to vote 'yes' to the first amendment and 'no' to the second block of amendments that I have proposed.

Senator SIMMS (South Australia) (20:29): The Australian Greens support the amendments proposed by the Labor Party because they are an improvement on what is bad legislation being proposed by the government. However, it does not change our view on the bill that the government has put before us today, and Labor's amendments fall short of addressing the issues with this bill. They do not stop the removal of the 50 per cent cap on up-front costs, for instance. They do not deal with the issue of weakening reporting obligations, and so they still expose students to risk.

The government have said that they have reason to be confident that the sector is in a good position and that somehow the sector is addressing the issues that have plagued it over the last few years. Well, let's be very clear on this: the evidence certainly does not support that view. There is barely a day that goes by when there is not another humiliating scandal plaguing the VET sector in this country. There is not a day that goes by when there is not more news of students being exploited and ripped off.

The government talks about wanting to remove the red tape. Well, it is removing the red tape and rolling out the red carpet for shonks and rip-off merchants. That is what is going to happen if the government goes down this path. It is absurd to be going down the path of removing protections for students when the government has not got its house in order in terms of ensuring that there is quality for students and that students are going to be protected.

I have heard a bit of discussion during this debate about the idea of Australia relying on international students and building a reputation for excellence within the field of international students. Obviously Australia has some terrific education institutions, and we are competing internationally, but one sure way for us to damage our reputation on an international level is to remove the protections that ensure that students get a quality product here in this country. We do not want to see a situation where students are buying an expensive lemon and they are being ripped off and that is the product that they take back to their home country. We do not want to see that model, yet that is the path that the government are taking us down if they remove these protections.

I think Senator Carr is right when he talks about this government's ideological obsession with deregulation and what that means. We need only look at what it has been doing to the higher education sector over the last several decades. I recall all too well the Howard government's deregulation efforts when the Liberals were last in power and, of course, the deregulation agenda that they have been pursuing in this term of government, which they have put on ice but intend to revive after the next election should they be returned. All of this is part of an ideological obsession with this idea of leaving students at the mercy of the market and letting the market decide. That is the Liberal Party's agenda: using education as a means to make profit and wealth for big business and big providers and selling out the interests of students and, all too often, the most vulnerable members of our community. In this instance, we are talking about international students, people who come to this country often lacking resources and sometimes language skills. These are the people who are going to be ripped off by some of the shonky operators. It is integral that we have protections in place, and the Greens are always going to continue to advocate for those.

Senator COLBECK (Tasmania—Minister for Tourism and International Education and Minister Assisting the Minister for Trade and Investment) (20:34): I thank Senator Carr for his amendments, and I indicate up front that the government will not be supporting them. I think Senator Carr actually belled the cat on his own amendments when he started talking about a business by the name of Vocation that has just gone belly up. The point that he made in talking about that business was that it had no money in the bank. This is one of the problems: it had no money in the bank. That means no money in its designated account, so where is the protection? That is one of the issues with the designated account process. I might add for completeness that Vocation did not have any international students, which is a good thing in this circumstance under this piece of legislation.

Senator Kim Carr: So it didn't need a designated account is the point you're making, is it?

Senator COLBECK: If it did, it would have needed to have one, but the fact that it had no money in the bank would have meant that the designated account would have effectively been useless. On the point made by the Greens in their discussion about some ideological process around deregulation, the point is that we want to see the appropriate regulation but we do not need to see duplication of regulation.

I paid credit in my contribution earlier to the previous government for the establishment of the Tuition Protection Service, because it is actually a good system. It is a world-leading system. The important thing to understand about where it sits now is that, as Senator Carr indicated in his speech this morning, it started with a relatively small amount of money: it started with a $5 million injection from government. I agree with Senator Carr's comment this morning when he indicated that he did not want government—we should say 'taxpayers' –to be propping up shonky operators, but in the context of the Tuition Protection Service that is not what is happening. That $5 million that was put in by government when the Tuition Protection Service was first set up is now three-quarters paid back, so that is being returned to government at an appropriate rate as the Tuition Protection Service grows, and the rest will follow. So the Tuition Protection Service is effectively industry funds paid by industry into a fund to provide protection against any failure from industry. So it is actually doing what Senator Carr wants it to do by the growth of the fund.

At this point in time, based on the latest information that I have available, the Tuition Protection Service has some $19.296 million in it—plus, to provide additional capacity should it be required, a $30 million insurance policy that sits on the back. The premium for that insurance policy is also paid out of receipts that are taken from education providers. So what we actually have and we will have once the $5 million is fully paid is a service and a system where education providers are providing the guarantee for any failures within the system. I think that is a good system. Rather than rely on the taxpayer, which I agree with Senator Carr that neither of us wants to do, we have a system where, through risk ranking of premiums or payments into the Tuition Protection Service—and I noted in my contribution earlier that private providers already pay more than public providers—there is also the capacity within that process to risk-rank providers. Where the Tuition Protection Service believes that there is a greater level of risk with one provider than another, they can be charged a higher amount for input into the service.

So I think that what we have in the TPS at this point in time is a very good system. Rather than bringing everybody in the system down to the lowest common denominator—the amendment that Senator Carr wants the chamber to agree to brings everybody down to the lowest common denominator, particularly the private providers, and, as Senator Carr indicates, there are very many good private providers—it provides the capacity for the system to provide a risk ranking against those who might present more risk to the system, charge them a higher amount and therefore reward the good behaviour of the good providers. By retaining the designated account, everybody in the system, regardless of whether they are good or bad, has to retain the additional expense of having that account. Worse, if they are a bad provider and if they are in financial stress, there may not be anything in the account, so you end up having to call on the TPS anyway. So you end up with a duplicating system, one that applies additional cost into the overall education provision service.

Senator Carr, you might think that $75-odd million is not a lot of money. In the context of $18 billion, it might not be seen as that. But this is a competitive international market. There is no question about that. It is a competitive international market, and making our businesses, our industry and our education providers, whether they be public or private, as competitive as possible in that international market does matter. It does matter. Education is now a global industry, and we are playing a very important part in that. As you indicate, Senator Carr, we have a very good reputation in that space. And the government, despite what you might like to say, want to ensure that we maintain that. But we want to maintain that with sensible regulation. We want to retain that with regulation that does not produce duplication. We want to maintain that with a regulatory framework that supports and rewards good behaviour.

We have, in the Tuition Protection Service, a system that can do that. We can raise or lower the amount of funding that we require to go into that system to ensure that there is an appropriate sum to provide the protections required. If you look at the amount of money, even with the concerns and the problems that have occurred over recent years and that have been taken out of the TPS so far, it amounted in 2012-13 to $649,941 and, under default funds before 1 July 2012 and under section 50B of the ESOS Act, $358,005, so in 2012 it was $1.07 million. In 2013-14, there was a total of $187,000; in 2014, $121,288; and, to 30 September 2015, $833.That is a total of $1.317 million.

So we have, as I said during my presentation, a balance of just over $19 million in there. There is the capacity to manage that and of course, as I indicated, a $30 million insurance scheme that sits over the top of it. So at the moment we have in the system a capacity of $50 million. That is being funded by the providers. I think that is the appropriate way to do that. They cannot escape it. They have to put their money in. There is no question about the designated account, because this is something that the TPS has control over.

I urge the crossbenchers to consider this quite carefully. This is part of a well-considered, well-consulted-on package of reforms. We think that there is the basis to go down this track because of the way that the TPS has been set up, because of the protections that it provides and because of the one example that Senator Carr gave about a business that went broke and had nothing in the bank. Had they done that as a provider of international education services there would have been nothing in the bank in the context of the designated account, so the TPS would have had to have been used in any circumstance. We do not believe that it is necessary to have both. We think that the structure and mechanisms of the TPS provide the protection that is required. As I said, I congratulate the previous government for the way they established the service.

Senator KIM CARR (Victoria) (20:45): The minister has misrepresented what I am saying about Vocation. I was saying that Vocation today announced that it was closing its doors and sending students on their way with no money in the account. Yet the government claimed they have robust regulatory supervision, and clearly they did not when it came to Vocation. And, as you have said, Vocation did not have any international students. That was not the point I was making. You are grossly misrepresenting my position. I am saying that you are relying upon regulatory authorities which have yet to demonstrate to my mind and to many others that they are indeed fit for purpose.

Let me refer specifically to the risk factor here. The explanatory memorandum notes:

While the designated account requirement was introduced to reduce risk to the TPS, …

The Parliamentary Library points out:

While the ESOS agency can choose to impose additional safeguards in relation to providers considered to be a high risk, the ultimate effect of … these provisions may be that the TPS is required to step in more often where providers fail to … refund those fees …

I am quoting from the Bills Digest, page 12. The issue here is that we have narrowed down our amendment to this particular issue around the designated funds. We have concerns about other aspects of this bill, this deregulation push, but this issue here stands to be a matter on which the Senate can make a judgement.

This is not the creation of a new fund; this is a protection of an existing fund. These amendments have the effect of keeping the fund that has only been in operation since 2012 in place, because the measures the government is proposing, I am suggesting, are premature. And in light of the evidence of the failure of our regulators to be able to deal effectively with the vocational educational system then it is indeed reckless.

The CHAIRMAN: The question is that amendment (1) on sheet 7801 be agreed to.

The CHAIRMAN (20:54): The question now is that items (9), (13), (15) and (18) in schedule 5 stand as printed.