$25 million top-up for consumer protection fund

The tertiary sector lost out in last year’s mid-year budget report, but it did better this time around. The federal government has committed itself to topping up the Education Services for Overseas Students (ESOS) fund by up to $25 million. The commitment was made in last week’s Mid-Year Economic and Fiscal Outlook (MYEFO). The top-up was part of almost $260 million in extra tertiary education funding through the mid-year budget report, a turnaround from last year when $280 million was clawed out of the sector. This year’s gains also included around $310 million for the additional apprenticeship bonuses and new trade cadetship scheme promised before the election. The government also pledged over $15 million to help the Victorian College of Arts and Music overcome its funding problems and secure national institute status. But these commitments will be offset by over $90 million in budget reductions from the Productivity Places Program (PPP), the VET National Support Program and the yet-to-be-established Centre for International Finance and Regulation. Industry figures welcomed the extra $25 million for the ESOS Assurance Fund, the government’s backup compensation scheme for overseas students whose colleges close down and fail to refund their pre-paid tuition or accommodation fees. The fund is activated if the students can’t get their needs met by the five industry-run tuition assurance schemes (TASs), which arrange alternative training placements for affected students. However, industry figures have warned that a string of college closures has left colleges with little capacity to accommodate any more displaced students, and that the Assurance Fund is running out of money. In March, ESOS reviewer Bruce Baird recommended that the Assurance Fund and the TASs be rolled into a single “tuition protection service”. Last week’s top-up is designed to ensure the Assurance Fund has enough money in the pot to meet its obligations until the beginning of 2012, by which time the government expects to have developed its response to the Baird recommendation. A DEEWR spokesperson told Campus Review that the $25 million would be a grant. A $5.1 million top-up announced in February turned out to be a loan which providers were obliged to repay through a special industry levy. English Australia executive director Sue Blundell said she was pleased that the fund would be kept viable with enough money for student tuition fees to be protected. “The industry will sincerely welcome this acknowledgement that the government shares the responsibility for consumer protection with the industry,” Blundell told CR. The Australian Council for Private Education and Training also welcomed the move, but said there was a more urgent need for action on student visa settings which were hampering international enrolments. “If government were to make simple amendments to improve the efficient operation of Australia’s student visa processes and administration, this would substantially reduce the risk of students being affected by college closures and possibly needing support from the ESOS Fund,” said acting CEO Claire Field. “While support for students is of paramount importance, it is disappointing that government is focussed on measures to assist them when colleges close, rather than focussing on measures to support the viability of the sector in the first instance.” The MYEFO’s major item, as far as the tertiary sector was concerned, was an extra $281 million towards the Tools for Your Trade bonus program for apprentices. The extra money – a pre-election commitment – will increase the total bonuses available from $3000 to $4700 per person. The bonus is designed to help apprentices in skill shortage areas cover incidental costs such as buying tools and servicing and insuring their vehicles. The government hopes the extra money will encourage them to complete their training. Payments will now rise progressively, from $1000 at the end of the first two years to $1500 at the end of the final year. Around $55 million of the extra bonus money will come from “uncommitted” PPP funding, Treasury papers suggest. But this is only a fraction of the $280 million of tertiary education funding appropriated by the government through the 2009 MYEFO. Last year the government clawed back around $28 million by deferring a new loans scheme meant to pay for student amenities, $25 million by increasing student loan administration fees, $20 million by winding back youth allowance changes, $9 million by transferring the promotion of international education from DEEWR to Austrade, and a whopping $200 million by cancelling promised allocations from the Education Investment Fund (EIF). The government said it was reducing EIF grants because the economy was recovering more quickly than expected from the global financial crisis – which had given rise to stimulus programs, such as the EIF, in the first place. Ironically, this year’s MYEFO has wound back a government commitment aimed at preventing another global financial crisis – the Centre for International Finance and Regulation. The May budget included up to $25 million to help establish the new centre, which would support regional financial stability through targeted research and by training financial regulators from Australia and the Asia Pacific. The MYEFO wound back $12.1 million of this commitment, with any remaining costs now to be met by the university or consortium of universities selected to host the new centre. Related stories: Single protection scheme for students Government tops up compensation fund ALP handballs PPP funds straight to apprentices Education confiscation: government quietly claws back $280m