Opinion & Commentary
Protectionist Ploy A Blast From The Past
Private providers of higher education have been assisted by the extension of the FEE-HELP loan scheme that lets their Australian students borrow money on similar terms to HECS students in commonwealth-subsidised places at public universities.
However, the Higher Education Support Act 2003 requires that these providers must (among other things) have their "central management and control in Australia" to be eligible. This was always a strange provision since there could be many benefits from having foreign providers set up in Australia.
Not long after the act came into force, the Howard government came to the same conclusion, but instead of changing the law passed a special amendment permitting students of the Adelaide campus of US-based Carnegie Mellon University to get FEE-HELP.
In the course of researching the ownership of private providers, I have come across two that have been taken over by foreign companies since becoming eligible for FEE-HELP. In the case of one, the Government's higher education institution website is advertising this as a positive: "In 2005 the college joined the Raffles Education Corporation, Asia-Pacific's premier creative design and business education provider, with a network of over 28 colleges across the Asia-Pacific region. As part of the Raffles Education Corporation, there is an exciting opportunity to study part of your degree at one of our other group locations."
So what does "central management and control in Australia mean"? The Education Department told me: "The following are the main factors taken into account when assessing whether the central management and control of an applicant are in Australia:
* "Whether the persons who make significant decisions about the applicant body, such as the chief executive and other relevant persons with the power to make significant decisions, reside in Australia.
* "Where the applicant is a company, whether the majority of its directors reside in Australia.
* "Whether the body's registered office is inAustralia."
Raffles probably does not meet these criteria. However, there isn't provision in the legislation permitting the minister to revoke FEE-HELP eligibility on this ground once it has been granted. An amendment to create such a provision is in the bill before parliament. Any relevant criteria should not just be required during the application process. But it is hard to see what public purpose was served by the original legislation. While it may be desirable to have some management in Australia to ensure compliance with other requirements, there is no need to have central management here.
Last year Raffles had 178 students in Australia, an unknown number of whom could lose their right to borrow under FEE-HELP as a result of this amendment and have to pay up-front instead. Some of them may have to drop out. Is this the kind of education revolution we want?
Andrew Norton is a research fellow at the Centre for Independent Studies.
