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“Legitimate relationships” safe from Australia cross-ownership rules

Incoming rules limiting the cross-ownership of education institutions are not intended to affect “legitimate relationships” between providers and agents, according to Australia’s education department, as concerns mount over what the regulations could mean for multi-strand education businesses.  

The government plans to crack down on education agents who also own institutions. Photo: Pexels.

Australia’s education department plans to amend the fit and proper provider test in the ESOS Act

In October, the Albanese government announced new measures to tackle unscrupulous players in the country’s international education industry, including preventing education agents from also owning and operating institutions. 

It follows the Nixon review, which found that agents working as part of criminal gangs brought non-genuine students to Australia and enrolled them in colleges owned by members of the network. 

The government’s reforms have been widely welcomed but questions remain about how they will be implemented in practice and whether legitimate operators could be caught up in the crackdown. 

Student recruitment giant IDP Education is partially owned by Australia’s universities, while other large international companies operate both agencies and institutions. Depending on the shape of the new regulations, there are concerns that these companies could potentially be forced to change their business models and universities may need to disinvest from IDP. 

In order to implement the policy, Australia’s education department plans to amend the fit and proper provider test in the Education Services for Overseas Students Act 2000 (ESOS Act), which gives the regulator TEQSA power to assess an individual or company’s proprietary to run an institution. 

When conducting the test, TEQSA currently considers an applicants’ compliance with the law, their past conduct and management history, and financial records. 

A spokesperson from the education department told The PIE News the planned changes, which remain unclear, will “be targeted at unscrupulous providers and agents who are damaging [the] integrity of the international education sector”. 

“The measure is not intended to affect legitimate relationships that providers have established with reputable agents,” they said, adding that the department is “working closely” with the sector in consulting and implementing the reforms, with further details to be provided “in due course”.

Speaking anonymously, one insider from a company potentially affected by the changes said the latest set of reforms go too far and that existing legislation should be used to crack down on dodgy providers. 

“I am not very confident it can be implemented”

Providers and agents feel it is difficult to prevent the proposed legislation from affecting the good actors as well as the bad ones and questions remain about how the policy will work in practice. 

“The government announcement is welcome but I am not very confident if it can be implemented as it has been announced,” said Ravi Lochan Singh, managing director at education agency Global Reach

“I doubt that the government realised that universities own the biggest education agent when it went targeting hundreds of private colleges that have cross ownerships of education agents.

“I also want to see how private colleges can be stopped from passing on the ownership of agencies to their family members if they are stopped from being directly involved,” he said, adding that the lack of details and timeline in the announcement made it seem “very incomplete and not sincere”.

Troy Williams, CEO of ITECA, which represents private colleges, said while the group “broadly” welcomed the reforms, there are “numerous issues to work through” to ensure “legitimate business practices are not unintentionally captured by a new definition, particularly where a registered provider also delivers education services to domestic students.”

Williams added that an enhanced fit and proper test must apply to all registered providers, both public and private. He said it would be “unacceptable to both students and the broader community if the Australian government was to exempt public providers”.  

“It is noted that some universities have strong ties to international student agents and thus those ties need to be tested in the context of what the Australian government is planning,” he added. 

Williams said the education department was being “fairly – but not entirely – open, honest and transparent in its consultations with the independent tertiary education sector”. 

IDP did not respond to requests for comment.

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One Response to “Legitimate relationships” safe from Australia cross-ownership rules

  1. I note the tense of Ravi’s sentence that includes the words “universities own…”
    Whereas it should have read “owned” past tense. Once upon a time IDP was wholly owned by the AVCC (now Universities Australia. As part of the privatisation of IDP the universities collective ownership fell to around 50 per cent through a collective body which in turn floated so that each university owned it on an equal shareholding basis. A further step devolved this ownership enabling each university to dispose of its shareholding or not as it saw fit. Some did so giving a short term boost to their balance sheet. It is no longer true to say that universities “own” IDP

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