Today is the likely final day of public hearings for the international student caps bill, ahead of a report due on 8 October.

Despite the strong campaign against this bill the political reality is that the Opposition supports provider-level caps. This gives scope for a compromise that will see the bill pass in some form.

In my final submission to the Senate inquiry I focused on ways to make the bill less bad, while still letting the government and alternative government achieve their migration-related policy objectives.

Remove the course caps provision

80%+ of international students do not stay in Australia permanently. In this context, the government’s position that international students should be stopped from taking courses that don’t align with Australia’s skills needs borders on the absurd.

With over 25,000 courses registered on CRICOS regulating at the course level is also beyond the government’s administrative capacity. As Claire Field has been reporting, there are numerous errors in the much smaller task of imposing about 1,150 provider-level caps.

In legislative terms: Remove Subdivision C of the bill, delete section 96A and amend or delete any cross-referencing provisions.

The power to exempt courses from the provider level cap should be retained so that international students already doing courses relating to Australia’s interests can stay uncapped: section 26B(4) & (5).

Constrain ministerial discretion

Even assuming that international student caps are desirable the level of ministerial discretion in this bill represents very poor legislative and policy practice.

High levels of ministerial discretion make the rules uncertain and therefore make it hard for affected parties to plan for the future or stay within the law.

High levels of ministerial discretion are a key risk factor for improper or corrupt conduct. To be clear, I am not accusing anyone of such conduct, just noting the risk.

To reduce this risk all caps should be based on formulas and rules. The government has used this approach so far (see: public university formula, private university and NUHEP formula, summary of VET formula). This method of capping should be a requirement. The formulas and rules should be set out in a legislative instrument.

Under a formulas and rules system the minister could not favour or disfavour specific providers on an ad hoc basis. This is important to stop the implied or explicit threat of a specific provider-level cap being used by the minister to acquire unlegislated power over the provider.

Distinctions such as new compared to ongoing students, metropolitan compared to regional providers, and new providers compared to established providers would still be allowed. Some Senate inquiry submissions argue that all providers should be subject to the same formulas and rules. That is consistent with my overall argument, but I can see merit in flexibility that is subject to parliamentary scrutiny via a legislative instrument.

The purpose of the capping power should also be made clear, to control the number of international students in Australia. This would provide clarity and help in administrative law litigation if the government used this power for other purposes.

The minister should have to table a statement on the expected overall migration impact of the proposed formulas.

In legislative terms: This would require a major rewrite of sections 26B and 26C. Section 26C deals with notifications to providers. Under the current bill it seems to duplicate the power in 26C to impose caps, but in a way that bypasses the 26B requirement for a legislative instrument (which could be disallowed in the Senate or even the House of Representatives, if we end up with a hung parliament next year).

Under the rewrite, section 26C notifications would apply the formula and rules in the legislative instrument to the circumstances of each provider. The application of the formula and rules could use information that was not available when the legislative instrument was enacted, such as more up-to-date enrolment figures.

Definition of enrolment

Neither the caps bill nor the current ESOS Act have a definition of enrolment that matches the policy intent.

The government has chosen to use the course start date as the enrolment count date but legally they could use the day the student visa is approved. Due to students who get a visa but don’t commence, that enrolment count date would reduce the number of enrolled students to below the cap.

In legislative terms: Amend section 5 definition changes to include the date for capping purposes.

Cumulative or point-in-time enrolment counts

A related issue is whether the cap should use a cumulative enrolment total – the government’s current position – or totals at any given time. The latter definition is more consistent with the bill’s overall migration purpose – what matters is how many students live in Australia at any one time, not how many live here at some point in the year. The cumulative method creates incentives to start students in semester one, but that would not suit many source country markets.

Implementing a point-in-time cap would, however, be complex given different patterns of course starts and finishes and student arrivals and departures across sectors and providers. The point-in-time cap would be lower than the cumulative caps providers have been allocated. Given the administrative difficulties the Department and providers already face with the caps start date less than 3 months away full implementation of this idea should be postponed.

A partial implementation could, however, occur via changes to the penalty regime.

Consequences of exceeding the cap

The penalty for a provider exceeding is the cap automatic suspension of further enrolment activity for that year, including cancelling the enrolment of any student who has been accepted but has not started their course.

Given the inherent difficulties of hitting a precise enrolment cap, along with the very marginal effect on the migration policy goal of slight enrolment overshoots, the penalties are disproportionate to the offence.

The ESOS system was set up to protect the interests of international students. As I said in my submission, ‘it would be a terrible irony if the ESOS Act ended up mandating the mistreatment of international students that it was originally enacted to prevent’.

At the absolute minimum, section 96(2)(c) on cancelling student enrolments should be removed (along with the parallel section 96A(2)(c) on courses if this section has not been entirely deleted).

A system of fines, sufficient to ensure there was little or no financial advantage in exceeding the cap, would be better.

If the automatic suspension regime is retained, there should also be an automatic lifting of the suspension if enrolments fall back below the cap – as is quite likely due to completions and attrition.

Under the bill as it stands there is a convoluted process for getting the Secretary of the Department of Education to lift the cap. This change would require amendment of section 96(5).

Amendments to give effect to student exemptions

The government has announced exemptions for students from Timor-Leste or Pacific island countries, students on most government scholarships, and students in course twinning arrangements.

I haven’t seen an argument that there is anything inherently wrong with exempting categories of students but I don’t think the bill as drafted supports it. It uses categories of providers and courses.

This would require a new subsection in section 26B, along with section 26E if it is not deleted (the course cap), and 26C and 26F, the notices to providers, if they are not reformed along the lines suggested above.