$1 million fines for ‘dodgy’ colleges in fresh crackdown

Fraudulent colleges will face fines of close to $1 million and the government will be able to freeze applications for new training providers in a bid to boost educational standards while cracking down on student visa rorting.

Legislation to be introduced on Wednesday will also weed out colleges misrepresenting themselves as prestigious institutions and void the registration of providers that have been inactive for 12 months.

Fraudulent colleges could be fined close to $1 million under new laws to be introduced by Skills and Training Minister Brendan O’Connor.Credit: Alex Ellinghausen

“We need to make sure we’ve got sufficient powers, sufficient teeth, to go after dodgy providers,” Skills and Training Minister Brendan O’Connor said as he prepares to increase penalties from $187,800 to $939,000 for “ghost colleges” with few or no students, or significant breaches of training and qualification standards.

“We believe that in some circumstances, the fines at the moment are factored in by some providers as the cost of doing business.”

The amendments to the act governing the vocational education and training sector follow a review by former Victorian police chief Christine Nixon, who found student visas were being systemically defrauded to funnel vulnerable temporary migrants into low-skilled and illegal work.

The integrity crackdown accompanies a broader migration strategy that limits foreign student work rights and tightens English language and financial requirements, as Labor leans on student numbers to help halve net overseas migration to 250,000 by 2025-26.

A parliamentary committee recommended in October that the Australian Skills Quality Authority pause the processing of applications for new international colleges, with limited exceptions for those with industry links or endorsed by state and territory governments.

The legislation will empower the minister, with the agreement of their state and territory counterparts, to instruct the authority to put new applications on hold while it investigates suspicious behaviour or blowouts in provider numbers.

O’Connor stressed such a power would be used judiciously and as a last resort so as not to affect the wider sector.

“It would be done in exceptional circumstances, and it would most likely be done for a class of, say, a course where there seems to be very unusual activity or possibly a set of providers who are acting in a manner that does not seem consistent with their obligations under the registration,” he said.

Independent Tertiary Education Council Australia chief executive Troy Williams has previously said pausing new provider approvals would be “nonsensical and unhelpful”.

“What the Australian government appears to be signalling is ‘we just don’t want to support the international skills training sector’,” Williams said in December.

The Albanese government’s overhaul of vocational training is also designed to address skill shortages across the economy, including by creating centres of excellence that focus on areas of need such as clean energy.

O’Connor said the sector was full of high-quality institutions but they were “tired of their reputation being damaged by the minority of providers who do the wrong thing”.

The government last year implemented a fit-and-proper persons test and established a tip line to uncover rogue operators. The quality authority has stopped 28 providers from operating since July.

Government data suggests 10 per cent of the approximately 4000 providers in the sector are dormant. Under the new legislation, their registration will lapse if they do not train students for 12 months.

“We can’t have hundreds of providers providing no education and training to any student in Australia and continue on as a registered business,” O’Connor said.

A new offence will also be inserted to deal with colleges that mislead students about their facilities, connections or pedigree.

“The classic case of putting up the sort-of Harvard campus … Cambridge, Boston, as their insignia, and then you go in and see a classroom with barely a laptop in it … there’ll be a response to that if people are being flagrantly lied to, to try and induce them to enrol in courses,” O’Connor.

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