The Impact of VSU Legislation on campus services in Australia
Review of source materials and the history of the VSU debate
A century of compulsory amenities and services fees
Compulsory amenities and services fees have reportedly been levied in one form or
another at various Australian universities going back to the 1920’s and even as far
back as 1906 for both The University of Sydney and The University of Melbourne.82
The voluntary student unionism debate is about these compulsory amenities and
services fees. The term ‘voluntary student unionism’ (VSU) has been described by
Norton (2005) as:
VSU is a catch-all term, which in common usage describes both voluntary student organisation membership and voluntary payment of the non-academic fee.
The VSU debate has been running within Australia for more than 30 years now. The
debate has been played out in the media, the Federal Parliament, the Victorian and
Western Australian State Parliaments, the courts, the Australian Competition and
Consumer Commission (ACCC) and on virtually all university campuses nationally.
The VSU debate during the 1970s and 1980s – legislation and legal cases
Norton (2005) refers to details provided by Hastings (2003) concerning major ‘occupations’ of university premises by student activists, to portray the turbulent
political environment which applied on university campuses in the late 1960s and the
1970s and which influenced the VSU debate over following decades.
The main focus of the VSU dispute which got underway in the 1970’s was not to do with the compulsory nature of the amenities and services fees. It was more to do with what student organisations were allowed to do with these compulsorily acquired fees.
Could they, for example, use part of this money to pay the student association’s
membership fees to the Australian Union of Students? Could they, for example, give
part of this money to be used to organise a speaking tour of PLO students?
Various pieces of legislation were introduced (and in most cases became law) over the
course of the second half of the 1970’s and the early part of the 1980’s, in federal
parliament and also in the Victorian and Western Australian State Parliaments, to do
with how compulsory amenities and services fees could be spent.86 All of these Acts
were subsequently repealed by State and Federal Labor Governments.
There was a series of cases between 1972 and 1989 where individual students mounted legal challenges either on the matter of how student associations could spend compulsory amenities and services fees or on the matter of whether or not a university could require the student to pay the fee as a condition of enrolment. None of the plaintiffs in these cases were successful in their attempts to implement VSU or impose effective limits on the uses of these monies by the student associations, via the courts.
The VSU debate during the first half of the 1990s – the rise of state based VSU
In 1994 state Coalition Governments in Victorian and Western Australian each passed
legislation to implement VSU.
The Western Australian legislation amended the establishing acts of state universities to prohibit them from requiring students to join a student guild as a condition of enrolment and also to prohibit them from imposing any fee not directly related to a course of study. This was what was to become known as ‘full blown VSU’.
The Victorian legislation permitted state higher education institutions to collect compulsory amenities and services fees from students but required the fees to be used for defined activities of direct benefit to the students at the institution.
To counteract the more severe form of VSU legislated in WA in 1994 the then Federal Labor Government amended the State Grants (General Purposes) Act 1993 (No. 92 of 1993) to compensate student organisations for income lost due to state VSU. Under the provisions of these amendments the WA student guilds received what became known as the Student Organisation Support Programme (SOSP) funding from the Commonwealth for the 1995 and 1996 years.
The Western Australian Parliament had anticipated the 1994 Commonwealth legislation by providing in its own legislation a prohibition against universities accepting Commonwealth funds in defiance of state laws. The Attorney General advised, however, of the likelihood of Commonwealth law prevailing in this matter.
Following the election of the Howard Coalition Government in March 1996 steps were taken to terminate the SOSP funding for the WA student guilds. On 27 June 1996 the Coalition Government introduced the Higher Education Funding Amendment Bill (No.2) 1996 to the House of Representatives. This Bill sought to repeal sections of the Higher Education Funding Act 1988 which provided the SOSP funding.
The Coalition Government’s Higher Education Funding Amendment Bill (No.2) 1996
was subsequently introduced into the Senate and on 22 August 1996 was referred to
the Senate Employment, Workplace Relations, Small Business and Education
Committee. It appears the Committee’s Report was tabled in the Senate on 10
October 1996.92 The Bill was not proceeded with in the Senate although the SOSP
payments were in fact terminated later in 1996.
According to NUS, only those WA student guilds that managed to lodge all of their
SOSP applications for 2006 before the SOSP payments were terminated by the
Coalition Government, received their SOSP payments in full for the 2006 year.
After termination of the SOSP payments to the WA student guilds, full blown VSU
applied in WA from the beginning of 1997 through until the end of 2002.
The election of the Gallop Labor Government in WA in February 2001 subsequently
(after some delay) led to the partial repeal of WA State VSU.
The partial repeal of WA State VSU effective 4 January 2003 permitted a compulsory
amenities and services fee to once again be collected from students as a condition of
enrolment. The WA repeal legislation preserved the right of students to ‘opt out’ of
membership of the student guild although the compulsory amenities and services fee
was still payable to the state university.
The election of the Bracks Labor Government in Victoria in September 1999
subsequently led to the partial repeal (effective 29 November 2000) of Victorian State
VSU. The Victorian repeal legislation preserved the right of students to ‘opt out’ of
membership of a student organisation although the compulsory amenities and services
fee was still payable to the state higher education institution.
VSU developments in overseas jurisdictions during the 1980s and 1990s
During the course of the VSU debate in Australia over the 1980s and 1990s there
were VSU related developments in the overseas jurisdictions of New Zealand and the
United Kingdom and in addition attention was drawn to the compulsory student
amenities and services fees models that applied in the higher education sectors in both
Canada and the USA.
In the United Kingdom in 1983 the Thatcher Government decided not to introduce
VSU but in 1994 amendments were made to the relevant laws by the Education Act
1994 (UK) to ensure amongst other things that student associations operated “in a fair
and democratic manner and were accountable for their finances”.
In New Zealand the Education (Tertiary Students Association Voluntary Membership)
Amendment Act 1998 (NZ) implemented a form of VSU with effect from 1 May 1999.
Under this form of VSU if the Council of a New Zealand university receives a request
for a referendum on VSU from 10 per cent or more of the students enrolled at the
university then the referendum must be held on whether or not there will be
compulsory amenities and services fees and the university must abide by that
referendum result.
It was reported in 1999 that in Canada and the USA the modes of funding for student
associations in the higher education sectors differ but both “rely on a principle of
compulsory funding with the option of opt out or conscientious objection”.
The Howard Government’s first attempt to introduce federal VSU - 1999
Whilst all these developments were occurring with state based VSU in WA and
Victoria the Howard Government meanwhile had moved on 11 March 1999 to
introduce the Higher Education Legislation Amendment Bill 1999 (the 1999 VSU
Bill) to the House of epresentatives, seeking to implement VSU at the federal level
by amending the Higher Education Funding Act 1988.
Parliamentary Bills Digest No. 137 1998-99 was prepared for debate on the 1999 VSU
Bill.
On 31 March 1999 the Senate referred the 1999 VSU Bill to the Senate Employment, Workplace Relations, Small Business and Education Legislation Committee. After conducting an inquiry the Committee tabled its report in the Senate on 25 May 1999. The 1999 VSU Bill was not passed by the Senate.
The attempt to introduce VSU under trade practices law – 2001 through 2003
In 2001 an attempt was made by a complainant (whose identity was suppressed) to the Australian Competition and Consumer Commission (ACCC) to the effect that the enrolment practices of James Cook University (JCU) were in breach of trade practices law.
It would appear the complainant in the JCU case was seeking implementation of VSU under the provisions of (by then) long established federal trade practices law. The ACCC subsequently described their role, the relevant trade practices legislation, the complaint and JCU’s response to the complaint as follows:
The role of the Australian Competition and Consumer Commission (the Commission) is to administer the Trade Practices Act 1974 (the Act) and related legislation. The objective of the Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection, resulting in greater choice for consumers in price, quality and service. The competition provisions of the Act prohibit certain types of anticompetitive conduct, including conduct known as third line forcing. Third line forcing involves conduct where a supplier supplies goods or services on the condition that the purchaser acquires other goods or services from another person.
A corporation can gain immunity from legal action by the Commission or any other party for third line forcing by lodging a notification with the Commission. Immunity is obtained automatically 14 days after lodgement of a notification.
The Commission may revoke a notice for third line forcing if it is
satisfied that the likely benefit to the public from the conduct or proposed conduct will not outweigh the likely detriment to the public from the conduct or proposed conduct. The Commission assesses the likely public detriment and benefit arising from the notified conduct within the framework of the Act and its objective of improving competition and efficiency in markets.
On 27 December 2001 James Cook University (JCU) lodged a third line forcing notification (N90962). The notification relates to JCU’s enrolment policy which requires that, as a condition of enrolment, students gain and maintain membership the James Cook University Student Association (JCU SA).
Immunity in respect of the notification commenced on 10 January 2002.
The ACCC then conducted a public inquiry in Townsville to determine whether it was
in the public interest for JCU’s legal immunity to be revoked. As a part of the public
inquiry the Commission sought written submissions from potentially interested parties
including JCU, JCUSA, DEST, Queensland Education and a number of peak and
representative bodies nationally. The Commission received 15 written submissions
including submissions from JCU, JCUSA, various individuals, the campus services
sector peak bodies ACUMA, CAPA and NUS as well as from DEST and from the
Hon Peter Lindsay MP, Federal Member for Herbert (Liberal).
As a result of the inquiry the ACCC on 21 October 2002 issued a draft decision
proposing to revoke the immunity but after further inquiry the ACCC decided on 30
April 2003 to allow the immunity to stand.
To obtain the immunity JCU had to undertake to the ACCC to strengthen the
provisions permitting students to ‘opt out’ of membership of the JCUSA (in which
case the students were nevertheless still required to pay a compulsory building fund
fee in the same amount as the membership fee of the JCUSA).
When announcing that the ACCC would permit JCU to have on-going immunity from
legal action over the enrolment policy the then Chairman of the ACCC, Professor
Alan Fels, noted:
"In assessing the [JCU] notification, the ACCC was not asked to
assess the merits of compulsory student association membership"
(
text in square brackets added)
The ACCC decision in the JCU case was based upon the specific circumstances
applying at JCU at the time. The decision did not mean other universities that might
subsequently have applied for immunity from legal actions for breach of third line
forcing provisions would necessarily have been permitted by the ACCC to maintain
that immunity.
As it turns out, since the JCU case have been no further notifications filed with the
ACCC by universities seeking immunity from legal actions by the ACCC or by other
parties for third line forcing involving enrolment policies or compulsory amenities
and services fees.
The Howard Government’s second attempt to introduce federal VSU - 2003
On 17 September 2003, approximately four and a half months after the ACCC’s final
decision in the third line forcing case at JCU, the Howard Government made its
second attempt to bring in federal VSU by introducing the Higher Education Support
Amendment (Abolition of Compulsory Up-front Student Union Fees) Bill 2003 (the
2003 VSU Bill) as part of its higher education reform package, Backing Australia’s
Future.
Parliamentary Bills Digest No. 58 2003-04 was prepared for debate on the 2003 VSU
Bill.
Prior to the introduction of the 2003 VSU Bill into the House of Representatives the
Senate had, on 26 June 2003, referred the proposed budget changes to higher
education contained in the Government’s higher education reform package, Backing
Australia’s Future, to the Employment, Workplace Relations and Education
Committee of the Senate for report.
The Senate Employment, Workplace Relations and Education Committee formed a
subcommittee to inquire into the proposed budget changes to higher education. After
conducting an inquiry at which the subcommittee received 486 submissions in
addition to supplementary submissions the subcommittee presented its report entitled
Hacking Australia’s Future to the full committee on 7 November 2003.
Chapter 5 of the Senate’s 2003 Hacking Australia’s Future report was on the subject
of the Government’s proposed 2003 VSU Bill and contained recommendation 39 that
the Bill be rejected in its entirety.
The 2003 VSU Bill did not proceed beyond the second reading in the House of
Representatives.
The Howard Government’s third attempt to introduce federal VSU succeeds - 2005
On 16 March 2005 the Howard Government made its third attempt to bring in federal
VSU by introducing the Higher Education Support Amendment (Abolition of
Compulsory Up-front Student Union Fees) Bill 2005 (the 2005 VSU Bill) into the
House of Representatives. Parliamentary Bills Digest No. 187 2004-05 was prepared
for debate on this Bill.
On 11 May 2005 the Senate referred the 2005 VSU Bill to the Senate Employment,
Workplace Relations and Education Legislation Committee. After conducting an
inquiry the Committee tabled its report in the Senate on 10 August 2005.
The 2005 VSU Bill was passed by the Senate on 9 December 2005 and incorporated
amendments which had been passed in the House of Representatives on 7 December
2005. The Act received royal assent on 19 December 2005 and federal VSU became
law with commencement (subject to transitional provisions) from 1 January 2006.
A copy of the Act is provided at Appendix L of this report.
Considerable further information concerning the VSU debate is available in the
Parliamentary Hansards for 2005 for both the House and the Senate.
There was a large amount of media coverage of the VSU debate over the course of
2005 and in the period following the passing of the 2005 VSU Bill by the Senate. For
purposes of preparation of this report more than 460 historical media articles (not
counting articles in student publications) concerning VSU were reviewed.
The Rudd Labor Government’s Ministerial Consultation on the Impact of VSU - 2008
The 24 November 2007 Australian federal election at which the Rudd Labor
Government won office from the previous Howard Government has led to further
government review of the VSU Issue.
On 17 February 2008 the Hon Kate Ellis, Minister for Youth announced she would be
consulting with the students, the higher education sector, sports and community
groups to improve campus services in the wake of VSU.
Key features of the VSU legislation
The federal VSU legislation implements ‘full blown VSU’ which, in terms of its
application, operates in much the same way as the earlier Western Australian VSU
that was in operation over the years 1994 to 2002. That is, students cannot be
compelled to become members of student organisations and students cannot be
compelled to pay an amenities and services fee.
There are some limited exceptions to the rule that students cannot be compelled to pay
amenities and services fees, to do with things that are essential for a course of study
including in certain circumstances supplies of food, transport or accommodation for field trips.
There are substantial penalty provisions in the legislation which apply to higher education providers that breach the provisions of the VSU legislation. The penalty is
calculated at the rate of $100 (indexed) per Commonwealth Supported Place (CSP) at
the university so penalties in the order of millions of dollars potentially apply where
there is a breach.
As further background on the VSU legislation refer to the DEST set of frequently
asked questions and answers on this topic. The ESOS provisions under the VSU legislation
There are special provisions under the federal VSU legislation relating to on-shore
international students enrolled in higher education institutions. Universities are still
permitted to charge compulsory fees for certain types of non-academic services
provided to international students.
In offering and providing courses to international students116 universities must comply
with various State and Federal Acts and in particular to be registered as providers in
this area universities must comply with the provisions of the Education Services for
Overseas Students Act 2000 (the ESOS Act).
The Education Services for Overseas Students Amendment Act 2005 (the 2005 ESOS
Amendment Act) amended various parts of the ESOS Act. The background to the
2005 ESOS Amendment Act is explained in Bills Digest No. 48 2005-06.
One of the changes arising from the 2005 ESOS Amendment Act was the insertion of
the new subsection 18(2) into the ESOS Act which has the effect of clarifying that a
registered provider (university in this case) does not breach its obligations under the
ESOS Act or any other Act (inclusive of the Higher Education Support Act 2003 the
amended version of which implements federal VSU) by charging overseas students a
compulsory amount as part of the student’s tuition fee, if the amount is for any action
the provider is required to undertake because of the ESOS Act or the National Code of
Practice. Paragraphs 45 through 48 inclusive of the original National Code of Practice provided that:
45 The registered provider must have in place appropriate support services and be able to demonstrate the advice provided to intending
overseas students on these services. These must include appropriate
arrangements for independent grievance handling/dispute
resolution[FN:10], which are inexpensive and include a nominee of the
student if the student so chooses. The procedures must allow for
prompt resolution having regard to the duration of the overseas
student’s stay in Australia on a student visa.
46 The registered provider must ensure that upon arrival, overseas
students have access to information or counselling services in the
following areas:
46.1 Orientation.
46.2 Academic progress.
46.3 Further study.
46.4 Accommodation.
47 The registered provider must discharge their responsibility under
DIMA requirements to approve accommodation/welfare
arrangements for overseas students under 18 years of age.
48 The registered provider must appoint a suitably qualified person
as student contact officer, and ensure that the officer is aware of
their responsibilities. The registered provider must advise
commencing students of the contact details for this officer. The
officer will be responsible for provision of support services to
overseas students, including counselling, which will:
48.1 Promote the successful adjustment by overseas students
to life and study at an Australian institution.
48.2 Assist students to resolve problems which could impede
successful completion of their study programs.
[FN:10] Dispute resolution services may be provided by the
Authority, or by industry associations, or through other dispute
resolution services including mediation or conciliation services.
The combined effect of the 2005 Federal VSU Act and the 2005 ESOS Amendment
Act is that universities are prohibited from compelling students to pay a fee for
amenities and services with the exception that universities are still permitted to
compel their on-shore international students (as distinct from their Australian
domestic students) to pay a fee for nominated amenities and services including but not
limited to orientation week, counselling, services to promote adjustment to life and
study at university and independent grievance handling.
There is nothing under the above ESOS provisions which prevents universities from
charging a separately invoiced compulsory amenities and services fee to on-shore
international students provided the fee is applied in the areas permitted under the
relevant parts of the National Code. Since the introduction of VSU all or nearly all
universities nationally have chosen to subsume any fees for amenities and services of
this type, within the main fee charged to the international student.
Standard 6 Student Support Services of Part D of the National Code of Practice 2007,
which replaced paragraphs 45 through 48 of the original National Code with effect
from 1 July 2007, provides a considerably more detailed statement of the sort of
student support services that registered providers are required to deliver to their
international students.
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