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MIGRATION AGENTS REGISTRATION APPLICATION CHARGE AMENDMENT REGULATIONS 2003 (NO. 1) 2003 NO. 93
EXPLANATORY STATEMENTSTATUTORY RULES 2003 No. 93
Issued by the Authority of the Minister for Citizenship and Multicultural Affairs
Migration Agents Registration Application Charge Act 1997
Migration Agents Registration Application Charge Amendment Regulations 2003 (No. 1)
Section 8 of the Migration Agents Registration Application Charge Act 1997 (the Act) provides that the Governor-General may make regulations for the purposes of section 6 of the Act.
Section 6 of the Act provides that:
• the amount of charge payable on an individual's making of a registration application is the amount prescribed by the regulations for an individual of that kind; and
• the regulations may prescribe different amounts for different kinds of individuals making registration applications.
The purpose of the Regulations is to increase charges payable by certain persons seeking registration or renewal of registration as a migration agent and to restrict access to the lower non-profit registration application fee to certain applicants for registration.
The increases in charges apply only to those persons who seek registration, or renewal of registration, as a commercial, or for-profit, migration agent. There is no increase in charges for non-commercial or non-profit migration agents.
Eligibility for the lower application fee is restricted to those applicants who solely act on a non-commercial or non-profit basis, and who also act as a member of (or person associated with) a non-profit organisation (also acting solely on a non-profit basis).
Details of the Regulations are set out in Attachment A.
A Regulation Impact Statement has been prepared and is set out in Attachment B.
The Regulations commence on 1 July 2003.
0301945B-0305122
ATTACHMENT A
Regulation 1 - Name of Regulations
This regulation provides that these Regulations are the Migration Agents Registration Application Charge Amendment Regulations 2003 (No. 1).
Regulation 2 - Commencement
This regulation provides that these Regulations commence on 1 July 2003.
Regulation 3 - Amendment of Migration Agents Registration Application Chaff Regulations 1998
This regulation provides that Schedule 1 to these Regulations amends the Migration Agents Registration Application Charge Regulations 1998.
Schedule 1 - Amendments
Item [1] - Paragraph 4(2)(a)
This item amends paragraph 4(2)(a) by increasing the charges for commercial or forprofit agents for the making of an application for registration (other than agents operating on a non-commercial or non-profit basis), where the application is made on or after 1 July 2003.
The new amount of the charge payable on the making of an application for registration, other than repeat registration, made on or after 1 July 2003 is $1,760. This is an increase from the previous charge of $1,180.
Item [2] - Paragraph 4(2)(b)
This item amends paragraph 4(2)(b) by increasing the charges for commercial or forprofit agents for the making of an application for repeat registration, where the application is made on or after 1 July 2003.
This item amends paragraph 4(2)(b) to provide that the new amount of the charge payable on the making of an application for repeat registration, made on or after 1 July 2003 is $1050. This is an increase from the previous charge of $950.
Item [3] - Subregulation 5(1)
This item amends subregulation 5(1) to clarify that this subregulation applies to an individual who acts, as disclosed in the individual's registration application solely on a non-commercial, or non-profit, basis and as a member of, or a person associated with, an organisation that operates on a non-commercial, or non-profit, basis in Australia.
This gives effect to the policy intention that where an individual works for an organisation which provides immigration assistance free of charge, the organisation or agent is entitled to pay the lower registration fee which applies to agents working only in organisations that operate on a solely on a non-commercial or not-for-profit basis.
ATTACHMENT B
PROPOSED INCREASE TO REGISTRATION FEES FOR COMMERCIAL MIGRATION AGENTS
REGULATION IMPACT STATEMENT
BACKGROUND
The migration advice industry in Australia was largely unregulated until 1992, at which point government regulation was introduced by means of the establishment of the Migration Agents Registration Scheme (MARS). This scheme was introduced in response to increasing consumer complaints concerning incompetent and unscrupulous agents operating in the industry. Since the implementation of industry regulation, only registered agents have been permitted by law to provide 'immigration assistance' as defined in the Migration Act 1958 (the Act).
In June 1996, the Commonwealth government commissioned a review of MARS. This was the first regulatory arrangement to be reviewed by the Commonwealth as a party to the Competition Principles Agreement. Following the findings of this review, statutory self-regulation was introduced in 1998. The aim was to move the industry towards full (voluntary) self-regulation while maintaining the consumer protection elements of the government (i.e. statutory) regulation scheme.
On 21 March 1998 the Minister appointed the Migration Institute of Australia (MIA) to act as the industry regulator, the Migration Agents Registration Authority (MARA) for a period of two years until 21 March 2000. It was stipulated that a review of the industry would be undertaken within this period.
The MARA was appointed under the Act. The regulatory regime is described principally in the Act, the Migration Agent Regulations 1988, the Migration Agent Registration Application Charge Act 1997 (MARAC Act) and the Migration Agent Registration Application Charge Regulations 1998 (MARAC Regulations), Continuing Professional Development Gazette Notices, and the current Deed of Agreement between the MIA and the Commonwealth (the Deed).
The MARA is responsible for:
• assessing applications for registration by people who wish to be migration agents;
• maintaining the migration agents Register;
• receiving and investigating complaints about registered migration agents;
• sanctioning agents who are found to have breached the migration agents Code of Conduct;
• coordinating the provision of Continuing Professional Development (CPD) activities for migration agents.
The MARA is funded solely through the registration and administrative fees that it charges. The fees are set on a cost recovery basis only. Registration fees account for more than 99% of income. The amount of the application fees is prescribed in the Migration Agent Registration Application Charge (MARAC) Regulations. The Deed requires the MARA, whenever the government changes legislation, to advise the Government if the change will have an impact on its ability to operate and if needed, to request an increase in application fees.
The MARA has advised that between 90 and 95 percent of all registered agents are working in businesses employing fewer than twenty staff (about one half to two-thirds of whom may be agents). The remaining five to ten percent of agents are working in a small number of businesses employing twenty or more staff, but the majority of these large businesses are community (not for profit) organisations.
There have been regular reviews of the effectiveness of regulation by the MARA of the migration advice industry:
• 1999 Review of Statutory Self-Regulation of the Migration Advice Industry, by the Department of Immigration and Multicultural Affairs (DIMA), found that as statutory selfregulation had been in place for only a little over a year, the industry was not yet ready for voluntary self-regulation;
• Ernst and Young Review of the Migration Agents Registration Authority, in September 2000 recommended operational improvements;
• 2000-01 Review of Entry Level Knowledge requirements, by the MARA, from which the MARA is implementing changes to these requirements;
• 2001-02 Review of Statutory Self-Regulation of the Migration Advice Industry (the Review), September 2002, by DIMIA.
This most recent Review made 27 recommendations to improve the regulation of the industry and protection of consumers, and recommended the continuation of the MARA as the regulator of the industry. Particular emphasis was given to issues of:
• quality of service being provided by some agents;
• level of professionalism within the industry;
• level of client service offered by the MARA to their stakeholders; and
• continuing vulnerability of client groups using migration agents including those overseas.
The Government has endorsed all the recommendations of the Review. The recommendations are given in full in Appendix A of this document.
The migration advice industry, at end December 2002 is made up of 2,947 registered agents.
Only 273 work on a non-commercial / not-for-profit basis. This sector has remained low since the scheme was implemented and has declined in percentage terms.
PROBLEM
The MARA has reviewed its financial situation and is concerned to adequately fund its current activities (including the actual costs of processing registration applications) via registration fee payments. The MARA's income / expenditure position has generally been in balance, however, a shortfall in 1999-00 caused some concern. It is also likely that there will be a small shortfall in 2002-03 (perhaps in the order of $50,000):
| Financial
Year
|
$
Surplus or (Shortfall)
|
| 1998-99
|
328,423
|
| 1999-00
|
(149,117)
|
| 2000-01
|
38,969
|
| 2001-02
|
(6,659)
|
Forecasted changes in operating expenses for 2002-03 include increased costs for operating liabilities (including a buffer to cover changes), professional indemnity insurance, adequate numbers of registrations staff, completing implementation of Privacy Act 1988 related changes, consultants and legal fees, Board meetings, infrastructure, increases in salaries, and advertising. The MARA also needs to allocate funds to reviewing its costs as the industry regulator, as required under the Deed.
Furthermore, the MARA, with the support of the Government, wishes to particularly implement additional measures recommended by the Review, as well as important MARA initiatives and recommendations not yet implemented from the other reviews. The following expenses are forecasted:
• $160,000 for implementing a common examination (MARA review of entry level knowledge as well as Review recommendation 3)
• $60,000 for redeveloping their website;
• $112,250 for employing an additional 1.5 staff to respond to complaints.
• $100,000 to provide agent materials e.g. an information leaflet on the regulation of the industry and how best to employ an agent - for agents to provide to their clients (Recommendations 18 and 25 of the Review);
• $175,000 to introduce sub-committees to implement the outstanding recommendation of the Ernst and Young Review (Recommendation 24 of the Review); and
• $120,000 for a set of advertising campaigns to raise consumer awareness about the regulation of migration agents (Recommendation 18 of the Review).
Given this projected expenditure increases on this range of items, the MARA's 2003-04 financial position could be precarious without an increase in income.
The MARA also anticipates that the number of initial registrations for commercial agents to trend downwards over time, due to the introduction of higher entry standards (recommended by the Review). It predicts that re-registrations will stabilise.
The MARAC Act sets the limit for registration application fees that may be charged. The limit is currently $1,800. The MARAC Regulations prescribe the actual application fees which the MARA currently charges, within this limit:
| Type
of fee
|
Amount
| |
| Commercial
|
Initial
|
$1,180
|
| Re-registration
|
$950
| |
| Non-commercial
|
Initial
|
$160
|
| Re-registration
|
$105
| |
It is proposed that the initial registration fee rise from $1,180 to $1,760 (49.1 percent) and the reregistration fee from $950 to $1,050 (10.5 percent). It is proposed that the increase would take place from 1 July 2003. There is no proposal to increase registration fees for non-commercial agents.
Based on this proposal, the MARA has forecast that the increased fees would provide about $577,000 per annum in additional revenue. These additional funds are likely to put the MARA into a sound position without an excessive surplus in future years.
OBJECTIVE
To set a level of registration fees to be paid to the MARA which will provide it with adequate funds to continue to carry out its current operations, improve its effectiveness as industry regulator, find further internal efficiencies, act in a more effective and timely manner regarding registration applications and complaints handling, and implement new measures recommended by the Review.
IDENTIFICATION OF OPTIONS
OPTION 1
Increase commercial agent fees as requested by the MARA:
| Type
of fee
|
Current
amount
|
Proposed
amount
| |
| Commercial
|
Initial
|
$1,180
|
$1,760
|
| Re-registration
|
$950
|
$1,050
| |
| Non-commercial
|
Initial
|
$160
|
no
increase
|
| Re-registration
|
$105
|
no
increase
| |
OPTION 2
Increase fees to a lesser degree for initial registration applications. Compensate for this by increasing the fee rise for re-registrations.
OPTION 3
To achieve the same financial outcome, increase fees for all agents. This will spread the impact of fee increases to non-commercial agents. As a result commercial fees would be increased to a lesser degree.
OPTION 4
Do not increase fees. Instead, in order for the MARA to continue operating within its current finances and implement the review changes it should implement further operational efficiencies.
It is important to note that the regulation of the migration advice industry, and in particular, the effectiveness of the MARA, has been regularly reviewed. Ernst & Young conducted an efficiency review of the MARA in late 2000, which aimed to clarify its financial viability and provide an improved basis for setting registration fees. The report found that there was considerable scope for improvement in MARA's procedures and that the Authority needed to sharpen its customer focus and streamline processes, especially in relation to repeat registration and complaints handling. It also analysed costs and identified potential savings. The MARA has fully implemented all but one of the recommendations.
DIMIA has also supported efficiency and cost reduction for the MARA through legislative change to enhance, for example, the ability of the MARA to efficiently process certain registration applications of concern. DIMIA will continue to support such enhancements, and is presently drafting legislation to allow the MARA to streamline approval and notification of CPD activities.
There is limited potential for further efficiency gains. If this option was followed it is predicted that the MARA would be unable to make up the shortfall in operating revenues by introducing further efficiency measures. The MARA would also be unlikely to be able to implement, either fully or in part, the recommendations of the Review and there would be a substantial risk that the level of consumer protection offered by the MARA would fall.
As this option is not viable it will not be analysed further in the RIS.
IMPACT ANALYSIS
AFFECTED PARTIES
The parties likely to be affected by each option are:
• The Migration Agents Registration Authority;
• Migration agents working in the commercial sector, generally in small to medium businesses;
• Migration agents working in the small non-commercial sector, for example, in not for profit community organisations;
• Consumers - clients of migration agents
• The Department of Immigration and Multicultural and Indigenous Affairs; and
• The community (those with particular concerns are community organisations serving ethnic communities and more vulnerable consumers, and members of parliament).
EFFECT ON EXISTING REGULATION
Measures to provide an adequate financial base to the MARA's work in the coming years support and strengthen the effectiveness of the existing regulatory regime without modifying it.
COST / BENEFIT ANALYSIS
Option 1 - Increase registration fees for commercial agents, particularly for initial registration
Costs
• A substantial increase in initial registration fees for commercial migration agents and a small increase in re-registration costs for these agents. The proposed increase in the registration fees is significant - well beyond the CPI increase of 8.9% from 2001 to 2003. However, the increase is within the fees limit set by the MARAC Act. The last fee increase on 1 July 2001 (2 years ago) in relation to commercial agents was from $1,085 to $1,180 (ie by $95 or 8.7 percent) for initial registration and for re-registrations from $870 to $950 (ie by $80 or 9.2 percent). Option 1 will increase initial registration fees from $1,180 to $1,760 (49.1 percent) and re-registration fees from $950 to $1,050 (10.5 percent).
The Review estimated that the full costs attributable to the regulatory scheme for a migration agent to operate their business were:
> Up-front compliance costs for each person entering industry including qualifications, initial registration fee, advertising of intention to apply and library: $6,950
> Ongoing costs for each agent including registration fee, Continuing Professional Development, library and insurance: $6,500
The increase in initial registration fees will increase compliance costs in an agent's first year of business to $7,820 (12.5% overall). The increase in re-registration fees will cause annual ongoing costs to rise to $6,600 (1.5% overall). These overall compliance cost increases are in line with the 8.9% CPI increase.
These increases may make some migration agents withdraw from the industry if their income is no longer adequate to support these costs. However, the number of agents withdrawing may have little effect on the total number of agents in the industry due to the continuing growth of the industry. It is also notable that since the MARA's first full year of operation, 1998-99, there has been a regular increase in initial registration fees (from $1,000 in 1998 to $1180 from 1 July 2001) but the commercial sector of the industry has continued to grow (from 1826 to 2503 agents at 1 July 2002). Furthermore, although each year a number of registered agents decide not to continue in the industry and let their registration lapse, the number of agents (both commercial and non-commercial) doing this each year has decreased from 836 to 338. It can be concluded from these figures that increases in fees to date are unlikely to be the main reason that agents have left the industry.
Ongoing criticism by those agents, businesses and community groups who regard the fees charged as excessive. The Review found that "the level of expense required for individuals seeking to enter the migration advice industry has been criticised in the past". However, it also decided that the fees are in line with those charged by other industry regulatory bodies such as the legal profession.
As the costs of running a business increase for commercial migration agents, these costs are expected to be passed on to clients of agents in higher fees for services. Based on information given by the MARA in September 2002, costs of registration and ongoing compliance costs which may be passed on to clients at that time were estimated to be from $8-$14. The proposed increase may lead to service fees being increased by $8-$16 depending on whether the agent is in his/her first year of registration, or re-registering. However, to gather accurate data on the costs passed onto consumers by agents, a comprehensive survey would need to be conducted across all sectors of the migration advice industry. It is difficult to predict costs in relation to agents and their clients as they would vary greatly from agent to agent. Some agents have hundreds of clients while others may have only one or two. Their areas of speciality vary too, as does the degree of complexity in assisting with certain visa subclasses, which may be reflected in higher fees.
Benefits
The proposed fee structure will more accurately reflect the true costs to the MARA of assessing initial registration applications which involves a much wider checking regime. This is in line with its cost-recovery funding regime. It will have a smaller impact on those agents seeking re-registration. This is justified as the costs of assessing re-registration applications are less (see further comparison of these costs in Option 2 below). While under this option non-commercial agent fees are not set at a cost recovery level, it is expected that the MARA will be able to streamline the processing of registration applications for these agents which will reduce the difference between the non-commercial fee collected and actual processing costs.
The MARA has predicted that the increases will place them in a sound financial situation and prevent a shortfall in income. In 2002-03 the shortfall is expected to be around $50,000, but in 2003-04 is expected to be much higher and their financial situation could become precarious. Forecasted expenses for 2002-03 to be met include increased costs for operating liabilities, insurance, staffing, consultants, Board meetings, infrastructure, advertising and reviewing the MARA's costs as the industry regulator, as required under the Deed of Agreement. The increase in fees will enable current operations to continue.
The increased fees would provide about $577,000 p.a. in additional revenue. These additional funds are likely to put the MARA into a sound position without an excessive surplus in future years.
• The increase in application fees will not change the existing regulatory framework, but is aimed at enhancing the MARA's effectiveness as industry regulator. In general, the ability of the MARA to sustain and improve its work as industry regulator is critical to increasing consumer awareness and protection, enhancing the professional reputation of the industry and accordingly its ability to attract custom, preventing registration applicants who are not fit and proper persons from entering the industry, removing unprofessional and unscrupulous agents from the industry; ensuring agents have appropriate knowledge, reducing exorbitant fees for consumers, and reducing the occurrence of agents and clients lodging applications with no hope of approval, in order to delay a client's departure from Australia and/or increase their income. Under this option the MARA will be able to implement recommendations made by the Review and enhance its operations particularly in the areas of:
> improving client access and information (via the Internet);
> providing information for consumers about the industry and how to employ an agent, including an advertising campaign;
> ensuring migration agents have a sound knowledge of migration law and procedure through introduction of a common entry examination;
> more efficient decision making via the introduction of sub-committees of the Board; and
> more resources dedicated to complaints handling to maintain and improve productivity in this area in spite of an expected increase in the number of complaints.
• By significantly increasing only initial registration fees at this time the MARA still has some capacity to increase re-registration fees in later years up to the level of the fees limit of $1,800. Leaving this flexibility is important as it is expected that the number of agents entering the industry will stabilise. After that stabilisation, fewer fees will be collected for initial registrations and re-registrations will become the main income source. If this is the case, re-registration fees may have to rise to compensate for the fall in income from initial registration fees. The emphasis of the MARA is likely to shift also from maintaining high standards in the industry by preventing unsuitable applicants from being registered, to removing registered agents from the industry through the complaints and sanctioning processes. As the prescribed means by which the MARA may obtain income is by imposition of registration fees, the processes of complaints investigation and applying sanctions do not have any separate cost recovery mechanism. Therefore, if complaints increase, investigation and sanction costs will be borne out of registration income.
• The cost burden on voluntary community organisations which offer the services of noncommercial agents will continue to be minimal. These organisations assist the most disadvantaged clients who have no funds to pay fees for commercial agents and ensure that consumers at all levels of society have the option of accessing immigration assistance. Any increase in registration fees, which are often covered by the organisation, is likely to reduce the size of the non-commercial sector. This concern was reflected by Senator Bartlett during the debate on 20 June 2002 of the Migration Legislation Amendment (Migration Agents) Bill 2002 and the Migration Agents Registration Application Charge Amendment Bill 2002, who said: "...I would not want to suggest that the Democrats would automatically lend their support to future rises, even if they are just CPI increases, for non-commercial migration agents, because of the ongoing burden that those organisations operate under."
Option 2 - Increase registration fees for commercial agents - for both initial and re-registration
Costs
• This option does not fully recover the cost to the MARA of the initial registration process and would involve cross-subsidisation of initial registration costs by re-registration fees. Assessment of initial registration is a more detailed process as the MARA has no knowledge of the applicant or their history in the industry. Re-registration, while requiring some information to be supplied again, to a large extent utilises the information provided during the initial registration process. Registration requirements at initial registration not assessed at repeat registration include:
> Evidence of publication of intention to register as an agent, and any objections made following publication
> Certain particulars of partnerships and corporations
> Federal Police Criminal History check
> Evidence of Australian citizenship
> Details of immigration assistance given while not registered, advertising for immigration assistance or providing immigration assistance for a fee or reward
> Evidence of two separate accounts if agents are to pay application fees on behalf of clients
> Proof of proficiency in the English language, such as suitable tertiary or high school qualifications, International English Language Testing System (IELTS) test results, or statutory declarations
> Confirmation from a public service employer that they approve of the person giving immigration assistance
The major item which is assessed at re-registration which is not assessed at initial registration is the agent's achievement of the required 10 points of Continuing Professional Development (CPD) activities. However, re-registration is a less resource intensive task requiring consideration of less documentation.
• Amendments are being made to legislation and by the MARA to introduce a new common entry examination for initial registration applicants. While the examination process is expected to be self funding, the Authority is required to underwrite its initial development. If the examination process is unable to be self funding the MARA will also be required to underwrite this and has allocated $160,000 for this purpose. If initial registration fees are not increased in line with the costs of introducing the common entry examination the MARA will be under-recovering the cost of processing initial registrations.
• The reduction in initial registration fees would merely shift to an increase in re-registration fees to achieve the same revenue result. An agent starting and remaining in the industry would pay higher fees throughout their migration agent career. In fact, if they stay in the industry for many years the higher annual re-registration fees may result in them paying far more than they would have paid for the higher one-off initial registration fee. This may be seen as disadvantaging agents who are committed to the industry and performing with sufficient professionalism to maintain a healthy business. New agents who fail financially in the first year and leave the profession, perhaps because of a lack of knowledge or professionalism will have benefited from the lower fee.
• By increasing re-registration fees at this time there will be less capacity to increase reregistration fees in later years. Leaving this flexibility is important as it is expected that the number of agents entering the industry will stabilise. After that stabilisation, fewer fees will be collected for initial registrations and re-registrations will become the main income source. If this is the case, re-registration fees may have to rise to compensate for the fall income from initial registration fees.
Benefits
• This option also provides most of the benefits identified in Option 1 except in the following areas:
> the cross-subsidising of initial registration fees by re-registration fees does not reflect actual cost recovery, and
> this option reduces the ability to the MARA to increase re-registration fees in future as the composition of the industry changes.
• Futhermore, agents who spend a short time in the industry will benefit from comparatively reduced initial registration fees. Also, the increase in the initial registration fee will be less significant than the Option 1 proposal and may attract less opposition from agents.
Option 3 - Increase registration fees for commercial and non-commercial agents
Costs
• The Review commented that "Over the last three years, the commercial sector has continued to increase while the non-commercial sector has steadily diminished." As at 1 September 2002, there are 264 non-commercial agents (9.3 % of all agents). The Review considered the option of also increasing fees for non-commercial agents in order to reduce the fees paid by commercial agents. It did not recommend a change.
• Increasing non-commercial fees may not have any effective impact on the MARA's revenue:
> the number of non-commercial agents is very small;
> any increase to non-commercial fees would only form a small part of total revenue. For example, even if the non-commercial initial registration fee were to be increased by 100% from $160 for initial registration to $320 (average of 24% of registrations) and $105 for repeat registration to $210 (average of 76% of registrations) the revenue earned from these agents would increase by only $31,185 to $62,370. However, to achieve the same revenue outcome for the MARA (a recommended increase of $577,000), raising non-commercial fees to this extent would only enable commercial agent fee increases to be reduced by no more than three percentage points;
> Such an increase in non-commercial fees is likely to further encourage non-commercial agents to leave this sector, leading to a flow-on effect whereby there will be fewer noncommercial agents to pay the higher non-commercial registration fees.
• Increasing fees for non-commercial agents may lead to a decrease in the number of agents offering non-commercial services in the community sector. These non-commercial agents offer their assistance to some of the most vulnerable consumers who have contacted community service organisations, and who axe unlikely to have the financial resources to pay the fees charged by commercial migration agents. Any decrease in the size of the noncommercial sector is therefore of concern, and for this reason, for some time there has been no increase in the registration fees for this group.
Benefits
• A small reduction in the intended increase in registration fees for commercial agents may possibly be achieved, without jeopardising the MARA's operations or ability to implement the Review recommendations.
• Increasing registration costs for non-commercial agents will more accurately reflect cost recovery. The MARA has found actual assessing costs for these applications to be higher than for commercial applications, as typically non-commercial agents fail to provide all the required documentation, fail to complete the application form, or fail to provide proof of completion of CPD activities.
CONSULTATION
The MARA provided a detailed submission in support of its request for the fee increase. The MARA also commented to the Review that "Applying the market model of analysis of a properly competitive environment, costs to consumers are minimised by competition among suppliers and / or by increased numbers of practitioners meeting existing or expanded demand... In the practical market place of this industry, however, the MARA's impression is that consumer choice of agent is driven less by prices charged than by perceived prospects of success if a particular agent is used, ease of communication, indications given about prospects of success and the like. The complaints record shows that cost of services is not a major issue." In support of this assertion, the following annual report data is relevant:
| Issues
presented in complaints
|
1999-2000
|
2000-2001
|
2001-2002
|
First
six months of 2002-03
|
| Standards
of professional conduct
|
78.5
|
76.4
|
81.2
|
84
|
| Fees
and charges
|
8.5
|
8.8
|
6.1
|
6
|
| All
other issues 8 areas
|
13
|
14.8
|
12.7
|
10
|
Furthermore, the MARA observed that "the community sector is an area of especially high vulnerability to poor advice, as it also vulnerable to problems or accessibility generally to the Australian migration system through the DIMA offices. The decline in the number of not-for-profit registered agents (both the absolute number and as a proportion of registered agents) is therefore an area of particular concern to the MARA."
The MIA is the single professional body representing the migration advice industry and represents 35% of registered migration agents. The MIA is also appointed by the government as the industry regulator (the MARA). The MARA Board (made up of current migration agents, members of the MIA, and representing the MIA membership) has considered that the increase in fees for migration agents, particularly for new agents entering the industry, is reasonable and sustainable.
The 2001-02 Review provides some insight into community and industry views on the regulation of the migration advice industry, and on the level of registration fees. The Review was conducted by DIMIA with the assistance of an External Reference Group (ERG) and received submissions from individuals and organisations (see Attachment B).
None of the submissions, even those from registered migration agents, commented that registration fees in particular, should be reduced or that they were too high. General comments were made about start-up fees as a whole being high and perhaps prohibitive for some.
Non-commercial organisations recognised that non-commercial agent registration fees were low, but expressed concern that overall costs for remaining registered as a migration agent were a barrier to non-commercial agents continuing to operate.
The Law Council of Australia, prior to the appointment of the MARA, asserted that lawyers with practicing certificates should not be subject to regulation by the MARA, but rather by their own legal professional bodies. In particular the Council has expressed concern that lawyer agents who must pay their annual practicing certificate fees are also required to pay high migration agent fees. The Council believes that the number of lawyers practicing as migration agents has fallen due to the level of agent registration fees they must also pay.
However, there is a financial advantage for lawyers holding practicing certificates when seeking initial registration as a migration agent. Those with practicing certificates are not required to attend a sound knowledge course (and or take an examination) to demonstrate their suitability to be an agent. This will be a saving of around two-thousand dollars in comparison to other applicants.
The Springvale Community Aid and Advice Bureau submitted to the Review that "There is a dearth of reliable, adequately resourced not for profit, non fee charging agencies that remain in this field of work".
The Immigration Advice and Rights Centre (IARC) submitted to the Review that "In June 1999, 17% of migration agents were non-fee charging agents while at 30 June 2001, only 11% were non-commercial agents or not-for-profit migration agents. Over the last three years there has been a regrettable decrease in the number of registered migration agents providing advice to members of the community. The reasons for this decline are varied but from IARC contact with community workers we believe the most critical factor is the increasing costs of registration. Despite a reduced initial registration fee in comparison with commercial agents, there are significant costs which are a barrier to registration of community based migration agents. Unlike commercial agents, non-fee charging agents cannot adjust their charges to accommodate the costs of registration and the costs of acting as a migration agent. These costs are prohibitive for community based agents in small organisations and have a particular impact in rural and remote areas. There is a growing demand for migration advice in rural and remote areas and we are not aware of any non-charging migration agents in rural and regional NSW."
The IARC suggested that non-commercial organisations be allowed to advertise the intention of its personnel to be registered as migration agents as a group, rather than require each agent to publish this intention as an individual. This would reduce the costs of this requirement which were estimated at around $400-$600 per agent. The Review adopted this suggestion as one of its Recommendations. DIMIA now intends that legislation be amended to allow all organisations, both commercial and non-commercial, to bulk publish in this way.
The Legal Aid Commission of New South Wales (LACNSW) expressed concern of high publication, CPD and start-up costs reducing the number of persons registering to practise in the not for profit or community sector and suggested that the MARA carry the costs of regular publication of persons intending to register. LACNSW commented "The publication fee coupled with the cost of undertaking the education and setting up a practice could, in fact be a deterrent to registration and provide an incentive for persons to continue to operate as unregistered migration agents."
CONCLUSION AND RECOMMENDED OPTION
DIMIA considers that the MARA has targeted its proposed fee increases carefully. A fee increase to the non-commercial sector has been avoided due to its potential disproportionate impact. Re-registration fees have been held to near indexation levels. The largest fee increase is for initial registration and reflects the higher cost of assessing applications from people who do not have a history in the industry. However, the total increase on the annual regulatory related costs for a new agent (which include costs of advertising an intention to become registered and of completing the Sound Knowledge course and exam) is comparable with the CPI increase in the last 2 years (8.9%).
Without the proposed increase in revenue from application fees the MARA has predicted that it will face a shortfall in revenue and, given an expected increase in complaints about migration agent conduct and registration applications, will be unable to efficiently handle the workload.
The fee increase will enable the MARA to continue its current operations and implement important improvements recommended by the Review. The Review has also recommended that the new Deed of Agreement currently being negotiated with the MIA include a number of performance measures. These will assist in assessing how effectively the MARA has used the additional revenue. The MARA has already made a number of changes to its procedures to use its existing resources more efficiently, particularly in the areas of reducing cumbersome decision making processes and automating routine administration.
It is critical to the future integrity of the migration advice industry that the MARA is permitted to raise adequate funds via cost-recovery. The need is for unprofessional, unethical and incompetent agents to be prevented from operating in the industry by either refusing their registration or sanctioning them. Standards of knowledge of the complex and ever changing migration legislation and policy must remain high. It is important that all consumers in the migration advice industry, especially the most vulnerable groups, have up-to-date and useful information about what they can expect from their agent.
Effective regulation of the industry by the MARA is broadly supported across commercial, legal, community and government sectors. Although the fee increase is likely to flow on to consumers of migration advice, consumers appear to be most concerned about the professional standards and success rates of their agent, not about fees charged. Consumers who report exorbitant fees (sometimes in the tens of thousands of dollars for lodging a simple visa application) are not charged such fees because of high costs of maintaining registration and running a migration agent business, but rather because of the unscrupulous practices of particular migration agents who take advantage of ill-informed and vulnerable consumers.
IMPLEMENTATION AND REVIEW
From 1 July 2003 the MARAC Regulations will be amended to increase the registration fees for commercial migration agents, as requested by the MARA.
Migration agents will be advised of the change to registration fees in advance by the MARA via its website and its telephone information service, by the MIA through information it provides to members, and by the Department on its website. It is estimated that only a small number of agents do not have internet access (about 5%). This notification will take place before 1 July 2003.
The MARA has, in seeking the fee increase, proposed a number of initiatives, including the appointment of additional staff to deal with complaints. The fee increase will be linked to improved complaints handling and this will be reflected in the new Deed of Agreement which is now being renegotiated (it expires on 30 June 2003). The following performance monitoring measures will be included in the new Deed which relate to complaints:
> performance targets - including improving the average time taken to finalise complaints and the regular reporting on performance against these to DIMIA and the Minister;
> quality assurance checking by DIMIA of a random and targeted sample of complaint finalisations and the provision of feedback on sample cases surveyed; and
> measures to provide for prioritising of complaints identified by DIMIA as needing urgent attention and reporting on progress with those complaints.
Other performance measures will be included in the areas of registration processing, Continuting Professional Development (CPD), discipline, industry monitoring and customer services.
It is anticipated that the new Deed will also include clauses whereby the Institute's costs as the MARA will be reviewed on a periodic basis to ensure the costs are appropriate, and to provide information to assist in setting the level of registration fees. Such review will assess areas for improved efficiencies and whether additional resources are required for the performance of statutory functions to the standards expected by stakeholders.
Any increase in fees subsequent to the proposed 1 July 2003 increase will depend on the MARA adequately improving its performance in complaints handling and effectively implementing the Review recommendations which it is proposing to implement as a result of the fee increase.
APPENDIX A: REVIEW RECOMMENDATIONS
Future of Statutory Self-Regulation
Recommendation 1
To provide ongoing consumer protection, statutory self-regulation should be extended and reviewed again at an appropriate juncture. The current framework should no longer be subject to a sunset clause.
The MIA and DIMIA should immediately commence consultations to define mutually-agreed key milestones in the development of the industry and in the effectiveness of the MIA as the regulator. These key milestones will relate to enhancements in the effectiveness of the MARA in its core roles - registration, Continuing Professional Development (CPD), complaints handling, discipline and industry monitoring.
The key milestones and ongoing review process that will enable proper assessment of progress towards them should be included in the Deed of Agreement.
The Deed of Agreement should be renegotiated to reflect the Government's recommendations arising from this Review.
Minor legislative changes of a technical nature (listed at Attachment D) should be made to refine the present statutory scheme endorsed by this Review.
Recommendation 2
To ensure that the MARA is fully representative of the migration advice industry, the MARA should be enabled to include community representatives or other non-MIA representatives in its decision-making processes in a manner to be agreed with DIMIA.
Consumer Protection - Professionalism and Competence
Sound Knowledge and Entry Requirements
Recommendation 3
To improve competence through sound entry-level knowledge, the sound knowledge course and examination should be lengthened and made more comprehensive.
The sound knowledge course and examination should cover the Migration Act and Migration Agents Regulations and the responsibilities of migration agents under the Code of Conduct. It should also include information for agents about running a business and their responsibilities as agents, including CPD requirements, their obligations to clients, to the MARA and to DIMIA.
An alternative means of entry should also be introduced whereby individuals could complete a period of supervised practice followed by an entrance examination. Only lawyers with a current practising certificate would be exempt from these initial entry requirements.
The MARA should be given the power to refuse to register a person seeking initial registration unless they have sound knowledge of migration procedure or other relevant qualifications.
Recommendation 4
To reduce the cost of initial registration for non-commercial migration agents, allow for bulk publishing of community organisation employees' details.
Continuing Professional Development
Recommendation 5
To improve ongoing knowledge and competence within the industry across the full scope of immigration assistance, reassess the differentiation between 'core' and 'elective' activities.
Require migration agents to pass a certain number of assessable CPD courses each year prior to re-registration (i.e. repeat and late registration; see Recommendation 9).
Some activities, including ethics, business management and migration legislative and procedural change should be made mandatory in the first year of registration and periodically thereafter. Amendments to portfolio legislation should be the subject of a mandatory assessable annual activity.
Recommendation 6
To ease the often complementary continuing education obligations of lawyers who are also registered migration agents, cross-accreditation with legal professional bodies should continue to be pursued by the MARA.
The MARA should make the process whereby prospective CPD activities are screened more transparent.
Recommendation 7
The MARA should develop an educational program on best practice to assist agents understand the requirements of the 'fit and proper person' and 'person of integrity' tests.
Recommendation 8
To better measure client satisfaction, DIMIA and the MARA should introduce regular client surveys and a survey of migration agents.
Recommendation 9
Ensure that the MARA has the power to require agents to meet CPD requirements within an appropriate time frame prior to lodging an application for re-registration (i.e. repeat and late. registration).
Define registration requirements for all agents applying to register for initial or re-registration.
Recommendation 10
Ensure that the MARA has the power to apply a 'fit and proper person' test in respect of applicants for re-registration.
Certified Migration Agent Scheme
Recommendation 11
The MIA/MARA and DIMIA should consult further on options for the possible development of a Certified Migration Agent scheme that would encourage both high standards of professionalism and better consumer protection within the migration advice industry for the benefit of clients.
Explore the feasibility of requiring migration agents, either as part of the CMA scheme or within the existing arrangements, to hold professional indemnity insurance at a specified minimum level to better protect clients from professional negligence.
Discipline and Ethics
Recommendation 12
The existing sanction to caution migration agents should be strengthened to allow for conditions to be attached.
The onus should be on the agent to satisfy the MARA, by means including but not limited to written advice, and disclosure or provision of or access to documents, that he or she has complied with any conditions attached to the sanction.
Recommendation 13
To enable the MARA to pursue unscrupulous agents who have been sanctioned and who inappropriately seek to stay within the industry, strengthen the definition of 'relationship by employment'.
Recommendation 14
To improve the MARA's ability to protect the interests of the client whose migration agent has become inactive, increase the penalty for inactive agents who fail to comply with s.306D of the Migration Act. The MARA should also be provided with the power to:
• require an agent to return original documents to the client and apply a penalty should the agent fail to comply;
• obtain necessary client information from migration agents whose registration it is considering cancelling, suspending or not renewing, or from agents who choose not to renew their registration; and
• appoint a representative to obtain copies of client files from the premises of a deceased or inactive agent.
Recommendation 15
Strengthen the MARA's powers to publish, for a specified period, the names on its Register of Migration Agents and elsewhere on its website of all agents who have been sanctioned and the reasons for the caution, suspension or cancellation.
Recommendation 16
To support the integrity of the migration and humanitarian programs, improve the monitoring of agents and develop more effective means of sanctioning agents who lodge high numbers of vexatious, unfounded or incomplete applications.
Recommendation 17
In support of more efficient handling of complaints, provide the MARA with the power to investigate matters referred by an organisation, as distinct from formal complaints lodged by individuals.
Recommendation 18
To ensure customer awareness, strengthen the Code of Conduct to require migration agents to provide their clients with detailed and clear information on the industry and its regulation, on complaints handling and on what they can expect from migration agents and the MARA.
This information would be prepared and maintained by the MARA and evidence that it has been provided to clients kept by the migration agent.
Develop an education strategy aimed at more vulnerable consumers. This should include establishment by the MARA of regular consultations with the community sector.
Recommendation 19
To enhance consumer protection and further protect the credibility of the MARA as the industry regulator:
• clarify and strengthen conflict of interest provisions in the Code of Conduct;
• clarify provisions in the Code of Conduct relating to the financial duties of migration agents;
• enable the MARA to require information from registration applicants in statutory declaration form and/or at an interview;
• enable the MARA to charge migration agents who seek to change status from noncommercial to commercial during a registration year a pro rata amount of the commercial application fee; and
• ensure wider publication of criminal and civil sanctions.
Overseas Practice
Recommendation 20
To strengthen consumer protection to visa applicants offshore, amend the legislation to extend registration to foreign nationals.
This would include a measure limiting the categories of people who can be appointed as representatives or agents of a visa applicant.
Decision-making
Recommendation 21
To ensure efficient decision-making, the MARA Board should establish specialist subcommittees responsible for specific types of decisions. MARA officers should receive more frequent training on administrative decision-making.
Client Services
Recommendation 22
To strengthen client services, a Client Service Charter setting out the MARA's service standards and responsibilities towards migration agents and their clients should be completed and posted on the MARA's Internet website and made available in hard copy.
Recommendation 23
To further support client services and consumer protection, procedures and practices should be reviewed and streamlined to enable proper public access to the MARA Secretariat, especially regarding complaints and registration inquiries.
Efficiency of the MARA
Recommendation 24
To improve the operations of the MARA and its credibility as the industry regulator, the MARA should implement measures to achieve, by end 2002, all of the remaining recommendations of the Ernst and Young Review of the Migration Agents Registration Authority of September 2000.
Fraud and Unregistered Practice
Recommendation 25
To ensure faster and more effective investigations and convictions of unregistered agents and migration agents engaged in fraudulent activities, DIMIA should:
• where other priorities allow, attach higher priority to investigations of unregistered practice;
• build stronger relationships with the Commonwealth Department of Public Prosecutions to facilitate prosecution and finalisation of cases;
• revise its guidelines to its employees on referring cases of suspected unregistered practice or immigration fraud to DIMIA's investigations units to improve both the quality of information referred and the speed of referral; and
• undertake wider publicity of prosecutions of unregistered practice.
Fees
Recommendation 26
To improve customer protection and the ability of clients to benefit from competition, the client information to be developed by the MARA (Recommendation 18) should include guidelines on how best to employ a migration agent and 'average fee' information to better ensure clients receive value for money.
Relations Between Migration Agents and DIMIA
Recommendation 27
To promote professional relations between migration agents and DIMIA employees, strengthen existing prohibitions regarding abusive, offensive and intimidatory behaviour by migration agents towards individuals.
Develop clearer guidelines regarding DIMIA employees' obligations towards registered migration agents.
APPENDIX B: SUBMISSIONS MADE TO THE REVIEW
The Review was steered by an External Reference Group comprised of:
• Mr Ian Spicer (Chairperson), formerly Head of the Australian Chamber of Commerce; he performed the role of Chairperson for the review of the Migration Agents Registration Scheme in 1996 and the review of Statutory Self-Regulation in 1999;
• Mr Ian Tonking (Member), Barrister and ERG Member for the 1996 and 1999 reviews;
• Ms Robin Hunt (Member), Senior Member of the Migration Review Tribunal (MRT) and solicitor; and
• Mr Tom Drakopoulos (Member), registered migration agent and Past President of the MIA.
Submissions were received from:
• Commonwealth Director of Public Prosecutions
• Legal Aid Commission of New South Wales
• Refugee Review Tribunal
• Migration Institute of Australia
• Migration Agents Registration Authority
• Law Council of Australia
• Law Society of New South Wales
• Immigration Rights and Advice Centre
• Geelong Migrant Resource Centre
• Springvale Community Aid and Advice Bureau
• Business Skills Section, DIMA
• Australian Council of Social Services (ACOSS)
• Michael Hutchinson, DIVA employee
• Paul Vilips, Registered Migration Agent
• John Gillespie, Registered Migration Agent
• Harvey Wade, Consumer
• Mervyn Rothstein, Lawyer and Registered Migration Agent