The NSO works to resolve student complaints about higher education providers. It is a free and independent service available to all higher education students, regardless of the higher education provider they study with.The levy is intended to recover approximately $11.3 million per year to cover the NSO's ongoing operations. The government argues that because the NSO investigates concerns and mediates outcomes involving specific providers, it is appropriate for the sector to support its costs [Explanatory Memo page 2]. A key feature of the legislation is that the specific amount of the levy is not set in the Bill itself but will be "prescribed in regulations." This is intended to provide "flexibility to ensure levy arrangements can be appropriately adjusted over time to reflect the costs of the NSO’s functions" [Explanatory Memo page 9]. To ensure compliance, the Amendment Bill makes the payment of the levy a condition of registration; failure to pay could result in enforcement action by TEQSA, including potential deregistration.
The establishment of a sustainable funding model for the National Student Ombudsman (NSO) is a vital step in protecting the rights and safety of tertiary students across Australia. By utilizing a cost-recovery levy, the government ensures that the NSO remains a permanent fixture of the educational landscape without placing a permanent burden on the general taxpayer. This "user-pays" approach is standard for industry regulators and ombudsmen, ensuring that the entities being overseen—who benefit from the increased public trust a robust complaints system provides—contribute to its maintenance [Judgment].
Central to the "For" case is the NSO's role in the Action Plan Addressing Gender-based Violence in Higher Education. Students, particularly those from vulnerable or marginalized backgrounds, often face significant power imbalances when dealing with large university administrations. The NSO provides an essential, free, and independent avenue for redress that promotes egalitarian outcomes by ensuring that a student's ability to seek justice is not dependent on their personal wealth or legal resources [Judgment]. Furthermore, the NSO serves a systemic function. By investigating sector-wide issues and providing advice on best-practice complaint handling, it drives improvements that benefit all students. Funding this through a levy on providers creates a direct incentive for institutions to improve their internal processes to reduce the systemic issues the Ombudsman must address.
While the goals of the National Student Ombudsman are laudable, the method of funding proposed in these bills raises significant concerns regarding financial transparency and the potential for "cost-shifting" onto students. Although the levy is technically imposed on providers, universities operating on thin margins may inevitably pass these costs down to students through increased service fees or reduced amenities, effectively making students pay for their own advocacy service [Judgment].
A major epistemic and legal objection lies in the use of delegated legislation to determine the levy amount. By leaving the calculation methodology to regulations rather than the primary Act, the Parliament is granting the Executive broad discretion to set what is effectively a tax. This reduces parliamentary oversight and creates financial uncertainty for higher education providers, particularly smaller or private institutions that may struggle with fluctuating annual costs [1].
Finally, making the levy a condition of registration is a heavy-handed enforcement mechanism. Linking an administrative fee to the very right of an institution to operate could be seen as an infringement on institutional autonomy. If a provider has a legitimate dispute regarding the calculation of their levy, the threat of deregistration places them under undue pressure to comply regardless of the merits of their objection [Judgment].
The explanatory memo notes that the levy will be set in arrears and vary year-to-year, making long-term budgeting difficult for smaller providers.
2026-09-10
House of Representatives
Before House of Representatives
Unspecified
Education
Education, Consumer Protection, Discrimination / Human Rights