Any change to international education policy must be carefully considered
By Monash University Vice-Chancellor and President Professor Sharon Pickering
International education is one of Australia’s great economic strengths. It is arguable that international education has stood between Australia and recession. However, people are reasonably asking questions in light of the government’s Australian Universities Accord and the least affordable housing in 20 years.
While those questions are legitimate, before adopting policy changes designed to constrain international student numbers, we should think carefully about the macroeconomic consequences, which could reduce the capacity for governments to ease the current cost of living crisis.
The benefits of international education are large. According to the Australian Bureau of Statistics, international students directly contributed $48 billion to Australia’s exports in 2023. Students particularly benefit Victoria, which earns over 40 per cent of all international student export revenues. International students are net contributors to government budgets – they pay income tax and GST, but are generally ineligible for welfare payments and many government services (most do not even get concessions on public transport). The Grattan Institute has found that those who transition to permanent visas each year will be net contributors of around $12 billion over their lifetime to government budgets.
International education will again help us avoid a recession in 2023-24. Before Covid-19 international students contributed more than a third of all university revenues, effectively funding world leading research and improvements to teaching. Until such time as Australian higher education is funded on par with its international performance, it would be a clear “own goal” to jeopardise the transformational research programs that only Australia’s universities can deliver. Programs such as the world leading Artificial Heart Frontiers Program and clinical trials that will help save hundreds of thousands of lives.
Australia’s top-ranked universities attract world-class students who contribute when they graduate to a high-tech national economy and the advancement of critical and sustainable technologies. And international students are a long-term investment in Australia’s place in the world – those who return to their home country are lifetime ambassadors for Australia; and those who stay can be vital links to their country of origin.
There is a danger that poorly-designed policy change might damage these substantial benefits.
Some have suggested Australia should follow Canada by capping the total number of international student visas.
But that would be a blunt instrument if applied unilaterally. It might deter the students who would contribute most to Australia, and the recent Canadian experience is that applications to universities have dropped substantially since the announcement of an overall cap on the number of international students.
Further, an overall cap would not change the uneven distribution of international students, because we are operating in an international market where students seek the highest quality education and reputation.
We understand the complex environment the federal government faces. We encourage the government to negotiate with individual universities about the number and profile of international students, respecting university autonomy and taking into account the particular university mission and contribution to the nation and to our region.
One policy that simply won’t work is trying to shift student enrolments from highly ranked universities to others. International students typically choose their type of course and university first, and their country second. If international students are prevented from studying at Monash, they are more likely to look at other top 50 global universities in North America, the UK or Europe.
Others have suggested that the federal government should increase budget revenues from international students by aligning the cost of student visas with other visa types. For example, the Grattan Institute has proposed increasing the current international student visa charge, bringing it closer to the cost of many skilled migration visas.
The increase could well affect enrolments at high quality universities, but it would have a much bigger impact on international students planning to enrol in one-year VET courses, where course fees can be as low as $6,000. Depending on precise student numbers, the proposal would raise in the order of $1 billion per year or a 0.1 per cent increase in Commonwealth Government revenue of around $700 billion and potentially add revenue equivalent to 9 per cent of direct government spending on higher education.
International higher education is an Australian success story. Across Australian early childhood education, school education and university education, only Australian public universities are world leading.
Calm thought is required to understand what problems we are trying to solve, which policies would really help, and how to design policy change to preserve the great benefits to Australia of its world-leading university sector performance.
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Professor Sharon Pickering is Vice-Chancellor and President of Monash University.
Published on Wednesday 8 May, 2024 in The Australian. Re-published here in full with the express permission of The Australian.