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Universities, TAFE and Colleges to Lose International Student Income

Universities, TAFE and Colleges to Lose International Student Income

Everyone will share our pain: ATN. Universities could cop $7 billion in “collateral damage” from policy measures targeted at other international education sectors, according to the ATN.

Student visa restrictions have been given top billing in the list of
problems facing international education, amidst the latest predictions of multi-billion dollar losses from tumbling overseas enrolments.

The Australian Technology Network of Universities (ATN) has also
highlighted higher education as the most economically significant
component of the international education industry, and pleaded for it to be quarantined from immigration department crackdowns.

ATN-commissioned modelling of the economic impacts of the downturn in international education, released last week, estimates that the losses in fee income for higher education providers alone could total $490 million in 2012.

The report, by the John Curtin Institute of Public Policy (JCIPP) at
Curtin University, found that the fee income would be around $950
million less than could have been expected under “modest” growth rates of 3 per cent.

Recent reports commissioned by the private VET peak body ACPET projected the losses across the entire international education industry would total around $550 in lost commencements, and $3.8 billion if foregone growth was also taken into account.

The JCIPP study found that overseas enrolments in higher education alone could slide by up to 100,000 by 2015, costing between $2.5 and $7 billion in fees and destroying between 3300 and 8800 university jobs.

ATN universities would be hit especially hard because of their
“particularly strong overseas student profile”. The report found that
international students comprised over a third of the student population at the five ATN institutions.

And it found that the implications for the broader economy would be far worse, because only 36 per cent of the average expenditure by overseas higher education students in Australia – almost $51,000 per student – goes into fees. The bulk goes into retail goods and services such as accommodation and restaurants.

The downturn in this type of expenditure would total between $2.2 and $5.4 billion in 2015, the report found, costing up to 46,000 jobs outside the education sector.

The report said urgent action was needed and nominated student visa policies as the key area for policy reform, along with permanent residency issues and regulation of quality.

“This is one area in which government has a considerable degree of
control over outcomes,” the report said.

“Given the importance of higher education to the Australian economy, both in terms of immediate economic impacts but also over the longer term, it is essential that government initiates a dialogue across the entire international education sector to address the problems created by recent and proposed policy changes.”

ATN chair Professor Ross Milbourne said the policy settings potentially amounted to “economic suicide”. He said higher education was experiencing significant collateral damage from policy measures aimed mainly at other sectors.

“Higher Education – the largest economic and employment generator in the sector, with the least problems in terms of quality – is already suffering reduced enrolments and lower visa grants,” Milbourne said.

“We absolutely accept there have been serious issues related to
international students that needed to be dealt with. But those did not relate to universities.”

Milbourne stressed the need for an “urgent policy rethink” of student visa arrangements.

“Current student visa restrictions and timing and financial complexities are driving international students away from attending our universities to study in the US and UK.

“Australia’s loss is another country’s gain. That is unacceptable.”

The report said higher education students were economically dominant in international education – despite accounting for just under a third of total student numbers – because they paid higher annual fees and studied longer than students in other sectors.

This also helps explain the relatively buoyant enrolments in higher
education despite big losses in other sectors, the report said. “There
is a lag between reported declines in commencements and declines in enrolments,” it said.

“Nevertheless, the impact of declining commencement numbers eventually manifests itself in lower overall enrolment numbers.”

Department of Immigration and Citizenship statistics indicate that
international higher education student visa grants declined by almost 12 per cent in 2009-10, with offshore grants – mostly commencing students – declining by 25 per cent.

Under the report’s most optimistic scenario, higher education
commencements will decline by 10 per cent next year and remain constant over 2012, before returning to 3 per cent annual growth.

The report’s most pessimistic projections would see commencements falling by 35 per cent next year and remaining flat for the following two years before returning to 3 per cent growth – “albeit from a vastly reduced base”.

One could blame the cynical politics from both sides who have been swayed by misinformation campaigns, including from the university sector. This has been exemplified by the likes of Dr. Bob Birrell (and others e.g. Dick Smith, Bob Carr etc.) conflating issues to facilitate anti imigration and anti foreigner sentiment in the media and political class to scare Australians.

As the definition of population changed in 2006 to include international students, back packers and temp workers spending more than 12 months in Australia, although temporary, they have been viewed as “permanent residents” or “immigrants”, and have caused short term spikes in population growth rates. Unfortunately Universites Australia etc. did nothing to disavow media, politicians and Australians of this notion and the underlying sentiment that (Asian) students are bad for Australia.

2 Responses to “Universities, TAFE and Colleges to Lose International Student Income”

  1. I don’t agree, I think its the right choice for Australia. Students often undercut the job market minimum rate by half, many work in jobs for only $8 to $9 an hour in the city. Places in the city would rather hire cheap students than local people. Local people without skills require and need these jobs. On top of this, people on minimum wages can’t afford to by apartments or homes. This visa change will impact the housing market and bring prices down which will be more fair for local people. The money the education industry makes only goes to a few at the top, unskilled local people suffer for it.

    • Presently, in Melbourne for example (and Perth) there are many openings in the hospitality industry that are not filled in the inner suburbs, and locals are paid as little as international. Most international job competition probably comes from British, Irish and European travellers on WHVs, not Asian students who are more visible. Many Australians do not appreciate the financial and other spin offs from international education e.g. relatives visiting as tourists, home stay accommodation (helps to pay mortgages) etc. However, in e.g. Melbourne one will see an impact from less students i.e. education personnel losing jobs, and less pressure on the rental market which means real estate prices decreasing (though much upward pressure is probably more from banks lending too much, local investors and spruiking). Nothing is stopping local unskilled workers or students getting required skills or looking for work?


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