The federal government will replace its failed international student cap with slowed visa processing in what has been described as “political point scoring” by the former deputy immigration secretary.
The cap, which aimed to drive down enrolments to a maximum of 270,000 by setting limits for individual institutions, was blocked by the Liberals and the Greens in the final sitting days of parliament.
The new Ministerial Direction 111 (MD111), to operate from Thursday, will introduce two categories of student visa processing: “high priority” and “standard priority” instead of capping numbers.
All international education providers will receive high priority processing up to 80% of their indicative international student cap. After reaching 80%, they will receive standard priority processing.
It replaces Ministerial Direction 107 (MD107), which was enacted in December last year as an arbitrary cap that gave visa processing priority to “low risk” sandstone universities and students from “low risk” nations, disproportionately affecting applicants from south Asia.
The minister for home affairs, Tony Burke, said the policy was a counterbalance to Peter Dutton’s “recklessness” in blocking the legislation.
“The best option would have been the cap that was voted down by Peter Dutton, but this option will still allow us to use one of the biggest levers in our migration system,” he said.
Abul Rizvi, a former deputy secretary of immigration, said MD111 wasn’t “earth shattering” and wouldn’t change much other than a slightly faster processing of visas for regional universities.
“It certainly isn’t a cap on student visas and it would be illegal for the government to try to use it that way,” he said.
Rizvi pointed to an “absolute blizzard of measures” enforced to improve integrity in international education in the past 12 months, which reduced the offshore application rate by 40% and largely removed visa processing delays.
The latest Australian Bureau of Statistics (ABS) data on overseas migration, released last week, showed there were 207,000 international student arrivals in 2023-2024, a decrease from 278,000 in 2022-23 and well below Labor’s proposed cap.
“The order of processing doesn’t make much difference if there is no backlog,” Rizvi said. “The primary factor is the refusal rate which is linked to the risk rating system and hits regional universities much harder.
“There’s no proposal to change it, it just means a faster no. This looks like political point scoring to me – they’re trying to show Dutton ‘we’ve got to do what we were going to do’.”
The chief executive officer of Universities Australia, Luke Sheehy, said MD111 was a “commonsense decision” that was “desperately needed” to deliver certainty to the embattled sector.
“MD107 has wreaked havoc, stripping billions of dollars from the economy and inflicting incredibly serious financial harm on universities, particularly those in regional and outer suburban areas,” he said.
“We have called for it to be revoked since June and we strongly support the Albanese government’s decision to create a more even playing field for universities.”
Sheehy said declining government investment in higher education over the past decade had meant institutions had become “necessarily reliant” on international student revenue, while also being used as “cannon fodder in a political battle over migration and housing”.
“As we head toward the next federal election … we need to take the politics out of higher education and focus on the national interest that flows from it,” he said.
CEO of the Group of Eight, which represents Australia’s sandstone universities, Vicki Thomson, said replacing “one flawed process with another” wouldn’t improve the integrity and quality of the international student visa system.
“We run the risk of confusing the international student market with these constant changes to policy settings,” she said.
“Having set targets for each Australian university’s international enrolments for 2025, it makes no sense that prompt government support processing visas will only apply to 80% of that target.”
The Innovative Research Universities (IRU), which represents seven institutions including Western Sydney University, said it shouldn’t have taken this long to replace MD107, particularly when the education minister had described it as a “blunt instrument”.
Its executive director, Paul Harris, said decisions taken over the past year had “damaged Australia’s reputation as a high-quality provider of international education”.
“We now need a commitment from all sides of politics to a positive and proactive approach to international education.”
Finance minister Katy Gallagher told ABC News Breakfast on Thursday the new policy would “prioritise visas for students going to … regional and smaller universities”, which Labor had “wanted to do” through its student cap.
“It will just help us manage those international student numbers, which … have contributed to quite substantial growth in numbers of people coming to Australia,” she said.
The Regional Universities Network (RUN) chief executive officer, Alec Webb, said MD111 was an improvement on the proposed student cap and MD107, which rewarded a “handful of metropolitan universities”.
Since 2019, international student fee revenue at regional universities has dropped by 61% and international student numbers have dropped by more than half.
“The key thing is how it works in practice,” Webb said. “How visas are processed, what are the time frames, and how do we set numbers going forward.
“We had issues with caps that set some universities well below pre-pandemic student numbers, which could perpetually be trapped at a significantly lower [international student] number.”
