Last week Anthony Albanese responded to concerns about whether international arrivals are adding to a tight housing market by noting the population is still lower than projected pre-Covid. That’s true, but won’t be for much longer.
In late February, Australia hit a record for both the number of international students (713,144) and of temporary entrants (2.8 million) in the country.
Even with measures to crack down on international student numbers enacted after the migration review was released in December, it takes a while for a reduced flow (international student visa grants were down 35% in February) to be reflected in a decreased stock.
The government has never ruled out more drastic measures, such as a cap on international students.
In February the Grattan Institute added another such idea to the mix: raise the international student visa application fees from $710 to $2,500, and use the proceeds to pay for an increase in commonwealth rent assistance.
Tertiary education sources say they understand the application fee hike is under active consideration.
Even those opposed to the idea see the logic: discouraging applications reduces numbers; if students are undeterred, it’s a revenue raiser for government.
The chief executive of the Independent Tertiary Education Council Australia, Troy Williams, said a fee hike “would be consistent with the Australian government’s clear policy intent to reduce the size of the international education sector”.
Abul Rizvi, the former deputy secretary of the immigration department, said increasing the non-refundable fee on foreigners to pay for Aussies’ rent is “very good politics” although he thinks it’s “poor long term policy”.
A spokesperson for the home affairs minister, Clare O’Neil, said “We’re considering all options as we work to restore integrity to international education.”
Governments hate to play the budget ruling-in ruling-out game, but they especially hate to do it with such a time-sensitive measure, which you would expect to be announced on budget night and backdated a day or two to prevent a flood of applications.
Hypothecating revenue – setting aside money raised for a specific purpose – is a bit of a fiction, as all government spending during times of surplus comes from the general revenue.
But increasing rent subsidies at the same time as international student fees has a logic to it. Double digit rent increases in capital cities are hurting households, and Labor is under attack on its right and left flank on housing costs.
Many stakeholders, from the Coalition opposition to sensible centrist economists like Chris Richardson, have linked the cost of housing to the temporary spike in arrivals, even if the housing shortage has many other, longer term and complex causes.
And universities, who would be expected to complain the loudest that good quality students from overseas could be discouraged from applying, would likely be less able to complain because of the larger domestic student constituency who benefit from rent subsidies.
Grattan’s chief executive, Brendan Coates, and deputy director of migration, Trent Wiltshire, think the fee increase would “discourage the growing number of international students who complete cheaper, low-value courses from coming to Australia”.
The pair said the measure is “unlikely to discourage talented students from choosing to study at one of Australia’s top universities – those who we most want to stay permanently – because they already pay upwards of $150,000 for a bachelor degree”.
But others are down on the idea. Rizvi said given how high Australia’s rejection rate of international students is, paying a non-refundable $2,500 fee for no guarantee of a place is “a lot like entering a lottery”.
Rizvi thinks the measure has the potential to “scare away the better students” – those who have options and can study in competitor nations with lower fees.
Williams said the measure would “penalise overseas students wanting to take up study in Australia” and be a “job killer”, particularly in the vocational educational and training sector.
Iteca wants the government “to align its strategy” on international education and migration strategy.
“The former encourages international students to take-up study in Australia and the latter seems to say that these students should stay home, there is a real inconsistency here,” Williams said.
When the opposition arcs up in question time complaining about the population size, Labor likes to quote the shadow immigration minister, Dan Tehan, who welcomed the return of international students post Covid and Peter Dutton, who agreed after the September 2022 jobs and skills summit that “we do need an increase in the migration numbers”.
But there’s only so long an 18-month-old quote can keep the Coalition scare campaign at bay. The government will be judged on its record, and in this climate that means: did it succeed in cutting international student numbers and net migration fast enough?
Demanding more cash for international student visa applications is an incredibly blunt instrument, but for its potential to raise revenue, dampen demand and rebuff Dutton, it may prove irresistible for Labor.
