One of the strangest policy directions of the Albanese government has been its assault on international education.
On budget night in May, the government announced it would move to cap international student numbers. It hinted that the new legislation will set a figure for how many students each university can enrol, course by course.
Since 2023, the Department of Home Affairs has been routinely denying student visas to prospective students from certain countries. Visa fees for prospective international students have also more than doubled, from $710 to $1,600: now among the highest in the world. Those visa fees are not refunded if the visa is rejected. Tourists visiting Australia on holidays have also been banned from applying for study visas, which may affect those students wanting to visit Australia before they stump up for an expensive student visa application.
Labor wants to cut temporary migration to take the pressure off housing affordability. But the impact on private colleges and public universities will be significant.
The International Education Association’s Phil Honeywood told the ABC recently that “we are really in danger of losing a $48 billion a year industry.” Universities Australia says the revenue shortfall this year will exceed $500 million and could cost 4,500 jobs. The University of Sydney’s Mark Scott commissioned modelling that predicts 63,000 fewer international students next year, with a $1.1 billion hit to universities’ revenues. Respected university analyst Andrew Norton thinks that figure is conservative.
State premiers and education ministers are also worried. Victoria, South Australia and New South Wales have all criticised the student cap, pointing to the economic impact of fewer international student arrivals. Research commissioned by the University of Melbourne and Monash University found that slashing international enrolments by 30,000 students across Victoria’s eight public universities could cost the state as many as 12,000 jobs by 2027. Ironically, despite higher national figures for international students, Victoria is still below its 2019 level of international enrolments.
The UK provides a real-world example of the effects of scaring away international students. Like Australia, British universities have become very reliant on international student fees to prop up stagnant domestic funding. In 2023, the Conservative government of Rishi Sunak clamped down on student visas and international enrolments at UK universities fell. Many British universities are now in real financial trouble, announcing a swathe of redundancies.
Education Minister Jason Clare said in Parliament in early July that “we’ve got to protect the integrity of this system and its social licence to operate.” That’s code for a crackdown. Clare says he wants to expand higher education to more young Australians. But clamping down on international student numbers will do the opposite.
International students are an easy target. They don’t have a well-funded lobby group in Canberra, or a friendly billionaire willing to host fundraisers for the major political parties. This has allowed foreign students to become a convenient scapegoat for Australia’s endemic housing crisis.
No-one denies that international students do have an impact on housing affordability. Students need a place to live, and the big universities have been notably lazy in building student accommodation, despite their healthy balance sheets and vast real estate portfolios. While debate rages about exactly how big their impact is, it’s clear that students do affect rents at the margins, as even the Property Council acknowledges.
But blaming international students for Australia’s housing crisis is desperately unfair. It’s certainly not their fault: we invited them here. The current upswing in international student numbers is in large part a result of Morrison government policy to ease student migration controls in early 2022, as the Coalition sought to open up the economy at the end of the pandemic lockdowns.
The current shortage of affordable housing took a generation to develop and has many contributing factors. You probably already know what some of these are: negative gearing, the capital gains tax discount, land banking by developers, the trend towards smaller household sizes, and the decision by state governments to stop building public housing. Temporary migration is only one aspect of the problem.
Slashing international student numbers may make a small difference to housing affordability at the margins. But the flow-on effects will be large. That’s because Australian universities have come to rely on international student fee revenues as public funding has not kept pace with the growth of the system. It would be nice to unscramble that egg, but that would require a lot more government funding.
One of the saddest aspects of this debate is how little voice students themselves have been given. International students make enormous sacrifices to come and study here, and they make a huge contribution to Australia’s public research and international competitiveness. But Jason Clare and Clare O’Neil have barely bothered to consult with student representative bodies before making these sweeping decisions.
It’s worth reminding ourselves that teaching students who don’t permanently reside in Australia is still a good thing, both for them and for us. It’s a good thing that people from around the world can come to Australia and study at our universities. It’s good for Australia that international students carry out cutting-edge research. And it’s a great deal for Australian students that their international classmates help subsidise the cost of their education.
Albanese and Labor say they want to make things in Australia. To do that, the nation needs both export earnings and a healthy higher education system. But a crackdown on international education will hurt everyone: students, colleges and universities, Australia’s research standing, even the local economy. It probably won’t solve the housing crisis, either. Maybe it’s time for Clare and Albanese to reconsider.
Disclosure: Ben Eltham teaches international students at Monash University.
Is the government wrong to focus on international student numbers rather than addressing the core drivers of the housing crisis? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
