The education minister has rejected a report the government will cap international students at 40% of university enrolments, after concerns such a restrictive cap could help propel Australia into recession.
Jason Clare on Thursday said Labor was “not intending” a cap of that size, and will help protect the “social licence” of the international education sector and not harm an “incredibly important national asset”.
The Albanese government announced in May it intends to cap international student numbers as the latest measure to cut increased arrival numbers that were attacked by Peter Dutton’s Coalition.
In July, Labor more than doubled the non-refundable application fee for international students, in a further effort to cut net immigration from 528,000 in 2022-2023 to 260,000 by 2024-25.
The government is yet to finalise the proposed cap. As Australia’s economy softens, some in the government are concerned that inoculating Labor against attacks on immigration should not come at the expense of economic growth, and have pushed back against a more restrictive cap.
With universities expecting to discover in days what the proposed cap will be, the Australian Financial Review reported on Tuesday it could be capped as low as 40% of total enrolments.
But Clare rebuffed that report.
“That is not right. I have seen those reports. That is not what we are intending to do,” he told reporters in Sydney.
Clare described international education, Australia’s fourth biggest export industry, as “an incredibly important national asset” which “makes us money”.
“It also makes us friends, because when students come to Australia to study and fall in love with the place or maybe someone special, they take that love for us back home.
“What we’re doing is making sure we protect the integrity of the system – and that is important – but also protecting the social licence for the system to continue to operate.
Clare said he would have “more to say about the levels that will be set” in parliament in the next few weeks.
His comments come after universities sounded the alarm over the proposed international student cap at a Senate inquiry hearing on Tuesday.
The chief executive of Universities Australia, Luke Sheehy, said the bill was “rushed policy”, “ministerial overreach” and a “political smokescreen”. He said it was designed to give the government the upper hand in “the battle over immigration ahead of the election”.
International students “accounted for more than half of Australia’s GDP growth [last year], almost single handedly saving [the country] from recession”, he said.
“Fewer international students on our shores could result in job losses, reduced economic growth and less money for domestic teaching and research activities.
“We need to seriously consider what we stand to lose in telling them to stay home.”
According to the Sydney Morning Herald, an analysis by Prof Richard Holden, an economist at UNSW Business School, showed a return to 2019 international student numbers would cause an $11.6bn hit to Australia’s economy in 2025, or about 0.5% of gross domestic product.
“That could easily be enough to tip Australia into an actual recession,” he reportedly said.
On Tuesday the chief executive of the Group of Eight, Vicki Thomson, told the Senate inquiry that capping international enrolments to pre-pandemic levels of 2019 for Go8 members against 2023 post-pandemic enrolment figures would have a massive impact.
It would cost the nation more than $5.3bn in economic output and 22,500 jobs in the economy, the group estimated.
“On the day when we’ve seen Wall Street suffer its worst result in two years, creating massive global economic uncertainty, why would we make a deliberate move to attack our own economic growth?”
