The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 [Provisions] Committee report was recently tabled in Parliament. It can be accessed here.
Recommendations include:
Recommendation 1
2.165The committee recommends that the bill be passed.
Recommendation 2
2.166The committee recommends that the bill be amended to remove the ability for the Minister to set course-level limits for Table A and B universities and TAFE providers.
2.167The Bill would still allow different limits for regional and metropolitan campuses and by sector (i.e. Higher Education and VET). The committee has heard concerns from a number of participants regarding enrolment limits being set at the course level. There were strong concerns raised regarding the practicality of imposing and managing course level caps including from university representatives. The concerns raised have been further discussed in paragraphs 2.88 to 2.96 of the report.
2.168On Tuesday 27 August the Minister announced that the Government would amend the Bill to exclude specific classes of students from the allocations that are counted towards the National Planning Level.
2.169The Minister announced that the excluded classes of students should include school students, higher degree by research students, students undertaking standalone English language courses (ELICOS), non-award students, Australian Government sponsored scholars, students that are part of an Australian transnational education arrangement or twinning arrangement, key partner foreign government scholarship holders, and students from the Pacific and Timor-Leste.
Recommendation 3
2.170The committee recommends that the bill be amended to exempt specific classes of students, including by citizenship, from enrolment limits in instruments and notices.
2.171The committee heard from a broad range of stakeholders that there should be greater consultation and transparency around the operation of the legislation. For example, the committee heard from Ms Black from BCA who suggested that it would be advisable for it to be mandated that consultation occur with TEQSA before setting enrolment limits. Similarly, the Law Council of Australia told the committee that they believed further consultation may be needed prior to introducing caps ‘to make sure it’s meeting Australia’s needs as well as those of the universities and of international students’. Other participants such as Deakin University, University of Wollongong, Western Sydney University and the Holmes Institute noted their concerns regarding lack of consultation before receiving their enrolment limits for 2025. The following recommendations reflect that feedback.
Recommendation 4
2.172The committee recommends that the bill be amended to require the Minister to consult ESOS agencies and Immigration Minister before setting limits.
Recommendation 5
2.173The committee recommends that the bill be amended to require the Minister to consult providers before setting future limits. The Minister should only be required to consult with providers on the initial setting of enrolment limits each year, without the process being duplicated in the event there is a reallocation of student places throughout the year.
Recommendation 6
2.174The committee recommends that Part 7 of the bill be amended to change ‘notices’ to ‘notifiable instruments.’
Recommendation 7
2.175The deadline for instruments made under the Bill should be changed from 1 September of the year before the first year to which the instrument applies, to the 1 July of the year before the first year to which the instrument applies.
Recommendation 8
2.176The committee recommends that Ministerial Direction 107 be removed upon royal assent to the legislative amendments.
Senator Tony Sheldon
Chair
Senator for New South Wales
Coalition Senators additional comments
Introduction
1.1The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 (bill) is principally concerned with providing the government with the power to cap international student enrolments in Australia, which is crucial because of Labor’s gross mismanagement of immigration.
1.2The bill was introduced into the House of Representatives on 15 May 2024. The following day, the bill was referred by the Senate to the Senate Education and Employment Legislation Committee (committee) for inquiry with a report due, initially, on 15 August 2024
1.3The number of international students in Australia has more than doubled since the Albanese government was elected.Labor’s ‘Big Australia’ policy and its immigration chaos have had a very significant impact on Australia’s housing crisis, particularly in Sydney and Melbourne where a large number of international students reside, along with other key services.
1.4The first public hearing was held in Canberra on 6 August 2024. By reason of the government’s reluctance to disclose all relevant information about the bill including in relation to indicative student caps for individual providers, we needed to seek three additional public hearings for this inquiry which took place in Sydney on 26 August 2024, in Sydney on 6 September 2024, and in Canberra on 2 October 2024.
1.5On 27 August 2024, the Minister for Education, the Hon Jason Clare MP (Minister), held a press conference announcing some details about the government’s student cap plan including the proposed National Planning Level (NPL) of 270,000 new overseas student commencements, referred to as the ‘total enrolment limit’ in the bill.[1]
1.6It was disappointing that no information on student caps was released until the morning after the second hearing which we suggest was deliberate and disrespectful.How could the government so disregard the important role of the committee to scrutinise the bill, as well as education providers including those who had given evidence at the second hearing in an information vacuum?
1.7Coalition senators determined not to accommodate the government’s thinly veiled attempts to cover up the significant flaws with this bill, or the most detrimental impacts which would flow to the tertiary education sector if the bill was passed without amendment.
1.8Similarly, it is disappointing we needed to obtain an Order for Production of Documents in the Senate to force the Albanese Government to disclose the full list of student cap allocations to vocational and education training (VET) providers along with other relevant data.[2] On 8 October 2024, it was necessary to obtain a further Order for the Production of Documents in the Senate in relation to this bill and we trust the government will not continue to obfuscate our attempts to access important information including in relation to its discredited net overseas migration (NOM) forecasts.
1.9Following our pursuit of individual international student caps as proposed by the government for both the higher education and VET sectors, we also secured the committee’s agreement to re-open submissions so that key stakeholders and, particularly, impacted providers, could have their say.
1.10The government has a critical responsibility to cooperate with Senate bill inquiries to ensure the Senate can discharge its important responsibility to review bills before the Parliament.The government’s continuing attempts through this inquiry to conceal information from the committee, and to avoid appropriate scrutiny, are unacceptable.
1.11The committee received 196 submissions.[3] We thank submitters which have worked so hard to raise legitimate concerns with the committee about this bill and regret the deep distress and uncertainty which some providers have suffered as a result of the government’s decision to put forward such a poorly drafted bill and indicative total enrolment limits about which there was no consultation.
Labor’s mismanagement of international students
1.12In 2019, international education was worth just over $40 billion to the Australian economy.[4] This was underpinned by 510,460 new international student commencements in that year.[5]
1.13Despite the financial downturn during the COVID-19 pandemic, in 2023 the value of international education to the Australian economy had grown to $47.8 billion. Of this, $30.5 billion was paid as goods and services and $17.1 billion was paid as tuition fees.[6]
Record international students in Australia
1.14Since the election of the Albanese Government, the number of international students studying in Australia has more than doubled – from 336,000 international students in March 2022 to 713,144 international students in February 2024, declining slightly to 679,293 international students as at 31 August 2024.[7]
1.15In 2022-23, the Albanese Government’s first full program year in government, 577,295 student visas were granted,[8] surpassing the previous record by 171,533 student visa grants.
1.16As referenced in the committee’s report, in May 2024 the number of international student enrolments in Australia was 809,780 (noting that some students enrol in more than course). Alarmingly, this figure grew to 943,977 in July 2024 (year to date) being the most recent data available.[9] We note this latest data has not been included in the majority committee report.
Policy response too little too late
1.17In the face of such unprecedented growth in international students, the Albanese Government has made several changes to the student visa settings including increasing the financial capacity requirements for a student from $21,041 to $29,710; increasing the Student Visa Application Charge from $710 to $1,600; increasing the English language proficiency requirements for students and graduates; and introducing Ministerial Direction 106 Genuine Student Requirement .[10]
Ministerial Direction 107
1.18Most significantly, the Albanese Government issued Ministerial Direction 107[11] to prioritise visa processing according to provider level risk, as assessed by a provider’s evidence level under the Simplified Student Visa Framework.[12]
1.19The impacts of Ministerial Direction 107 have been far reaching and have had a manifestly disproportionate and discriminatory impact on regional and smaller universities and private higher education and VET providers.
1.20Many stakeholders called for the removal of Ministerial Direction 107 in their submissions and in evidence to the committee. For instance, Innovative Research Universities stated in it submission:
Ministerial Directive 107 was introduced by the Minister for Home Affairs in December 2023 as part of the government’s Migration Strategy, to slow down visa processing. It has led to disproportionate and unfair impacts on IRU students and universities. The effect of Ministerial Directive 107 has been to further entrench inequities across the sector, undermine diversification and reduce enrolments in courses relevant to Australia’s skills needs.[13]
1.21La Trobe University also raised major concerns, asserting:
…the introduction of Ministerial Direction 107 in December 2023 has affected the sector unevenly. The sudden and unplanned drop in international student revenue threatens to hinder La Trobe’s ability to deliver on its equity mission, including to the regional communities it serves.” “Ministerial Direction 107 created blunt and unpredictable levers to restrict the number of international students.[14]
1.22The committee received overwhelming evidence about the enormous economic harm the Albanese Government’s Ministerial Direction 107 has wreaked on the tertiary education sector, with conservative estimates that regional and smaller universities have suffered losses of at least half a billion dollars.[15]
Minister’s ultimatum
1.23On 16 September 2024, the Minister wrote to universities with an ultimatum, declaring Ministerial Direction 107 would only be lifted if this bill was passed.The letter was silent in relation to whether the Government supported any amendments to the bill.Coalition senators are concerned about this heavy-handed approach by the Minister which in our view constitutes an inappropriate threat to any provider which is seeking improvements to the bill.
1.24Coalition senators are deeply concerned about the severe economic damage Labor has inflicted on regional and smaller universities, as well as private higher education and VET providers because of Ministerial Direction 107 and Labor’s chaotic approach to policy making in the higher education sector more broadly.
Delay of evidence level assessment compounds the harm
1.25We also raise concerns about the Department of Home Affairs’ proposal to delay the adjustment of evidence levels for providers.Many regional and smaller universities have suffered downgrades in their evidence level ranking caused by the high number of student visa refusals they have suffered, a direct result of Ministerial Direction 107 and the Government’s policy.
Labor’s immigration chaos is fuelling Australia’s housing crisis
1.26By its own admission, the Albanese Government’s mismanagement of immigration has fuelled Australia’s housing crisis.On 12 September 2024, the Department of Education even published on its website a fact sheet on international students and the rental market,[16] confirming that seven per cent of international students makeup the private rental market and not four per cent as contended by the Student Accommodation Council.
1.27The Department of Education states there are “significant housing pressures in inner-city locations with a higher concentration of international students”, noting that in five local government areas, international students exceeded 15 per cent of the total renting population.
1.28In the Sydney CBD, where rents for units (median rental asking price) have increased from $838 in 2019 to $1,200 in 2024 representing a staggering 43 per cent increase in rents, international students make up 42 per cent of the total population. In Melbourne City, where median rents have increased from $533 to $633 in the same period, international students make up 18 per cent of the total population.
1.29The Department of Education concluded that “Evidence suggests a connection between rental prices and the high numbers of international students”.It also confirmed that ‘Even small impacts on the demand and supply of housing can impact on rents and housing affordability, noting “The Reserve Bank of Australia [(RBA)] estimated that a 1% increase in dwelling stock results in the cost of rentals decreasing by 2.5%.”
1.30On 8 October 2024, the RBA released its minutes of the monetary policy meeting of the board on 24 September 2024, noting that lower numbers of international students driven by a cap on enrolments would support access to housing:
The cap on international student commencements to be applied to the higher education and vocational education and training sectors in Australia from 2025 was expected to weigh on services exports. Members noted that the cap was in addition to the earlier tightening in requirements for student visa applicants, which had already seen a fall in student visa grants. However, the implications of lower student arrivals for the balance between aggregate demand and supply, and hence for the inflation outlook, were less clear. Lower numbers of international student arrivals would be likely to reduce aggregate demand (including for housing), but also lower growth in population and therefore the economy’s supply capacity. The implications of these various effects would be assessed more carefully as part of the subsequent forecast update.[17]
Provision of student accommodation
1.31The housing crisis, which is caused, in part, by excessive international students in large metropolitan cities, is compounded by the failure of some universities to provide adequate student accommodation.While this bill supposedly requires the government to recognise the provision of student accommodation in determining individual student caps, this requirement is opaque.
1.32Despite there being nearly 700,000 student visa holders in Australia, recent analysis undertaken by the Department of Education estimates around 50 per cent of all international students reside in the private rental market, 25 per cent live with parents or relatives, only 20 per cent are in student accommodation and a further three per cent use homestay arrangements
1.33Student accommodation at Australia’s public universities offers only 40,000 beds. Whilst private student accommodation providers and homestay programs offer additional capacity, this supply must also support domestic students who need to move away from home to undertake their studies
1.34Based on evidence to the committee particularly from Western Sydney University which asserts it has an excess of accommodation,[18] we are also concerned the Government has not even considered the availability of student accommodation before determining indicative student caps.
Core mission of public universities
1.35Coalition senators reiterate that the primary purpose of Australian public universities, which receive many billions of dollars of taxpayer funding every year, is to educate Australian students.
Educational outcomes matter
1.36Every country has a responsibility to manage its migration program in the national interest.
1.37Given the excessive number of foreign students who have flowed into Australia’s most prestigious universities in recent years, particularly the University of Sydney and the University of NSW in central Sydney, and the University of Melbourne and Monash University in Melbourne, we respectfully suggest that a number of Group of Eight universities have lost sight of their core mission.
1.38At the University of Sydney, international students make up more than 50 per cent of the total student population (noting an exact figure is not currently available) while at the University of Melbourne 46 per cent of students are from overseas.
1.39The ‘rivers of gold’ derived from international student enrolments are now very substantial.While public universities argue the estimated $9 billion per annum they receive from international students is vital to subsidising the delivery of domestic courses and undertaking ground-breaking research,[19] discerning the true cost of the delivery of university courses is complex, opaque and difficult to quantify.
1.40Last year, the University of Sydney alone made a staggering $1.5 billion from international students.We believe such large amounts of money are leading to perverse outcomes including a lack of focus on the core mission of public universities which is to provide Australian students with high value tertiary qualifications which deliver meaningful and sustainable employment outcomes.
Social licence to educate international students is necessary
1.41We recognise the important role that international students play, particularly on university campuses. This cannot be understated. Notwithstanding, universities must be cognisant of the social licence that is required to educate international students.
1.42The Department of Education states that 90 per cent of international higher education students enrolments are in the major cities of Australia (Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra).[20] The excessive number of foreign students, particularly in Sydney and Melbourne, has fundamentally changed the character of a number of our public universities, and put at risk their social licence to educate international students.
1.43These concerns have been led most prominently by Professor Iain Martin, Vice-Chancellor of Deakin University, who contends that foreign students at public universities should be capped at a maximum of 35 per cent.This call for a flat cap was supported by a number of other universities but, unsurprisingly, not universities where the foreign students exceed 35 per cent as a proportion of the total student population. Professor Martin told the committee on 6 September 2024:
As universities, we have the privilege to educate international students, but we do that with the permission of the Australian government and the blessing of the Australian public. If we lose that social contract of what we do, how the university benefits and then how the community around us benefits because the wider community is concerned about issues like the number of students, mix of students and meeting both domestic and international needs, we will lose that very permission that undermines the great success story that has been Australian international education.
That’s why I think that it is important that we have that open and transparent debate around how we are driving these settings and how we make sure that we balance out our commitments to what we need to do in metro, regional and remote settings in Australian with the really important benefits for international students but also the benefits that those students bring. It’s getting that balance right and having that conversation, and it comes from doing it in the light, not behind some hidden process.[21]
1.44There is growing evidence that high numbers of international students are, at times, compromising the educational outcomes of Australian domestic students.For instance, on 1 September 2024, Senator Henderson stated:
…there was the story a few weeks ago about a young first year commerce student at Melbourne uni. He’s just left commerce because his entire tutorial was basically being spoken in Mandarin, including from the tutor – the occasional bit of English here and there – but every other student in his class was a foreign student. They were all speaking in Mandarin, and he was just in despair, he couldn’t learn. And that is not good enough. So, as I say, the universities have got to focus on their fundamental obligation to Australians, and that is teaching excellence, getting back to basics, face-to-face learning, and making sure that they are delivering high value degrees. And I think too many Australians are leaving university without a high value degree.[22]
Labor’s student caps scheme mired in incompetence, secrecy, uncertainty and unfairness
1.44While the bill gives the Minister the power to set total enrolment limits for each higher education and VET provider which we support for the reasons stated above, we hold deep concerns about the lack of adequate safeguards to ensure such caps are allocated appropriately, fairly and in the national interest.The Coalition has consistently raised concerns that the Government’s student caps scheme is riddled with incompetence, secrecy, uncertainty and unfairness.
Threats to pilot training a case study in incompetence
1.45For instance, it was only through the work of this committee that we discovered that pilot training schools in Australia faced collapse by reason of the botched allocation of international student caps which not only jeopardises contracts with international airlines but puts at risk the viability of Australia’s leading flight training colleges. As the Independent Tertiary Education Council Australia (ITECA) argued:
The aviation training sector relies heavily on international student enrolments to maintain operational viability … By capping international student numbers, Australia risks significantly reducing the supply of qualified pilots, leaving airlines unable to meet demand. The shortage of pilots is already a critical issued for airlines worldwide.[23]
1.46Mr Johan Pienaar, CEO of Flight Training Adelaide, told the committee at its 2 October 2024 hearing that his business, the country’s largest pilot training school, faced imminent collapse:[24]
The revenue generated is in the order of $80 million per annum from both those schools. The new cap that’s being imposed on us will take revenue from our international school, Parafield, effectively down from $40 million a year to $15.8 million for 2025. With an estimated loss of $10.1 million, we will cease to exist and so will the Qantas Group Pilot Academy.[25]
1.47The Department of Education and the Department of Employment and Workplace Relations have now conceded the Government’s proposed cap would have dire consequences for the flight training sector, with the Department of Employment and Workplace Relations indicating it intends to conduct further consultation and apply national interest considerations to reassess the sector’s cap.[26] This is an example of the secret way the Albanese Government is fixing its student caps debacle about which we are concerned.
1.48Under the bill as currently drafted, there is no requirement to publicly report individual student caps which may, in theory, allow a minister to do improper or unfair deals in relation to the allocation of student caps.
1.49Coalition senators are also concerned there is currently no requirement in the bill which requires the Minister to be publicly accountable for his student cap allocations which should be remedied.
Student caps favour Australia’s most prestigious universities
1.50As noted in paragraph 1.5, the NPL consists of a cap on new overseas student enrolments of 170,00 – 145,000 for Australian public universities; 30,000 for private higher education providers; and 95,000 for VET providers.But this tells only part of the story.
1.51It is clear the Government has looked after the big end of town.Despite the Government’s spin, the fact remains that the 2025 enrolment cap of 61,000 for the Group of Eight universities is almost exactly that same as international student enrolments for these universities in 2023.This represents a 12 per cent increase from 2019.The Group of Eight’s “cut” of 22,000 places for 2025, as compared to the number of international students enrolled in 2024, has only occurred because Ministerial Direction 107 ensured foreign students at the Group of Eight universities skyrocketed to anticipated 83,000 for 2024.
1.52In contrast, regional universities have still been hit hard.After international student enrolments crashed to just 8,949 in 2024 principally as a result of Ministerial Direction 107, regional universities have received a total cap in 2025 of 15,900. However, this represents a significant reduction of 16 per cent compared with 2019 when international student enrolments totalled 19,021.[27]
Unfair treatment of regional and mid-tier universities
1.53Throughout our inquiry, we learned that some regional and smaller universities have been hit with caps which contradicted the Minister’s announcement that regional universities would be the winners from the NPL. These include Federation University in Ballarat and Western Sydney University.
1.54Distinguished Professor George Williams raised serious concerns about the cap provided to Western Sydney University which stated in its submission:
Our region relies on international students to fill acute skills shortages, including in professions that are difficult to staff, such as nursing and aged care. Most of the 1,350 international students who studied nursing and midwifery with us last year have gone on to work in Western Sydney’s overburdened hospitals. The region is forecast to be short of 10,000 nurses next year. Without international students graduating as nurses, Western Sydney’s public hospital system would face further strain, impacting on patients.[28]
1.55In its submission, Federation University stated:
The interconnection between international student revenue and domestic post-secondary education makes these risks real and serious. Migration policy settings have already led Federation to make 163 professional and back-office staff redundant to offset a drop in international enrolments of over 50%, equivalent to $80 million in revenue.[29]
Discriminatory treatment of private providers
1.56We also learned about the appalling treatment of many private higher education and VET providers which some submitters argued was nothing more than an ideological attack on hard working Australians who had built successful, reputable businesses and were providing highly valued education services to both domestic and international students.
1.57These include:
Imperial Engineering Education in South Australia which has a CRICOS capacity of 275 but has been given a cap of 10 places, putting its future viability as a provider of engineering degrees targeted to the AUKUS submarine program at risk along, with its $3.5 million investment at risk;[30]
Ikon Institute of Australia which has been hit with a cap of 200, an 87 per cent reduction on the number of foreign students who commenced in 2024;[31]
Holmes Institute, one of Australia’s most established higher education providers, which has been provided with a cap of 990, a fraction of its CRICOS capacity as determined by the regulator of 8,806;[32]
Nova Anglia, a newly registered higher education provider in Brisbane offering bachelor’s degrees in electric vehicle technology which was given a student cap of zero despite being registered by the regulator to teach 250 international students at any given time;[33]
Academy of Interactive Entertainment Ltd and AIE Institute Ltd which submitted that its student cap allocation of two had put its $200 million investment in a new facility in Canberra including 600 beds for domestic and international students at peril.[34] Chief executive officer John De Margheriti told the committee on 2 October 2024:
What country are we living in? I feel like I’m in a banana republic. I’ve got a college that has generated an industry that’s worth $3 billion to $4 billion to Australia. We come to a third to 40 per cent of the entire employment. We’re a not-for-profit educator. We’re tax exempt. We’ve been servicing the Australian market. We’re just entering international markets now, and we’re faced with this. We’ve gone through COVID. We went through the VET student loan debacle in 2016. We go through COVID, and now here we are again. What is going on? You’re meant to be serving the Australian people, but you’re not. The fact that we’re actually here having this discussion is a total shock to me. But I’m here. I’ve flown in from Italy. I cut down my holiday to be here to confront you and tell you to wake up and to not destroy our nation, because that’s what you’re about to do.[35]
Concerns raised by a majority of private higher education providers
1.58As of 6 September 2024, the Department of Education has advised that 107 public universities and private higher education providers have raised matters related to their indicative caps.[36] The Department of Employment and Workplace Relations has advised that more than 160 providers have raised concerns in the VET sector.[37]
Student caps riddled with anomalies and irregularities
1.59The Albanese Government has attempted to sell this bill as one that focuses on ‘quality and integrity’, yet Ms Claire Field in her submission to the inquiry highlighted numerous major concerns with cap allocations including that:[38]
more than 10 providers received an indicative allocation of more than their CRICOS registration limit;
providers whose CRICOS registration is currently suspended have been provided with allocations;
providers whose registration has been cancelled, suspended or not renewed by ASQA and are appealing the decision with the AAT have been provided with allocations;
129 providers which enrolled no students in either 2019, 2022, 2023 or 2024 YTD were allocated places for 30 commencements; and
420 places have been allocated to five publicly funded universities and nine private higher education providers which are registered dual sector providers yet have no CRICOS approval to deliver to international students.
1.60These anomalies clearly demonstrate there has been no consultation between the Department of Education and the Department of Employment and Workplace Relations, let alone with the regulators, the Tertiary Education Quality and Standards Agency (TEQSA) and the Australian Skills Quality Authority (ASQA.)
1.61It is clear to Coalition senators that should this data not have been made public, the Government’s allocations would have gone unchecked.
Greater transparency required
1.62Coalition senators strongly echo the calls from stakeholders for the calculation methodology and data used to be made publicly available and published to ensure there is full transparency and accountability of the Government’s methodology.
1.63As Ms Tracy Harris noted in her submission:
… if caps are to be implemented, then there must be transparency and clarity in the formula that is used.[39]
Other issues
1.64There are a number of other significant issues with the bill, some of which have been identified in the majority committee report.These include in relation to the following matters:
Education agents and commissions
1.65Parts 1 and 2 of the bill are intended to address integrity concerns across the education sector following the release of the Rapid Review into the Exploitation of Australia’s Visa System (the Nixon review).[40]
1.66The review cited approximately 75 per cent of international students seek the assistance of an education agent, but noted the current regulators for the education sector, being TEQSA and ASQA, play no role in the supervision of education agents. Instead, the onus is on the education provider to ensure the agents they deal with do not engage in false, misleading or unethical recruitment practices.
1.67The bill updates the definition of an “education agent”, inserts a new definition of “education agent commission” and inserts a fit and proper test for providers engaging with education agents.
1.68Some stakeholders raised concerns the breadth of the new definition of education agent may have unintended consequences.
1.69The Australian Chamber of Commerce and Industry submission stated for instance:
… the broad definition of ‘associate’ may pose logistical challenges for providers, potentially deterring valuable investments and complicating compliance. To mitigate these issues, it is crucial to carefully consider the unintended consequences of these broad definitions before progressing the Bill.[41]
1.70The submission from Independent Higher Education Australia (IHEA) stated:
While IHEA supports clarity through the definition of an education agent, the references to people who “provide advice or assistance” to overseas students or are “otherwise dealing with overseas students” seems quite broad, far−reaching and may capture people who are not engaged in a financially beneficial relationship with a provider. While we understand the intent is to capture all situations where there are monetary and non−monetary agreements and benefits to agents, it is not clear how a compliance regime will support the identification of non−monetary benefits.
1.71Whilst the definitions are intended to support the integrity of the sector, Coalition senators note this is a long way removed from recommendation 13 in the Nixon review which proposed regulating onshore and offshore education agents and adopting a similar model to the United States.
1.72Coalition senators note the Government response to the Nixon Review agreed in principle only to the recommendation to regulate education agents. The Government response to recommendation 13 stated
The Minister for Home Affairs will consider expanding the remit of the Office of the Migration Agents Registration Authority (OMARA) to include education agents as providers of visa advice. An expanded OMARA role would be complemented by increased accountability of education providers, without requiring separate regulatory infrastructure in the Department of Education.[42]
1.73The Law Council of Australia also supported the implementation of a system of registration for onshore and offshore education agents.[43]
1.74Given the report was handed to the Government in March 2023, nearly 18 months ago, Coalition senators note with disappointment that this bill is the extent of the Government’s efforts to address risks to international students through abuses of sexual exploitation, human trafficking and other organised crime.
Caps on courses
1.75Parts 7 and 8 of the bill provides the Minister with the ability to apply caps at a provider, campus and course level, which demonstrates significant overreach. The Group of Eight submission to the inquiry stated:
Parts 7 & 8 of the ESOS Amendment Bill provide the Minister with the power to apply caps on international student enrolments at universities and high-quality public providers, down to the course level, with attendant draconian penalties.
1.76When asked at the 6 August 2024 inquiry hearing on how this could be delivered Ms Vicki Thomson from the Group of Eight Universities said:
We don’t believe it can be. I use the example of our universities. It could mean up to 8½ thousand different caps across the eight universities’ course and student numbers. Multiply that by 39 and it’s significant. We’ve been asking ourselves, ‘How can you actually implement this?’[44]
1.77Mr Luke Sheehy from Universities Australia also said:
… there’s universal agreement across Australia’s higher education sector, and more broadly, that the intervention at course level is completely unworkable. We have no confidence that the government could do this overall let alone by 1 January 2025. That is why all of us here are saying that the government needs to abandon that intervention, at course level, as part of this legislation.[45]
Lack of consultation
1.78The bill does not require the Minister to consult with providers or provide appropriate rights of appeal in relation to individual student caps or reasons for decisions.
1.79Given the number of anomalies and errors that we have discovered, we believe as a matter of procedural fairness and natural justice and the potential for devasting consequences for providers, appropriate rights of consultation where the Minister is accountable for the decisions made particularly in relation to individual student caps, are vital.
Cancellation of courses for non-delivery
1.80The bill provides that where a course for overseas students is not delivered at a specific location for 12 months, all courses at all locations which are registered to teach international students are automatically cancelled.This appears to be a case of significant overreach and, in our view, should be remedied.
Over-enrolment of international students
1.81The bill provides where a registered provider exceeds its total enrolment limit, the provider is automatically suspended with respect of the enrolment of further international students in that course.This is a poorly drafted provision of the bill which has led to confusion in the higher education and VET sector, given the proposed relevant concerning ‘Automatic suspension for all courses for the year’ provides:
(1) If a registered provider fails to comply with section 26D in relation to a year, the registration of the provider is suspended for all courses (other than courses that are exempt from the provider’s total enrolment limit under subsection 26B(4) or 26C(4)) for all locations in respect of the year by force of this subsection.[46]
Restrictions on registration of new private education providers
1.82Part 3 of the Bill provides the Minister with powers to specify a limitation on the registration of new providers or new courses through TEQSA or ASQA for up to a 12-month period to manage growth of the sector.We note the concerns of IHEA and other submitters that this would have the effect of preclude the entry of new providers to the market.
Exemptions of classes of students
1.83While the minister has recognised the bill will be amended to exempt certain classes of students from being captured within the NPL which reflects another, we are concerned about the lack of certainty as to what constitutes an international students who are foreign government scholarship holders or part of a transnational education arrangement.While the Department of Education has published certain criteria on its website, this is of no legal import and reflects a lack of appropriate consideration and consultation as to how the bill will operate in practice.
Improper communications by TEQSA
1.84Finally, we reiterate concerns about TEQSA’s heavy-handed communications with some private higher education providers in relation to compliance and financial viability concerns as a result of the Government’s indicative student cap allocations, as raised at the fourth public hearing.In a response to a question on notice received on 8 October 2024, we note that TEQSA has apologised, stating:
In the letters we incorrectly suggested the reduction of overseas student numbers had been legislated.TEQSA apologises for this and is contacting affected providers to clarify this miscommunication. Feedback has been provided to staff about this matter to minimise the risk of a recurrence.[47]
| Senator Matt O’Sullivan
Deputy Chair Senator for Western Australia |
Senator Slade Brockman
Member Senator for Western Australia |
| Senator the Hon Sarah Henderson
Participating Member Senator for Victoria |
Australian Greens’ dissenting report
1.1The Education Services for Overseas Students Amendment (Quality & Integrity) Bill (‘the Bill’) should not be passed unless Part 7 and Part 8 of the Bill are removed.
1.2Across four days of hearings and 196 written submissions, there is near unanimous opposition to the international student caps proposed in this Bill.
1.3The committee heard again and again that:
This Bill is a migration policy disguised as an education Bill.
It is a poorly thought through and chaotic plan to cap international student numbers.
There was little or no consultation with the sector on the methodology.
It scapegoats and harms international students for a housing crisis they did not create.
It allows for unprecedented ministerial overreach and intervention.
It damages Australia’s reputation as a destination for international students.
It will result in significant job and financial losses.
Capping international student numbers has little to do with quality and integrity.
1.4Of particular frustration throughout the inquiry process into this Bill has been the timing and lack of data provision, and the failure of the government to produce any modelling on the impact of capping international student numbers. The government did not communicate the provider-level caps for universities until the day after the second committee hearing into this Bill, and then proceeded to communicate the caps for VET providers while the third hearing was in progress. In doing this, the government made a mockery of the Inquiry process. Had the Inquiry not been extended on two occasions, there would have been no opportunity to interrogate the data relied on, the formulas created, and the numbers themselves.
1.5The Committee Report itself neglects and minimises the very serious concerns raised by the majority of witnesses in the hearings. Importantly, the report maintains that the Bill – including the caps – are quality and integrity measures. There is an absence of evidence to support this view.[1]
1.6A letter to universities written on 16 September 2024 from Minister Clare, not only attempted to strong arm universities into submission to agree with the caps, but pretty much confirmed that the international student caps are about reducing Net Overseas Migration and controlling the number of students entering the country.[2]
1.7Overall, the report fails to reflect the strong opposition to international student caps, the flaws in methodology and the way the caps have been formulated.
1.8In recommending that this Bill be passed, the government has completely ignored the overwhelming concerns highlighted by the sector that the Bill will cause major and long-lasting damage to Australia’s tertiary education sector.
1.9The Greens agree with higher education expert Claire Field who told the Committee on the last day of hearings, ‘it would be wrong to go ahead like this’.[3]
1.10Below is an account of the issues with this Bill. These were also raised by witnesses and submissions to the Inquiry.
Politically Motivated Migration Policy
1.11It has been clear from the beginning that these international student caps are migration policy, not education policy.
1.12Luke Sheehy, CEO of Universities Australia, described the Bill as a ‘political smokescreen’ that is being used by the government to ‘gain an upper hand in the battle of migration ahead of the next election’[4]. This view was reiterated by Group of Eight CEO, Vicki Thomson, who similarly reported that ‘migration is shaping up as a key battlefront in the lead-up to the federal election, and the university sector is shaping up to be the fall guy, unfairly and unjustifiably so’[5]. Phil Honeywood, CEO of International Education Association of Australia, stated that the caps ‘have been designed as a politically blunt instrument to address a spurious narrative—that the international students are the principal cause of the current rent increase in Australia’.[6]
1.13The government is crushing higher education in a bid to look tough on migration in the months before a federal election. International education, international students, and universities will become collateral damage as a result of this terrible policy.
Flawed Policy and Methodology & Chaotic Process
1.14The calls for the government to engage in proper consultation with the sector have been loud and unanimous. Ian Aird, CEO of English Australia, gave evidence that ‘this Bill has been drafted on the run, without meaningful consultation of those impacted, without consideration of its economic impact or the jobs it’ll cost and without concern for students.’ He went on to say that the Bill ‘claims to be about quality and integrity, but it does nothing to require, encourage or incentivise quality’[7].
1.15The government has claimed these caps are about housing, skills shortages, and integrity and quality, but none of these policy aims are reflected or achieved in the formulas that have been developed to create indicative caps.[8] The absence of these purported policy outcomes shows how irrational and flawed this methodology is.
1.16Not only is the policy misguided and fundamentally flawed, the entire process has been rushed, opaque, chaotic, and confusing. Vicki Thomson, CEO of the Group of Eight, described the Bill as ‘rushed and poorly framed legislation’ that ‘is a classic example of retrofitting policy to suit dubious politics’.[9]
1.17In the higher education sector, Professor George Williams, Vice-Chancellor and President of Western Sydney University, stated that ‘the formula did not account for the most basic and important issues’[10] and noted that to impose an arbitrary formula on such a complex sector would result in ‘gross unfairness … randomness and arbitrariness’.[11] Professor Williams described the formula as a ‘shock’, while Mr Christopher Riley, Pro-Vice-Chancellor at the Australian Catholic University, said that ACU ‘were blindsided when the letter came out’.[12] In response to a question regarding the ability to plan for the future, Professor Andrew Parfitt, Vice-Chancellor and President of University of Technology Sydney, stated that: ‘In terms of a planning regime, it’s chaotic’.[13]
1.18In the private VET sector, Claire Field, an independent education expert, highlighted that there are 12 VET providers who are fighting a cancellation decision by ASQA in the Administrative Appeals Tribunal who have a collective indicative cap for 2025 of 1,429 places.[14] Troy Williams, CEO of the Independent Tertiary Education Council Australia (ITECA), following the publication of VET indicative caps, reiterated that ‘the legacy of this legislation, if passed, will not be to improve or enhance international education’ but will ‘tarnish Australia’s reputation’ and ‘exacerbate job losses’.[15]
1.19In relation to the allocation of caps across the sector, Claire Field gave evidence that, with the exception of TAFE institutes, across every other provider type – public universities, private universities, non-university higher education providers and private VET providers – there ‘is no consistency in how caps have been allocated even within those individual groups of providers’.[16] Ms Field’s analysis identified many errors, issues, and anomalies with the allocation of caps, predominantly in the VET sector[17], and she stated in her evidence that, if the caps proceed as proposed, she suspects ‘we will see quite a large number of private VET providers in particular close their doors’.[18]
1.20The view that this policy had been needlessly rushed was shared by many witnesses[19], who expressed alarm at the proposition of these caps being in place by January 2025.
Impact on the Sector
1.21Universities have become disproportionately reliant on international student revenue in the absence of appropriate government funding and funding cuts by successive Labor and Liberal governments.
1.22Funds from exorbitant international student fees are used in universities to cross subsidise research and to support domestic students. Professor Attila Brungs, Vice-Chancellor and President of University of New South Wales Sydney, gave evidence that ‘teaching activities for domestic students rely heavily on cross-subsidisation, which comes primarily from international student revenue’.[20]
1.23This is a problem in and of itself; however, in the absence of any additional government funding, the more immediate question is how universities will manage with such a significant drop in revenue. For next year alone, based on the average international student revenue, Sydney University is looking at around a $220 million reduction in funding, while the University of New South Wales will face a $323 million shortfall.[21] Many universities are in a similar position.
1.24Incredibly, while the report notes estimates from the Group of Eight, the National Tertiary Education Union, and the University of Melbourne that the job losses from this Bill will be significant and could number tens of thousands, the sole response from the government, quoted in Chapter 2 of the report, is that ‘from a ‘macroeconomic perspective’, Treasury does not expect any job losses as a result of this Bill’.[22] Incredibly, no modelling was provided for even these claims, and one can assume that no detailed modelling was undertaken to determine specific impacts on the sector or on the economy as a whole of these caps.
1.25The Australian National University (ANU) has been the first university to announce job cuts, announcing the closure of their College of Health and Medicine and the loss of at least 50 jobs, citing the international student cap as one of the contributing factors to this decision.[23] University of Sydney staff were contacted in August and warned of hiring freezes and other cutbacks in anticipation of the international student caps.[24]
1.26Many universities are facing even more dire circumstances, with the government already decimating international education for many providers through Ministerial Direction 107. Luke Sheehy, CEO of Universities Australia, stated that ‘even without [caps], the government has already taken a sledgehammer to the international student sector’.[25] The Direction, which purportedly was introduced to ‘prioritise’ student visa applications, has instead been used to severely restrict the number of students arriving in Australia, and has disproportionately impacted smaller, regional universities.
1.27Dr Ant Bagshaw, Executive Director of the Australian Technology Network of Universities, reported that the six universities he represents have lost over half a billion dollars in 2024, as a result of Ministerial Direction 107.[26] Mr Paul Harris, Executive Director of Innovative Research Universities, similarly reported the ‘disproportionate and unfair’ impact of the Direction on the universities he represents.[27]
1.28Evidence from private providers was that the imposition of the caps in their current form, with only three months’ notice, would be ‘catastrophic for the entire industry’.[28] Dr Kunnumpurath Bijo, CEO of the Institute of Health & Management Pty Ltd, stated that the ministerial power to impose caps was ‘not transparent and not based on evidence’ and would impact the workforce availability of nurses and aged-care workers.[29] Stephen Nagle, CEO of the Holmes Institute, described the caps as ‘illogicality at its best’ and noted that Holmes alone was looking at losing around 100 staff and potentially closing campuses.[30]
Ministerial Overreach & Student Choice
1.29This Bill is an attack on the fundamental principles of university independence and student choice.
1.30Although not reflected in the caps themselves or their formula, the government has suggested that the caps will be used to facilitate higher numbers of international students in areas of critical skill shortages.
1.31Firstly, students should, of course, be able to study what they want, but they also will simply not apply to study in Australia if they are not able to study the course they want to study. This view was backed up by many witnesses.[31] The government should learn from the Coalition’s job-ready graduates scheme which completely failed to achieve its objective of forcing students into certain courses.
1.32Secondly, universities whose international student numbers will be capped quite drastically teach the courses which address the skills shortages, hence undermining the government’s own argument. For example, Western Sydney University’s states in its submission that ‘most of the 1,350 international students who studied nursing and midwifery with us last year have gone on to work in Western Sydney’s overburdened hospitals’.[32] Yet, their international student numbers have been reduced by 18% from 2024 to 2025.[33] Similarly, the Australian Catholic University is the largest educator of teachers and nurses in the country,[34] and they are facing a 53% reduction in international students from 2024 to 2025.[35]
1.33The level of ministerial overreach in this Bill is alarming.The Minister has unfettered power to set provider-level caps. The penalties for breaching these caps involve automatic suspension of registration, and the Minister also has the power to automatically cancel courses deemed not in the public interest. Lukey Sheehy, Universities Australia CEO, described this as ‘ministerial overreach to an extent we have never seen before’.[36]
Reputational Damage
1.34Across the four days of hearings, twenty-two individual witnesses explicitly raised concerns about the serious damage this Bill will cause to Australia’s reputation as a welcoming reputation for international students.This damage has already started. Alec Webb, CEO of Regional Universities Network, ‘these measures are an act of economic and reputational self-sabotage’.[37] With high levels of visa delays and refusals, a $1600 visa application fee, and caps that mean even with an offer you may not be guaranteed a place, it is clear that many students will no longer even consider studying in Australia. Rod Jouning of Moorabbin Aviation Services highlighted that the proposed caps will result in ‘enormous long-term reputational damage’.[38]
1.35Canada implemented a cap on international students and the results have been disastrous. The President of Universities Canada, Gabriel Miller, has been recently quoted as saying ‘[w]hat’s happened in Canada should be a warning to everyone in the world because Canada is perilously close to squandering a reputation it’s built over years and years’.[39]
1.36The Labor government should heed this warning.
Scapegoating of International Students
1.37Capping international student numbers under the government’s plan is fundamentally flawed in that it relies on a false narrative that international students are the cause of Australia’s current housing crisis. This scapegoating of international students is further evidence of racist dog whistling from a government who is unwilling to take real action on the housing and cost of living crises.
1.38Of most concern, and too often lost in the debate, is the impact of these caps on students themselves. International students have long been exploited as cash cows to prop up university budgets in the absence of government funding, and now they are being scapegoated for the policy failures of both the Coalition and Labor governments. The harm this causes to international students and migrants cannot be overstated. It is this kind of dangerous political rhetoric and dog whistling that is responsible for so much of the racism and discrimination that people of colour experience.
1.39Many witnesses spoke to the damage caused by the language and rhetoric being used by the government around international students. Felix Pirie, Deputy CEO of ITECA, gave evidence that ‘public rhetoric has demonised international students and the sector that supports them, and this needs to come to an end’.[40]
1.40Ngaire Bogemann, President of the National Union of Students, stated that the proposed caps have ‘perpetuated the scapegoating of international students for a housing crisis they did not create and will do little to meaningfully improve quality and integrity in the sector’. She went on to say: ‘Every student who comes here to study deserves to have a safe, positive and enriching experience, and if this is the type of system that the federal government is looking to create, these caps do need to be rethought’.[41]
1.41Janageeth Logeswaran, President of the Flinders University Student Association, and the only international student who gave evidence at the hearings, reported that government policy has left international students feeling like ‘a mere commodity’, stating that the delays and refusals stemming from Ministerial Direction 107 have sent ‘a strong message to the world that international students are not welcome here’.[42]
1.42In addition to the harm caused to international students themselves, this rhetoric fails to account for the vibrancy, culture, and diversity that international students bring to our campuses and communities. Professor Scott Bowman, Vice-Chancellor of Charles Darwin University, gave evidence that ‘Darwin would not be Darwin without its international students’, and that the students ‘really enrich the Northern Territory and they enrich the university’.[43]
Concluding Remarks
1.43Universities and private providers alike have been clear that the government’s reckless international student caps will be disastrous for tertiary education. Providers already suffering from the government’s secret Ministerial Direction 107 are looking at thousands of job losses and potential campus closures. For some providers, these caps spell the end of their business.
1.44It is clear that this Bill by the Labor government puts politics before policy. Despite all the evidence provided of the flaws, gaping holes, inconsistencies, the lack of consultation and the damage this policy will do, the government is pushing ahead with strangling the higher education sector in their disgraceful attempt to achieve a migration outcome which has absolutely nothing to do with international education. The higher education sector will be collateral damage in this race to the bottom on migration between Labor and the Liberals.
1.45In summary, and for all the reasons listed above, this Bill should not be passed.
Recommendation 1
1.46That this Bill not be passed unless Part 7 and 8 of the Bill are removed.
Recommendation 2
1.47That Ministerial Direction 107 be revoked immediately and not be contingent on the passage of the government’s legislation to cap international student numbers.
Recommendation 3
1.48That the government withdraw this Bill, go back to the drawing board and properly consult with the tertiary education sector to develop a plan which is sustainable rather than a rushed reckless migration policy.
Recommendation 4
1.49That university funding be increased to fully and properly funded learning, teaching and research.
Senator Mehreen Faruqi
Deputy Leader of the Australian Greens
Senator for New South Wales
Senator David Pocock’s additional comments
National impact of the bill
1.1With its Future Made in Australia legislation the Albanese government recognises, in part at least, the urgent need for Australia to build a new economic future. A future that’s less reliant on the “dig it and ship it” fossil-fuel-driven revenue base that has sustained us in the past and more adapted to an energy transitioned economy adapted to our changing climate.
1.2The Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 stands in stark contrast to that vision for Australia’s future.
1.3As drafted, the ESOS Bill imperils Australia’s biggest export industry outside of iron ore, coal, and natural gas.[1] A sector that was worth $47.8 billion to the Australian economy in 2023 and accounted for more than half of Australia’s economic growth in 2023. As the Group of Eight highlight in their submission:
…spending by international students was responsible for a 0.8 percentage point increase in GDP in 2023, over half of the recorded economic growth for that year.[2]
1.4According to data provided by the Department of Education, in 2024 estimated Higher Education New Overseas Student Commencements for publicly funded universities was 161,484.[3] The Government has proposed a National Planning Level limit for these universities of around 145,000 commencements for 2025. That represents a sector-wide, year on year cut to international student numbers of more than 10 per cent.
1.5There is broad agreement among stakeholders that the Bill’s quality and integrity measures are welcome.
1.6For example, Universities Australia said it ‘supports the government’s intention to maintain the integrity and sustainability of the international education sector…’[4]
1.7There is also recognition from across the higher education sector that unchecked growth in international student numbers poses a social licence challenge in terms of overall migration numbers and also as regards domestic student experience.
1.8We need to have a sensible conversation about migration, about how big we think Australia should be. We need a plan and clear targets that consider things like housing, infrastructure, impacts on the environment and our priority migrant skills needs.
1.9However, despite repeated questions from Senators on the committee, Treasury, Home Affairs and the Department of Education were unable to confirm what the national net overseas migration (NOM) target is for Australia. They advised the committee that there is in fact no target, only a forecast of the NOM.
The current forecasts for NOM were published in the 2024-25 Budget. Treasury will produce updated NOM forecasts for the 2024-25 MYEFO. The ABS publishes NOM statistics on a quarterly basis.[5]
1.10Given the significant economic, as well as social and cultural, benefits the international education sector brings to Australia it is deeply concerning that Treasury has done no modelling on what impact the proposed National Planning Level limits will have on the economy at the national or local level.
1.11The Reserve Bank of Australia has indicated its concerns noting in its latest meeting minutes that it was assessing the implications of the Bill saying it was ‘expected to weigh on services exports’.[6]
1.12Capital Economics has said:
We calculate that the proposed cap on international student commencements will cause education exports to plunge by around two-fifths, shaving off 0.7 percentage points off growth in 2025.[7]
1.13Organisations were not given their indicative caps until part way through the senate committee inquiry.
1.14Initially we were told:
Senator DAVID POCOCK: There’s no actual goal for the net overseas migration for next year?
Ms Cavanagh: Net overseas migration is a forecast.
Senator DAVID POCOCK: Do you have a goal for what you want to try and get it to?
Ms Cavanagh: I’d take you back to that statement that’s in the migration strategy as released last September—
Senator DAVID POCOCK: I heard that. It’s one thing to say pre-pandemic levels, but there are decades and decades of years pre-pandemic. We’re hearing a lot of talk about reducing migration, and I think there’s a lot of people who would agree [with] that. I’m also hearing that we don’t actually have a number in mind, we’re just reducing.
Ms Cavanagh: I can only repeat what the government has said.
Senator DAVID POCOCK: I’m interested in what Home Affairs is working towards.
Ms Cavanagh: We’re not working towards a number.[8]
1.15After the release of the indicative caps, Treasury said:
Treasury provided advice on the impacts of a National Planning Level for new international student commencements as part of the Cabinet process. Treasury will continue to assess any potential effects as part of updating its forecasts for net overseas migration in the 2024-25 MYEFO, taking into account latest available indicator data and other relevant information.[9]
1.16This wholly inadequate response does not give the committee, or the Australian community, any understanding of what the impact of these far reaching changes that touch every higher education provider in Australia’s fourth largest export industry will be.[10]
1.17Universities Australia estimates that already the combination of Ministerial Direction 107, increased student visa application fees from $710 to $1600 and the indicative national planning limits have cost Australia’s economy $4 billion.[11]
1.18The lack of Treasury modelling compounds the government’s failure to provide a regulatory impact statement for the Bill, a point raised by the University of Melbourne’s Deputy Vice-Chancellor Global, Culture and Engagement Professor Michael Wesley. The Bill introduces significant changes to the regulatory framework for international education, and it is important that the potential costs and benefits of these changes are carefully considered.
1.19Despite the lack of modelling and analysis, the impacts of these changes are clearly already being felt.
1.20Responses to Questions on Notice from Home Affairs show visa applications are down year on year.
Higher Education Sector Visa Applications
1.21The most recent student visa applications from July and August paint a deteriorating picture.
Student visa applications
1.22Immigration expert Abul Rizvi and higher education expert Professor Andrew Norton were both recently quoted in the media saying these figures ‘suggested many institutions wouldn’t reach the new international student caps that the government wants to introduce from next year’.[12]
1.23These most recent changes come after a difficult period for universities and other higher education providers whose operating budgets were hit severely during the COVID-19 pandemic and who were largely excluded from federal government support.
1.24As former Education Minister Kim Carr said:
There’s a strong case to say that universities are now too big and there is a legitimate case to be argued in regard of quality assurance. But caps are bad policy and ignore the Faustian deal that when the universities were not properly funded, they turned to international education as a way of securing the revenue they needed.[13]
Student numbers and funding
Parliamentary Library
1.25In the absence of meaningful funding of the true cost of research in Australia by our government, the proposed caps are a serious threat to our research in Australia across all universities. As a reminder, over the last decade, the percentage of Australia’s gross domestic product (GDP) spent on Research and Development (R&D) has fallen continuously. National investment in science and research across the economy — business, government and universities according to the 2023 Australian Bureau of Statistics — fell from 1.80% in 2019/20 to 1.68% in 2021/22. Our national investment in research funding is pale compared to that of our friends such as the U.K., Germany, South Korea or the U.S., which are closer to 4%.
1.26Of concern is the reputational damage Australia’s international education sector will suffer as a result of these changes which were announced with no consultation and were not foreshadowed in the year-long Universities Accord consultation process that proceeded them.
1.27Given the proposed start date of 1 January 2025 and where these reforms come in the international student enrolment cycle, serious concerns have been raised about institutions having to rescind offers already made to students.
1.28Collectively, the Group of Eight (Go8) universities had made around 50,000 offers to international students for the 2025 academic year, and that it was unclear how many of these offers would need to be rescinded if the new caps were implemented. CEO Vicki Thomson stated:
Rushing this legislation through is a critical mistake. In our case, we’ve already made 50,000 full and conditional offers to students to start in 2025. That reflects the 18-month timeline it takes to recruit students. And those students will not come back the following year.[14]
1.29Multiple witnesses pointed to the experience of Canada implementing caps, and the resulting decline in international student demand for study there. Almost 50 per cent of potential students in a recent IDP survey are considering study elsewhere, and page searches by Studyportals show a sharp drop in interest in Canada and more recently the UK.[15]
1.30Evidence tendered to the committee points to a real risk of international student caps repeating the failed experiment that was Job Ready Graduates by seeking to force students to study particular courses or at particular institutions or locations.
1.31Western Sydney University’s evidence to the committee highlighted some of the perverse outcomes and unintended consequences likely to result from the bill. Vice-Chancellor, Distinguished Professor George Williams AO, said:
The bottom line for us is that we’re down a thousand students on the number of students we would have liked to take next year. That will cost us $26.5 million in revenue next year, or about $78.4 million across the life cycle of those students. In our case, for every dollar we take in from an international student, 24c goes to supporting other activities, particularly our domestic students. So 24c in every dollar goes to our food pantry for domestic students, to equity issues and to study help. So we’re thinking very carefully about how this will affect our Australian students, because we will no longer be able to offer some of the vital programs they need to get through university.[16]
1.32The bill’s broad application could also deviate from the original intent of focusing on problematic providers without imposing undue burdens on reputable institutions.
1.33Independent Higher Education Australia (IHEA) has raised concerns that the bill’s measures will impose an excessive regulatory burden on high-quality providers with a strong record of integrity, regardless of their past performance. They are also critical of the bill’s criteria for cancelling courses based on perceived value to Australia’s skills needs or public interest, which they argue are overly subjective and risk ideological bias, potentially leading to the unjust cancellation of valuable courses.
1.34Concerns haven’t just been raised by providers. The NTEU argues that the proposed legislation would undermine the objectives of public universities and create unintended consequences for regional Australians’ access to equitable education and research opportunities.
1.35The NTEU also argues that the proposed amendments in the ESOS Amendment Bill represent a poorly designed and inefficient solution that is likely to have an effect on the sector that will be more damaging than helpful. They say that the bill lacks transparency, accountability, and sustainability, and that it would disrupt and reduce the capacity of ESOS Agencies to act in an effective and appropriate way.
1.36One of the biggest concerns with the Bill is in the overreach of power it assigns the Minister. This is explored at length by Professor Norton in his supplementary submission, who says of the minister’s broad discretionary powers:
The implied threat that this allows – universities that displease the minister could be penalised with lower caps – changes the power dynamic between the minister and universities. This is not necessary to achieve the bill’s purposes. It is undesirable both as a general principle and in the context of Australia’s history of university autonomy.[17]
1.37The senate has only recently passed reforms to remove Ministerial intervention from the Australian Research Council and its grants. To be reintroducing even greater ministerial powers now without any guardrails, limited parliamentary oversight and no sunset provisions is nothing short of extraordinary.
1.38The overwhelming view from stakeholders is that this legislation, and Parts 7 and 8 relating to international student caps in particular, is rushed, poorly drafted, has been subject to inadequate consultation and will lead to perverse outcomes while failing to appropriately respond to the legitimate concerns.
1.39Tying passage of this Bill to the repeal of Ministerial Direction 107 which has already resulted in a dramatic decrease in the number of international students of almost 60,000 students in the past year[18] is extraordinarily cynical politics. Ministerial Direction 107 should immediately be revoked and replaced with a fit for purpose instrument for managing student visa applications.
Impact on the ACT
1.40The adverse national impacts from the Bill will also apply to the ACT but in a more concentrated way.
1.41Canberra is a university town, home to five university campuses and a host of innovative private providers.
1.42According to the submission from the ACT Government, there are currently around 35,000 international students in the Australian Capital Territory (ACT) contributing around $400 million annually to the Territory’s tertiary education providers through course fees.
In 2023 the ACT had over 21,000 international student enrolments, and international education’s export value was $1.1 billion for 2022-23 – our single largest export by value.
Importantly, international students contribute greatly to the social fabric of Canberra, bringing diverse cultural perspectives, traditions, and experiences to the communities which fosters cultural awareness and appreciation.[19]
1.43The submission goes on to note:
Given this significance, any changes to policy settings for international students must carefully consider the impact of those changes on economies that rely on the sector.[20]
1.44The ACT has a number of revenue raising disadvantages in comparison with other jurisdictions and international education is currently our largest services export industry.
1.45While it appears that South Australia has been given favourable treatment related to the upcoming merger of the University of Adelaide and the University of South Australia and the Northern Territory has been carved out from the new international student caps altogether, no such allowances have been made for the ACT.
1.46The Australian National University’s indicative international student cap for 2025 is 3400, which is 400 students lower than it enrolled in 2024. Crucially however, it is also well below the university’s forecasts, showing the government’s rhetoric of “managed growth” to be not just empty but counterfactual.
1.47The impact of this cut to international student numbers with no lead time is already apparent with the ANU announcing plans last week to downsize the university and cut more than 50 jobs in an initial restructuring.
1.48The ANU has gone from a projected deficit of $60 million to more than $200 million this year. The university’s chief financial officer Michael Lonergan reportedly ‘told staff one of the factors impacting the university’s bottom line was the international student cap.’[21]
1.49In the wake of the announcement, the NTEU has also noted that:
ANU’s financial situation has not been helped by the uncertainty around international student caps, and we repeat our call for the Education Minister, Jason Clare, to implement a transition plan to make up funding shortfalls due to federal government policy changes.[22]
1.50While the University of Canberra’s indicative international student cap of 1500 students for 2025 represents a very small increase on its 2023 numbers, it does not give the university scope to grow. And this growth is needed given the university’s operating deficit has blown out from $26 million to $36 million for this year with job cuts also foreshadowed. Nor does UC’s cap appear to recognise the fact that international students only comprise some 22% of the University’s total student cohort.
1.51Perhaps most galling for Canberra’s universities is, in setting the indicative international student caps, the lack of any recognition of investments they have made in student accommodation over the past decade.
1.52The Australian National University (ANU) has a significant amount of student accommodation available on campus. In their submission they state:
ANU has more than 6,500 beds on its Acton Campus, a ratio of 1 bed to every 1.6 international students enrolled at ANU.[23]
1.53ANU points to the range of student accommodation options available on and off-campus. In their submission they state:
The University has relied on productive commercial partnerships to grow our residential footprint. To provide these partners surety to support their investment these agreements include provisions such as minimum occupancy rates and demand tests that must be met before accommodation footprints can be expanded.[24]
1.54A failure to recognise existing student accommodation when setting caps extends beyond the ACT.
1.55Western Sydney University noted its surplus of student accommodation capacity, saying:
The University’s purpose built student accommodation currently has 20 per cent spare capacity. Every one of our international students who wants a bed, gets a bed.[25]
1.56Once again, the extent of any direct link between international students and Australia’s housing crisis has not been modelled by Treasury.
1.57In response to my questioning, they said (on notice):
Treasury does not track or model the number of international students in the private rental market.[26]
1.58Instead, they estimate, while at the same time holding no data on each international higher education providers’ student accommodation offering.
1.59It is also important to highlight the impact of the Bill on private providers in the ACT. I have had providers from around the country contact my office in desperation after receiving their allocations. Two local providers have also recently spoken out publicly. Academy of Interactive Entertainment Chief Executive John De Margheriti told the Canberra Times ‘he was in total shock after being told his international student quota would be slashed from 248 to zero for 2025’.[27]
1.60While Key 2 Learning College director Michael Bermejo whose college trains workers for aged care, nursing and disability support workers, said ‘his college had been told its international student quota would be cut from 250 to 75, meaning the college would no longer be financially viable’.[28]
1.61Their experiences highlight the poorly targeted approach to restoring integrity in Australia’s international higher education sector contained in this bill. Rather than a risk-based approach that rewards high-quality providers with integrity, this model is a blunt instrument that harms all, and in many cases those who have ‘done the right thing’ by not inflating their international student numbers in recent years even more.
Recommendations
1.62The weight of evidence tendered to this inquiry leads firmly to the conclusion that this Bill should not pass without significant amendments, including winding back, and putting guardrails around, the extraordinary powers this Bill confers on the Minister.
Recommendation 1
1.63Delay commencement of Parts 7 & 8 of the Bill to 1 January 2026 to enable an orderly transition without further damaging Australia’s international reputation and the longevity of our international education sector.
Recommendation 2
1.64Include ‘sunset provisions’ in relation to the Minister’s powers so that they sunset at the sooner of two years, or when a relevant Mission Based Compact entered into.
Recommendation 3
1.65Amend the Bill to require the use of formulas and rules in the legislative instrument and remove the power to cap providers or vary legislative instruments independently of the Parliament. Establish legislated criteria for setting caps and require the Minister to provide and publish a statement of reasons for each cap.
Recommendation 4
1.66Insert a provision creating an independent process for providers to challenge and/or request a formal review of any cap they are given.
Recommendation 5
1.67Set a floor on the annual international student caps to give providers a minimum level of certainty to plan their budgets. The floor is proposed to be a cap that is not more than 15% lower than the previous year’s cap or the average of the previous three calendar years, whichever is higher.
Recommendation 6
1.68Amend the breach provisions, so that they are more proportionate, and so that suspensions are not automatically triggered for minor breaches. Include a range in the international student cap allocations to each institution to provide flexibility and minimise unintentional breaches of the cap. Include at least one warning of potential breaches prior to penalties being enforced.
Recommendation 7
1.69Insert a provision that annual international student cap limits must be provided no later than 1 July of the preceding year and be publicly notified.
Recommendation 8
1.70Require the formula for setting caps to take into account the provision of existing student accommodation, including any arrangements through third party providers.
Recommendation 9
1.71Remove the Minister’s power to set caps at a course level.
Recommendation 10
1.72Provide clarity to providers around the priority categories of students to be excluded from the caps including postgraduate research students, exchange/study abroad/mobility students, and students in transnational education (TNE) programs.
Recommendation 11
1.73Require the Minister to consult with a registered provider before determining a limit for that provider
Recommendation 12
1.74Insert a new provision requiring the government to maintain a public register of all notifications provided. Notifications to providers should be directed to be immediately included in the register.
Recommendation 13
1.75Amend the definition of education agent to make it clear that an agent is an entity that engages in the specified activities in relation to a provider in exchange for a commission, and that is listed in the PRISMS system.
Recommendation 14
1.76Better define enrolment for the purposes of setting annual international student caps.
Recommendation 15
1.77In consultation with stakeholders, develop and legislate a workable system for reallocating unused places.
Recommendation 16
1.78Narrow the reasons why the Minister can suspend or cancel a course to those with systemic integrity issues.
Recommendation 17
1.79Ensure the legislation allows new independent higher education providers to enter the market with appropriate quality and integrity safeguards.
Recommendation 18
1.80The government should develop a national plan for population and immigration that sets specific targets through consultation with Australians and consideration of impacts on housing accessibility and affordability, infrastructure, the environment and water, and our priority work skills needed.
Senator David Pocock
Participating Member
Senator for the Australian Capital Territory
More analysis to follow tomorrow morning.
We wait to see if the debate will be schedule on the order of business tomorrow.
