This week, the Senate will debate the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024. The Bill paves the way for unprecedented Ministerial control of and intervention into international education.
The most controversial part of that Bill is, arguably, the introduction of powers that let the Minister for Education set annual limits on the number of international students who can study in Australia and at each institution each year. The Bill will also allow the Minister for Education to decide which courses international students can study.
Four Senate committee hearings have examined the Bill and worked through nearly 200 submissions on its provisions. The overwhelming majority of the submissions and the witnesses at the hearings gave damning accounts of Bill’s rushed development, of the lack of genuine stakeholder consultation in that development, and the extraordinary levels of ministerial power the Bill enables.
Two additional Senate hearings were added along the way due to the outrage of the non-government Senate Committee members with various government departments. Twice, the spokesperson for the Department of Education suggested to the Committee they were not aware of the details of the government’s plans to release the enrolment limits to individual institutions. Both times, those individual institutions received letters with those limits within hours. Twice, Treasury appeared and stated they had done no economic modelling of the impact of the Bill despite sector estimates of the loss of billions of dollars in exports. In the final hearing, a Treasury spokesperson said they expected no significant job losses. The appalled reaction by Greens Senator Mehreen Faruqi would have only been outdone by those watching from home, having already lost their jobs due to the sector downturn from the mere threat of the Bill.
Today, English Australia, the national peak body for the English language teaching sector in Australia, has publicly released new data that estimates day-to-day spending by international students in each of Australia’s federal electorate communities. It also estimates the inevitable decline in that spending due to the proposed caps (due to come into effect on 1 January 2025) should the Bill pass. Of course, many in the sector see this as a moot point, as there have been so many constraining changes to the student visa regime in the last 12 months that student visa applications from outside Australia have fallen by nearly 40% compared to last year.
English Australia’s new modelling is quite different to the ABS data that shows international education generated $50.5 billion in export earnings for Australia in 2023. The new modelling, developed by esteemed geo-demographer Nick Nicholas of The Demographer’s Workshop, shows spending by each student on living expenses – food, transport, clothes, entertainment, accommodation, etc. It estimates that international students’ day-to-day spending in 2023 totalled more than $13.75 billion. That spending goes into the pockets of businesses in electorate communities around the country. That means the government’s efforts to rapidly shrink the sector will take billions from the pockets of those businesses in those communities.
That’s not to mention the impact on the more than 250,000 Australians who were employed in the sector. As we’ve seen in the news already, thousands are already losing jobs. Estimates from within the sector are for job losses in the tens of thousands. This represents a heartbreaking impact on these people and a significant economic impact of its own.
So why, since the closing months of 2023, has the Australian federal government worked overtime to dramatically shrink the sector. Why are they so willing to see billions in export earnings and tens of thousands of jobs lost?
Well, in late 2023, with increasing community concern about housing, the government started by linking increased international student numbers to the housing crisis. Students do rent and so they do impact the rental market, but research showed their impact was minimal – between 4% and 7% of the rental market depending whose research you prefer. The Property Council also showed that rental availability and affordability actually worsened most during COVID when student numbers were at all-time lows. It turned out that the biggest factor was fewer people per dwelling.
Then government pointed the finger at “shonks” and “crooks” as the reason we needed the Bill and repeatedly referred to the Nixon review which uncovered appalling, criminal behaviour albeit by a tiny minority. But the Nixon review had flagged behaviour that was already illegal – it didn’t need new laws. Nixon called for targeted police and regulator action, not a reduction in the number of students. Afterall, we didn’t deal with drink driving by reducing the number of drivers on the road, we put more police on the roads and introduced breath testing. That is, we used targeted regulator action.
So, why? Well, with an election looming and worsening housing and cost of living crises that are very tough to fix, government needed a problem they could ‘solve’ that would win votes. With the post-COVID surge in the net migration figures and the massive 2023 growth in international student numbers, it shouldn’t have been a surprise which ‘problem’ the major political parties would choose to ‘fix’. Immigration.
So, where did the ‘problem’ come from. At the tail end of COVID, the government were very eager to reinvigorate the economy and so, against the urgings of peak bodies like English Australia and IEAA, they gave international students unlimited work rights so we could restock supermarket shelves, restaff cafes and childcare centres and aged care facilities, and get construction sites moving again. And it worked a treat – student visa applications skyrocketed and international students got the GDP moving. As English Australia and IEAA had warned though, with them came ‘bad actors’ and the emergence of what has become known as ‘ghost colleges’ which sold courses but only delivered the visas.
There was also the free COVID 408 visa that allowed/encouraged students to drop studies and work. This visa attracted more than 100,000 in the end. Many came to Australia on a student visa only to transfer to the COVID 408 visa as fast as possible so they could take advantage of the unlimited work rights.
With minimal visa application scrutiny and zero enforcement of visa compliance, the incoming numbers kept growing while the outgoing numbers didn’t. In fact, looking back at the five-year net migration average across the COVID period, the increase in incoming students stands out far less than the fall in numbers of students leaving. In part this is because many students come to study for 3 or 4 years. This means the large numbers who came at the end of 2022 and the first half of 2023 won’t leave until late 2025 through to mid-2027.
There is little patience in Canberra to wait that long though. They need to ‘fix’ the problem now. As in ‘pre-election-now’. And despite generating significantly higher export earnings than tourism, many misunderstand international education. Many are unaware of how much international students contribute to local communities. Many Australians think, as a One Nation MP once falsely claimed, that international students take places from domestic students. So, reducing international student numbers appears to win votes in key ‘battleground’ electorates. But maybe if they knew international students’ tuition fees actually subsidise university for domestic students and create five times as many jobs per export dollar as mining does. Maybe if they knew just how much international students contribute to their local economies. Maybe then, they wouldn’t be quite so keen to see numbers fall.
These questions led to the new study. This analysis has identified every campus registered to deliver courses to international students in Australia and plotted them to federal and state electorates. It then uses gravity modelling to estimate spending in each electorate using the numbers of students in each SA1 geographical region and then using a probability model to map the movements and spending as the students study, live, and pass through the federal electorates. The report uses ABS data estimating annual living expenses of $24,000.
The analysis estimates total day-to-day spending at $13.75billion. This excludes the billions spent by international students in tuition fees and tuition related payments, such as Overseas Student Health Cover which is compulsory for all international students to cover any medical expenses during their stay in Australia.
IEAA CEO, Phil Honeywood, commented that, “The expenditure by overseas students in their local economy has never been properly analysed. It’s also little acknowledged that their friends and family members coming to visit them from overseas comprises over one third of Australia’s international tourism revenue.” IHEA CEO, Peter Hendy, also commented that, “The EA work is very timely and gives us concrete data that emphasises the importance of international students to the Australian economy.”
The analysis shows international student spending is shared across almost every federal electorate. In the top 25 electorates, they spent from $2.64billion to $98million in 2023. The actions of the government over the last 12 months have already caused a fall in new student visas being granted of more than 30% for YTD 30 September versus 2023 and more than 15% versus pre-pandemic numbers. Australia has already become far less attractive to new students. New applications from potential international students coming to Australia are down 37% YTD versus 2023 figures.
Cutting student numbers by 30% cuts day to day spending across our local communities by 30% – that’s a cut of more than $4billion. That’s all money out of the tills of small businesses and out of the pockets of mums and dads trying to pay their bills in the midst of a cost-of-living crisis.
With the LNP looking to cut immigration more than Labor, the Bill will likely pass Senate and come into force in January. Tough times are ahead. This new analysis shows that it won’t just be those in the education sector that will be doing it tough.
Ian Aird is the CEO of English Australia.
