The Albanese government is again attempting to impose commencing international student caps on education providers. The proposed Australian Tertiary Education Commission would implement the caps, with a bill to create ATEC currently before the Parliament.
While explanatory material released with the ATEC bill foreshadows further legislation to establish a capping framework, the bill as it stands includes a capping power. It would give ATEC the power to ‘allocate a maximum number of international students to ESOS registered providers at the direction of the minister.’
From the government’s perspective, however, the problem is enforcing these caps. The ATEC bill lacks specific penalty provisions. For universities, ATEC could potentially impose indirect penalties via less favourable ‘mission based compacts’, which universities must sign to get Commonwealth grants. But non-university higher education providers and vocational education registered training organisations won’t have compacts.
Due to this enforcement issue, the government probably won’t use ATEC caps to replace its current ‘indicative allocations’ of commencing international student places to education providers. In 2025, non-university higher education providers significantly exceeded their total indicative allocation. Using migration law the government can at least inflict some pain on these providers, through slow visa processing.
Although the ATEC power to cap commencing international students probably won’t be used without further legislation, the ATEC bill’s wording should make the sector nervous.
Background briefings to universities suggest that ATEC will, when allocating international student places, take into account each university’s financial position and their balance between international and domestic students. But the phrase ‘at the direction of the minister’ in the ATEC bill suggests that the minister could specify caps by provider, with ATEC just implementing the minister’s decision. Direct ministerial allocation was the method chosen in the 2024 ESOS legislation capping proposal.
Other parts of the ATEC bill also give cause for concern about how international education will be handled. International education is not included in the topics on which ATEC must advise the minister. It is missing from the list of items ATEC may include in its annual State of the Tertiary Education System report. While international education will inevitably come up indirectly – ATEC could hardly advise on ‘financial sustainability’ without considering international education – its absence as a distinct subject is striking.
Perhaps these issues will be resolved in further legislation. But why then does the current ATEC bill creates a power to cap international student commencing places, instead of waiting for necessary future detail?
Regular readers of my blog on higher education policy will know that this government is adept at exploiting vulnerabilities in existing legal frameworks to achieve its higher education goals. We should not risk leaving a power to cap international student commencing students in the ATEC bill.
Andrew Norton is a Professor of Higher Education Policy at the Monash Business School.
A discussion of this issue with reference to specific legal provisions is here.
