The Australian Government has plans to limit the number of international students in Australia by capping the number enrolling at each university or college. The new measure will allow institutions to negotiate a higher cap if they build new student accommodation to ease pressure on the domestic rental market.
On page 16 of the recently released “ Australia’s International Education and Skills Strategic Framework “ it says:
Government will establish a process to set international student profiles with individual universities that limit how many international students can be enrolled over a set time period, supported by changes to the ESOS Act. A range of considerations will influence the profiles allocated to universities, including the university’s supply of purpose-built student accommodation, and the contribution of enrolments to meeting Australia’s skills needs. Government will allow universities to enrol additional students above their international student profile where the university establishes additional, newly built supply of purpose-built student accommodation.
Purpose-built student accommodation (PBSA) is one thing, and the allocation of visas institution by institution is another. For those who have halls of residence vacant, this may well be a welcome policy change. For those who have been down the planning road only to have PBSA accommodation knocked back, it isn’t as much.
New builds also take time and cost money.
One potential immediate and short-term alleviator is linking homestay (hosted accommodation) availability to institutional accounts.
According to David Bycroft, Founder of Mystay International the solution “involves stakeholders working together to maximise the use of these unused, well-located spare rooms and making sure these are properly managed through NEAS-endorsed homestay providers.”
“The strategy will not only protect and enhance our important international education industry by cultivating a nationwide network of standards-compliant hosts, but it will also take pressure off current rental/housing shortages and provide hosts with tax-free income, which can alleviate cost-of-living pressures.” He says.
How could it work?
Bycroft proposed the following model:
- Introduce a new student visa condition specifying compliance with specific accommodation arrangements that do not compete with domestic housing demand.
- International students must have accommodation booked through existing PBSA (including on-campus dwellings) or NEAS-approved hosted accommodation (homestay) organisations.
- Point 2 above would be an ongoing condition of the student visa.
- Education providers to monitor and report on visa non-compliance
- Education Accommodation Fees could be paid upfront (as part of the students ‘proof of funds’ ) and paid in an approved and secure financial vehicle
Beyond the proposed structural changes above, Bycroft is also advocating for a tax concession for host families to incentivize the unlocking of rooms for students.
The current Australian Tax Office (ATO) interpretive decision on homestay revenue earned by hosts was originally published in 2001 and, according to Bycroft, needs an update in 2024. ‘It has to be made very clear that the tax-free status of hosting an international student can only be applied if the host is working through a NEAS-approved homestay organization.’ He says.
This will effectively drive hosts to the standards-based approved providers and assist in increasing the supply of quality international student accommodation that does not compete with the domestic accommodation demand.
Education Providers and Industry can all encourage hosting through this process where the international student experience, safety and support is the priority.
By clarifying the tax incentive, the Government will go a long way to increasing a strong and workable hosted accommodation in addition to the limited PBSA option for international students.
An interesting proposal as we enter new and uncharted territory.
