Registered Training Organisations already listed on CRICOS have become significantly more valuable. Not because of a funding boost, but because of a new regulatory barrier that will make it much harder for competitors to enter the international student market.
Recent changes require any RTO seeking a new registration on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) will be required to demonstrate at least two years of delivery to domestic students before they can enrol international students on student visas.
For providers already on CRICOS, that requirement effectively locks in a competitive advantage.
Why this matters
CRICOS registration is the gateway to recruiting international students. Without it, an RTO cannot enrol students on Australian student visas.
Under the new framework, new entrants will face what can reasonably be described as a “tariff” — not in the financial sense, but in time. Before accessing the international education market, they must first establish themselves in the domestic training sector for a minimum of two years.
In a tightly regulated market, time is money. Two years of mandatory local delivery represents a substantial cost of entry.
A tariff by another name
The Oxford definition of a tariff is “a tax or duty to be paid on a particular class of imports or exports.”
In this case, the duty is temporal rather than financial. The “cost” is two years of operational delivery to non-visa students. That is the new price of admission to the export education market.
For start-up RTOs, that hurdle is not minor.
The domestic delivery challenge
Recruiting and retaining local students is no simple exercise, particularly in a market shaped by government-funded initiatives such as Fee-Free TAFE.
In New South Wales, for example, state-backed training is available at no cost to eligible students through TAFE NSW. Similar programs operate across most states and territories, creating significant competitive pressure for private RTOs attempting to build a domestic cohort.
For a new provider, establishing a viable local business in this environment will require capital, patience and a strong value proposition. Only after clearing that hurdle can they apply for CRICOS registration.
In practical terms, the barrier to entry into international vocational education has just risen.
Winners and worriers
Reactions across the sector are likely to be mixed. Some stakeholders may express concern about reduced competition and potential market concentration. Others will quietly acknowledge what this means for asset value.
When regulatory barriers increase, incumbents benefit.
Existing CRICOS-registered RTOs now operate in a more protected market. Their approval status has become scarcer, and therefore more valuable. For business owners considering succession, investment or sale, that exclusivity may translate directly into balance sheet uplift.
In short, do not be surprised if some providers view the reform less as a constraint and more as an unexpected windfall.
Alan Manly OAM is a distinguished entrepreneur, innovator, director, and author with decades of experience in technology and education. He has held directorships in private, public, and non-profit sectors. He was the CEO and PEO of RTOs and Higher Education Institutions for over twenty years.
