Whenever the government sets about rearranging the deck chairs, the important thing to do is keep an eye on the money. Doing so can provide tremendous insight.
The release of the Inquiry into Australia’s Tourism and International Education Sectors interim report provides significant detail into the funding of International Education promotion and its ROI.
In fact, the funding is/was clearly a consideration of the report. The following excerpts demonstrate a funding situation that demonstrates that Australia’s international education sector punches well above its weight and why avid watchers should pay attention to the relationship between International Education and Tourism in Australia (TKN 23/10/23).
Key excerpts are:
Study Australia Funding
Study Australia is allocated just under $6 million annually for dedicated education staff located in 36 locations around the world, a small specialist team in Australia, the Study Australia website and digital and social media outreach for global promotion of Australian education and training, including a marketing portal for providers and education agents. An additional $2 million was allocated in this budget year to redevelop for user experience on mobiles, including ten foreign languages. (2.50, Page 21)
Ratio to Income
Study Australia’s budget is extremely modest given the direct revenue and soft power influences potential of international education for Australia. International education revenue (including students here under 12 months and over 12 months) generates sixty-eight per cent of international tourism spend in Australia. (2.51, Page 21)
Comparative to Tourism
Tourism Australia spent $57.7 million in advertising and research in 2021/22, Austrade’s marketing spend for international education for the same year (2021/22) was $6,883,923. (Page22)
State Funding
New South Wales committed in 2022 $19.1 million over 4 years for destination marketing and to improve the student experience (including internships and sports programs). Queensland in the same year announced $20.6 million to support the State’s 5 years roadmap to drive the post-pandemic recovery of International Education and Training (IET) exports. Western Australia in 2023 announced $13.1 million investment international education for international student support (including student grants) and destination marketing. This brings Western Australia’s total spend on international education to $75 million over 4 years. (2.58, Page 22)
Comparison to Competitor Countries
Australia’s spend on international education marketing is approx. $6 million (an additional $2 million was allocated in this budget year for a special project) in comparison with competitor countries, the United Kingdom and Canada, this is a tiny amount. (2.59, Page 22)
UK Comparison
The British Council, established in 1934, is the United Kingdom’s international organisation for cultural relations and educational opportunities. It is a charity governed by Royal Charter and a UK public body. It has 12,000 staff across 100 locations around the world. In FY 21/22 the British Council spent £175 million (approx. AUD $335 million) on encouraging educational cooperation and promotion the advancement of education. (2.60, page 23)
Canada Comparison
In 2019, the Canadian Government announced a new international education strategy backed by government investment of CDN$147.9 million (approx. AUD$165 million) over five years, starting in 2019–20, with a further CDN$8.0 million (approx. AUD$9 million) per year, ongoing. The strategy included approximately $24.1 million (AUD$27m) of funding for a targeted digital marketing strategy to attract students from a diverse range of markets. (2.62, Page 23)
Another Levy?
Of course, no discussion can be had without proposals on how funding can be increased.
Austrade proposed a range of funding models that could enable enhanced and united Australian education marketing and promotions activity. These would build on and extend structures –including the Study Australia Partnership that already exist. (2.85, page 29)
States and territories could contribute to a joint education marketing fund which promotes Australian education and Australia as a destination via an agreed formula. This joint marketing fund could build on the governance structures and activities established through the Study Australia Partnership. The approach could enable Australia to compete, grow and defend market share in a hyper competitive environment in a more unfired and stronger position to the benefit of all stakeholders. (2.86, Page 29)
A marketing and promotions levy could be collected from CRICOS registered Australian education providers. This could be based on the New Zealand Export Education Levy (EEL)109 and based on a percentage of international student fees (as captured in PRISMS). (2.87, Page 29)
Austrade noted that levy implementation and management is an extensive administrative exercise and equity issues across sub sectors and locations will have to be carefully managed. A levy may not be welcomed by all parts of the sector on the principles of affordability, misalignment with recovery trajectories and administration burdens. (2.88 Pages 29/30)
Study Australia under Austrade is seriously underfunded as compared to competitor nations in an increasingly competitive international environment. The Committee’s view is that the Government should consider allocating more of the existing overall Brand Australia budget to international education outreach and that this commitment be used to leverage co-contributions from the sector via a focused marketing levy in accordance with the recommendation below. (2.146, Page 41)
The recommendation?
Under recommendation 1
be jointly resourced by both the Government (via Austrade) and the sector, potentially via a light touch time-limited marketing levy on Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) providers subject to shared governance so those who pay a levy have influence over how it is spent. (Page 42).
Yes, another levy.
The full Inquiry into Australia’s Tourism and International Education Sectors interim report can be seen here.
