Failure to reverse a downturn in international student enrolments could cost billions to Australia’s GDP and over 45,000 jobs by the end of the decade, a report has found.
International student enrolments began to decline in 2010 following stricter visa regulations, the rise of the Australian dollar and a series of attacks on Indian students – at least some of which were found not to be racially motivated but which nevertheless created a perception Australia was unsafe for foreign students.
A Deloitte report commissioned by Universities Australia, which represents 39 Australian universities, modelled the effects of the downturn over time and estimated that continuing the downward trend could cost billions.
“In net present value terms, the reduction in GDP over the 2010 to 2020 modelling period is $37.8 billion,” the report said.
“Australian employment is also expected to fall over the modelling period because of a lower number of higher education enrolments.”
“In 2010 the reduction in full time equivalent employment numbers is estimated to be 5,314 and by 2015 forecasts a loss of 56,993 full time equivalent workers, recovering to 45,457 by 2020.”
Changes to the General Skilled Migration program that made it more difficult for international students to stay after finishing their degrees have also helped discourage enrolments, as has increased competition from universities in the U.S. and Asia, the report said. The global financial crisis put only a minor dent in demand for an Australian education by students from developing countries, the report said.
The report made the following recommendations:
- Changing visa rules that discourage university students from staying on in Australia after their studies finish.
- Reviewing the need for visa rules that require foreign students to prove upfront they have enough money to pay for three years study and living costs.
- Exempting students from restrictions on skilled migration
- Promoting Australian universities abroad.
- Boosting safety for international students and encouraging communities to welcome them.
- Allowing international students to qualify for public transport concessions in all states.
- Providing more housing for overseas students.
Fees and charges paid by international students account for around 18% of income for Australian universities.
“We are concerned it leads to a volatile element in university revenues, particularly where we are using those moneys to significantly cross-subsidise domestic students,” said the chief executive of Universities Australia, Glenn Withers.
“That seems a bad principle and we are hoping the base funding review will ensure that domestic students are fully funded,” he said.
“In that case, the international ups and downs won’t affect the domestic provision of education.”
Professor Simon Marginson from the University of Melbourne’s Centre for the Study of Higher Education said that given that tough visa and migration policies are likely to continue, the report actually underestimated the losses that would result from the downturn.
“There is no reason to assume those policy factors will change,” he said.
“My judgment is that the report seriously understates the impact of the market downturn in the medium and long term. Its forecast recovery is too early under almost every possible scenario. Even if migration policy changes, there will be lags while the effects of the current policy continue to play out.”
“This is a wake up call for the government.”