A Roadmap to Fix the Visa Showdown
By Tim Dodd, higher education writer
Let’s be clear. The Albanese government’s intention to place a cap on the number of international students in Australia is very badly conceived. It’s a policy of self-harm. Not only does it have serious economic consequences, but it fails most of the tests we would expect that a credible government policy for international education should meet.
The impact of the caps spreads wide and deep and other authors in this series have enumerated many of the faults.
Susannah Patton, from the Lowy Institute, has described how the new policy not only squanders Australia’s reputation but also ignores many new challenges which international education is facing.
Vicki Thomson, from the Group of Eight universities, says its claimed benefits are illusory and it will not address housing shortages or migration issues.
Ren Yi, from the University of Southern Queensland, urges Australia to broaden education links with regional countries and to focus on meeting other countries needs.
And Gwilym Croucher and Chris Ziguras, from the Centre for the Study of Higher Education at the University of Melbourne, give a comprehensive rundown of the new policy, explaining its context and identifying the winners and losers among education providers.
These four articles comprehensively cover the issue but, in this piece, I will take a step back and examine the fundamentals of what Australia’s international education policies should achieve and compare them to what the government’s new policy of student caps is likely to lead to.
There are five areas in which an international student policy needs to deliver.
It should make, as its first priority, achieving beneficial outcomes for students, both domestic and international.
It should support Australia’s migration and skill policies
It should give universities and other international education providers a stable and effective policy and regulatory environment.
It should be effective in promoting Australia’s national interests, creating positive economic outcomes and enhancing Australia’s status in the Asian and Indo-Pacific regions.
It should recognise that international education is a competitive market and match policy to market realities. It should not try to force outcomes which are not feasible.
The problem is that the government’s policy of student caps, driven as it is by Labor’s political need to shut down the Coalition’s populist attacks on high migration levels, doesn’t meet these needs.
Let’s take them one by one.
Beneficial outcomes for students, both domestic and international
The caps policy, and the policy gyrations which led to up it, were and are intensely disruptive to international students. Late last year the government threw out its hitherto reliable criteria for assessing student visa applications and began delaying and rejecting student visas for arbitrary and unpredictable reasons. This policy still exists even though international student caps have been layered on top of it. The caps, which reach down to the level of giving individual institutions a quota for enrolment of new international students next year, restrict student choice, forcing them to consider choosing universities which they would ordinarily not favour.
Support for Australia’s migration and skill policies
The caps are a product of the government’s confusion over migration. The politically unwelcome spectre of “Big Australia” which the Coalition tried to pin on Labor, led the government to prioritise reducing net migration. But net migration is a furphy. Because it measures anybody arriving in the country who intend to stay at least 12 months, regardless of whether they will be in Australia permanently, it picks up international students. But most international students do not stay in Australia. They leave. The only ones who contribute to Australia’s long-term population are those who take the further step of applying for Australian residency, and eventually citizenship.
And the caps do not integrate well with Australia’s skills policy which encourages international students who have necessary qualifications in areas of short supply to apply for permanent residency and remain in Australia. What happens to the availability of these skills when student numbers fall?
Stable and effective policy and regulatory environment
International education has long needed more policy regulatory stability. It has rarely had it and this has contributed to swings in activity and difficulties for education providers in making long-term plans. For example, two years ago, with the economy suffering labour shortages post-Covid, the government implemented measures to encourage international students to come. Then the situation suddenly switched.
This was difficult enough but now the caps policy has delivered a king hit of disruption that will reverberate for years. The universities which will lose international students will lose revenue they believed they could rely on. And it has taught investors in the many high quality private colleges which cater to international students that they can’t rely on consistency of government policy and that their business is beholden to bureaucratic whim.
Promote Australia’s national interests
Australia’s national interests fall into several categories. One of them is economic and international education has delivered superbly on this with over $50bn worth of exports in the latest 12-month period. Caps will cut this export market.
The government’s caps system will also hand huge power to bureaucrats (or possibly the planned Australian Tertiary Education Commission) which will set student quotas for individual institutions. It will be a nightmare of central planning, and about as efficient as any centrally planned sector of the economy.
International education also plays a large role in influencing Australia’s reputation, and creating opportunities for public diplomacy, in Asia and the Indo-Pacific. All of this is imperilled by caps.
Matched to market realities
The international student market is highly competitive, both among education institutions in Australia and between Australia and overseas countries which also enrol international students.
Although there is government intervention - for example through the issuing of student visas and the requirement for institutions to be licensed in various ways - until now there have been no price controls over fees or volume controls over the number of students. Students are currently free to choose their destination country and their education institution.
Caps will take away some of this freedom. More students will be turned away from their chosen institution. The government wants a more even spread of international students across universities and hopes, for example, that regional universities which have been awarded more generous caps will gain international students. However, a market reality is that most international students don’t want to study in the regions. They want a major city which is why so many regional universities have capital city campuses for international students. And placing regional university campuses in major cities does nothing to ease housing shortages in Australia’s big cities which was supposed to be one of the goals of the caps policy.
Future action
The caps policy does not satisfy any of my five principles for good international education policy. But what should be done?
There needs to be recognition that the record rate of net migration last year was an after effect of Covid and is likely to pass. Because so many international students went home during Covid there was a net outflow and net migration fell. Then when these students returned the number of arrivals greatly exceeded the number of departures and net migration boomed. It would be far better to have let the situation settle before deciding to reduce international student numbers.
What the government can and should do is put more resources into the other part of its international student changes, the crackdown on dodgy colleges and education agents. It has taken the government way too long to find effective ways to remove these people from the education industry. But effective action will prevent students being exploited and also improve Australia’s reputation in the region.
There is also an urgent task for universities. They need to make international students a plus for domestic students, not a source of resentment or concern.
The problem is that, while international education has clearly benefited the Australian economy as a whole and given many universities large revenue streams which have underpinned their research budgets, it is not so clear how domestic students have benefitted.
In some courses in some universities, particularly business, there are overwhelming numbers of international students which distinctly changes the nature of a university education.
Universities believe they need international student dollars to fund research. But they need to dial back the focus on the dollars and, as Ren Yi suggests, focus on the needs of the countries the students come from.
That way, international education will be delivering lasting benefits over many decades to Australia, as well as to students' home countries. And it will also create lasting goodwill that is invaluable to Australia in positioning itself in the region.
Tim Dodd is the former higher education editor of The Australian. He was also the education editor and Indonesia correspondent of The Australian Financial Review.
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