Delivered by Mr Luke Sheehy, Universities Australia Chief Executive Officer
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Good morning and thank you for that warm welcome.
I begin by acknowledging the traditional owners of the land on which we meet, the Yugambeh people, and I pay my respects to elders past and present.
It’s great to be here with you all at the ITEC24 Higher Education Symposium, and I thank the Independent Tertiary Education Council Australia for the invitation to speak.
I appreciate the effort that’s gone into organising this event at what is a particularly intense period for tertiary education.
I know Troy Williams and I have been busy as our respective groups respond to the concerning shifts we’re seeing in the international education landscape.
I’ve been asked here to speak on how cohesive policy delivers better outcomes.
It’s an important topic, and a sentiment hard not to agree with.
We have a perfect case study right now in international education, gift wrapped by both sides of politics.
The current policy approach to international education is anything but cohesive – it is policy chaos, starting last year with the rollout of visa processing changes.
Framed as measures to shore up the sector’s integrity, we now have every reason to believe these changes were a cap by stealth on international students.
And it has only gotten worse.
Now, both the Government and the Opposition are openly targeting international students in their bid to slash migration.
All to neutralise an electoral battle ahead of the next federal election over migration and its perceived impact on housing affordability and availability.
Rarely do the major parties find common ground on migration, but here they are on a unity ticket with the shared aim of shutting the door to international students.
Seldom has another major export industry been treated as a political plaything in the way international education is right now.
This bipartisan attack on international students is short-sighted and politically expedient.
Yet, little thought is given to the deeper consequences of policies driven by polling, which is what these movements in the international education landscape are.
In tinkering with Australia’s international education policy settings, we cannot forget its significant and far-reaching value.
We export education to the world, and we do it well.
It’s a great Australian success story.
And it’s one of our biggest exports – the biggest we don’t dig out of the ground and our fourth largest export overall.
In 2023, it contributed $48 billion to the economy.
That’s equivalent to the annual salaries of around 545,000 nurses.
It’s more than enough to fund the National Disability Insurance Scheme for a year.
It also makes us friends, acting as a bridge between Australia and our neighbours.
The powerful foreign policy soft power our universities help facilitate is increasingly important in a parlous geopolitical environment.
Education is an important industry to our economy, and it’s important to Australia.
Last year, international students accounted for over half of Australia’s economic growth – contributing 0.8 per cent of the overall 1.5 per cent increase in GDP.
The nation would have slipped dangerously close to recession if not for the rapid return of international students.
A return supported by both sides of politics, no less.
In 2020, the Coalition Government’s strategy for international education contained measures to, quote, “help support the rapid return of international students”.
In launching the strategy, the then-Government declared: “We want to see our international student market flourish again”.
Meanwhile, the current Government has been critical of its predecessor for telling international students to go home during the pandemic.
All the while hailing its own efforts to accelerate the return of international students to our shores by breaking the back of the visa backlog, only to rip the handbrake again.
So why are international students now being treated as cannon fodder?
Our universities are forecasting a collective shortfall of more than half a billion dollars in 2024 due to slower processing and a subsequent increase in visa cancellations.
Inevitably, this will lead to cuts.
Cuts to infrastructure projects on campuses in the absence of a replacement for the old Education Investment Fund.
Cuts to research and development funding – further adding pressure to a system already facing record low investment from the Government.
And cuts to jobs.
A funding shortfall of $500 million could claim as many as four and a half thousand jobs across the sector.
That would mean more people out of work during a cost-of-living crisis, driving up unemployment and adding further pressure to the Government’s budget bottom line.
At the same time, universities are being asked to produce more knowledge, skills, opportunities and research in response to the findings of the Accord final report.
More skilled graduates to meet Australia’s future skills needs.
More research and development to drive our productivity and progress.
The position we find ourselves in is, ultimately, the reality of the bipartisan about-turn on international education.
And it’s a consequence of our sector’s dependence on international student revenue to fund the core activities universities are relied on for by the nation.
This is not, however, a problem of our own making.
These are the cards we’ve been dealt through more than a decade of successive and consistent changes to policy and funding settings – resulting in domestic student caps and less government investment in infrastructure and research and development.
Throw in declining domestic participation and the long tail of COVID-19 and it all makes for a perfect storm.
It’s hard to be match fit when you’ve been sidelined to this extent.
What’s concerning is that these fresh moves to curb our international education sector will further hinder a return to full strength.
We don’t yet know for certain the extent to which either of the major parties will reduce Australia’s international student intake.
That’s what’s being worked through in the Government’s current consultation process with providers.
Pleasingly, the Opposition, if elected, has also committed to working with the sector to reduce the number of international students in line with its migration cuts.
But any reduction in export revenue from international education will have far-reaching consequences – and not just for universities.
Lower export earnings would limit the Government’s ability to spend on essential services and infrastructure – including hampering future investment in housing.
And on other necessities like Medicare and pensions, defence spending and investment in initiatives to support the delivery of national priorities.
A reduced student intake would also hit jobs beyond university campuses.
Australia’s international education sector supports 250,000 jobs nationally.
Jobs not only in education but in sectors right across the economy.
In retail, tourism and accommodation.
A smaller inflow of international students would have an effect on these industries.
Last year, a Senate inquiry heard that 69 per cent of the money that comes into Australia for tourism is via international education and visitors to students here.
That’s to say, without international education we would effectively have an international tourism sector one-third its regular size.
This is unsurprising when you consider tourism’s value plunged 94 per cent to $1.7 billion in 2020-21 when Australia’s borders closed during COVID, and international students were absent from our shores.
This resulted in the sector shedding 400,000 jobs.
That’s half its workforce.
Any significant reduction in international student numbers to Australia would result in further job losses.
This is the reciprocal and interdependent nature of these two lucrative service export sectors.
We must also consider the intersectionality between migration and unemployment.
That is, migration can result in higher labour force participation and lower unemployment.
With budgetary pressures mounting, shouldn’t we be aiming to grow industries that sustain our economy rather than adding more strain?
This all begs the further question – is now really the time to water down a major export industry?
To do so shows little regard for the enormous benefits it offers to our nation.
The political imperative to act lies in Australia’s housing crisis – a mess for which international students have become convenient scapegoats.
But to lay the blame at their feet for the availability and affordability of housing is to ignore a few uncomfortable realities for those whose hands hold the policy levers.
Firstly, according to a new report from the Student Accommodation Council, international students only make up four per cent of the rental market.
The same report shows only 13 of Australia’s 556 local government areas had a concentration of international students above 10 per cent of the rental market.
Meanwhile, 73 per cent of local government areas had an international student concentration of less than one per cent.
Secondly, rents have been rising since 2020 during the pandemic when Australia’s borders were closed, and most international students had returned home.
Between 2019 and 2023, median weekly rent increased by 30 per cent while student visa arrivals decreased by 13 per cent.
Thirdly, there were more international students enrolled in higher education in 2019 than there were last year when the migration-housing debate began in earnest.
Other factors, not international students, are to blame.
The Reserve Bank has said the cause of high house prices was not an increase in migration, but a shortage of housing supply made worse by the pandemic.
This much is true.
The pandemic created supply chain disruptions and workforce shortages – not to mention rampant inflation which has further driven up construction costs.
Much of the political rhetoric in this debate has ignored these realities.
It’s what happens when short-term thinking trumps cohesive policy development.
In this case, short-term thinking is jeopardising Australia’s hugely successful international education export industry.
Jeopardising export income that supports the delivery of services all Australians rely on and underpins a higher standard of living.
Jeopardising jobs – in universities and across the various sectors of the economy international education supports.
Jeopardising our research and development activities.
And jeopardising our ability to educate enough students to meet Australia’s future skills needs.
To finish, I want to talk briefly about another major export industry – mining.
Under pressure leading into the 2022 election, Anthony Albanese committed Labor to matching the Coalition’s pro-mining stance.
The two major parties insisted that as long as there is international demand for exports, Australia will continue to sell its resources to the world.
This was in part to secure blue-collar votes in crucial seats but also in recognition that Australia’s prosperity rests on an economy fueled by exports.
In 2023, mining exports generated around $426 billion of export revenue.
The sector employs around 310,000 people directly.
It’s a big and important export industry.
This is not lost on either side of politics – and nor should it be.
Australia does not yet have the complexity in its economy to abandon the sectors that pay our nation’s way.
Education, right after mining, is one of those sectors.
A $48 billion industry – supporting 250,000 jobs.
And there is high global demand for our education products.
The strength of the Australian international education sector in recent decades has been built on bipartisan support and encouragement.
We call upon both sides of the aisle to continue approaching this vitally important sector in the same way they approach mineral exports.
Otherwise, the deleterious and negative effects will be there for all to see.
Even weaker economic growth, lower employment and damage to other sectors of the economy, including inbound tourism which is struggling to recover fully from the border closures associated with the pandemic.
Let facts and data guide the debate and decision-making, not ideology or wishful thinking.
The numbers stack up for international education – it’s the short-term politics that doesn’t.
Thank you.
