In a submission to the draft international education and skills strategic framework, head of the Business Council of Australia, Bran Black, outlined the financial impact of the proposed cuts, pointing out international students accounted for almost a quarter of all GDP growth over the year to March 2024.
“We are playing with Australia’s fourth-largest export at a time when our economy is on a knife’s edge. The sector was worth AUS$48 billion in 2023 and employed over 200,000 people. It’s 48 billion reasons to think twice before we cut too hard,” Black wrote in the AFR this week.
In addition to the impact on the economy, the cuts will also affect Australia’s standing as a global leader in research, BCA warned.
“Our major research universities pay for around 70% of their research with course fees. It follows that if our research quality drops because we earn significantly less revenue from international students, we will struggle to hold our position as a major education exporter, and that means jobs will be cut,” the BCA submission said.
In its submission to the draft framework, Sydney University argued rapid cuts could result in a $4.1b hit to the Australian economy as a result of direct and indirect job losses, according to financial modelling commissioned by the university.
In the university sector alone, the losses are as equally significant. A 30% reduction in student visas – or 63,500 fewer international students – could cost the university sector $1.1b in 2025 alone and result in 21,922 direct and indirect job losses, the modelling suggested.
“It should be obvious that any rapid and large cuts to international numbers will have an immediate impact on the viability and competitiveness of Australian universities and other providers,” said the submission.
The Group of Eight’s submission to the draft framework also argues the proposed enrolment caps will significantly weaken the financial position of many Australian universities.
“Ratings agency S&P have very recently published a report Australian Universities: Would International Student Caps Spur A Course Correction? outlining that the politically motivated policy to cap international student numbers, in response to a post-Covid increase in temporary migration, threatens to unravel a thriving industry and curtail critical institutional autonomy,” the submission said.
The Minister for Home Affairs, Clare O’Neil, said that the raft of changes to the migration system that were brought in on July 1, including the news that visas have increased in price from from AUS$710 to AUS$1,600, were intended to fix a broken and dysfunctional system.
“The changes coming into force today will help restore integrity to our international education system, and create a migration system which is fairer, smaller and better able to deliver for Australia,” said O’Neil.
Instead, BCA argued, the move will only further deter students from choosing Australia.
“This week, the government increased the cost of a student visa by 125%, making Australia the most expensive country to apply for a visa in the world and that will mean less students and lower economic growth for our country,” Black said.
The Group of Eight submission also argues the hike in fees will put students off – and expecting universities to raise fees to compensate for lower numbers is unrealistic.
“It is important to note that increasing international student fees to compensate for the potential loss of institutional income from the introduction of caps will not be a viable strategy. A detailed [Group of Eight] analysis shows that international students are sensitive to price, and this will be a significant factor in their decision of whether to study in Australia,” it said.
Group of Eight chief executive Vicki Thomson called the visa hike “death by a thousand cuts to our most successful services export sector”.
“Far from ‘restoring integrity in the international education sector’ this measure will be a deterrent to international students. The recent crackdown on visa approvals has already sent a strong signal that we are not open for business,” she said.