Peter Dutton incoherent on international student visas

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In last week’s federal budget reply speech, Liberal Opposition leader Peter Dutton promised to reduce the number of permanent visas from 185,000 planned for this financial year to 140,000 for two years, 150,000 in year three, and 160,000 in year four.

If achieved, Dutton would effectively lower the permanent intake to 2006 levels, as illustrated below in blue:

Permanent migrant intake

However, Peter Dutton said very little of substance about curbing temporary visas; other than that we have too many, and the number of international students should be capped.

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Temporary visas on issue

“We will reduce excessive numbers of foreign students studying at metropolitan universities to relieve stress on rental markets in our major cities”, Dutton said in his speech.

“We will work with universities to set a cap on foreign students”.

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“And we will enhance the integrity of the student visa program by introducing a tiered approach to increasing the student visa application fee and applying it to foreign students who change providers”, he said.

Rhetorically speaking, Dutton’s comments are encouraging. Australia’s international student volumes are absurdly high by global standards and must be lowered.

However, Dutton undid his encouraging comments with the following statement later in his budget reply speech:

“We will also lift the number of hours those on student visas can work by 12 hours a fortnight”.

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Before the pandemic, international students were permitted to work 20 hours per week during semester—a figure that was considered generous by global standards.

After a brief period where permissible working hours were uncapped during the pandemic, the Albanese Labor government increased the work hour cap to 24 hours a week.

Now Peter Dutton wants to increase the work cap to 30 hours a week—a level that would be 50% higher than the pre-pandemic level.

Such a policy would be an unmitigated disaster and would see Australian student visas transform even more into defacto low-skilled work visas.

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It would be ‘red rag to a bull’ for residents from poorer Asian, African, and Latin American nations seeking to use the student visa system for backdoor work rights.

Issues important for international students

South Asia and Africa care about work and migration, not education quality.

The policy would also pivot international education further away from being a genuine export industry to a people-importing industry.

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If Peter Dutton is serious about curbing net overseas migration, he must slash the permanent migrant intake along with ensuring that the stock of temporary migrants does not continue to grow (The Albanese government has delivered record numbers of both permanent and temporary visas).

Dutton’s expansion of student visa work hours would have the opposite effect of encouraging more non-genuine students to enter Australia.

The overall focus must shift from quantity of students (migrants) to quality.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.