Luke Sheehy, Universities Australia Chief Executive Officer, delivered a speech on Wednesday attacking the federal government’s announced cuts to international student numbers.
Sheehy claims the changes are “short-sighted and politically expedient”, as well as economically damaging.
Take a look at the following dross:
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…
It’s more than enough to fund the National Disability Insurance Scheme for a year…
Education is an important industry to our economy, and it’s important to Australia…
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…
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…
Education, right after mining, is one of those sectors…
The numbers stack up for international education – it’s the short-term politics that doesn’t.
As you can see, Luke Sheehy has leant heavily into the lie that international education is a $48 billion powerhouse export industry that funds all manner of public programs and infrastructure, including the NDIS, Medicare, and the aged pension.
The reality is the opposite. International education is, in fact, a people-importing migration industry that generates far less export income than claimed.
If generous work rights and permanent residency were not offered by Australia, few students would bother to come, and the entire industry would collapse.
According to the Australian Bureau of Statistics (ABS) the fantastical $48 billion international education exports figure is derived by combining “an average spend estimate from Tourism Research Australia … supplemented by the addition of the total expenditure on course fees”.
The ABS also wrongly includes all estimated spending by students in Australia as an export, even when the bulk of the money used to pay for this spending is earned by working in Australia.
As noted last month by Salvatore Babones, Associate Professor at Sydney University and author of the book, “Australia’s Universities, Can They Reform?”:
[Education exports are] based on the fantastical model that a typical international student saves up the full cost of tuition, housing, meals, and incidentals, transfers it to an Australian bank, and then lives on that money for the duration of stay in Australia.
This may be true for a small number of elite university students. But university students make up only 45% of the international student total, and most of those are non-elite.
Just watch the 2019 Four Corners special Cash Cows to find out how things really work at a typical university, and then remember that most international students are not even in universities, but in low-level vocational and English-language courses.
The idea that all (or even a substantial portion) of the money spent by these students is transferred from abroad, rather than earned in Australia, is flatly ridiculous.
To see that, just remember the uproar that broke out in 2020 when Scott Morrison refused to extend JobKeeper and JobSeeker to international students. Most international students in Australia work very hard, but the fact is that they come to Australia primarily to work, not to study.
The tuition they are required to pay is simply part of the cost of their work visas…
In short, the entire international student industry is, in essence, a giant immigration scam.
Of course, Luke Sheehy is not the only one to attack caps on international students.
Australian Chamber of Commerce and Industry boss Andrew McKellar last month claimed that “we shouldn’t be capping an export industry like that – we’re not talking about capping iron ore exports, or LNG exports, or something like that”.
Immigration influencer Abul Rizvi made similar arguments last month regarding the caps.
“It’s quite extraordinary [policy] and all about getting to the 2025 election”, he said. “The levels of intervention exceed anything I’ve ever seen in any other industry. This gives them the power to tell a business how many customers you can have, what they can buy from you and how much”.
“The power and its use is unsustainable. You can’t run an industry this way”.
My question to Luke Sheehy, Andrew McKellar, and Abul Rizvi is as follows: if international education is a business and an industry, then why aren’t universities taxed?
Australian universities are non-profit entities that currently do not pay taxes (unlike other ‘export’ sectors). This is despite universities behaving as corporatised, profit-maximizing enterprises, with senior leadership groups earning excessive salaries.
Other export businesses pay corporate taxes and royalties (in the case of mining), so why shouldn’t universities if they are such a vital export?
As the system stands currently, universities, rather than taxpayers, are ‘clipping the ticket’ and earning economic rents from Australia’s immigration system through student fees.
Universities from privatising the gains from record levels of immigration while the costs are being pushed onto Australians at large, most notably renters.
I suggest imposing a levy on international students to ensure that Australians receive a financial cut from the trade, similar to how a sovereign wealth fund collects revenue from mineral exports.
