Australian politicians ‘dreaming’ over overseas student caps

Crackdown proposed without any forethought about the broader consequences, Press Club hears

June 19, 2024
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Source: iStock/Grandfailure

Politicians are “dreaming” if they think they can suppress international enrolments without damaging Australia’s economy, according to University of Melbourne deputy vice-chancellor Michael Wesley.

Professor Wesley said both sides of the political divide were in denial about the impacts of their proposals to cut net migration by limiting overseas student numbers. “They’re not thinking through the consequences,” he told the National Press Club in Canberra.

He said the combined cost of the government’s signature technology programmes, the Aukus security pact and the Future Made in Australia industrial policy, would be immense. “Who’s going to pay for that? Where’s the tax base going to come from? The tax base is already dwindling. Governments have to…get real and educate the Australian public that migration is a big part of Australia’s future.”

Professor Wesley described the Labor government’s proposal to cap student visas as “a solution looking for a problem to solve”. No “elaborate modelling” was required to judge the likely results, he said.

“After the Covid restrictions lifted, and before international students returned, small businesses struggled to find staff or sell products and services. The tourism sector went into freefall. We struggled to get fruit and vegetables to market. This could all happen again, and it’s not just university jobs that will be lost. We know from those Covid years that lower numbers of international students means tens of thousands of jobs vanish in the broader economy.”

He said the caps had been designed by people who did not understand the consequences of even suggesting such measures. “Already, we are seeing students who had intended to study in Australia decide it’s too risky. Why would they risk paying an application fee…if there’s a good chance they won’t get a visa? Why not just study in Europe, or in the Gulf, or in the US or in Singapore?

“What the government is proposing is being interpreted as a major new source of sovereign risk that is spooking investors, credit ratings agencies and students and their parents. Governments come and go. Lasting damage stays with the country for the long term.”

Independent migration expert Abul Rizvi told the Press Club that Labor’s proposed institutional caps made no sense in a market economy. “This will effectively mean the government decides how many customers each business in the industry can have each year,” he said.

The opposition coalition’s proposal for an overall student cap would be “pure chaos”, forcing each institution to “fight it out year by year before an annual cap is reached. Both approaches represent short-termism ahead of an election.”

Dr Rizvi, former deputy secretary of Australia’s now-defunct Department of Immigration and Border Protection, warned that “significant further measures” would be needed to force net migration down to the levels both parties had targeted. He said the coalition might “cut even more deeply into overseas student numbers, as that is the only option [opposition leader Peter] Dutton feels comfortable revealing before the election. That would mean even more job losses in Australia’s universities.”

Professor Wesley said there had been no “careful analysis” of the level of international enrolments that would be economically or educationally desirable. “People are pulling numbers out of the air because they think that they will look electorally attractive.

“We’ve dived straight into putting our fingers in the wind and saying, ‘I reckon this number looks OK.’”

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