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COVID-19 raises doubts about our reliance on international students

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The Australian Government must reassess its international student intake, both for the good of the nation and the students themselves, writes William Bourke. 

MANY AUSTRALIANS HAVE had the pleasure of hosting international students, including my parents who for over a decade. welcomed around 20 homestay students into our family home. It was an enriching experience for all and in particular my parents, who subsequently travelled to several Asian countries to attend weddings and other important events in those peoples' lives.

I recently asked Mum how many of their students returned home after studying in Australia. It was all but one. The exception is a Japanese student who married her Australian partner. But this was all before the Howard Government's push to make universities and higher education more self-sustaining in the late 1990s.

Following the withdrawal of funds from our higher education sector, international students were increasingly targeted as a commodity to help pay the bills. At the same time, the Howard Government created huge incentives for these students to seek permanent residency through a variety of educational qualifications.

Shortly after these changes, private vocational education organisations also sprang up and dangled the carrot of permanent residency. Enrolments by international students skyrocketed, rising from 204,401 in June 2002 to 465,414 in June 2009. We reached an extraordinary 720,150 students enrolled across various sectors as of September 2019.

Very rapidly, our international student program went from an export industry hosting self-funded students, to one attracting a very different market: poorer students from the developing world.

The consequences have been widespread, with many international students ending up with dubious certificates of education and suffering significant abuse. They have become victims of unscrupulous convenience store employers who pay well below minimum wage, greedy landlords that house them in overcrowded apartments and even criminal gangs that enslave them as sex workers to repay debt. These issues continue to dog our education system and international reputation.

Despite the problems, the international student "export" program has become a cash cow, in part because of the supposed export income it earns Australia. The latest claim is that education exports earned Australia about $37 billion last financial year.

But is this plausible? COVID-19 has helped to expose the truth.

If education is a huge export industry, why are so many international students who lose casual jobs very quickly destitute? If they cannot survive without working in Australia, economics 101 tells us it is not "export" income. It is Australian-sourced income that also puts downward pressure on local wages, particularly in the youth job market.

In summary, greed and corruption have turned a healthy export industry into a labour importation industry – and of course a huge pipeline of tenants for a property industry engaging in rampant overdevelopment.

The much-vaunted $37 billion figure is "fake news", undermined by flawed and out-dated assumptions. It is "junk-in, junk-out" modelling, upon which our politicians are making critical decisions.

Yet our politicians were clearly warned. A detailed independent assessment was conducted by the Centre for Population and Research at Monash University in 2009. According to the Monash report, the overseas trade contribution from education services is at best about half the amount usually attributed to it.

The published figures are inflated because of three broad factors. First, estimates of student expenditure on goods and services in Australia are based on students with different (much wealthier) demographic characteristics than the more recent Australian stock of overseas students. Second, the value of onshore earnings by overseas students was erroneously included in the total. Third, direct costs, such as offshore agents’ fees (who recruit the students) weren’t deducted.

Nor were the negative impacts on our environment, housing affordability or the youth labour market.

According to an analysis of fees conducted by the University of Melbourne, it is estimated that each international student effectively subsidises each domestic undergraduate student by a measly $1,200.

It's time to return to a genuine and sustainable education export industry. This is likely to be much closer to the number of international students we hosted at the turn of the Century – around 200,000.

While continuing to warmly welcome genuine foreign students, Australia should de-couple study from work and immigration outcomes, and re-establish the integrity and quality of the Australian international education sector. We might salvage our international education credibility in the process.

William Bourke is President of Sustainable Australia Party.

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