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Alex Hawke trashes Australia’s international education industry

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New Immigration Minister Alex Hawke has relaxed student visa work restrictions, creating far reaching issues for the students, Australian workers and Australia's international education industry (Screenshot via YouTube)

New Immigration Minister Hawke appears not to have grasped the flow-on effects of relaxed visa conditions on Australian workers, students' exposure to exploitation or maintaining Australia's standing in the international education industry. Dr Abul Rizvi reports.

NEW Immigration Minister Alex Hawke has announced overseas students in Australia can now work unlimited hours in the hospitality and tourism industry as well as in agriculture, aged care and disability care.

This decision will have far-reaching consequences for both the reputation and reality of Australia’s international education industry.

After some 30 years of governments resisting pressure from various employer bodies to remove the 40 hours per fortnight cap on the number of hours student visa holders could work while their course was in session (it used to be a more strict 20 hours per week), Alex Hawke has rolled over to pressure from the hospitality, tourism and other industries at extraordinary speed.

By allowing unlimited work in these industries, the Morrison Government now fully supports the idea student visas are just low skill work visas in disguise — something low-quality international education providers have encouraged for years. It also makes a farce of the "genuine temporary entrant" requirement.

Hawke appears to have forgotten that in March 2021, there were 778,100 unemployed people in Australia.

While removal of the work hours cap is described as a "temporary relaxation", employer bodies will fight tooth and nail against any reversal of this policy. The Morrison Government’s penchant for giving more and more power to employers will also make reversal difficult.

Hawke has abandoned limiting work rights for student visa holders with little regard for the reputation of Australia’s international education industry, perhaps reflecting the general attitude of the Morrison Government to Australia’s universities. The decision also undermines the critical role overseas students play in skilled migration.

Past immigration ministers and parliamentary secretaries I have worked under – such as Hand, Bolkus, Ruddock, Patterson and Vanstone – all understood the primary purpose of a student visa must be study. And, ensuring students attend classes and complete their courses at a high standard was crucial to the reputation of Australia’s international education industry. The Department of Home Affairs only pretends that is important now.

There were four main reasons past immigration ministers resisted removing the cap on work hours for overseas student visa holders.

Firstly, it undermines the integrity of the visa system and full-time work opportunities for unemployed Australians.

Having no limits on hours worked by overseas students fundamentally changes not just the nature of the student visa but also undermines the design of temporary skilled migration. Why bother with extensive regulatory protections before an employer can sponsor an overseas worker for a temporary skilled migration visa if employers in many industries can easily access, on a full-time basis, the very much larger cohort of student visa holders with no pesky sponsor obligations?

Past immigration ministers have always been conscious the bulk of unemployed Australians have few post-secondary skills and are largely competing for unskilled and semi-skilled jobs. While there are currently many complaints from various industries about labour shortages, Hawke appears to have forgotten that in March 2021, there were 778,100 unemployed people in Australia. Full-time employment actually decreased in March 2021 by 20,800. And while the underemployment rate fell in March, it remained at a high 7.9%.

Given the March labour force figures showed even more Australians want full-time work and more work hours, it is extraordinary Immigration Minister Hawke would remove the cap on hours student visa holders can work full-time in a range of industries. This means around 500,000 overseas students currently in Australia will be able to directly compete for full-time, unskilled and semi-skilled jobs with unemployed and underemployed Australians.

Rather than putting pressure on these industries to improve wages and conditions to attract more Australians, Minister Hawke has ensured these industries can keep wages as low as possible. That is consistent with the 2021 Budget forecast of very slow wage growth and compounds the problems created by past measures to cut penalty rates, which so many who work in these industries rely on.

Secondly, it facilitates onshore poaching of students by cheaper, low-quality providers.

Past immigration ministers worried that low-quality education providers rely on poaching overseas students from higher-quality providers after entry to Australia. Lower quality providers using unscrupulous education agents, offer courses with cheap tuition fees, requiring little study effort so that students can maximise time in employment.

While in the past this had to be done surreptitiously to avoid students, employers and education providers being caught in breach of relevant migration regulations – for example, s116(1)(b) and s235 of the Migration Act – low-quality education providers and their education agents can now openly encourage students to transfer into low-quality courses and work as many hours as they wish as long as they maintain course enrolment and “satisfactory” course attendance.

The bulk of overseas students enter Australia on the basis of a higher education course. A comparatively small number of students do so on the basis of a private VET course. This is because, after 35 years of experience, most private VET providers are considered high risk from an immigration perspective requiring applications for a student visa to be scrutinised much more closely in terms of English language skills, financial capacity and a genuine intention to study.

As a result, refusal rates for offshore student visa applications to study with a VET provider in the period 2017-2020 was over 35%, while the refusal rate for offshore applications to study with a higher education institution over the same period was substantially less than 10%.

The business model of many private VET providers (and also some lower-quality higher education providers) involves poaching students from higher-quality providers after entry. 

Source: Student Visa Report, DHA

Chart 1 (above) highlights the extent to which the higher education sector dominates offshore recruitment. On average, around 60% of offshore student visa grants are for the higher education sector (not including the post-graduate sector), while only around 10% of offshore student visa grants are for the VET sector (mainly private colleges). As a result of offshore student visa policy tightening by the Department of Home Affairs from September 2019, the portion of offshore VET student visas fell below 10% in 2019-20.

By contrast, Chart 2 (below) shows how much the VET sector relies on onshore recruitment, including students who originally entered Australia as higher education students. In 2019-20, onshore student visas for the higher education sector represented some 43% of student visas granted – the lowest portion in over a decade - while the VET sector represented 47% of onshore student visas granted – by far the highest portion in well over a decade. There has been an increasing portion of onshore student visas going to the VET sector since at least 2007-08 when only 35% of onshore student visas were for the VET sector.

Source: Student Visa Report, DHA

In recent years, the length of time a student must remain with the education provider for which they were originally visaed has been reduced from 12 months to 6 months. This has made it even easier for VET sector providers (and lower quality higher education providers) to poach students from high quality higher education providers.

The availability of unlimited work rights in various industries will make such poaching even more effective as low-quality education providers, unscrupulous education agents and students predominantly interested in full-time work, will no longer need to disguise their arrangements.

Thirdly, past immigration ministers worried that full work rights associated with a student visa would trash the reputation of Australia’s international education industry.

Before Hawke’s decision, Australia already provided the most generous work rights for student visa holders among our major competitors. His decision now makes Australia’s student visa work rights a complete outlier. This is a fact that our competitors in the international education sector will use against us — if you want a cheap, low-quality course with lots of opportunities for full-time work, go to Australia.

In the UK, university students are eligible to work for a maximum of 20 hours per week when classes are in session. However, new students applying for further education colleges (both publicly and privately funded) are not allowed to work. Previously, these students could work for ten hours per week. The UK has recognised the risk of these colleges simply becoming "work visa" factories — a lesson that Australia still seems not to have learned.

The USA is even more restrictive in the amount and type of work an international student can undertake. On-campus employment for up to 20 hours per week is permitted in the USA but this usually requires the permission of the relevant international student office, which often do not permit any work during a student’s first semester or year. Student employment may not displace a U.S. resident.

Off-campus work in the USA is strictly restricted to optional or curricular practical training; in cases of severe economic hardship due to circumstances beyond the student’s control, or associated with international institutions.

In Canada, a student can work up to 20 hours per week off-campus — if they are a full-time student at a designated learning institution and enrolled in a post-secondary academic, vocational or professional training program of at least six months duration leading to a degree, diploma or certificate, the student’s course has started and the student is the holder of a social insurance number.

New Zealand allows student visa holders to work up to 20 hours per week if the student is doing a full-time course of at least two academic years duration and results in a qualification that attracts points under the skilled migration category. During COVID, New Zealand has allowed some students to work more than 20 hours per week in supermarkets when residing in a region of New Zealand experiencing alert level restrictions.

Very high-quality education institutions such as Harvard and Cambridge are even more restrictive about the work that students can undertake.

Finally, past immigration ministers understood the risks associated with overseas students becoming a permanent underclass in Australia. This risk is created when overseas students take a particularly long time to complete their course or courses (or, indeed, never complete their courses) because they were spending a large portion of time working. Having spent many years in Australia without securing a relevant qualification that enables a pathway to permanent residence, these students will also not want to leave Australia. That creates major challenges for immigration policy and administration.

If I had proposed the removal of work restrictions on student visa holders to former Immigration Minister Phillip Ruddock, I have no doubt he would have said to me, “Abul, do you care nothing for the integrity of the visa system or the reputation of Australia’s international education industry?”

Alex Hawke clearly does not understand that. He may argue that many students were already working in breach of the 20-hour cap. But just because his Department stopped enforcing the law does not make it a bad law.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.

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