Reports of government student visa cut misleading

Reports of the Government risking economic chaos by cutting the numbers of international students are misinforming readers. Dr Abul Rizvi reports.

ACCORDING TO political editor Phil Coorey, writing in the Australian Financial Review (AFR):

‘Businesses small, medium and large and the tourism industry have accused the Government of presenting an “immediate and unacceptable” risk to an economy already teetering on the brink of recession by slashing the number of international students.’

But are overseas student numbers really being slashed?

Apparently:

‘Business concerns were expressed in a letter sent to Prime Minister Anthony Albanese and his cabinet this week by the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Council of Small Business Organisations Australia and the Tourism and Transport Forum Australia.’

June student trends will be making ministers nervous

With student visa numbers surging, the Government will have to consider new ways to slow application rates to reach its net migration forecast.

The AFR article goes on to say that the ‘industry fears numbers could drop to 95,000 new foreign students by 2026-27, down from the pre-pandemic level of 240,000’.

Exactly what the industry is measuring here is not clear.

Pre-pandemic, there was no year when there were anywhere near 240,000 student net migration arrivals. The highest pre-pandemic level was in 2018-19 when there were 172,930 student net migration arrivals and 60,220 net migration departures giving a student net migration contribution of 112,710.

In 2022-23 there were 279,870 student net migration arrivals and 15,200 student net migration departures giving a student net migration contribution of 264,670. But there is no chance that will repeat anytime soon. That will remain a historical outlier now that the Government is set on limiting net migration.

But the key statistic to look at is the stock of student visa holders in Australia as these reflect the number of fee-paying students in Australia.

In February 2024, these hit a new all-time record of over 700,000. As is always the case, these gradually fell back in subsequent months as existing students either departed or moved onto other visas, usually a temporary graduate visa (which are also at record levels of well over 200,000).

The stock of student visa holders in Australia (not including onshore student visa applicants in the massive bridging visa backlog) fell back in June 2024 to 608,262.

But student arrivals (both long-term and short-term) in July 2024 were 137,770 and departures were 43,930 given net student arrivals of 93,840. That was slightly above the net student arrivals in July 2023.

Together with the processing of the massive number of onshore student visa applications in the bridging visa backlog, this will ensure the stock of overseas students in Australia will again be close to or exceed 700,000 at end July 2024. It may well set another record.

Rise in overseas students ringing alarm bells

Australia’s overseas student industry continues to ring alarm bells about the Government’s tightening of overseas student policy.

While the industry is right to point out that student caps are a poor policy tool for managing the aggregate number of students in Australia – and we do not yet know where these will be set – if the Government adheres to its long-term net migration target of 235,000 per annum, the stock of students in Australia will continue to grow.

The growth rate will slow compared to 2022-23 but that does not mean overseas student numbers are being “slashed”.

There is a substantial element of Chicken Little in the letter from the various industry lobby groups to the Prime Minister. He should ignore the letter as it is based on an extraordinary level of misinformation (and no small amount of scaremongering). But he should review the student capping policy.

A better approach would be as follows:

First, use overseas university entrance exam scores as the key basis for the grant of an offshore student visa and/or development of a dedicated university entrance exam for that purpose as used by top universities in the UK and the U.S. This would provide the best tool for managing aggregate numbers with a focus on targeting the best students not just those with a capacity to pay.

Second, replace the existing provider-based risk ratings with ones based only on sectors and source nations. In other words, all providers within a sector would compete on a level playing field subject to appropriate limits on the portion of overseas students in each class or course. We need to ensure that overseas students are getting an Australian education where they are able to benefit from studying with Australian students.

Third, post-study work visas should only be available to students who complete qualifications in areas of long-term skill shortage or have completed post-graduate research in Australia. All other students would be required to depart once they complete their studies.

This would enable both steady growth in the number of overseas students, address concerns about quality and have fewer former students getting stuck in immigration limbo on a temporary graduate visa.

Capping student visas to curb net migration could create chaos

There has been much discussion in the media that the Government will cap student visas to bring down net migration to 250,000 in 2024-25.

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.