Overseas students – The Australian Population Research Institute

Migrant deluge creates a giant wave of problems

Bob Birrell, Migrant deluge creates a giant wave of problems
This article was first published in The Herald Sun, 30 September 202

In 2022-23 Australia’s net overseas migration (NOM) is expected to reach 450,000. This is way above the level before Covid of about 250,000. If there are no policy changes this huge influx will continue. We know this is the case because it is largely based on a sharp increase in the number of overseas students and visitors (more on this category shortly). The number of overseas students already in Australia is a record. So is the number of new student visas issued in 2022-23, most of these were issued offshore and are still to move here.
The recruitment of overseas students has built up a head of steam that, if not capped, will generate massive further increases. Most of these students are in the higher education sector, where universities are actively seeking more because of the financial incentives. However, though from a lower base, the numbers visaed in the cheaper English Language and vocational colleges is exploding. This is because these courses offer a much cheaper entry point into our labour market.
Student visas are crucial because they provide a legal right to work here while studying. Once here students can move from one temporary visa to another, thus prolonging their time in our workforce.
A similar process applies to those arriving on a visitor’s visa. Their numbers, as noted, have also surged. A visitor visa offers an easier and less expensive pathway to Australia. Huge numbers are now using this pathway to stay on, mostly on a student visa which they obtain after they have arrived. In 2022-23, some 75,000 visitors were granted a student visa. This number is unprecedented.
The migrant deluge was not official Labor Government policy. It is an unplanned outcome. Once Covid period restrictions on visaing temporary entrants and travel restrictions were removed, Labor put no constraints in place. It just let the recruiting process rip. The subsequent influx reflects a monumental failure to anticipate the response.
Worse, Labor facilitated the deluge by throwing financial resources at slashing delays in processing visas. It also left the flimsy academic and language requirements and weak financial capacity regulations in place. As long as students have the funds to pay their up-front first year fees, there are minimal requirements on proof that they have enough funds for their subsequent fees and expenses. Decisions on these standards have been left to the universities, who do not have an interest in taking a tough line.
The Government’s failure to anticipate the subsequent migrant deluge is illustrated in spades by the forecasting record of its Office of Population located within The Treasury. In December 2022 the Office projected that NOM for Australia would be 235,000 in 2022-23. Just five months later at the time of the May Budget, the Office adjusted its forecast to 421,000. In fact, as indicated, it is likely to be around 450,000. The Office projects that NOM will reach 350,000 in 2023-24 and 300,000 in 2024-25. This, too, is likely to be an underestimate unless the Government acts to get the recruitment process under control.
Labor has shown no signs of doing so. Quite the contrary.
The Government has flagged its intention to integrate overseas students into our skilled labour workforce. It will do so by creating an easier pathway to a permanent entry visa for those deemed to have skills in short supply. Such promises just add to the inducements for overseas students to enroll in Australia. Also, from July 2023, overseas students who graduate in all fields of science, IT, engineering and health (including nursing) will be allowed to stay on in Australia for at least another two years. (This is on top of the existing minimum two years that university graduates from overseas can remain in Australia.)
Why worry?
First, the sheer numbers of extra people are adding obvious pressure to Australia’s housing affordability crisis, especially rental accommodation. This at its most serious in Sydney and Melbourne, where most recent migrants on temporary visa are moving to. They do so because that is where the overseas student industry is predominantly located.
Second, Labor’s policies of directing overseas student graduates into Australia’s skilled workforce is having serious consequences for domestic students’ opportunities. It is far more lucrative for universities to enroll overseas students than domestic students. Already, our universities graduate many more overseas students than domestic students in engineering and IT. Labor’s new policy of encouraging even more overseas students to enroll in the sciences will prompt our universities to devote more of their teaching capacity in these fields to overseas students. Nursing is likely to be a growth point, again because it is far more lucrative to devote any extra capacity for nurse training to overseas students. This will be at the expense of opportunities for young Australians.

Bob Birrell is the head of The Australian Population Research Institute

Feds must resist visa push from business

Opinion piece by Bob Birrell, published in The Herald Sun, 26 April 2021

With the recovery from the Covid recession, employer interests have been pressing the government for more migrants.

This lobbying is coming from representatives of employers such as the Committee for Economic Development of Australia, and from industry associations relying on low skilled workers, including the hospitality and horticulture industries.

Federal Parliament’s Joint Standing on Migration (or at least its Coalition members) has endorsed these concerns.

These lobbyists are responding to the collapse of Australia’s annual net overseas migration intake of around 250,000 since the pandemic began.

All assert the decline in overseas student enrolments is a major contributor to this collapse. All claim it is disrupting their access to both skilled and unskilled migrant workers.

They want the Commonwealth government to accelerate the inflow of students and other temporary migrants. As well, they want the abolition of restrictions on their employment, including removal of labour market testing, and the creation of new temporary visa categories which tie migrants to work within specific industries.

The Joint Standing Committee even recommends that places be reserved on flights to Australia and in quarantine facilities for skilled migrants.

Is this advocacy a prelude to major Coalition immigration initiatives? Let’s hope not, because if implemented the consequences will be ugly.

If Australia legislates to create visa which tie migrants to particular industries it will reverse one of the founding principles of our nation — that all residents should be employed on fair wages and conditions.

Also, do we want the overseas student industry to return to its pre-pandemic state, when universities acted like private corporations, maximising revenue from overseas students with scant regard for their pubic role of educating and training Australian students?

By 2018, overseas students made up 41 percent of all commencing students at Melbourne university. At Monash University it was 44 per cent.

It is true that most of Australia’s previous 250,000 NOM derived from temporary rather than permanent migrants. This is because far more temporary migrants were entering Australia than leaving each year.

The result was that by the beginning of the Covid emergency in March 2020 there were 1.5 million temporary migrants in Australia. About 541,000 of these were students at all education levels.

By late February 2021, the number of temporary migrants in Australia had fallen to the still huge number of 1.1 million, with much of the decline due to students. Their numbers had fallen to 441,000.

Do we really need more?

Let’s start with the claim that overseas students are essential to restore a flow of skilled migrants. This is a myth.

Most of the growth in university enrolments came in the business faculties, particularly accounting. These courses were dumbed down to accommodate overseas students with limited academic and English language skills. Only a minority have been able to secure professional level jobs in Australia.

For many, (especially those from the Indian Subcontinent) the value of an Australian degree was that it provided access to the Australian labour market while studying and, in time, a permanent residency.

The Australian government has facilitated this by granting two-year temporary graduate visas to all those graduating from an Australian university. This visa allows a two-year stay in Australia with full work rights.

By late February 2021 there were 102,765 of these temporary graduate visa holders in Australia, up from 96,819 in March 2020. They are in addition to the 441,000 students in Australia as of February 2021.

It will be good to see a recovery in overseas student enrolments. But if it is to occur, it should be on the basis of the quality of their training rather than the access it gives to the Australian labour market.

As to the lower skilled labour markets, a revival of temporary migrant flows, especially students, will boost the relevant workforce. But in doing so it will reinforce employers’ dependence on migrant labour.

The hospitality and horticulture industries illustrate the point. The working conditions and wages in these industries reflect this dependency. Employers do not need to offer jobs attractive to domestic workers.

The tied visa proposals from these industries will make this situation worse. The Restaurant and Catering Industry Association wants a special visa which will limit employment to the hospitality industry.

The National Farmers Federation has for years advocated a similar visa that restricts recipients to work in horticulture. In other words, both want a conscripted workforce.

Governments and employers need to be reminded how contrary these arrangements are to our labour market traditions.

The focus of government should be to put the onus back on employers to make employment in these industries attractive to locals. If this means that coffee or garlic costs a bit more, or the jobs are automated as with robot baristas, then so be it.

Bob Birrell is the Head of the Australian Population Research Institute

Australian universities’ dependence on overseas students: too much of a good thing

Bob Birrell and Katharine Betts
(This post is republished from John Menadue’s site, Pearls and Irritations, 27 December 2018.)

In November 2018 we published an analysis of the higher education overseas student industry. It was framed around the remarkable growth in the share of commencing overseas university students to all commencing students over the years 2012 to 2016. This share increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.

Since publication, higher education statistics for 2017 have been released. They show that the share of commencing overseas students to all commencing students have increased to 28.9 per cent. In the case of the Group of 8 (Go8) universities, by 2017 this share had reached well over 40 per cent in the University of Sydney, ANU, and the University of NSW (Table 1).

The following brief summary indicates why such extreme reliance on overseas students should be of concern. We then explore another issue, not canvassed in the November report. This is the implications of the rapid growth in overseas student commencements for access to higher education on the part of domestic students.

This a highly topical matter because in December 2017 the Coalition government announced that it would henceforth cap the level of domestic higher education enrolments. Since that time, Australia’s universities, including the Go8, have mounted an offensive against this decision on the grounds that it limits opportunities for domestic students. Yet the enrolment data examined below indicates that, at least since 2012, the Go8 have effectively enforced just such a cap on domestic enrolments.

A summary of the November report’s findings
The November report argued that the overseas student industry was in a precarious state because of its increased reliance on overseas student enrolments. The share of overseas commencing students to all commencing students at Australia’s universities increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.

We concluded that the tail was wagging the dog. That is, such was our universities’ reliance on overseas students, that most were prioritising the health of the overseas student industry over the educational needs of domestic students. In the case of research, the universities’ focus was primarily on basic research. This is because it is this that is relevant to their aspiration to achieve a place in the top 100 institutions in the global university ratings systems. As documented in the November report, research of this kind is the most likely to be accepted by the top international journals that drive the ratings system. Research focused on local priorities wouldn’t make the cut.

Australia’s overseas student industry is split into two distinctive markets. The first includes most of the Go8 universities, where overseas students were charged some $40,000 a year, mainly for courses at the undergraduate and post-graduate-by-coursework level in business and commerce. Most of the students are Chinese. Indeed, between 2012 and 2016, the total increase in overseas student commencers at Go8 universities was 13,738 . Of these 12,198 were Chinese.

Students’ (or parents’) willingness to pay for such high priced courses can be attributed to the fact that they deliver credentials from a university rated in the international top 100. (This includes almost all of the Go8.) Qualifications from these universities appear to be highly regarded in the Chinese labour market. Relatively few of these Chinese students stay on in Australia after completing their studies.

This enrolment pattern helps explain the universities’ focus on basic research. In order to maintain enrolments from China, they have to promote such research because it scores best on the metrics used by the international ratings systems.

The second market is composed of almost all the other universities. The number of overseas students enrolling in these universities also increased significantly between 2012 and 2016 (though at a slower rate than occurred in the Go8). However the countries of origin were primarily located in the Indian subcontinent. Most of these students were attracted to Australian universities because of the access their enrolment gave them to the Australian labour market and thus to the potential of a permanent residence visa.

We concluded that the overseas student industry was in a precarious state. In the case of the Go8, overseas enrolments were vulnerable on three points.

First is the risk of reputational damage on account of the poor quality of the education overseas students are receiving. In the business and commerce faculties at the Go8, where Chinese students often constitute the majority, such courses have had to be made less demanding so that the many Chinese students with relatively limited English language skills can cope with their requirements. Then there is the risk from geopolitical tensions that threatened Chinese enrolments. And finally there is the risk of competition from other countries.

For the other universities the main issue is current changes in the rules governing overseas-student access to the Australian labour market and to long-term employment contracts. This means that their chances of obtaining a permanent residence visa are contracting. As a consequence we argued that these changes would diminish the attraction of enrolling for higher education at a non-Go8 Australian university.

Table 1: Per cent share of commencing onshore* overseas students to all onshore commencing students, Go8 universities and all Australian higher education institutions, 2012, 2016 and 2017

	2012	2016	2017
Group of eight:
University of Melbourne	27.3	36.2	38.7
University of Sydney	22.8	39.2	42.9
Monash	24.0	36.5	39.8
ANU	28.8	36.5	43.1
University of Queensland	27.4	31.8	37.0
University of NSW	30.2	38.7	42.9
University of Adelaide	28.5	28.3	31.4
University of WA	19.1	20.8	25.1
All Australian higher education institutions	21.8	26.7	28.9

Source: Department of Education and Training, Higher Education Statistics, Table 1.10, Commencing Students by State, Higher Education Provider, Citizenship and Residence Status.
* The term onshore is used to distinguish overseas students being educated in Australia from those in Australian campuses set up overseas. The latter are not included in these figures.

Higher education opportunities
Australia’s universities repeatedly assure the Australian public that increased enrolments of overseas students are not damaging the prospects of domestic students aspiring to a university education. Rather, they state that the two sets of enrolments are independent of each other; opportunities for locals are not being crowded out.

How could this be? Well, according to a 2014 policy document from the Go8, international students actually ‘directly facilitate domestic participation in higher education’. This is achieved, the document claims, because revenue from overseas student fees contributes to the costs of domestic education. It asserts that international student fees ‘subside each domestic student by around $1,600’.

This might seem plausible given that domestic enrolments have increased since the removal of enrolment caps for domestic students in 2009. Over the years 2012 to 2017 (years in which overseas enrolments expanded rapidly) the number of commencing domestic students at Australia’s universities increased from 370,314 to 416,371.

The result is that a very high share of the cohort of university age are currently enrolled as higher education students. In fact, university competition for potential domestic students is such that some universities have seen a drop in their domestic enrolments over the past couple of years. Concern that this enrolment scramble had gone too far (and was costing the Commonwealth government too much in funding) prompted the Coalition government in December 2017 to announce that it would re-impose enrolment caps in 2018 (caps which Labor promises to withdraw should it win government in 2019).

The universities have responded to these caps by insisting throughout 2018 that they amount to a reduction in opportunities for domestic students. According to Margaret Gardiner, Vice Chancellor at Monash University, the cap acts as a funding freeze which ‘will limit the share of highly-skilled well-paid jobs in our economy that can be done by qualified Australians in the decades ahead’. Or, in the words of the newly appointed (in June 2018) Chief Executive of Universities Australia, the reinstating of caps puts an end to the ‘unearthing and unleashing’ of talent that has occurred since the caps were removed, starting in 2009.

If expansion of overseas student enrolment was helping to create opportunities to increase domestic enrolments you would expect that more domestic students would be gaining places in Go8 universities. Over the period 2012 to 2017, when there were no caps on the number of domestic students that any university could enrol, domestic student commencements at Go8 universities barely moved. They were 87,939 in 2012 and 87,930 in 2017. By contrast, over these same years the number of overseas student commencements at the Go8 increased from 30,320 to 56,363. (The data are drawn from Higher Education Statistics releases, various years.)

Given that there were no caps in place, the Go8 could have taken more domestic students over these years. Many more thousands of these students would have jumped at the opportunity to attend a Go8 university. They were precluded from entry by the high ATAR entry thresholds imposed by Go8 universities. Such is the Go8 universities’ prestige that they attract the best domestic performers in secondary school exams. Like the overseas students, domestic students know that a credential from a Go8 university gives them a competitive advantage in the labour market (in this case within Australia).

The stabilisation of domestic enrolments was not because the Go8 lacked the capacity to increase their student load. They did have the capacity, but all of it has been taken up by increased enrolments from overseas students.

Clearly, the Go8 universities preferred to enrol overseas students. In effect, the benefits of the allegedly superior education that these universities offer went to overseas students rather than to local students. This was not because overseas students had superior potential to take advantage of what the Go8 offers. The contrary is the case. The Go8 do not preference high performing overseas students. There are minimal entry barriers to their enrolment other than the ability to pay the huge fees required.

Conclusion
Australia’s universities, especially the Go8, are caught in a vicious circle as their reliance on overseas student revenue deepens. This reliance means that they cannot prioritise teaching which benefits the vocational needs of their domestic students, to expand enrolment opportunities for domestic students or to focus on research activities relevant to Australian industry or the well being of Australian citizens.

Report authors
Bob Birrell (mobile 0413 021 126) is the Head of the Australian Population Research Institute (TAPRI), an independent, non-profit research organisation. Katharine Betts is deputy head.
This paper is based on two TAPRI research reports:
Australia’s higher education overseas student industry revisited, December 2018 and Australia’s higher education overseas student industry: in a precarious state, November 2018.