Immigration policy is hurting an industry that not only earns big bucks for Australia, but expands our influence in the region.
SIXTY years ago, Commonwealth foreign leaders devised a scheme to boost the development of emerging Asian countries.
Dubbed the Colombo Plan after the city in which it was created, it included a huge program of sponsored education, whereby the best and brightest of the region’s future leadership were sent off to the universities of nations including nearby Australia.
Australia still benefits from the far-reaching relationships and influence earned in those days by teaching future civic leaders in countries such as Indonesia, Japan, Laos, the Philippines, the US, Vietnam and Thailand.
Describing the Colombo Plan on its website, the Department of Foreign Affairs and Trade says: “This bold initiative brought Asia and the West together at a time of great political and economic uncertainty”.
What would those far-sighted leaders of the past think of today’s policy makers, who are quietly throttling the modern-day version of the Colombo Plan, Australia’s $18 billion international student sector, which had nearly 500,000 enrolments for the year to June.
Education providers are becoming increasingly agitated by both current federal government actions and the anti-immigration stance taken by both major parties in the current election campaign.
Among the key changes was a new Skilled Occupation List to replace the Migration Occupations in Demand List (from July 1), which had until February listed those occupations and specialisations identified by the Department of Education, Employment and Workplace Relations that were in short supply. This change has suddenly decoupled education and migration.
Another sore point has been a 50 per cent increase in the amount of funds prospective students from many developing nations have to prove they have. A few weeks ago that number jumped to $18,000 from $12,000 without warning, a bitter blow to those who had saved for years to meet this already tough requirement.
These policy shifts have already taken a major toll on the industry, which is not only a major export earner but also a key employer in the so-called knowledge economy and a significant source of the people required for sectors such as mining, which is again experiencing skilled labour shortages.
Nowhere is this being felt more acutely than Western Australia, where the sector is worth more than $1 billion a year. Although the state’s share of the international student market is commensurate with its market size, it is being squeezed more than most markets by the federal policy coupled with macro-economic forces outside anyone’s control, such as the strength of the Australian dollar and big competition from alternative markets.
While enrolments are holding up, especially at tertiary level (see story page 10), the number of international students starting courses this year to date is down alarmingly, especially in English, which is seen as the leading indicator for the market. Universities are bracing for a big hit as their future students learn English in other markets.
The issue can be summarised by a statement released this week by the Australian Technology Network of Universities, five leading institutions including WA’s Curtin University, which sit just outside the traditional sandstone Group of Eight and educate about a quarter of the nation’s university students.
The ATN has described what is taking place as “economic suicide”.
Releasing a report entitled: ‘The Economic Implications of Fewer International Higher Education Students in Australia’, ATN warns that economic output associated with the nation’s third largest export industry will shrink by as much as $600 million in 2011 and by $1.2 billion to 2012.
It warns of the the loss of up to 9,000 jobs in 2012 across Australia, rising to a total loss of 19,000 jobs by 2012, as related sectors such as retail and hospitality are hit by the downturn.
This is in the middle of an election with a Labor government claiming the economic high ground.
ATN chairman professor Ross Milbourne said the most immediate issue for government to address was the impact of changes to student visa conditions, permanent residency issues and regulation of quality issues in the sector.
“What we are seeing from current policy settings is potentially economic suicide,” professor Milbourne said. “Government must reconsider its policy settings.
“As outlined in the report, higher education – the largest economic and employment generator in the sector, with the least problems in terms of quality – is already suffering reduced enrolments and lower visa grants in what appears to be a case of significant collateral damage arising from policy measures aimed mainly at other sectors in a challenging international environment.”
While the ATN’s language is acute, its economic predictions are not the direst in the industry.
The International Education Association of Australia is warning of as much as 35,000 jobs potentially lost across Australia, including 2,500 at risk in WA.
According to the IEAA, international student enrolments in 2010-11 are expected to drop about 30 per cent, or between 100,000 and 125,000, across universities, VET, schools and the English language industry.
Extrapolated into dollar figures, a 30 per cent cut in the $18 billion export industry could represent a loss of $5.4 billion.
The IEAA blames factors including the failure of successive governments to invest sufficiently in the industry and ad hoc, damaging policies, including the frequent and ill-considered student visa and immigration policy changes.
Other issues include a stronger Australian dollar, aggressive student recruitment from other countries, particularly the US, the collapse of private colleges and reputational damage from attacks on international students.
Perth Education City executive director Mike Ryan described the concurrence of issues during the past 18 months as a perfect storm.
Many of the problems plaguing the sector have come from the global financial crisis, which has not only reduced student demand but has also made rival nations such as the UK and the US more competitive. The weak pound and US dollar have not only turned the tables on the once-cheap Australian dollar, but their universities are considered comparatively more prestigious.
Furthermore, with internal demand down and government funding cut due to its economic woes, US universities have become more aggressive in the marketplace.
“You could go back to the GFC, which some people forget about,” Mr Ryan said.
“That has hurt some of our source markets.”
ACIL Tasman director Ian Satchwell chairs the Chamber of Commerce and Industry WA’s services forum and is very concerned about what is happening because foreign students are a potential source of skilled labour.
“The reality is we need to retain a lot of those students to meet future demand,” Mr Satchwell said. “We are a rapidly growing services exporter, that is an important part of rounding out our economy and deepening it.
“That is very important, let’s not blow it.”
Mr Satchwell also sees the Colombo Plan style opportunity for Australia’s engagement in the region, pointing to a new generation of Indonesian officials and politicians that have received training in Australian universities.
“The previous generation of Indonesian leaders have sent their kids to Australia to be trained for obvious reasons,” he said. “Obviously there are massive relationship benefits for us.”
