Education cushioned from fallout

01/10/2009 - 00:00


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TEACHING is widely regarded as a recession-proof profession.And it appears those companies that turn a profit from private education have also come out largely unaffected by the economic downturn.

Education cushioned from fallout

TEACHING is widely regarded as a recession-proof profession. And it appears those companies that turn a profit from private education have also come out largely unaffected by the economic downturn.

The international education sector contributes $840 million to the Western Australia economy every year and employs more than 2,200 people across the state, according to Access Economics. The industry has grown by more than 40 per cent nationally during the past three years, and those cleaning up the fragmented sector are making a tidy profit.

Mount Pleasant-based Navitas remains the state's biggest private education exporter, predominantly making its money from international student fees linked to university pathway programs - bridging courses that funnel foreign students into universities - and English language courses.

The bulk of the $470.7 million Navitas made in revenue for fiscal 2009 - compared to $345.4 million the year before - was generated through these two major income streams, making it a major exporter for the state.
The company generates the vast bulk of its profits from Australia despite having a presence in several overseas locations. Navitas boss Rod Jones says the sector is cushioned from the extremes of a recession, rather than being recession-proof.

The state's universities have not been left out of the rise of private education, with Curtin University of Technology remaining the biggest beneficiary, among the universities, of international student fees.
During the 2008 calendar year, the university generated $136.2 million in international student fees from its local and offshore campuses, compared to $96.4 million five years ago.

Companies including Navitas and US-based Kaplan partner with universities in profit sharing arrangements.
Perth Education City - an industry body responsible for the promotion of the state's international education sector - estimates that the number of private providers outstrips the number of public institutions with international students by 10-to-one, and contributes close to a half of all international student enrolments in WA.

"I doubt that Western Australia's public institutions would be anywhere near as successful as they have been if there were not such a strong private education sector presence in Western Australia," Perth Education City chairman Professor Gary Martin says.

UWA has bulked up its international student division during the past five years, and now pulls in $64.1 million from the full-fee-paying foreign students.

The director of UWA's international centre, Kelly Smith, says the division is yet to experience a negative flow-on effect from the financial crisis.

"We're cautiously optimistic, but are prepared for the fact that it's a huge crisis and may have an impact," Mr Smith says.

WA has an 8 per cent share of Australia's international student population.

Educators say the economic downturn may not be felt in the sector until next year, as foreign students usually make the decision to come to Australia a long time before their actual arrival.

While UWA generates most of its international student fees in Perth, it does run intensive courses in countries such as Singapore and the Philippines using a combination of fly-in fly-out lecturers and local teachers.

The model is used to accommodate foreign students who seek an Australian-styled education in their home country on a part-time basis.

ECU increased its international student fee revenue from $27.8 million to $47.2 million during the past five years, while Murdoch has boosted its income stream from $21.6 million to $34.7 million.

The private education sector is a diverse one that includes everything from English language teaching to driving schools, although it is the former that generates the export revenue.

Market researcher IBISWorld Australia says Asian countries including China, South Korea and India make up about 77 per cent of the English language student market in Australia.

Roughly half of the students come to Australia on student visas, while increasing numbers study while on a working holiday visa.

IBISWorld notes that most educators are benefitting from a thirst to acquire knowledge and training, led by the English language training sector.

Professor Martin says WA is enjoying strong growth in the vocational and training sector, which recorded a 47 per cent increase in student numbers to 14,279, compared to the same time last year.

He says the vocational and training sector has become a very important export for the state, unsettling the perception that the state's international education export industry is in higher education.

An Access Economics report found that the international education industry was the country's third biggest export industry, behind coal and iron ore, with a $14 billion contribution to the economy.


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