Student “citizenship exports” boom

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By Leith van Onselen

Australia’s education system has become an integral part of the immigration industry and Australia’s population ponzi – effectively a way for foreigners to buy backdoor permanent residency to Australia.

Dr Jenny Stewart, Honorary Professor of Public Policy at the University of New South Wales, recently drew the direct link between permanent residency and foreign student demand in her excellent article Hooked on Students:

If you work in a university, you cannot help but be aware of the extent to which universities are dependent upon income from international undergraduate students. Many of us working in the sector realised that it was not for any intellectual brilliance on our part that the students came, but because for many, coming to Australia as a student was a significant step on the path to becoming an Australian resident.

What I had not realised, until I looked at the data, is just how significant this educational program has become in the migration sense. The numbers are substantial. In 2013-2014, of just over 290,000 student visas that were granted, 153,000 were for study in higher education institutions. (Most of the rest were for vocational courses, which in turn offer a pathway towards onshore application for a higher education visa).

What do these undergraduate students do once they have completed their qualification? Many, understandably, wish to remain in Australia…

With appropriate advice and support and the necessary persistence, it would seem to be possible for just about any international student who is a graduate of an Australian university to become, eventually, a permanent resident…

The RBA’s submission to the parliamentary inquiry into home ownership also admitted as much when it noted that “recent rule changes have made it easier for students to remain in Australia after graduation, including by becoming permanent residents”, and then forecast a huge increase in net migration from international students, particularly into Melbourne and Sydney:

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Well, the RBA’s forecasts seem to have come to fruition with international education enrollments soaring by 11% in the first seven months of this year according to Federal Education Department data. From The Australian:

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The biggest increase has been in vocational certificates, suggesting foreign students’ appetite for Australian courses has not been damaged by the scandals surrounding domestic vocational education colleges and the spectacular losses incurred by listed training chains such as Vocation, Australian Careers Network and Ashley Services.

Federal Education and Training Minister Simon Birmingham said the figures reflected the strength of Australia’s international education sector…

“As well as skilling people from all over the world and building Australia’s reputation abroad, international education provides 130,000 jobs and represents income for our accommodation, hospitality and services sectors back home,” Senator Birmingham said…

While higher education recorded the strongest growth in raw figures, the vocational education and English language sectors also saw steady increases. Enrolments in certificate III, the qualification level of most apprenticeships, grew by 21 per cent compared with 11 per cent for bachelor degrees and 2 per cent for PhDs.

Enrolments in senior secondary certificates rose 12 per cent, fuelling growth in schools.

It is unlikely that Australia’s education exports would be anywhere near as high if the carrot of permanent migration was not attached. That is, if Australia’s universities and vocational education providers had to compete solely on quality, they probably wouldn’t be able to stand on their own two feet.

In reality, Australia’s education exports are to a large extent merely “citizenship exports”.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.