Why are taxpayers subsidising international students?

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By Leith van Onselen

The 2019 Federal Budget included an obscure measure, entitled Destination Australia Program, promising to fund scholarships for both domestic and international students to study in regional Australia:

$93.7 million from 2019-20 (and $23.7 million per year ongoing) to establish the Destination Australia Program to support domestic and international students to study in regional Australia by providing scholarships towards a higher education or vocational education and training (VET) qualification.

Last week, the Minister for Education, Dan Tehan, provided more information on this package via a Media Release:

Destination Australia will provide 4,720 scholarships of up to $15,000 a year for domestic and international students to study at a regional university or vocational training provider…

“International Education made a $35 billion contribution to the economy last year, yet just three per cent of the 690,000 international students were enrolled in regional Australia,” Mr Tehan said.

“The Destination Australia scholarships will encourage more international students to study outside our major cities which means regional centres can share in the job, business and cultural opportunities that come with international students.

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Other than the above information, details are thin.

Nevertheless, Australian taxpayers are facing a bizarre situation where they will soon provide millions of dollars in subsidies to international students. Why?

Rather than handing scarce taxpayer dollars to foreign citizens, these funds would unambiguously be better spent on worthwhile social programs that raise the living standards of incumbent Australian voters, such as raising Newstart.

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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.