Australia’s $37.6b international student export con

Australia’s Education Minister, Dan Tehan, issued a media release spruiking that Australia’s education ‘exports’ surged by $5 billion in 2018-19 to a record high $37.6 billion:

International education contributed $37.6 billion to the Australian economy last financial year, which was a $5 billion increase.

Australian Bureau of Statistics figures released yesterday found the economic contribution of the international education sector had grown by 15 per cent.

Minister for Education Dan Tehan said the figures confirmed Australia was a world-leading study destination.

“International education has experienced its fifth year of consecutive double digit growth, highlighting the strength of Australia’s higher education system,” Mr Tehan said.

“Australians should be proud of our innovative international education sector.

“It is our largest service-based export and supports 240,000 jobs, business opportunities and economic growth.

Below is a chart showing the dramatic rise in international student ‘exports’ using the latest available Australian Bureau of Statistics (ABS) data:

And next is the breakdown by the three largest source nations – China ($12.1 billion), India ($5.5 billion), and Nepal ($2.6 billion):

While Australia’s international student ‘exports’ sound impressive, they are wildly exaggerated, since they include both tuition fees and expenditure while studying in Australia.

As shown in the first chart above, spending on “goods & services” by international students ($20 billion in 2018) far outweighs spending on enrolment fees ($15 billion in 2018).

A significant share of this expenditure would have been paid for via earnings by international students from within Australia. To that extent, they are no more ‘exports’ than a domestic university student that lives out of home an supports themselves via paid employment.

A significant chunk of this expenditure also would have been on imported goods, which actually worsens Australia’s trade balance.

Moreover, any money earned in Australia and sent back home by international students also represents an import and should be deducted from the export count. On this point, there was a US$5 billion net outflow of migrant remittances from Australia in 2017, some proportion of which would have originated from international students studying in Australia:

Don’t just take my word for it. Associate Professor Salvatore Babones’ also debunked Australia’s bloated education ‘exports’ figure in a recent paper for the CIS:

International students are clearly important for Australia’s universities, but their importance to the economy as a whole is frequently overstated. One oft-quoted statistic is that educational exports have risen to become Australia’s third-largest export after iron and coal. That doesn’t really capture the full story, since exports in different sectors are reported at different levels of granularity.

Figure 5 compares the size of Australia’s educational exports to that of other major sectors from across the economy, using data from the Australian Bureau of Statistics (ABS). Additional historical data going back to 2002 are reported in Table 5 in the Appendix. Educational exports overtook receipts from all other travel (tourism, family, and business combined) in 2008, but are still smaller than Australia’s exports of agricultural or manufactured goods. Moreover, more than half of Australia’s reported educational exports (53.7% in higher education and 57.2% for the education sector as a whole) consists not of student fees, but of goods and services bought by students while in Australia. Since this spending is at least partly generated by income that students earn from working in Australia while studying, the true net value of education exports to the Australian economy is likely lower than the headline figures reported by the ABS and DET…

Like most arguments canvassed to support Australia’s extreme concentration of international students, the $37.6 billion ‘export’ figure is a mirage. The true value, while unknown, is likely much lower, as are the purported benefits.

Leith van Onselen

Comments

  1. Been saying the same as this for 6 years now.

    If you add in the unemployment impact
    (75% of the 715,000 foreign students & partners work illegally – Sydney Uni & UTS study) = 540,000 Australian jobs stolen – that’s $9.3 billion alone in Australian unemployment benefit costs.

    Then we have lowered wages overall (tens of billions in wages lost plus taxation revenue)

    Add on housing contention ($billions including the 116,000 Australians permanently homeless and 360,000 with no affordable housing.)

    89% of the 715,000 foreign students & partners living in ‘private shared accommodation’ (ABS) which is code for foreign criminal owned cash in hand bunkshare.
    And the foreign owner only declaring a minimal rent or legal occupancy. That alone is $7.3 billion in accommodation paid, but less than half declared.

    Then add on destroyed Australian education (fallen 10 places globally) & destroyed affordability for our Australian families & youth – as our education industry prostitutes itself as a migrant guestworker visa alibi.

    Then add on congestion, unnecessary ‘infrastructure’ projects, environmental impact & other tangible cost or social impacts…. billions, tens of billions of cost impact.

    The foreign student industry has also become the epicentre of foreign criminal run vice & crime networks, ABN & labour racketeering & money laundering.

    -/-

    Most foreign students enter with fake funds & are in debt. They are third world poor mature age unskilled.

    The ‘education is only an excuse to work illegally, repay an agent procurer & send back remittances.

    By any measure, the Australian foreign student industry is not an ‘export’.
    That lie was based on a propaganda piece by Deloitte Access Economics paid for by the Australian Education Gov – and has been widely discredited as a farrago of lies, mistruth & omission.

    -/-
    The Australian foreign student industry is socially & economically negative by many tens of billions.

    Each foreign student coming in thru airport arrivals on average, costs this country some $25,000 a year in a holistic view of their economic & social impact.

    715,000 foreign students & partners x -$25k = $18 billion negative net impact.

    It’s a net import of debt and then outflow.

    Nearly 3/4 of a million third world unskilled migrant guestworkers on a visa racket, doing nonsense courses and the majority working illegally to repay agent procurer debt & send back remittances.

    The real test?

    Remove work rights & enforce it.
    Full fees paid up front.

    700,000 of the 712,000 foreign students & partners would exit immediately.

    • this number is fake even by simple accounting standards, imagine adding all the externalities added on top

      governments have been doing fake news for centuries and that was fine, now when technology enabled anyone to do it it’s a problem

  2. yeah it is all a con… but it means that Harry Triguboff makes money so that is what counts, right?

  3. if it was only him … billions in fees payments go directly into pockets of fake educational institution owners for providing nothing but working visa

  4. If I mention anything about remittances the answer I get is always “well its their money”, but on such a scale isn’t this a huge drag on our economy?

    No wonder consumer spending is so poor when so many people are shipping off basically their whole disposable income overseas. Having known some of these people, they live as cheaply as possible in share accomodation and are on the first plane out of the country for their annual holidays.

    It’s just simple maths that someone making say $50k who spends their entire income in our economy, is far more beneficial to the economy versus someone who makes the same but spends the equivalant of a dole recipient (is that $12k?) and ships the rest off elsewhere.

  5. TailorTrashMEMBER

    There was a time when the education minister
    Would have concerned himself with the education of Australian kids . Now he is concerning himself with the sales figures of a corrupt business model
    labeled as “exports “ I’m sure all the recent arrivals in said education business will be happy as they
    rake in the dosh but “minister for education “ he is not

    • Kinda like councils concerning themselves with all manner of other social issues instead of keeping neighbourhoods tidy.