Australia’s fake international student “exports” exposed by virus

Commentators frequently trumpet how education is one of Australia’s biggest export earners, exceeded only by coal, iron ore and natural gas. And this view is superficially supported by official government data:

James Doughney, Emeritus professor at Victoria University, put this “exports” argument to use last week before demanding the M0rrison Government provide welfare support to international students:

International students in Australia contribute more than just the fees they pay. They also spend money while they are here, generating jobs and income in the broader economy…

The blue line in the below chart on Australia’s education exports is exponential…

Education exports as we know them today had grown from near zero in the 1970s to about A$37 billion last financial year (2018-19). In 2018-19, they comprised almost 40% of Australia’s exports of services and 9% of exports of all goods and services…

Considering the amount of money these students have brought in to our economy, giving them access to JobSeeker payments would benefit us all…

The Australian Greens also demanded the Morrison Government provide welfare to the “thousands” of international students facing poverty:

Senator Faruqi said:

“Over the last two weeks, I have received hundreds of messages from international students who have lost their jobs and now face an incredibly uncertain future.

“The government has refused to listen to the thousands of international students who have been forced into poverty by this crisis, many of whom are now struggling to pay for food and rent.

“The Greens will move for temporary visa holders including international students to be made eligible for the JobKeeper wage subsidy today. We call on the Opposition and crossbench members to support this effort to ensure international students are not left destitute.

“We also continue to call for international student access to income support, including the Coronavirus Supplement, and Rent Assistance.

“Platitudes by the government are not going to help international students at this time of need. They need concrete help and financial support to get through this crisis.

These sorts of please have been repeated across the mainstream media by union groups and the education industry.

What this episode shows categorically is that Australia’s purported $37 billion education exports are wildly exaggerated, since they wrongly include expenditure by international students from money earned while in Australia (see footnote C in the first graphic above). 

Remember, international students are permitted to work 20 hours a week and many also work extra hours illegally. However, when this income is spent it, is erroneously counted as an “export” by the Australian Bureau of Statistics (ABS). Yet, such expenditure is no more of an “export” than that by domestic students that live out of home and work to support themselves.

The fact that so many international students are not being funded from their home countries, are relying on working to fund themselves, and are now facing destitution following the collapse in the labour market, demonstrates unambiguously that Australia’s much taunted $37 billion education exports figure is fake. 

Finally, 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 working in Australia: 

Like most arguments put forward to support Australia’s extreme concentration of international students, the $37 billion ‘export’ figure is a mirage.

The true value is likely much lower, as are the purported benefits.

Meanwhile, the negative impacts on wages, education standards, the housing market, and congestion in the major cities is ignored entirely.