International student exports don’t add up

For years the education industry and state governments have talked up the immense value of international student exports, which the Australian Bureau of Statistics (ABS) claims was worth $37.3 billion in 2019.

These exports comprised: 1) $15.9 billion of tuition fees; and 2) $21.4 billion of goods & services expenditure, as illustrated in the next chart.

According to the ABS, international student exports more than doubled from $16.7 billion in 2013 to $37.3 billion in 2019.

I have regularly debunked this data for the simple fact that a large share of the international students that come to Australia pay for at least some of their expenses by working in jobs, as noted recently by the RBA:

Labour market conditions in Australia will also be a key consideration for these students. Census data indicate that over three quarters of Indian and Nepalese holders of student visas were in the Australian labour force in 2016…

By definition, money spent in Australia earned via working here is not an export, yet it is perversely treated as such. Accordingly, we witnessed the bizarre situation last year where thousands of international students begged for income support from the government and sought charity when they lost their jobs after COVID-19 shut the economy down. Clearly, these students were reliant on paid work to meet their expenses.

The mythical export figure also does not subtract funds sent home (remittances) by international students, which have grown significantly (see next chart).

Migrant remittances from Australia have soared over recent years, hitting $US5.7 billion in 2019.

In short, any genuine calculation of international student exports would only count money that comes into Australia from overseas and would net out money sent home via remittances. The fact that the $37 billion export figure does neither of these things, and wrongly includes expenditure funded via paid work in Australia, means exports are grossly exaggerated.

An article published yesterday in The SMH highlighted the absurd propaganda surrounding international student exports, claiming that the average student in NSW spends $60,000 a year in addition to their tuition fees:

International student education in NSW is worth $14 billion a year and is the state’s largest service export. Each student spends, on average, $60,000 annually on top of their education expenses.

Given tuition fees make up around 40% of exports (see above), this would suggest that the average international student in NSW spends around $100,000 per year.

To put The SMH’s statement to the test, the below table compares education exports as exaggerated by the ABS with the number of student visas on issue in Australia, as measured by the Department of Home Affairs:

Australia’s education exports were estimated at $67,516 per student in 2019.

Even if we use the ABS’ rubbery export figure, the average international student contributed $67,516 in ‘exports’ in 2019, comprising $28,792 in fees and $38,724 in living expenses (goods & services expenditure). This is a far cry from the $60,000 figure claimed by The SMH, which is supposedly “on top of their education expenses”.

Finally, according to the ABS’ latest national accounts, the average Australian spent $40,700 in calendar year 2020 (calculated as household consumption expenditure divided by the population).

Are we seriously expected to believe that the average international student studying in Australia spends 66% more than the average Australian? I smell bullshit.

Sadly, the creative accounting and propaganda surrounding education exports plays straight into the edu-migration industry’s hands by inflating its worth while never mentioning the costs.

Unconventional Economist

Comments

      • chuckmuscleMEMBER

        Agree, excellent work by LVO.

        Seems like these guys are taking the p!ss a bit, just make up a number and see if it gets believed. They are not even trying to hide the BS anymore.

        Google ” How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High Tech Workers”. It’s a report by Eric Weinstein showing that people in charge of the immigration system and universities know EXACTLY what they are doing and have since the 1980’s. The question in my mind is, have the current lot of clowns drunk so much kool-aid that they completely believe mass immigration doesn’t have any deleterious effects, or like the original gangsters do they know that it does, and choose to lie about it?

  1. PalimpsestMEMBER

    The strangest to me were the ABC articles reporting the terrible situation of students that could no longer send money back to their impoverished families because they couldn’t work. From a humanitarian view that was true, but from an education export view it just didn’t add up. The 80/20 rule probably applied at first, some 20% of students had money from parents, some even had their apartments bought for them. The other 80% lived a pretty frugal lifestyle like any student. As it transformed into a ‘scheme’ as it always seems to in Australia today, it became just a working visa back door, and even the fees were mostly earned locally. The initial registration fee can be classified as an export. Probably not much else.

    • From all the overseas students that I saw at a couple of Universities in Australia, very few were sustaining themselves on money from parents. Pretty much all had a job and a good portion of them used that money to pay their fees after their first year. Those in none degree programs all paid their fees from the second semester onwards from earnings inside the country.

      The economic modelling surrounding education is obviously flawed and the vested interests that want to see it continue have the aim of making them appear to be indispensable. University fees are probably correct but the multiplier effect is probably negative due to the above lower than the amount of fees paid here. This is a 10b a year industry at best if you net it all out. That doesn’t take into account the requirement to model negative effects to local students and the economy of providing local students what’s become sub-standard education. I blame successive governments for this, those who received free or highly subsidised education but now want to pander to the oldies and not tax them instead of building the young and the future tax base.

  2. Concur with Divya and RL, good piece. I think it’s also worth pointing out, as Leith has many times, that while laying into the education industry’s hands it is also simultaneously degrading the quality of that education, skewing the financial rewards of this racket to education insiders and non-teaching staff, with the VC the grasping pinnacle of this sh!tpile.

    Also, the industry is not homogeneous, dodgy VET-sector fly-by-night colleges also cream the trade pumping out worthless qualifications. (had a friend on Admin Appeals Tribunal doing refugee work – those with VET qual he gleaned that the quals are even considered worthless in the dodgy countries of origin).

    In the end though, it doesn’t matter, this is just raw feed-stock for GDP growth.

  3. No pretence that it’s anything to do with education – this from the university trade newsletter this morning:

    Naturals for immigration selection

    Graduates are the new Australians we need, says the IRU

    Australia suffers by separating immigration and international education policies, the Innovative Research Universities argue in a submission to a Commonwealth Parliament committee inquiry into skilled migration.

    “Attaining a qualification from an Australian university or other provider is a positive outcome for a person in demonstrating their relative standing for skilled immigration visas,” the IRU argues.

    “Hence, there should be a pathway that allows international students to apply for residence and citizenship, with decisions based on national policy and the relative standing of applicants at the time. This would not create the right for places but the legitimate potential to apply.”

    The lobby compares Australia’s “rigorous separation between its international education policy and its migration policy” with the practise of New Zealand and Canada.

    With immigration on COVID-19 caused hold, the skilled migration intake for 2021 should “pay particular attention” to applicants already here, including international students who have completed degrees. “Some of these graduates face an uncertain option for returning to their home countries,” the IRU suggests.

    • And yet typically mist employers consider freshly minted students to not be very skilled!
      (They are talking about research at Uni’s, which might mean there are a handful of truly gifted students but the vast majority only have proven they can learn at a certain level, they have few real skills, that is why they have graduate training programs. Aussie kids (thus if all races) should get priority for this training to go to next level)

    • @barry
      See my below comment for wider view of actual reality and the economic and social impacts of the foreign student & partner visa racket as part of migrant guestworker trafficking industry.

      On vocational achievement and progression.

      In 2015 a report ‘migrant pathways a decade on’ measured vocational and income achievement of the foreign student & partner intake in Australia.

      The progression of foreign students and partners to a higher than average income in either Australia or their home country was 3.6%.

      That’s right – 96% fail to become anything.

      Granted worthless certificates or diplomas – or nonsense degrees and they still remain an unskilled, useless and parasitic unskilled migrant underclass on a visa alibi – working in the black economy here, or else back to their third world slum or rural village to try their hand on re entry on some other visa category.

      Why the Productivity Commission decided in 2016 that foreign students and partners WERE NOT a suitable intake for PR.
      -/-
      Excerpt.
      Vocational achievement?

      In 2015 the Government report ‘Migrant Pathways a Decade on’ noted the vocational attainment of foreign students into a professional vocation with a higher than average income (Australia if they secured a PR or back in their country of origin).
      It was 3.9%.
      👉🏾Yes you read that correctly.

      96% of foreign students and partners after ‘study in Australia’ often 6-8 or more years with course churn & visa extension..
      96% fail to achieve a higher than average income either in Australia or their home country.

      👉🏾Exposing just what a farce this so called education is.

      We are not importing human capital value.

      We are importing third world mature adult unskilled useless parasites recruited from the slums and rural areas of the third world, trafficked in on a pretext ‘education’ visas alibis to do nonsense courses..so they can live & work illegally here as part of a now 2 million strong foreign national TR migrant guestworker underclass.

  4. If the Australian uni degrees are so good, then I am sure that all the students overseas can just study on-line and pay the fees and our “export” will continue just fine ….. !

  5. Charles MartinMEMBER

    Just another bullschit industry claiming to benefit the country as a whole, when in actual fact it benefits very few.

  6. The big lie – that foreign student education is Australia’s third-largest ‘export’ —behind only iron ore and coal—with more than 700,000 international students enrolled last year, bringing about Aus$32 billion into the economy !!

    This lie originally propagated by a Deloitte Access Economics propaganda puff piece back in 2015 paid for by AustralianEducation Gov & extrapolated from the then $18 billion ‘gdp’ by student numbers to now $32 billion ‘gdp’ by the shameless foreign student industry lobbyists.

    Gdp contribution onshore from money earned here is not an export.

    Fees were then $8 billion. Human capital value $8 billion (it assumes they all get PR and stay). Parents & relatives coming to stay $2 billion.
    And all the other larded up nonsense and lies.

    With a target in a follow on Deloitte Access Economics paper also commissioned by Aust gov of over 1 million foreign students and partners by 2025.
    And until Covid & the borders closing in April 2020 it was dangerously on track to potentially exceed that..

    👉🏾Let’s fact check the real social & economic impact of the foreign student racket.

    🔻Foreign student education in Australia is not an ‘export’.

    This myth is based on an Australian Education Gov ‘paid for’ pro propaganda paper published by Deloitte Access Economics & embellished since.

    Facts are:
    In December 2020 there were 823,000 foreign student visa holders with 772,000 primary visa holders & 65,000 so called partners on secondary visas in December 2019 & and estimated total of 750,000 now.

    The majority who work illegally (refer to fact tar 75% work illegally – Sydney Uni & UTS studies 2018-2019.

    Many who in 2020 have attended no classes or pretended to under the guise of covid-19 and ‘online learning’ to dramatically increase their illegal work.

    The majority of foreign students and partners enter on self declared or falsified funds (borrowed / bank statement / money whisked our for the next one) and only pay the first semester.

    They occupy at least 617,000 Australian FTE jobs often working both legally and then illegally to repay agent procurer debt and send back remittances.

    👉🏾Creating at least 600,000 Australian unemployed costing over $17 billion in Australian Centrelink payments.

    👉🏾So our welfare payments to the Australians made unemployed by the foreign students working illegally exceeds their entire fees paid .

    Our foreign remittances outflow primarily from foreign students and partners has increased from $2.3 billion (2009) to now over $8 billion (2019 World Bank remittance outflows 2019). And that’s just the official money Xfer channels. Another $5 billion is estimated to be sent out by the migrant foreign nationals on temporary visas foreign run / unmonitored web & alternative xfer mechanisms.

    To China, India, Nepal, Bangladesh, Thailand, and other third world countries of origin.

    Debt repayments to the foreign agent trafficked and then to their foreign family.

    The foreign students & partners are not here for the ‘education’ – that’s just the visa pretext to live & work illegally.

    Remove their work rights and enforce it & over 600,000 or more would be immediately depart. They have no funds, most are in debt, a poor unskilled migrant labor underclass that live week to week & work illegally.

    They casualise jobs & lower wages for all Australians including our youth & mature age. Costing tens of billions.

    👉🏾Housing.
    They occupy at least 150,000 modest Australian established dwellings (5 or more per dwelling).
    Where do people think they all live and how?
    They live in vast fetid third world migrant ghettos in our main cities, occupying Ex Australian modest dwellings now foreign owned and converted to cash in hand sublet migrant only bunkshare.

    Little or no landlord income is declared, or else it is minimised – and negative gearing then claimed by the usually PR foreign national who runs the migrant slum share.

    Creating massive housing contention and cost impacts to all Australians – with now 116,000 Australian permanent homeless and another 340,000 Australians seeking affordable housing.
    Costing another $4.2 billion a year in Australian taxpayer support.

    Job loss, wages loss and housing loss are all direct and tangible correlations of the foreign student & partner economic and social impact to Australians.

    👉🏾The foreign students have massively increased the cost of Australian education for Australian youth – as the university’s, colleges, institutes and academies all prostituted themselves as a visa alibi for migrant guestworkers.
    Tens of billions of current and future social and economic impact as Australian youth are denied education & opportunity.

    A huge economic and social burden.

    Fee income sources.
    Total fees paid 2019 – $14.5 billion.
    Paid primarily from money earned here.
    ‘Fees’ earned onshore at least $12 billion.
    75% work illegally. (Many studies support this)
    👉🏾Not an export at all.

    They are the epi-centre of foreign criminal migrant trafficking syndicate, money laundering, vice and criminal activity.

    As example the Australian vice industry is now exclusively run by Chinese, North Asian and North East Asian criminal syndicates with over 50,000 foreign students or partners as their stock in trade.

    👉🏾Educational achievement?

    In 2015 the Government report ‘Migrant Pathways a Decade on’ noted the vocational attainment of foreign students into a professional vocation with a higher than average income (Australia if they secured a PR or back in their country of origin).
    It was 3.9%.
    Yes you read that correctly.
    96% of foreign students and partners after ‘study in Australia’ often 6-8 or more years with course churn & visa extension..
    96% fail to achieve a higher than average income either in Australia or their home country.
    Exposing just what a farce this so called education is.
    We are not importing human capital value.

    We are importing third world mature adult unskilled useless parasites recruited from the slums and rural areas of the third world, trafficked in on a pretext ‘education’ visas alibis to do nonsense courses..
    so they can live & work illegally here as part of a now 2 million strong foreign national TR migrant guestworker underclass.

    🔹Less foreign students is a good thing for Australia.

    It’s a reduced import cost and social impact burden.

    Finally – if Australia had the same rules as the UK, US or say China for a foreign student.
    These include rules such as:
    🔻No work rights
    🔻No partners
    🔻Proper Health Checks – onshore Doctor check.
    🔻Full course fees paid in advance from offshore & no refunds
    🔻Proper checks on their housing, no 8 Chinese students working illegally in a fetid 2 bed unit bunk share paying cash in hand rent not declared to a Chinese criminal who bought that Australian home unit with dirty money.
    🔻No vice (yes it’s legal in NSW for a foreign student)
    🔻Reporting to the local police station monthly to declare all activities, funds & sources of income.

    👉🏾If we had those rules then there would be less than 65,000 foreign students, and virtually no partners in Australia.

    And despite what the parasitic ticket clipping universities etc say – the less foreign students we have in Australia, the better off we are.

  7. It should be spelt out that much of that increase in outflows would be those students that have stayed on as immigrants is them paying their loans back, despite popular belief most foreign students are not rich, families save & borrow to get them here, like Aussies & housing.

    And I reckon even that $38.000 figure is double what most students bring, it’s nowhere near what my nephew worked out for him to go overseas as he actually wants to work as well as study