Judith Sloan takes axe to edu-migration rent seekers

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The Australian’s Judith Sloan has penned a terrific article explaining why the “Tidal wave of overseas students must stop”.

Sloan claims that senior administrators at Australia’s universities are relentless rent-seekers and will take every opportunity to lobby the federal government to open the nation’s international borders to foreign students.

Instead, Sloan insists that any decision to re-open Australia to overseas students on a large scale must consider whether the benefits outweigh the costs for Australia.

Below are some key highlights from Sloan’s demolition job:

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  • The tidal wave of international students has been “vital to the funding of outsized university budgets, whopping salaries and over-the-top campus building programs”.
  • International student numbers studying at Australia’s universities ballooned by 80% between 2010 and 2019 and have only fallen modestly during the pandemic.
  • Measured on a per capita basis, Australia now hosts more international students than any other major country in the world.
  • University rent-seekers only tout the benefits of international students (most of which they capture) and never mention the costs borne by Australian students and the broader society.
  • These costs include: inadequate English; degraded educational standards, including the misuse of group assignments; the degraded experience of local students being crammed into classes dominated by foreign language speakers; restrictions on freedom of speech; and endemic wage theft and exploitation, generally by business owners of the same ethnic grouping.
  • The federal government’s recent deregulation of international student work hours “begs the question why these students are here: is it to study or to work?”. Most “international students are more motivated by the prospect of securing permanent residence than undertaking an often substandard university course… In other words, we are importing low-skilled workers who aim to stay here permanently or for very long periods”.
  • Therefore, “there is an overwhelming case for avoiding the resumption of international student enrolments on the scale and type that existed prior to the pandemic”.
  • Specifically, student numbers should be curtailed by requiring a “much higher English proficiency standard… to obtain a visa as well as evidence of the ­financial means to cover all costs of study… International students should also be expected to go home upon the completion of their studies” and “there should be no expectation of achieving PR after graduation”.
  • What Australian needs to avoid at all costs is returning to the pre-COVID settings whereby “all the financial benefits of having so many international students were captured by the higher education sector ­itself while the costs were largely borne by the community”, such as “loss of urban amenity, including excessive congestion; unsightly apartment buildings; and distortions to the unskilled segment of the labour market”.

Bravo Judith Sloan. MB has been making the same arguments for years.

Australia’s pre-COVID concentration of international students was extreme, dwarfing all other developed nations:

International students concentration

Australia’s international student concentration was extreme.

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Sensible policy would seek to lower foreign student numbers to international norms by:

  1. Raising entry standards (particularly English-language proficiency);
  2. Raising financial requirements needed to enter Australia; and
  3. Removing the link between studying, work rights and permanent residency.

These reforms would lift student quality and would raise genuine export revenues per student.

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They would also help to improve teaching standards and the experience for domestic students, which should be our universities’ number one priority.

We must restore Australia’s universities back to being about ‘higher learning’ rather than ‘higher earning’.

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.