Australia a honeypot for Indian student visa fraudsters

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Late last year, the former Morrison Government attempted to open the student visa floodgates by uncapping the number of hours those on a student visa could work, alongside extending the amount of time that international graduates can work in Australia.

These reforms were explicitly announced by the former government to ensure a “rapid return of international students”.

At the time, I argued that “the decision to grant VET graduates an automatic two-year temporary graduate visa is especially egregious, since it will inevitably lead to thousands of poor students from developing nations (e.g. the Indian sub-continent) undertaking cheap mickey mouse courses in order to work and gain permanent residency”.

To nobody’s surprise, student visa fraud has since proliferated, as reported here, here and here. This has prompted the Home Affairs Department to launch a crackdown on student visa fraud, especially from India:

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The Australian Financial Review understands that the fraudulent applications were coming from a handful of states and education agents in India, with “students” sending false financial records and school certificates.

The increase in fraud was allegedly motivated by visa applicants wanting to use the visas primarily to work rather than study, after the government removed limitations on students’ work hours in any industry early in 2022 to help businesses crippled by skills shortages to find staff…

As usual, the chief mouthpiece for the international education lobby, Phil Honeywood, lamented that the crackdown would see Australia lose market share to Canada and the UK:

Mr Honeywood warned that the delays caused by the visa frauds “exacerbated” other issues stopping Australia’s international education market recovering from the pandemic…

“A combination of embassy lockdowns, fraud out of India, high visa charges – it all adds up to reasons why a student may choose a competitor such as Canada over Australia,” Mr Honeywood said.

He said Australia’s two-year border closure and now delays processing visas meant Australia’s biggest rivals for international students – the UK, USA and Canada – were increasingly appealing to students…

“We thought after two years of fortress Australia we’d finally have a big uptick in student enrolments … but a combination [of these issues] have combined to create false hope for many education providers,” Mr Honeywood said.

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All of which begs the question: why would Australia want such low quality ‘students’ in the first place?

The above farce proves yet again that international education is a people-importing industry not a genuine export industry.

Most students arriving from poor nations like the Indian subcontinent or Nepal don’t bring money from their home countries into Australia, which would be a genuine export. Instead they pay for their studies and living expenses by undertaking paid employment in Australia – often at below-award ‘wage theft’ rates. These funds are by definition not an export since the money is earned here. Yet the Australian Bureau of Statistics wrongly classifies it as such, which then encourages policy makers to promote the international education industry as some great economic boon for the nation.

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For many international ‘students’, the primary motivation for studying in Australia is not to gain an education, but instead gain work rights and permanent residency. And our higher education industry has more than willing to assist in the ‘bums on seats’ process by slashing entry and teaching standards to accommodate them. In turn, they have become ‘middle-men’ to the entire ‘Big Australia’ immigration scam.

Ultimately, the problems of visa fraud and falling education standards won’t be overcome until the policy towards international education shifts from maximising student volumes to maximising quality. This can only be achieved by:

  • Raising entry standards (particularly English-language proficiency);
  • Raising financial requirements needed to enter Australia; and
  • Removing the explicit link between studying, work rights and permanent residency.
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These reforms would raise student quality, would lift genuine export revenues per student, would lift wage growth by removing competition in the jobs market, and would lower enrolment numbers to sensible and sustainable levels, in turn improving the experience for local students. They would also ensure that students come to Australia to study, not for work or migration purposes.

Of course, reforms like the above would never happen. Because if entry standards were raised, and work rights and permanent residency were scaled back, then international student volumes would plummet. And this would stymie the ‘Big Australia’ mass immigration model, which is really what the industry is all about.

So watch on as our policy makers pretend to crackdown on visa fraud, while instead degrading standards even further to entice as many warm bodies into Australia as possible. Because that’s what the business, edu-migration and property lobbies demand.

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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.