Without international students, what is the fate of universities?

Canberra: The loss of international students due to COVID-19 restrictions, and predicted second semester declines, will see universities lose between AU$3 billion (FJ$4.25bn) and AU$4.5bn (FJ$6.37bn), according to Universities Australia.

The higher education sector was dealt another blow this week when the Australian government said universities wouldn’t get the increased access to the AU$130bn (FJ$184.12bn) JobKeeper fund for registered charities.

Universities estimate more than 21,000 jobs are at risk in the next six months, and more after that. On April 3, Prime Minister Scott Morrison said about international students: “If they’re not in a position to support themselves, then there is the alternative for them to return to their home countries.”

This was chilling in its indifference.

The Commonwealth has good reason to support universities hit by falling international student revenues as part of its pandemic stimulus measures.

Current university jobs depend on this revenue. According to a Deloitte Access Economics report commissioned by Universities

Australia, universities contributed AU$41 billion (FJ$58.07bn) to the Australian economy and supported a total of 259,100 full-time jobs in 2018.

The government also has good reasons to support international students who have lost jobs and are not eligible for JobKeeper or JobSeeker payments.

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.

In fact, the international education sector has become so economically significant that to burn it now will dampen Australia’s postpandemic recovery.

Just how significant?

Since 1985, when the Commonwealth allowed Australian universities and colleges to charge full rather than subsidised fees, revenue from international students has grown exponentially in real terms, flattened only briefly by the GFC.

Exponential is a familiar term in these pandemic days. It’s another way of talking about compounding – growth on growth. Total education exports – as Australia’s national accounts categorise them – comprise both the fees international students pay and the amount they spend on goods and services while in Australia. 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 per cent of Australia’s exports of services and 9 per cent of exports of all goods and services.

By comparison, Australia’s total rural exports to the world were about $44 billion last financial year.

Universities are scrambling to determine the size of the inevitable international student decline they will experience. For instance, on March 1, 2020, 56 per cent of international student visa holders from China were outside Australia, and Chinese students account for onethird of total education exports.

From 2003 to 2018, international onshore student revenue rose, on average as a share of all universities’ revenue, from 14 per cent to 26 per cent. For some universities, the dependency is even greater, well exceeding 30 per cent.

Overall student revenue also grew, both as a share of, and by a larger proportion than, total revenue. Neither the Commonwealth’s funding share nor spending by universities on academic teaching have kept up.

The latter has fallen as a share of student revenue from 37 per cent in 2003 to 30 per cent in 2018.

What the government should do

Education minister Dan Tehan’s message to international students will win few friends. On the one hand it says “you are our friends, our classmates, our colleagues and members of our community” and allows those who have been in Australia for longer than 12 months access to their superannuation. Cynically it adds that where we need you (such as in nursing and aged care), we will let you work more than your allowed 40 hours per fortnight.

And no JobSeeker payments, even for those here for more than a year, but merely access to what must be piddling superannuation accounts, is a shocking way to treat “our friends” and “members of our community”.

The Conversation