• Education industry hit

Universities face a big financial hit as NZ travel ban keeps their valuable foreign students at home

Just three years ago, international education was being trumpeted as New Zealand’s fourth largest export earner, behind tourism, dairy and meat.

Like tourism, those export dollars are earned by people coming here to do things, rather than us sending things offshore to be consumed.

A 2017 Deloitte study put the ballpark value of having high school, polytech, private training establishment and university students come to study in New Zealand at $5.1 billion annually.

According to Education NZ, 117,248 international students studied in New Zealand in 2018. Of those, about 37,090 came from China, with about a third enrolling at universities.

Of that $5.1b estimated economic value from international education, about 30 per cent comes from university students, although they are not the largest student group by number. That’s because their courses are more expensive and longer, as a rule, than those at other educational courses.

This year some 12,600 Chinese students have enrolled at New Zealand universities, but about 6500 of them are stuck in China because of the New Zealand Government’s coronavirus travel ban, which came into force on February 2. A Government decision late yesterday has dashed the universities’ hopes that most of those students might be allowed to come to New Zealand in coming days.

With the virus now present in 40 countries and the list growing, now was not the time to be favouring foreign students over New Zealand citizens.

The next valuable group of

Chinese students, those at high school, is far less affected by the Covid-19 outbreak as secondary school starts earlier in the year than tertiary study and most Chinese high schoolers were here before the travel ban was imposed.

The next most-exposed to the student losses are, in order of financial impact, private training establishments (PTEs) and polytechs. Some PTEs may not survive the impact.

That is partly because the international education sector had already faced one major blow since that 2017 estimate of its value.

That was the impact on Indian student enrolments of immigration policy changes and concerns about low quality courses at some PTEs. The number of Indian students coming to study here since the middle of the decade has collapsed, except in the university sector.

Indian students enrolling with

PTEs peaked at 12,830 in 2015 and had plunged to 3920 by 2018, according to the most recently published official statistics.

Now, it is confirmed that the coronavirus/Covid-19 outbreak will prevent about half of this year’s intake of Chinese students — by far New Zealand’s largest and most valuable source of international students — from studying here this year.

Close observers of the international education sector believe it may now be worth barely $3b a year to New Zealand. That is a huge economic impact to bear in one sector of the economy and, for the universities, an important loss of income that subsidises the quality of their offering to New Zealand students.

As this column was being written, there was a slim but rapidly shrinking chance that most of the stranded Chinese university students might be allowed to travel to New Zealand under a temporary relaxation of the travel ban.

A few hundred students living in Hubei province, the epicentre of the outbreak, would have been excluded altogether. But students in other parts of China, where the outbreak is so far mild and the risk of infection very low, might reasonably have been able to travel here.

Or so the argument went until this week.

Unfortunately for the universities, there was a sudden and dramatic divergence between what might be reasonable and what was politically possible.

A travel ban exemption that Prime Minister Jacinda Ardern raised as a credible possibility on Monday afternoon this week was, by Thursday, a far more difficult proposition, and by yesterday was dead.

“Now is not the time to step back from our approach. We must put the health and safety of New Zealanders first,” said Health Minister David Clark.

The Universities New Zealand spokesman on international students, Professor Grant Guilford, had been hoping for a positive decision yesterday from the New Zealand Government.

If there was going to be a breakthrough, it would most likely have occurred during the bilateral meeting between Ardern and her Australian counterpart, Scott Morrison, who met yesterday after the Australian Cabinet considered relaxing its ban on travel by highschool students on Thursday.

However, Morrison could ill-afford a second version of his tin-eared response to the Australian bush fires and remained cautious, while New Zealand has so far acted in lockstep with Australia in its border control responses.

Both countries would rather risk the wrath of the Chinese Government, which feels its citizens have been unfairly singled out for a travel ban that goes beyond the advice of the World Health Organisation, than the wrath of their own fearful citizens.

As a result, universities will be picking up a substantial tab.

Wellington’s Victoria University, where Guilford is vice-chancellor, is forecasting a $12 million direct hit to annual revenues.

And the University of Auckland — where the largest number of Chinese students enrol each year — imposed a hiring freeze on Thursday.

Of course, there would have been big costs too if the students had been allowed to travel. The universities had been moving heaven and earth behind the scenes to make it possible for their Chinese students to get to New Zealand if at all possible.

A taskforce spent weeks planning how to greet and monitor students to ensure they complied with selfisolation protocols — a large enough task in itself — on the presumption that it would be discriminatory to treat Chinese students differently from Kiwis returning from China.

However, when Covid-19 started turning up in numerous other countries this week, the universities accepted their Chinese students would have to be quarantined in a way similar to the New Zealanders who were evacuated earlier this month from Wuhan.

Universities spent this week scouring the country for spare hotel beds, hostels, army and police barracks, and other places where arriving students could be isolated en masse. But the Government was unmoved.

Part of the reason the universities went these extra miles may have been self-preservation. The universities have been determined to demonstrate to the Chinese authorities that they would leave no stone unturned to try to preserve the educational opportunity that Chinese parents have invested so much to create for their, often, only child.

Unless they were seen to do so, the universities feared their sector would be punished by the Chinese Government in response to New Zealand and Australian Government actions over which they have no control. That may still yet happen.