SA government calls for federal counterparts to exempt state from international student caps

The state government says caps on international student numbers being pushed by the federal government could have a devastating impact on SA’s economy.

The state government is seeking an exemption from its federal counterparts’ proposed cap on international students amid concerns the move would “unnecessarily risk SA’s economic prosperity”.

Plans to cap the number of foreign enrolments have also sparked fears for the merger of the University of Adelaide and University of South Australia, with the state opposition worried that its viability could be undermined by the policy.

The federal government’s bill, introduced to parliament last month, would grant the Education Minister new powers to set a limit on the number of international students that can be enrolled by providers or in a course. 

Deputy premier Susan Close says a cap would “unnecessarily risk SA’s economic prosperity”. Picture: NCA NewsWire / Morgan Sette

The move aims to crack down on shonky education agents and address the issue of student housing supply.

But Deputy Premier Susan Close said the situation in Adelaide was different.

“Unlike some eastern state capitals, Adelaide has a 10 per cent vacancy rate for purpose built student accommodation,” she said.

“Given the importance of international students to the state’s economy, and the adequacy of student accommodation at present, the SA Government has recommended to the Commonwealth to not impose limits that might be appropriate elsewhere and which would unnecessarily risk SA’s economic prosperity.”

Dr Close has discussed the issue with federal ministers in Canberra and the state government is expected to lodge a formal submission on the matter as part of a senate inquiry into the bill.

Education has become South Australia’s biggest export, with the state netting more than $3 billion last year as a result of international students.

The new mega Adelaide University is expected to attract thousands more international students into South Australia after it opens its doors in 2026.

Opposition education spokesperson John Gardner said the business case for the university merger in South Australia is heavily based on the new institution’s ability to attract another 5,000 to 7,000 international students, which would bring in $150 million a year.

“The Federal Labor Government gave written commitments to South Australia that they were supportive of the university merger, and it is deeply troubling that the new policy might undermine the merger’s viability,” he said.

“The Labor Party needs to get its act together and Susan Close needs to reassure South Australians that we are not going to be on the hook for lost revenue caused by Labor’s policy.”

Dr Close and the university co-vice chancellors told The Advertiser the proposed caps are not expected to impact the new institution.

In a joint statement, Adelaide University co-vice chancellors Peter Høj and David Lloyd also said that while international students will play a “significant role in the success of the new Adelaide University”, the proposed caps are not expected to jeopardise the institution’s plans to grow foreign enrolments.

Federal Education Minister Jason Clare did not say whether South Australia would be granted an exemption but said the proposed caps won’t be a “one size fits all approach”.

“For universities, the approach to a managed system will be negotiated through unique international student profiles, which will establish limits on enrolments for each university,” he said in a statement.

“In considering options for sustainable growth, the government will consider where growth is distributed and at which providers.

“This includes consulting with South Australian education providers and working with the South Australian Government.”