Australia should shake up its $40 billion international student sector to shift the focus to teaching online and offshore, the government says, arguing that an extra 10 million students could benefit from an Australian education over the next 20 years.

In its new 10-year international education strategy, the government says Australia should look to Britain which in 2019 taught 407,000 students in offshore arrangements, compared to 117,000 – or 22 per cent – by Australian education providers.