Taxpayer bailout risk in University of Queensland’s ‘over-reliance’ on China

The University of Queensland’s ‘over-reliance’ on fee-paying Chinese students, who boost its revenue by $250 million a year, is leaving it at risk of needing a taxpayer-funded bailout if the market collapses, according to a new report.

THE University of Queensland’s “unsustainably risky, over-reliance” on fee-paying Chinese international students, who boost its revenue by $250 million a year, is leaving it at risk of needing a taxpayer-funded bailout if the market collapses, according to a new report.

The Centre for Independent Studies makes the claim in a report to be released today, warning Chinese enrolments are particularly unstable due to China’s economy and political risks.

The report claims UQ is one of seven universities in Australia it describes as “more dependence on fee-paying Chinese students than just about any other universities in the English-speaking world”.

The report’s release follows violent clashes at UQ’s campus last month between pro-Hong Kong and pro-China protesters, as well as concerns the university had given Beijing too much control over what is taught at its Confucius Institute.

Protests at University of Queensland against the uni's China-aligned Confucius Institute. Picture: Liam Kidston.

But UQ has argued international students subsidise costs “in a climate of declining federal funding”, while Education Minister Dan Tehan said universities were required to be financially viable under law and were monitored closely.

The report estimated almost 15 per cent of the Queensland university’s revenue, or $256 million, came from Chinese international students in 2017.

In 2018, 34 per cent of UQ’s enrolments were international students and about half of those were from China, while Griffith and QUT international enrolments were estimated to be below 20 per cent.

The report’s author Salvatore Babones said the government would not allow big universities to fail financially if a crisis saw Chinese enrolments plummet suddenly.

“Australian universities are now seeking to expand into the Indian market, but India is too poor to serve as a realistic alternative to the China.

“If their bets (on the Chinese market) go sour, Australian taxpayers may in all likelihood pick up the tab.”

Centre for Independent Studies professor Salvatore Babones. Picture: Supplied

A UQ spokeswoman said it had a diversified mix of international students, including India, Indonesia and Latin America.

“In a climate of declining federal funding as a share of total university funding, international students subsidise our universities, especially our research programs,” she said.

“International students enrolled at the university are held to the same academic entry and performance standards as UQ’s domestic students.”

Universities Australia Chair professor Deborah Terry said international education had been carefully nurtured over 60 years and now injected $37.7 billion into the Australian economy.

“Universities give constant and careful attention to future trends in student recruitment, and nurture diversity within and across regions, as part of their business planning,” she said.

“As not-for-profit public education institutions, our universities prudently manage taxpayer funds — and have extensive expertise in doing so.”

Education Minister Dan Tehan said universities are required to be financially viable, and likely to remain financially viable, under the Higher Education Support Act.

“The department monitors the financial performance and position of each university on an annual basis,” he said.