By Penry Buckley and David Swan
Leading voices in Australian tech say the federal government’s proposed cap on international students is driving uncertainty in the burgeoning industry, and could have a lasting impact on its global growth.
Richard White, chief executive of WiseTech, the largest ASX 200-listed tech stock, and Airwallex chief executive Jack Zhang, a former international student who co-founded the now-multibillion-dollar fintech company in Melbourne in 2015, both told this masthead they are worried by the effect of caps on the sector’s ability to grow and attract global talent.
WiseTech chief Richard White says changes to caps risk “using an elephant to crush an ant”.Credit: Dominic Lorrimer
Education Minister Jason Clare last week revealed more detail on the policy announced in this year’s budget, saying the federal government would limit the number of new foreign students in Australia next year to 270,000 – a 16 per cent cut, or 53,000 fewer compared with 2023 – as it sought to reduce net migration to 235,000 amid a national housing shortage.
He rejected claims the cap would hurt Australia’s $48 billion higher education sector, but concerns have been raised about the effect on the homegrown tech sector, which the government last year valued at $167 billion, up 80 per cent in five years.
Speaking before the government’s announcement, White said the long-term impacts of the cap could be “devastating”, saying while there were other issues involved, the policy risked “using an elephant to crush an ant”.
‘We have close to a thousand people in Australia. That’s employment ... We pay rent, we contribute, we pay tax ... There’s a lot of upsides.’
Jack Zhang, chief executive of Airwallex
Zhang said he didn’t think the caps were a good idea because of the economic contribution made by international students, who he said included “a lot of founders”.
“We [Airwallex] have close to a thousand people in Australia. That’s employment. And, you know, we will keep growing, right? We pay rent, we contribute, we pay tax,” he said. “There’s a lot of upsides.”
Research by the Technology Council of Australia (TCA) has found more than 60 per cent of Australia’s tertiary technology students are from overseas. The most likely educational pathway into tech jobs remains via university, with 62 per cent of workers holding a degree. One in two international students studying technology in Australia choose to migrate permanently.
TCA boss Damian Kassabgi has praised measures introduced by the government, including the National Innovation visa which will replace the Global Talent visa later this year, saying it addressed a “shortage of digital and tech skills”, but added “international students play a key role in this effort too”.
“We need to increase, not decrease, our skilled migration over the next five years to meet the tech council and government’s joint goal of achieving 1.2 million tech jobs by 2030,” he said.
Jeanette Cheah, head of Melbourne-based educational startup HEX, which has provided accredited entrepreneurship programs to more than 10,000 students worldwide and in Australia (where 30 per cent of the students it supports are international) said uncertainty around the announcement had already led to university engagement with educational tech “receding”.
Jeanette Cheah, head of educational startup HEX, says university engagement is already “receding” following uncertainty around the cap.Credit: Steven Siewert
“What we’re seeing is universities looking more at how to serve students in their home countries – they’re reinvesting into bricks and mortar campuses,” she said, which was “counterintuitive to a thriving international student sector in Australia”.
Out of eight high-ranking universities for STEM education contacted for comment, including the University of Sydney, the University of Melbourne, UNSW, Monash University and the Australian National University – understood by this masthead to bear the brunt of cuts – most declined or said they had not enough time to work out the effect of caps of places on tech courses.
The federal government has argued caps will direct more international students to smaller and regional universities, which will be able to increase their numbers. Cheah said she thought international students would still get an excellent education at regional universities.
Both Cheah and White said tech education in Australia was not yet adequate, calling for baseline - not just job-specific - education from early years through to undergraduate level for all students.
International students on information technology courses make up 10.8 per cent of all current international enrolments (including higher education and VET), while students across all of STEM make up 22 per cent, according to data from the Department of Education. STEM courses account for a significant proportion of Australia’s two largest international student groups, China and India, or 22.1 and 32.8 per cent respectively.
White and Cheah said the tech industry’s global nature meant changes to policy could reduce Australia’s appeal as a destination for talent in a field already struggling with “brain drain”.
“For a lot of these students, it’s not just choosing a course or a uni. They’re choosing a life,” said Cheah. “What signal does it send about our openness to work with the rest of the world?”
Sarah Tan, who came to Australia from Malaysia in 2015 to study graphic design at RMIT and works as a product designer at Atlassian, said the news about the cap was “disappointing”.
“With what is being implemented, I do feel like, looking back, maybe I wouldn’t be as confident to move to Australia,” she said.
Sarah Tan, a product designer at Atlassian, says if the caps existed in 2015 she might not have come to Australia from Malaysia to study at RMIT.
Tan, who worked as a contractor on campaigns for Google, Facebook and Mastercard while she waited for a long-term visa and has married and bought a home in Australia, said international students already faced challenges in the job market, although tech was a more “progressive industry”.
“No matter how hard people try to kind of remove bias, there’s always going to be biases.”
In a statement to this masthead, the Department of Education said the government was committed to implementing a “managed system” for the international education sector and was providing an estimated $16.5 billion over the next four years and exploring additional funding to support strategic priorities, including in STEM and technology.
“This new approach will help ensure that Australia continues to attract international students and that they receive the highest quality education experience possible,” it said.
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