Border closures will halve the $40bn education export industry
Continuing border closures will halve the value of Australia’s $40bn education export business, says a new study.
Australia’s highly successful education export business, worth over $40bn in 2019, will see its value halved by the end of next year unless international students are able to move freely into the country, according to a new study.
A new report from Mitchell Institute at Victoria University forecasts that if borders remain closed “the international education sector is on track to shrink by $13.5bn by the end of 2021”.
By the end of 2022 the loss “will blow out to $19.8bn”, the report said.
The loss will hit the general economy because, while education export earnings include tuition fees paid to universities and other education providers, most of it is spent by students as rent, other living expenses, travel and entertainment costs.
The report, titled Stuck in transit: International student update, said that without an injection of new students the large numbers who were completing courses meant that overall enrolments would continue to fall.
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While 500,000 international students were enrolled in Australian courses in November last year, this is likely to fall to 250,000 by the end of this year unless the border opens.
“It’s pretty clear the trajectory is going down from this point in,” said report author Peter Hurley, a Mitchell Institute policy fellow.
“All the indicators are that there’s not many more students enrolling. Applications are low and there are students who are finishing their courses who are not being replaced.”
The report has for the first time estimated the revenue value of students who are studying online from overseas because they can’t reach Australia. It says fees paid by these students added $1.9bn to education export earnings in the last half of 2020.
But Dr Hurley believes the value of such online courses is unlikely to grow and cannot offset the sharp decline in overall numbers of international students.
To stop further decline in student numbers, about 10,000 students a month would have to enter Australia through the quarantine system which has a current capacity of 6000 to 7000 a week. Currently there are about 150,000 people holding Australian student visas outside Australia who are likely to want to enter.
“It would take about six months using Australia’s entire hotel quarantine capacity simply to process the backlog of 150,000 international student visa holders. That is before the challenge of enabling new students to enter Australia,” the report said.
“If Australia can find a safe way for international students to enter the country, the rest of Australia might also be able to come and go in greater numbers.”
International Education Association of Australia CEO Phil Honeywood said that some education providers had created a successful market for overseas online education. “But this will deliver only a very small component of the extraordinary number of students who want face-to-face study in Australia,” he said.
To compound the problems for international education, a new global survey of 900 education agents has found that interest in studying in Australia and New Zealand is rapidly declining because of the border closure.
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