English language teaching losses cost Australia $2.7 billion

Australia has taken a $2.7bn hit from lost business in the sector that relies on teaching overseas students English face-to-face.

Brett Blacker, CEO of English language teaching industry body, English Australia.

Last year’s Covid-19-induced collapse in numbers of overseas students learning English in Australia will cost the economy $2.7bn in direct and indirect contributions, research commissioned by industry body English Australia shows.

Chief executive Brett Blacker called on the federal government to extend and increase its support for the English Language Intensive Courses for Overseas Students (ELICOS) sector as trading conditions are even worse now than last year, when numbers dropped by 47 per cent to 90,130.

“As an indicator, numbers of ELICOS students on student visa for the six months to June this year were down another 61 per cent, from June last year,” Mr Blacker said.

The English Australia report on the economic impact of Covid-19 on the sector said lost tuition fees and living costs in 2020 accounted for $1.2bn of the total loss, taking into account students who went home once the pandemic hit, those who decided against travelling to Australia and those who decided against enrolling. It also includes losses when English colleges dropped their fees by an average of 10 per cent.

Most of the projected $1.5bn loss in indirect costs is based on the assumption of income forgone when a proportion of students failed to advance as usual from their English college to other parts of the international education sector, such as higher education (an estimated $980m loss) and vocational education and training ($388m).

It also includes the loss of indirect income from students who moved to offshore learning.

While Australia retained its place as the third most popular destination for international English language learners, Mr Blacker said that position was at “high risk” given students’ growing interest in rival destinations such as Canada, Britain and the US.

China remained the top source for students, with 18,830, although that number was almost half that of the year before. Japan, usually second with more than 20,000 students, dropped by 60 per cent, which elevated Colombia into that position with 10,772 students, a drop of 25 per cent.

The research estimates that, as of this month, 19 per cent of ELICOS colleges have stopped operating, with more expected to do so, although many retain their registrations in the hope of making a recovery.

In 2020 about 35 per cent (1663) of staff lost their jobs despite the federal government’s Innovation Fund 2021, with 75 per cent affected in some way, such as loss of hours. The scheme allocated $9m to private ELICOS and higher education providers, with grants of up to $150,000 in the six months to December.

”The budget allocation from the federal government was good, but it was based on the experience between 2019 and 2020,” Mr Blacker said. “Our case is that 2021 is much worse.” For example, federal government and regulators fees are due to be reintroduces from January. “We also need an expansion of programs akin to the Innovation Fund to enable colleges to continue to operate.”

Support would enable colleges to seek new online and offshore markets, keep teachers employed and develop a pipeline of students ready to come to Australia, maximising chances of a rebound. “The whole international education sector will rebound if ELICOS rebounds,” Mr Blacker said.