Crucial first step for NSW, a state with most to lose

It’s no surprise ­Dominic Perrottet is so determined to abandon Fortress Australia.

NSW has borne the brunt of the collapse in international students and travellers, and so has the most to gain from the reopening of the borders. Picture: AFP

It’s no surprise ­Dominic Perrottet is so determined to abandon Fortress Australia.

His state has borne the brunt of the 97 per cent collapse in tourism export values since Australia shut itself off from the rest of the world.

NSW – and also to a large, ­albeit lesser, extent, Victoria – has shouldered an additional cost of closed borders because the state claims more than its fair share of the international education ­export market, which has halved in value since the pandemic.

CBA senior economist ­Belinda Allen said it was clear that NSW had the most to gain among the seven states and territories from re-engaging with the world.

“We know NSW is over­exposed compared to other states for international tourism and for foreign students, so any easing of restrictions to help those areas of arrivals will obviously be a boost,” Ms Allen said.

She added NSW and Victoria “don’t have the cushion of commodity exports, like in WA and Queensland – they are much more reliant on the services side”.

Foreign student commencements nationally dropped from well over half a million in 2019 to 200,000 by the middle of this year.

And before Covid, NSW claimed close to 40 per cent of international student enrolments, higher than the state’s roughly 33 per cent share of the national economy, research by Ms Allen shows.

Victoria was also over represented in the foreign study market, accounting for around a third of students, versus its quarter of national GDP.

 

Mr Perrottet has signalled a phased return of international travellers, starting with Australians desperate to return home.

With no clear road map to when other visa holders will be able to come to our shores, Ms Allen cautioned that the ­announced reopening of the NSW border was just the ­“important first step” in what would be a long haul to get foreign students and tourists back into the country.

And whether international students would ever return in pre-Covid numbers remained an open question.

China had been the biggest source of international student arrivals, and a massive source of tourist growth.

Education exports to China doubled over the five years before the pandemic, reaching $13bn in 2019 – twice the next largest market, India.

In 2020, education exports to China had dropped by 40 per cent, to $8bn.

With relations between the two countries at a low ebb – and with no signs of an improvement in the foreseeable future – the Chinese foreign student market may not return to its pre-pandemic strength for the foreseeable future, Ms Allen said.