Higher education experts say Labour’s latest round of changes will jeopardise a sector already on its knees as economic data reveals the economy is grinding to a halt, despite persistently high inflation.
This week’s National Accounts show Australia’s economy is on the brink of recession, but the higher education policy being pushed through by Labor will severely hurt Australia’s second-largest export industry – the only thing currently standing between poor economic performance and a recession.
While the latest quarterly economic growth figures were just 0.2%, services exports have been supporting this figure. Led by the university sector, they grew at an annual rate of 5.6%.
However, recent changes by Education Minister Jason Clare (limiting international student intake at elite universities to 2019 levels) will halt that growth.
Equally important, the new policy will destroy the core objective of Labor’s higher education policy of increasing the number of Australians with university degrees. This policy was announced with great fanfare ahead of the 2022 election.
For years, international students who pay full tuition have subsidized underfunded university research and the admission of local students.
However, limiting the number of full-tuition paying foreign students will force some universities to close entire faculties and limit the number of domestic students they enroll.
This is because these students represent a per capita cost to the university. Foreign students who pay full tuition have been subsidizing that loss.
Without the revenue stream of full-fee paying overseas students, Labour’s goal of a more educated national population will simply not be realised unless the government significantly increases university funding, which it will not do given the pressures already on the budget.
Higher education experts say the Labour government’s latest round of changes will put a sector already on its knees at risk, and come at a time when the economy is grinding to a halt.
Labor’s higher education policy will severely damage Australia’s second-largest export industry (photo: Education Minister Jason Clare and Premier Anthony Albanese)
But that is not the only political objective that Clare’s disastrous policy is putting at risk.
Even the political rationale of reducing the number of foreign students to reduce immigration and relieve pressure on housing stock will not work if the government tries to shoehorn foreign students from elite institutions into lower-quality universities in an attempt to help lower-ranking institutions already suffering from previous policy changes by the Labour Party.
This is because international students do not tolerate transferring to less reputable institutions. They will simply move elsewhere and attend higher quality universities in other parts of the world.
Higher education is a competitive global business. It is almost as if the Minister of Education is not aware that we live in a globalised world.
Insiders have told Daily Mail Australia that the minister has been captured by his higher education department’s deputy secretary, Ben Rimmer, who “is out of control and is leading the minister down a blind alley,” according to the source.
“The policy is disastrous for the university sector and terrible for the country,” the senior source told Daily Mail Australia.
‘Its implementation design is so flawed that it will do the opposite of what the government seeks to achieve.’
University administrators are united in opposition to what the government is doing.
They have collectively warned the Minister and those around him that this will damage elite universities, including lowering their world rankings, but will not solve the problems that Clare Ministerial Directive 107 imposed on lower-quality institutions.
Ministerial Directive 107, imposed on the sector almost a year ago, prioritized visas for lower-risk and higher-quality institutions.
Replacing this with a 2019 numbers-based quota system that limits admissions to the best institutions means that quality students will study abroad and only the highest-risk students will make it through the quota system to study at lower-quality institutions.
“It’s just a mess,” another university administrator told Daily Mail Australia.
These lower-quality students are also more likely to want to take advantage of visa rules that make it easier for them to migrate to Australia.
‘Only a small fraction of international students studying at top universities seek to migrate to Australia.
“The vast majority return home with their degree.”
But that is not the case in lower quality institutions.
“What Labor is doing will increase the number of international students seeking to stay in Australia, not reduce it,” says university administrator.
This will put upward pressure on immigration, contrary to the government’s policy objectives.
Even the political motive of reducing the number of foreign students to reduce immigration and relieve pressure on housing stock will not work.
Now former Labor leader Bill Shorten has injected into this mess everything the government itself created.
He will take up the role of vice-chancellor of the University of Canberra next year, but Shorten will continue to serve in Anthony Albanese’s cabinet until then.
The university sector hopes Shorten will become a powerful advocate for the problems Labor is creating, but the former Labor leader has said he will recuse himself from any cabinet discussions on higher education while he remains in government.
“After that we need him to take up the cause because this policy change is an absolute disaster,” says a high-profile professor at one of Australia’s top universities.
If Labour’s policy goes ahead, universities will be forced to impose massive staff and teaching cuts across their institutions in order to remain financially positive.
