Drop in overseas students could cost $38b

The Australian economy is set to lose $38 billion over the next decade as a result of the sudden and dramatic downturn in overseas student numbers.

Inspector Ian Geddes talking to Indian students this morning at a orientation session in September last year, run by the Australia India Council Society to introduce them to Australian culture. Photo: Rebecca Hallas

Peak body Universities Australia issued yesterday the findings of a Deloitte Access Economics report it commissioned to independently model the effects of the student drop-off to the sector and wider economy up to 2020.

The report estimates that in net present value the reduction in GDP from 2010-20 will be $37.8 billion, with Australian employment set to fall as a result.

Universities Australia chief executive Glenn Withers said, ''These figures show a seriously negative effect in the short- and medium-term that would be a source of major public controversy in most sectors or industries.''

The report suggests several factors have contributed to the downturn, including the strength of the Australian dollar, and damage to the reputation of Australia as a safe place for study for Indian students, after several violent attacks in 2009.

While Indian students came second only to Chinese students in terms of market share in 2009, numbers dropped by 49 per cent last year, although they appear to be rising again.

Australia is also facing an increasing challenge from the rise of competitor countries more actively targeting the international student market, with the United States now actively targeting the Indian market, and budget cuts in Britain encouraging institutions to more aggressively recruit overseas. In addition, Asian countries are increasingly posing threats to Australia's share of the international student market.

Yet the report argues the factors that have been most central to the downturn in international enrolments include recent Commonwealth policy changes to student visa regulations and to the General Skilled Migration program.

Changes to student visa regulations such as tighter rules requiring international students to demonstrate their financial resources have been seen as prohibitive and have discouraged new enrolments.

Source: The Canberra Times