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

Audit finds flaws in tough visa regime

AUSTRALIA'S tough system of automatic visa cancellation for overseas students who break the rules was in legal working order for just five months between 2001 and 2009.

A series of technical legal challenges meant that about 18,800 student visa cancellations were ruled invalid and more court challenges are likely, federal auditors say. In a report on student visas, the Australian National Audit Office urges a review of the visa cancellation regime and of the 20-hour a week work limit for overseas students.

The auditors also criticise a lack of high-level co-ordination between the immigration and education bureaucrats jointly responsible for overseas students.

However, it is unclear whether this would have made any difference to the handling of policy changes, which has proven so harmful to the education export industry.

The audit report points out that stricter rules for skilled migration and student visas emerged from "separate forums attached to cabinet processes".

Stephen Connelly, president of the International Education Association of Australia, said: "A crisis cabinet is always going to derail the best laid plans, but having a coherent approach to strategy development and implementation in the first place should diminish the impact of crises and the need for knee-jerk reactions."

Under the student visa system, education providers must report students who fail to turn up for class or fall behind in their work. If those students do not go to an immigration office promptly, their visas are automatically cancelled. If they do go to immigration, the officer is supposed to have very little discretion and mandatory cancellation applies.

But in their report the auditors say this regime suffers from "systemic flaws and vulnerabilities".

Automatic cancellation is "highly vulnerable to legal challenge". And despite the rhetoric, statistics show officers applied discretion in many cases, often because of errors by education providers.

The Department of Immigration and Citizenship said it would review its regime for cancelling student visas by June next year. DIAC also promised to revisit limiting students to 20 hours a week work.

The official line is that a DIAC officer has no choice but to cancel the visa of a student who exceeds the limit.

But the auditors find busy officers give priority to cases where evidence of a breach is "clear and overwhelming", often requiring an admission by the student.

Officers turn a blind eye to minor breaches, including in the taxi industry where two shifts would take a student over the limit, the report says.

DIAC has struggled to deal with the overseas student boom, having to cope with an average annual growth of 15 per cent in the student visa program in the decade to 2009-10, when applications declined for the first time in many years. DIAC built up a backlog of non-compliance notices generated, for example, by students falling behind with their studies.

"With the rapid growth of the student visa program from 2006-07, the backlog was out of control for several years," the audit report says. Although many of these notices would have been trivial matters, there were "potentially serious cases of student non-compliance hidden within the backlog".

Source: The Australian