Ms SPENDER (Wentworth) (18:17): International education is an Australian industry success story of the last two decades. Since the opening of Australian institutions to international students in the 1980s, the education sector has innovated its business models and leveraged its strengths and reputations to grow Australia's higher education sector into our largest non-mining export industry and our fourth biggest export earner. This is a huge achievement. International education provides value through, first and foremost, the fees paid to our universities. For universities these fees that the international students pay allow an important cross-subsidisation that helps our universities deliver comparatively affordable education to Australian students. These fees are also critical for research funding over time, contributing to a tripling in research funding since 2000. This has enabled world-class research that helps attract foreign students and employees and has propelled innovative Australian industries, such as quantum computing.
Also, as a second-order benefit, the Australian international education sector has increased our soft diplomacy in the region and beyond. In 2023 the QS world ranking of higher education found that Australia has the third highest concentration of high-quality universities in the world, behind only the US and the UK. This acts as an enormous pool for international talent and is directly and indirectly responsible for almost 70 per cent of Australia's international tourism. Since 2005, 3.7 million international students have studied in Australia, fallen in love with our cities and regions, and experienced our unique landscape, culture and way of life—and those who have returned to their own countries have taken that back home and increased Australia's soft power across the region in particular.
Finally, as we think of the future of Australian industry and businesses, the international education sector is an area that Australia should want to expand and grow. This is because this export earner really plays to Australia's enormous strengths: our incredibly strong education system and our welcoming way of life. This is an education sector that is of high value and provides high-value jobs for highly educated Australian people. This should be an area that, as a country, we want to continue to grow and develop.
But I appreciate that there are some concerns over the growth in the sector, particularly since the COVID-19 pandemic. As at February this year, there are almost 700,000 international students enrolled to study in Australia, a 20 per cent increase on 2019. This is partly due to a long backlog caused by COVID, but the unavoidable truth is that it is also the fault of loopholes in the migration system.
The Rapid review into the exploitation of Australia's visa system, known as the Nixon review, presented in 2023, identified that generous visa provisions to enable our education system have led to a proliferation of unscrupulous operators gaming the system in two key ways: firstly, education agents seeking to extract commissions from international students for transfers that are not necessarily in their best interests; and, secondly, so-called ghost institutions that offer vague courses targeting non-genuine students who are looking for a back door into Australia for work. While not exclusive to the vocational sector, the majority of these practices and behaviours are accounted for there. These operators do not reflect the whole sector, but they represent a significant enough share of the sector to be a danger to the integrity and reputation of Australia's international education sector.
The Nixon review, as well as last year's Migration Strategy, suggested significant crackdowns on these operations. But, unless you were a student or an education policy wonk, many of these various reviews into the system went unnoticed. These concerns have found new life more recently because of the impact the education system has had on net overseas migration and particularly rental affordability. The Grattan Institute estimates that, for every 100,000 unanticipated migrants who come to Australia, rents rise by approximately one per cent. Feeling the pressure, the government is seeking to kill two birds with one stone, cleaning up the sector while implementing a speedy cut to net overseas migration. Unfortunately, students are the lowest-hanging fruit.
Half of this bill is quite sensible and goes to some of the major concerns and subsequent recommendations of the Nixon and migration reviews. This includes introducing increased transparency over agent commissions and associations with providers, as well as stricter requirements on providers to demonstrate genuineness. Parts 7 to 8, however, are problematic—problematic in the powers delegated to the Minister for Education to impose hard caps on courses as well as providers and potential penalties imposed for exceeding these caps.
While I understand the concerns with migration, international students and education institutions are not to blame for our housing crisis, despite the rhetoric surrounding this bill. Instead, it is decades of inaction from coalition and Labor governments at all levels of government—state, federal and local governments—to put forward adequate housing policies to provide for future generations. They have been missing in action, and we now have a housing crisis. But, now that we're in this mess, the government would risk causing irreparable damage to the education sector. Meanwhile, the coalition seems to be broadly supportive, if not disappointed that it doesn't go further.
I find this baffling. Consider the comparison here with the mining sector. For decades, the overwhelming weight of local and international evidence has pointed to the need to address climate change produced by the fossil fuel industry, yet both Labor and coalition governments have at various times been swayed by the argument that this would come at an unacceptable cost to the Australian economy. Yet, when shown one year of migration numbers that highlight their collective inaction on housing over decades, both parties are ready to put shackles on the largest non-mining export that we have, an export that last year contributed half of our GDP growth and that supports employment for around a quarter of a million Australians. Am I missing something here, or is it just that the education system needs more lobbyists?
As I've said, I am really sympathetic to the arguments surrounding the quality of the international education system, and I am not ignorant of the pressures on the cost of housing that Australians are facing right now. But I think this needs to be done carefully. I think there are other ways that the government's broad objectives can be achieved without killing the goose.
As is so often the case, the Grattan Institute provided some considered proposals that would be fairer and less disruptive and would work better than implementing student caps, and, to their credit, the government has implemented some of these. Raising the student fee from $710 to $2,500 would raise an additional $1 billion a year, enough to fund the government's crisis accommodation measures for women and children experiencing domestic violence outlined in this year's budget. The government's increase to $1,600, which came into effect this week, will discourage some students from participating in low-value programs.
Additionally, the government introduced a genuine student test and lifted English language requirements, as well as cracking down on visa hopping for those who have completed their studies. Both of these measures will make it harder for low-value studies or unskilled professions to be used as a visa back door. Restrictions in visa hopping alone is expected to lower the number of international students and graduates by 140,000 students by 2030.
But the problem with these measures is that they wouldn't necessarily work fast enough for the government. I get it. Housing is a huge issue for my community as well, and I'm absolutely on the record, across this parliament and since before the last election, as calling for the need for action. But this bill represents a kind of short-term political thinking that landed us in the housing crisis to begin with, and, once again, offers no long-term solution for getting us out of it either.
I've run businesses, and I know that businesses can't turn on a dime. You can't turn your customers on for one week and then, three weeks later, say: 'I'll turn you off. Don't worry, I'll come back to you in a couple of months when I feel I'm ready to have you again.' The education industry has taken many years to build up in Australia. We should respect the work that has gone into building this industry and the enormous contribution that it makes to this country. We shouldn't expect that we can turn it off with the flick of a switch and then expect it to restart again when we think that we need some more export earnings. Business doesn't work like that, and the real world doesn't work like that. If we do follow through with what the government wants and what the opposition seems to want even more, we will pay for this in the long term in our export earnings and in our universities. That is entirely serious.
We do have other options, and I've outlined a couple of them, in terms of how to take a more measured approach to addressing this migration problem. We should be looking carefully at what happened to Canada, which imposed similar visa caps and ended up with a much stronger response from students, who now are not choosing Canada at all. There's been a much more significant reduction in earnings from those overseas students.
I know we need to change the education system for overseas students. From speaking to people and young people in the community, I know there are some genuine concerns about how integrated some courses are, particularly for overseas students, and how to make it a better experience not only for the overseas students but also for the Australian students studying alongside them.
There are real challenges here. But flat caps and, particularly, government control of courses completely stand against the entrepreneurial spirit which has given us this export industry. Again, businesses cannot and will not evolve and grow in the way that they have if government is constantly dictating the details, because it's not the nature of government to build and grow these sorts of industries which have added enormous value to this country.
We need to fix the housing crisis, but we need to do it in other ways. That is the appropriate thing to do, rather than to, once again, use migrants and particularly overseas students as a sort of punching bag in this issue. If nothing else, we need to make sure all of our actions focus on ensuring that we retain the highest-value students—the ones that contribute most to the economy, in terms of both their fees and their other contributions to the economy. That is the way to do this well. That is where the increase in fees for the visa application would weed out many of those students who are not really here to study but to work. I think that is a much more effective way: continuing to raise that fee so only genuine students come here to get a degree that costs a fair amount of money and provides a fair amount of return to the Australian government and to the Australian people.
I feel like the crossbench has tried to be the voice of reason in this debate and has put forward some sensible amendments that will mitigate the potential damage of this bill. This includes a sunset clause for two years, to be moved by Ms Daniel, which will prevent these dramatic powers being used by future governments. Ms Tink will move to exclude course caps that I see as egregious overreach from a government into the running of private organisations and actually give our universities the ability to respond to the needs of the market, because we know that government is not in touch with the needs of the market and so most likely will once again kill the goose that laid the golden egg. Dr Ryan has requested a review to be conducted on the validity of the caps. Finally, Ms Chaney has sought to push back the start of this legislation by one year to give students and universities certainty, given that the enrolment process for 2025 is already well underway, as well as cut out sections 7 and 8 entirely. These are reasonable and thoughtful amendments to the bill that would mitigate some of the worst effects of this bill.
I urge the government to reconsider this course of action and look for other ways that it can manage the education system without this draconian impact and the likely impact on the broader strength of this export industry that we have built up—the universities have built up, in particular, as well as the vocational community—over many years. I will be supporting the amendments from the crossbench, but I will not be supporting this bill. I believe it is a step too far by government, and I'm genuinely concerned about the economic and reputational damage these powers present, if not now then later under future governments. I particularly urge the coalition to consider that they used to be the party of free enterprise and of trying to build and grow businesses and really letting these sorts of success stories grow. Again, I find it unfathomable that the coalition is once again leading the charge on trying to destroy one of Australia's most successful export industries and one that is a credit to all of us and all the people who have built it up over time.
