PETER VAN ONSELEN: How Anthony Albanese and his team are set to destroy one of our most important money-making machines with international student caps

Just when you thought the Albanese government couldn’t find new and inventive ways to impose more bad policies on the nation, the education minister Jason Clare enters the room.

He’s come up with the not so bright idea of imposing a cap on foreign students attending top tier universities. In other words, he is cutting the number of foreign students Australia’s best higher education institutions can enrol, so that lower end institutions can increase their numbers.

The reason Labor is doing this is because its previous policy of clamping down on foreign students across the sector resulted in fewer international students enrolling in low end institutions rather than the top ones.

Because of that, the bottom end of the sector was brought to its knees, causing Labor all manner of political headaches in marginal seats and regional areas, where many of these struggling institutions are located.

Don’t take my word for it. Clare said these lower end institutions have been ‘haemorrhaging’ because of his ‘ministerial direction’.

That’s hardly a surprising outcome by the way. The brains trust that is this government really should have seen it coming.

If you allow fewer foreign students into the country but don’t limit the numbers institution by institution, the best unis will naturally win out and the lower end of the market will collapse.

It’s common sense.

There is a perception that all foreign students coming here – and we take hundreds of thousands each year – want to become Australian citizens. Only they don’t, at least not most foreign students studying at the elite universities

Which is exactly what happened. An unintended consequence but one that a good government and a good minister should have foreseen. In fact, an average government and an average minister really should have predicted it too.

Hopeless is the only descriptor. Now Labor is groping around in the dark for a new policy to fix the damage it’s already done. 

However, what it has come up with is even worse, and doesn’t solve the political problem the initial policy was crafted to address. 

So why was Labor looking to reduce foreign student numbers in the first place? It seems silly to anyone who knows anything about higher education as foreign students fund our universities.

For years, Australia’s governments have let funding levels for our universities decline. Compared to overseas institutions of similar standing and compared to per capita funding domestically in years gone by, funding has fallen.

The universities have made up this shortfall – while maintaining high international rankings for a medium sized nation like Australia – by attracting foreign full fee paying students.

They have funded our quality institutions, not the government. Which has let governments of both partisan stripes off the hook when it comes to paying for a quality higher education sector.

The public probably doesn’t mind, given that there is a perception out there that universities are bastions of activist inner-city woke ideology.

That’s sometimes true, but not always. For example there is plenty of that in arts and social sciences faculties at some institutions, but much less of it in faculties such as engineering, business and medicine.

And let’s face it, these are for the most part the well regarded faculties dragging up Australia’s international higher education reputation.

Labor in its infinite wisdom is killing that golden goose with its goose of a policy change just announced

The political problem Labor faced shortly after coming to power was concerns about massive immigration fuelling difficulties accessing housing for many Australians. The perception being that large numbers of foreign students contribute to that.

But they really don’t –  at least not students attending the top tier institutions that are now having their numbers cut.

Foreign students studying in Australia get access to a visa upon completion, and with that a pathway to citizenship. This is obviously a huge attraction for many people living in other parts of the world not nearly as affluent or aesthetic as Australia.

So the perception is that all foreign students coming here – and we take hundreds of thousands each year – want to become Australian citizens.

Only they don’t, at least not most foreign students studying at the elite universities.

Under seven per cent of foreign students studying at the top universities seek to stay in Australia after they complete their studies. They want to go home with their quality qualification.

At lower end institutions, however – the ones now retaining higher numbers thanks to Clare’s policy on the run – that isn’t the case.

Much higher percentages of these students stay here. And those are the institutions Clare’s policy change will allow to enrol more students, not less –  and exactly the ones more likely to migrate.  

Which again isn’t exactly surprising. These students aren’t attracted by the low quality of the institutions they attended. They are attracted by the pathway to citizenship their enrollment offers.

So where does all of this leave us? Labor HAD a policy that curbed foreign student numbers at lower end institutions wherein such students were more likely to take advantage of immigration pathways that contributed to population growth, thus putting pressure on housing. But not anymore.

Previously, top tier unis could fund their high rankings with a large foreign student cohort – and one that doesn’t contribute very much to immigration numbers as illustrated.

But Labor in its infinite wisdom is killing that golden goose with its goose of a policy change just announced.

It will result in job losses and funding shortfalls in our best unis, which will in turn see their rankings fall. And they will likely have to cut domestic student numbers to cover the cost of losing foreign students who are full fee paying.

It’s a dog of a policy change.

So let’s give Labor a slow clap for finding new and inventive ways to damage the Australian economy and higher education, which until now has been our second largest export industry after mining.

Oh, and Treasury didn’t even model the economic impact that this policy change will have on the economy.

You really couldn’t make this level of policy stupidity up even if you tried.