International student caps threaten Victoria’s economy

A new independent analysis has found that the proposed introduction of a cap on international student enrolments at universities would cause serious damage to Victoria’s economy, reinforcing calls for a review of the proposal.

The analysis, prepared by SPP Consulting for the University of Melbourne and Monash University, found that Victoria’s public universities contribute $27.4 billion to the Victorian economy. Students and staff at Victoria’s universities contribute about $15.4 billion to consumer spending on food, clothing and entertainment in the state.

This economic advantage is under threat as the Australian government pushes ahead with its proposed international student caps. Cutting enrolments would jeopardise many small businesses still recovering from the COVID-19 pandemic, putting a range of service sector jobs at risk.

Professor Michael Wesley, deputy vice-chancellor for international affairs, culture and engagement at the University of Melbourne, highlighted the significant damage the proposed caps could cause to the state’s economic health.

“The direct contribution of Victoria’s public universities to gross domestic product in 2023 was $6.7 billion, representing 1.2 per cent of total economic activity in the state. The potential loss of revenue from the proposed caps will place an additional burden on our federal budget, which in turn will impact our state budget and our ability to fund important services and infrastructure for all students.

“Critical services like health care are already being cut in Victoria due to financial pressures. These proposed limits will only cause further damage to our state.”

Monash University Deputy Vice-Chancellor (International) Professor Craig Jeffrey said the report highlighted the role international students play in supporting the economy. “Restricting international students’ access to world-leading universities risks damaging Victoria’s economy, vital research and our position and impact in the region,” Professor Jeffrey said.

“Restricting international students will deprive the sector of revenue and undermine life-saving medical research. We depend on a stream of brilliant international students to fund and conduct this vital research.

“One of the great things about living and working in Victoria is that we come into contact with international students. They are vital to the social, intellectual and cultural life of our state, and this report shows that they are absolutely vital to our economy too.”

Professor Wesley urged the Australian government to reconsider the caps or risk damaging the country’s reputation as a destination of choice for higher education.

“Trust, certainty and interest in Australia as a high-quality provider of higher education has been built up over decades. What the Australian government is proposing is being interpreted as a significant new source of sovereign risk that will deter prospective students and their parents, as well as investors and credit rating agencies. Instability from sudden policy changes in visa regulations and fees will encourage students to study in other countries.”