Letter from Australia: Between a rock and a hard place

For reasons that can be hard to understand, there has always been this kind of unspoken competition between international education and tourism. Trade ministers tend to favour the latter even if it is less of a revenue raiser for the economy. Maybe it’s about the photo opportunities. Or the fancy hotels, the nice dinners and the free dives on the Great Barrier Reef before it bleaches completely to dead-as-a-dodo white.

Some new research clearly articulates the epic contribution of education-based tourism, or edu-tourism. It’s not just family members coming to visit for graduations and taking in a side trip to Byron Bay or Kakadu while they are here. It’s the massive number of visitors who take in a spot of educational activity.

The numbers look something like this: in 2018 of the 8.5 million visitors to Australia, 577,000 said their main purpose was education, accounting for nearly 40% of the total tourism spend. Spending by Chinese education visitors was bigger than the total spend from UK and US visitors of all descriptions.

Of the $44bn spent by visitors to this country, $35bn is education related. that’s a big number. Education visitors stayed on average 136 nights and spent $20,000 each, compared to 25 nights for the rest and an average spend of $2350. Obviously, the flow on effects are dramatic. But (there’s always a but), there are a few hazards on the road ahead.

Mixed messages

While much is being made politically about congestion and insufficient infrastructure to cope with the number of international students in the inner cities of Sydney, Melbourne and Brisbane, the recapping of the demand driven system is going to push universities to look for alternative sources of revenue growth. And that is most likely to be international students.

At the same time, Education Minister Dan Tehan is concerned about English language and entry standards of international students and has asked the regulator to take a look (which may put downward pressure on supply).

Tehan has also indicated he wants more international students to go to regional areas, but whether international students actually want to go is another matter. Making this happen may in turn put downward pressure English language and entry standards – the very thing Tehan is hoping to push up.

Meanwhile, Donald Trump’s trade war with China will likely see a redirection of students to Australia, the UK, New Zealand and Canada. A recent survey of education agents confirmed that point. That sounds good for Australia, but as David Amor, director of market insight and knowledge at INTO told The Pie News, the shift away from the US should serve to illustrate just how precarious the international education sector can be.

The survey reminds us how closely student recruitment is linked to politics and diplomatic relations, a precarious position with so many institutions so heavily dependent on one or two source markets,” he said.

That should make Australian universities – particularly those heavily reliant on Chinese students (which, let’s face it, is most of them) – sit up and have a think about diversification of revenue sources.

After all, relations with Beijing have been a trifle rocky in recent years. Indeed, two days after the federal election a editorial in the China Daily called on Australia to show more respect towards China. It noted that the Australian government referred to the US as a “friend” but China as a “customer”.

As a report in SBS News succinctly noted: “Foreign policy was hardly raised during the five-week campaign, but improving the bumpy relationship with its biggest trading partner, while keeping traditional ally the US onside, will be a difficult balancing act for the re-elected government.”

Big bucks

Back to standards. We have an embarrassing expose about entry standards, academic progress and international students once a year or so. The most recent was on 4 Corners which revealed Murdoch University was waiving English language entry requirements for mainly Indian postgraduate students. Just not a good look.

In general, universities require an IELTS score of between 6 and 7, even though this is not fully proficient. The federal government sets a minimum IELTS score of 5.5 to obtain a student visa, those who score as little as 4.5 can still get a visa as long as they also enrol in an English language pathway course before starting university.

Undertaking and passing a 10-20 week intensive English language course means students can enter university without having to resit IELTS. It’s estimated about a quarter of all international students obtain entry to university in this way. I’m not having a go at the ELICOS sector. It’s reputation remains mostly untarnished. But this complex interplay between visas, standards, political grandstanding and geopolitical tensions means there are push and pull factors at play and it’s hard to get a handle on just where the sector is heading.

In the meantime, Simon Birmingham has been named as Trade Minister. That should please a lot of people. He’s a former education minister, he’s smart, he understands the issues. So a big sigh of relief. Phew.

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