I hate to say I told you so – but that never stopped me.
Back in February I noted the problems that changes to visa laws for international students would create for Australian universities. Well, guess what? Despite the numerous warnings by the university sector, visa law changes are now biting and are undermining one of Australia’s largest export industries. One article is here.
Now obviously as a Dean at Monash University I care about this. But why should you care?
Two reasons. First, if the university sector ends up in financial crisis it is the taxpayers who will be bailing them out. As I noted in my earlier article:
to the degree that our universities hit a crisis due to a federal government induced collapse in the market for overseas students studying in Australia, the problem will fall on the funders of these universities – the same federal government.
Put simply – the Federal government and the taxpayers are the biggest winners from the overseas student education industry.
And the second reason? Well, if you have students that are at university or will be heading there in the next decade then you have been in line to receive a large subsidy. As I have also noted before, our university sector is currently underwritten by a huge cross subsidy from overseas to domestic students. If it messes up our education exports then the government may have to start charging you or your children the true cost of their education. At a rough guess that is probably three or more times the current HECS rate for business degrees.
So the federal government in the short term has three choices:
- fix the visa issue so that the Australian education system remains internationally competitive and the cross subsidy to domestic students can continue; or
- massively increase the funding per domestic student so that it covers the true cost of that student’s education (either backed up by an increase in HECS or via taxpayer funding); or
- prepare to inject billions of dollars into the tertiary sector in the form of bailouts over the next 2-3 years.
Given that option 3 is the default option, I expect that option 3 will occur. And if it does, the federal government will be responsible for trashing the reputation of our universities and killing a viable long-term export industry in education.