Australia’s not so large education export industry

Reporting of Julia Gillard’s India trip has regularly mentioned Australia’s ‘$15 billion’ international education industry.

Eighteen months ago I claimed that these figures were inflated, and while I was away last month Bob Birrell offered the most detailed substantiation yet of this argument.

In addition to the point I made about the need to deduct earnings by overseas students while in Australia, he adds that estimates of their spending while here are too high. I think he’s right, though a new survey of international students is needed to arrive at a more defensible number.

Universities Australia boss Glenn Withers wrote an article for the Higher Education Supplement defending the $15 billion figure, but though making a couple of good points it is unconvincing overall.

One good point is that the overseas student expenditure figures do not include air fares to Australia or capital outlays (though many of the air fares would be paid to foreign airlines). Another point is that tourist spending by friends and relatives visiting overseas students could be said to be generated by the international student industry. But he gives no reason believe the ABS’s assumptions on spending or why these other sources would bring the total up to $15 billion.

He also argues that applying Birrell’s logic of deducting overseas student earnings would mean that ‘mining exports would reduce by deducting imported machinery, 457 visa worker earnings, and repatriated profits.’ Well yes (though this is slightly different, with education the claim is that the industry never generates the claimed foreign revenue at all, rather than that some of it is paid back overseas), but the mining industry does not use dubious export factoids for political reasons.

Withers also unfairly attacks Birrell’s claimed ‘nativistic enthusiasm’ and ‘mercantilism’, and criticises a non-existent attack on student employment as bad for the economy. In fact, Birrell has come out the current controversies on international students looking better than anyone: he has consistently criticised abuse of the visa system and dodgy colleges, which have now damaged Australia’s reputation as an education provider.

It’s pretty sad that Universities Australia is so committed to spin on international students that it reacts to criticism in this way.

9 Responses to “Australia’s not so large education export industry

  • 1
    Sinclair Davidson
    September 2nd, 2009 17:32

    Birrell has come out the current controversies on international students looking better than anyone

    Has he? My perceprion of his contribution is that there isn’t a problem in Australia that hasn’t been caused by a foreigner.

    abuse of the visa system and dodgy colleges, which have now damaged Australia’s reputation as an education provider.

    I’m not convinced this has damaged Australia’s reputation at all. The failure of the police to provide a safe environment and crack down on criminal elements that have targeted international students is more likely to have tarnished Australia’s reputation as an education provider.

  • 2
    Tom N.
    September 2nd, 2009 17:56

    Inflated export earnings claims involving foreign students is nothing new. As the PC pointed out a few years back, the official ABS tourism statistics use a laughable definition of tourist as anyone away from their usual place of work or residence (so that business people flying from Sydney to Melbourne are tourists; and farmers travelling to a regional centre to do the shopping are tourists), and then adds all the value added up the supply chain to get a total number. “Education visitors” are included in this exercise, with all the expenditure by overseas students included as part of the output of the “tourism” industry.

  • 3
    Andrew Norton
    September 2nd, 2009 19:53

    Sinc – Birrell has been critical of migration levels, but his work is thorough and well-researched and has been the major person documenting how parts of the education industry have been selling visas more than courses.

    Your reputation point is an interesting one – I suspect the main damage is to the smaller education providers who cannot easily distinguish themselves from the ‘rogue operators’. I first became aware of this issue when I spoke to ACPET (the private providers lobby group) conferences in the mid-2000s. A constant theme was their complaints about state regulators, including their failure to act against dodgy colleges, which the ACPET members believed risked damaging their reputations.

    Tom – I hadn’t seen (or didn’t recall) the PC work on tourism. A fine organisation, but I don’t read all its reports:)

  • 4
    Sinclair Davidson
    September 2nd, 2009 20:26

    I may be unfair in my assessment. We don’t have a subscription to his journal so I only ever get to read what he does and says in the media.

  • 5
    charles
    September 2nd, 2009 21:18

    Does the education sector really care where the money comes from, does it care if the student worked for it while in Australia or received it by bank transfers from India? I doubt it.

  • 6
    Andrew Norton
    September 2nd, 2009 21:54

    Charles – Glenn Withers’ defence of $15 billion figure suggests that the answer to your question is yes. It is hard to believe that in their honest private moments they care, but publicly Universities Australia will clutch at any straw in calling for more government support – arguing we need more public funding to be internationally competitive.

  • 7
    Kymbos
    September 3rd, 2009 08:18

    Sounds like the estimates could be tested fairly easily, by the ABS or someone else. Survey the expenditures of students and compare them with expenditures used in the trade figures.

    It’s too far back for me to remember, but is it possible that the ABS treats money earned while in Australia by foreigners as an export as they are here only temporarily?

  • 8
    conrad
    September 3rd, 2009 09:31

    I’m with SD on that the point about damage to reputation — most of the damage has nothing to do with dodgy colleges (of which no doubt many students are happily complicit in what goes on) — it’s the violence that caused all the problems. These are really two separate issues confounded by the media and politicians.

  • 9
    Andrew Norton
    September 3rd, 2009 09:51

    Conrad – I did qualify my point about reputation at comment 3. But we should find out in the next 6 months. If it is general damage to brand Australia on safety grounds, all education sectors should show similar levels of decline. If it is dodgy colleges the vocational sector will decline much more than higher ed, schools or English language (though changing migration criteria will complicate analysis).