Will Australian universities be hit by an employment domino effect?

For the last decade or so, Australian universities have been funded by what has been called a reverse Colombo plan – a reference to the post-war scheme that brought thousands of Asian students to Australia on scholarships. Back then, Australians funded Asian education. Now, Asian students fund Australian education through the fees they pay. Without them, the Australian higher education system would collapse.

Obviously, students from much poorer countries than Australia like India and China – our two largest markets – are not doing this because they altruistically want to fund the human capital of middle class Australians. Many of them come here as students because they want to migrate. A 2006 survey of international students by Australian Education International found that about two-thirds of them planned to apply for permanent residence.

The ease with which international students have been able to migrate has owed much to the growth in skilled migration quotas during the Howard years (and continuing in Rudd’s first year), combined with rule changes favouring former international students. Historically, migration levels rise with employment levels, and the Howard government was no exception to this pattern.
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