International Student Caps in Australia Could Harm Victoria’s Economy, Report Warns

The Australian government’s proposal to limit the number of new international students enrolled at universities could cause a huge damage to Victoria’s economy, a recent report has warned.

The analysis by the independent advisory firm SPP states that capping international student numbers would jeopardize many small businesses still fighting to recover from the COVID-19 pandemic and threaten many jobs.

The same recalls that universities in Victoria contribute a total of $27.4 billion to the state's economy, and the contributions from students and staff of Victorian universities reach $15.4 billion through consumer spending on food, clothing, and entertainment in the state.

The number of students enrolled at Victorian public universities is 399,000, including 130,000 international students, Erudera.com reports.

Commenting on report's findings, Deputy Vice-Chancellor (Global, Culture, and Engagement) at the University of Melbourne, Michael Wesley, restated the harm that the proposed international student cap could cause the state’s economy, saying it would burden the federal budget.

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

Wesley also stressed that the cap will further negatively impact sectors such as healthcare, which is already struggling due to a lack of funding.

The analysis prepared for two of Australia’s leading universities, the University of Melbourne and Monash University, also found that during 2022/23, international education accounted for 48 percent of Victoria’s services exports and 19 percent of total exports.

Data released by the Department of Education showed that Australia welcomed a record number of international students in 2023. According to these data, international student enrolments totaled 975,229 last year, reflecting a 31 percent increase from the previous year.

The number increased by 22,850 students, from 952,379 enrolments in 2019. China and India remained the top two source markets, with 166,420 and 126,487 students, respectively.

Australia announced in May its plans to reduce international student numbers and curb immigration levels in this way. In his budget speech on 14 May, Treasurer Jim Chalmers said that authorities will limit the number of international students based on a formula, including the amount of housing they can build.

“If universities want to take more international students, they must build more student accommodation,” Chalmers said.

In 2022/23, international students contributed $36.4 billion to the Australian economy.

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