Higher education insiders say Labor’s latest round of changes will imperil a sector already on its knees, as economic data reveals the economy is grinding to a halt, despite stubbornly high inflation.
This week’s National Accounts show ’s economy is on the brink of recession, yet the higher education policy Labor is imposing will severely hamper ’s second largest export industry – the only thing currently standing between poor economic results and a recession.
While the latest quarterly economic growth numbers were in the doghouse at just 0.2 per cent, services exports have been propping that figure up. Led by the university sector, it grew annually at 5.6 per cent.
However Education Minister Jason Clare’s recent changes – capping the intake of foreign students at elite universities at 2019 levels – will grind that growth to a halt.
Just as importantly, the new policy will destroy Labor’s signature higher education policy goal of increasing the number of ns with university qualifications. This policy was announced to much fanfare ahead of the 2022 election.
For years now, full-fee-paying foreign students have subsidised underfunded university research as well as the intakes of local students.
However, capping the full-fee-paying student numbers from overseas will force some universities to shut down entire faculties and limit the number of domestic student they enrol.
That’s because these students are a per capita cost to the university. Full-fee-paying overseas students have been subsidising that loss.
Without the cash cow of full-fee-paying foreign students, Labor’s goal of a more highly educated domestic population simply won’t happen, unless the government significantly increases university funding, which it won’t do because of the pressures already on the budget.
But that’s not the only policy goal Clare’s disastrous policy is putting in jeopardy.
Even the politically driven motive of reducing foreign students to cut immigration and ease pressure on housing stocks won’t work, if the government tries to shoehorn overseas students from elite institutions into lesser quality universities, in a bid to help the lower ranked institutions already suffering from earlier policy changes by Labor.
That’s because foreign students won’t tolerate moving to lower reputation institutions. They will simply take their business elsewhere and attend higher quality universities in other parts of the world.
Higher education is a competitive global business. It is almost as if the education minister is unaware that we live in a globalised world.
Daily Mail has been told by insiders the minister has been captured by his higher education department deputy secretary Ben Rimmer, who ‘is out of control and leading the minister down a blind alley’, according to the source.
‘The policy is disastrous for the university sector and terrible for the country,’ the senior source told Daily Mail .
‘Its implementation design is so faulty (such that) it will do the opposite of what the government seeks to achieve.’
University administrators are united in opposition to what the government is doing.
They have collectively warned the minister and those around him that it will damage elite universities, including lowering their world rankings, but won’t fix the problems Clare’s Ministerial Directive 107 imposed on the lower quality institutions.
Ministerial Directive 107, imposed on the sector nearly a year ago, prioritised visas to lower risk, higher quality, institutions.
Replacing this with a quota system built on 2019 numbers limiting intakes to top institutions means that quality students will study abroad and only higher risk students will get through the quota system to study at lower quality institutions.
‘It’s just a disaster’, another university administrator told Daily Mail .
Those lower quality students are also more likely to want to take advantage of visa rules making it easier for them to migrate to .
‘Only a tiny fraction of overseas students who study at the top universities seek to emigrate to .
‘The overwhelming majority return home with their qualification.’
But that isn’t the case at the lower quality institutions.
‘What Labor is doing will add to the number of foreign students who seek to stay in , not subtract from it’, the university administrator says.
That will put upwards pressure on immigration, contrary to the political goals of the government.
Now former Labor leader Bill Shorten has injected himself into this mess all of the government’s own making.
Next year he’ll take up the role of Vice Chancellor at the University of Canberra, but Shorten will continue to serve in Anthony Albanese’s cabinet until that time.
The university sector hopes that Shorten will become a powerful advocate for the problems Labor is creating, but the former Labor leader has said that he will recuse himself from any cabinet discussions on higher education while he remains in the government.
‘After that we need him to take up the cause because this policy shift is an absolute unmitigated disaster’, a high profile professor at one of ’s top universities says.
If Labor’s policy goes ahead, universities will be forced to impose massive staff and faculty cuts to their institutions to remain financially in the black.