A Treasury deputy secretary has said the government’s new international student cap will not substantially impact the Australian economy.
This comes despite claims about significant job losses and bankruptcy from education providers.
In August, the government announced an international student cap of 270,000 for the 2025 calendar year after passing the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024.
The new measure aims to curb the flow of students into the country and relieve pressure on the rental market.
However, it has been strongly opposed by universities and higher education institutions nationwide.
During a recent Senate inquiry hearing, Greens Senator Mehreen Faruqi questioned the Treasury Department representatives about the cap’s economic, labour, and social costs.
“We have heard from the University of Sydney. They’ve done some modelling. They suggest $4.1 billion (US$2.8 billion) lost to the Australian economy,” she said.
“When bills of this significance are brought in, shouldn’t there be some [government] modeling and work done on the impacts of it?”
In response, Sam Reinhardt, the deputy secretary of the Fiscal Group at the Treasury Department, said her department did not forecast any major impact.
“We saw that the national planning level numbers of [270,000] were consistent with what was in the budget in terms of student net overseas migration, which means that [it was] also consistent in terms of the economic forecast,” she said.
“So, we would not see a substantive impact as a result of those changes.”
Faruqi then asked whether the department had looked into evidence from education providers who reported their potential job losses.
“We have heard from universities [about] tens of thousands of job losses. We have heard from private providers–they are closing down already,” she said.
“Is it not the responsibility of the Treasury to actually look at that very real-life impact?”
Reinhardt responded that the department did not see any impacts of the recent education legislation from a “macroeconomic sense.”
“We do not expect any job losses as a result of this bill,” she said.
Education Providers’ Account of Job Losses and Shutdown
Johan Pienaar, the CEO of Flight Training Adelaide, told the Senate Committee about his company’s predicament due to the international student cap.“The new cap that’s been imposed on us will take our revenue from our international school … effectively down from $40 million a year to $15.8 million for 2025, with an estimated loss of $10.1 million. We will cease to exist,” he said.
“We cannot survive that type of arrangement. It will just not work for us.”
According to Pienaar, Flight Training Adelaide trains around 300 international students a year and employs 400 staff.
The CEO also noted that the cap would have a lasting impact on Australia’s reputation as a pilot training destination.
He explained that Australia’s flight training programs were among the most expensive in the world, but had a reputation of delivery high quality training.
Pienaar was concerned that if news about the student cap were spread, international students would flock to other training markets, such as the United States, and that the Australian market would not be able to recover in the short term.
“We won’t see those international students for the next three to five years,” he said.
“It will decimate the international flight training industry if we go down this path.”
Timothy Eckenfels, the CEO of IH Sydney Training Services, also shared his company’s bleak outlook.
“Enrollments are dropping nearly 10 percent month on month. Visa rejections have increased from 6 percent to 19 percent this year alone, [and] we will refund over $12 million of student tuition.
“Cash is tight. Bank and loan covenants will soon be breached.”
In addition, Eckenfels stated that his company recently closed down a campus in regional New South Wales and had to review the operations of other campuses.
“We are now reviewing our needs, and up to 35 percent of our staff are now at risk,” he said.
