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Thursday, 18 August 2011
Page: 8576

Mrs PRENTICE (Ryan) (13:03): International students bring an enormous benefit to Australia. Economically, education is our third largest export, second only to coal and iron ore, and it is estimated that each international student studying in Australia generates $29,000 value added to our economy. Given international students' contribution to our economy, as well as the benefits they bring in diversity and culture, it is vital that legislation relating to this industry ensures its continued success.

The bills before us today have four main aims: to ensure that only courses and course providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students may offer and provide courses to overseas students; to ensure that international students in Australia receive the education and training for which they have paid; to protect the reputation and integrity of Australia's education and training export industry; and to strengthen public confidence in the integrity of the student visa program.

The bills today—administering compulsory registration fees for providers of courses for overseas students—have been introduced to provide for recommendations arising from a review of the Education Services for Overseas Students legislative framework, which was conducted by the Hon. Bruce Baird AM. This review was commissioned in 2009 after a series of violent events against international students, coupled with revelations of a few very questionable practices by some education providers which left the sector facing a crisis. This crisis has not yet been stemmed, with the Australian reporting in May last year that the sector saw a 40 per cent decrease in overseas student applications in one month alone. At the time, Stephen Connelley of the International Education Association of Australia cautioned that, should this decline continue, the sector could lose up to 35,000 jobs by the end of 2011.

The Sydney Morning Herald also reported in February this year that the number of international students choosing Australia for their degree course has fallen. Student visa applications from outside Australia decreased 32 per cent over the past six months of 2010 compared with 2009, where they had already fallen 22 per cent compared to the same period in 2008. This drop in international student levels can have serious effects, with Monash University—Australia's largest—announcing that it would lay off 300 staff to cover the budget shortfall caused by the reduction in international students at that institution.

Estimates by Access Economics also show the impact of a five per cent increase—or decrease—in international student activity. The effects of a five per cent decrease are significant, reducing the total value-added contribution by more than $600 million. s seen through the Monash example, however, the most telling effect of a decline in international students is its impact on employment rates, with a five per cent decrease resulting in an employment fall from 126,240 full-time equivalent workers to just 119,900—a loss of more than 6,000 FTE workers.

This is a serious issue. Education export from Australia is by no means a small industry: the benefits of international students are vast. International students contribute $12.3 billion, value added, based on student expenditure of $13.7 billion and visiting friends and family expenditure of $365.8 million. While students spend about 46 per cent of this—$6.4 billion—directly on their education, they also spend money on other items such as food, accommodation and travel. Again, based on an average $14.3 billion, value added, it is estimated that for every $1 an international student spends on their education there is a flow-on effect of $1.91 economy wide, value added—nearly double. This in turn, of course, generates jobs for Australians.

Tourism Research Australia suggested that for every two formal students one friend or relative visited Australia throughout the duration of their studies. These travellers contribute an estimated $314.7 million to the economy, comprising $179.7 million in labour income and $135 million in gross operating surplus. Indeed, Brisbane City Council, through Brisbane Marketing, initiated a student ambassador program to try to maximise the effect and impact of visiting friends and relatives. These students now Twitter and Facebook their experience in Brisbane so that when their family and friends come to stay they do not immediately want to go anywhere else; they want to see what their family member has already experienced in Brisbane—Australia's new world city.

It is clear that international students contribute enormously to Australia as a whole, but the effects are also evident when broken down to a state-by-state level. In Queensland international students and their friends and visitors contribute approximately $1.7 billion, value added, to the state's economy. Comparing this to the gross state product of $214 billion, international student flow-on effects account for 0.81 per cent of GSP. Of this, $1.2 billion is in the direct form of employee wages, with the remainder representing a return to capital investors. International student activity in Queensland contributes close to 17,500 full-time equivalent workers, including almost 14,000 jobs in my hometown of Brisbane alone. This equates to $970.4 million in direct wages and $416.8 million as returns to capital investors, with the sector contributing $4.15 billion to Brisbane's economy.

When broken down to a local level the contribution and importance of international students becomes particularly clear. Once again, Brisbane City Council joins with many of the consuls and other institutions providing education services and holds a function welcoming international students once a year to emphasise how much we appreciate these students contributing to our city and to our local economy.

This is why legislation that supports this industry is vital. It was very concerning back in 2009 when stories emerged of scam institutions guaranteeing students results in the IELTS—the International English Language Testing System—exam in exchange for thousands of dollars in fees. We heard tales of shonky providers threatening students with deportation unless they paid more fees upfront and, of course, there were students who were forced to make advance payments on courses at colleges which were then shut down and the students lost their money.

Stories about students falling victim to these scams were damaging for the industry's reputation and unfairly stained the image of hundreds of good private colleges. It was a blow to the industry and, as I have previously detailed, it was also a major blow to the economy.

International students are valuable to Australia. We do not ever want to see a repeat of 2009, when international students were so let down by shonky providers. The bills before us today go some way to ensuring this does not happen again: we cannot afford to lose our international students.