The “how low can you go” competition between Labor and the Coalition on capping international students before the election was a stats-free stunt. Reserve Bank staffers present the numbers in a new paper.
Madeleine McCowage and colleagues from the RBA address the claim that internationals increased rents. They point to QILT survey data that nearly half of them are not in the market, living with family/friends, in student dorms or otherwise off market.
The half who rent are concentrated in inner-cities, outnumbering local students there two to one. And while 50,000 of them renting should have increased rents in the tight market post pandemic, they found “much of the rise in advertised rents occurring before borders were reopened.”
As to the popular claim internationals pinch jobs from locals, before the pandemic international students worked half the working age population’s hours (the 40 hours a fortnight cap will have helped with that). But since the country re-opened this increased to 75% overall, although Indian and Nepalese students drive the average up. The authors suggest this will decline as visas are tighter for “groups of students who were more likely to be seeking to work.”
And we will miss them when they are fewer, making a “notable contribution” to labour supply in accommodation, hospitality and healthcare. “This contribution was important in helping businesses in these sectors facing labour shortages in the tight labour market that emerged post-pandemic.” However the authors offer no judgement of their own on the impact of students who stay on graduate visas or as permanent residents.
But they do comment on the overall contribution internationals make to the balance of payments. Critics claim that students earnings from working reduces the overall value of education exports. Again, they do not refer to such arguments, but they state the value of education exports exceeds the Australian Bureau of Statistics’ compensation of employees to non-residents category.
“In 2023/24, education exports were worth $50bn – more than three times higher than the estimated $13.4 billion of COE earned by international students.”
And then there is the hit to CPI of all the demand they bring sloshing around the economy. Or rather, there is not. “The rapid growth in international student numbers post-pandemic likely contributed to high inflation over this period, but was not a major driver.”
