Are Australian universities over-reliant on fees from international students?

A new report entitled ‘Future development of the NSW tertiary education sector‘ primarily focussing on the state of university sector in the state has been released in January 2021.

This inquiry was established on 28 May 2020 to inquire into and report on the future development of the New South Wales tertiary education sector.  

The report notes that the state’s universities enrol a majority of their international students from a small number of countries, namely China, India and Nepal.

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Students from these three countries generated $2.4 billion in revenue to NSW universities.

In Chair’s foreword, the Chair Hon Mark Latham MLC has observed: “For many years they have been building up overseas student numbers and income, particularly from China, to cross-subsidise their research efforts. … Could a greater mess be constructed in modern Australia? Making our universities more reliant on China, and inevitably more exposed to Chinese political interference, while running down the quality of student teaching and undergraduate outcomes, solely for the purpose of cross-subsidising the post-modernist slosh that comes out of many faculties and research centres?” (page ix).

The NSW inquiry report observes on page 93 that during their inquiry, the committee received evidence about the risks of foreign political interference posed by foreign nationals especially from China.

The committee has received evidence of a number of other protective and risk mitigation strategies that the NSW universities have put in place against foreign political interference.

The Australian Federal Government has announced its own parliamentary inquiry into Chinese infiltration of the university sector.

The report points out that universities with significant dependencies on students from the abovementioned countries could be vulnerable to changes in international education demand.

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During the inquiry, many university representatives spoke very favourably of the financial, economic, cultural and reputational benefits of the NSW’s international student intake.

“International students represent over 38 per cent of the total tourism spend in Australia and one in four international students have family visit Australia, bringing another 300,000 visitors who spend over $1billion in Australia each year,” the report notes.

But the inquiry received conflicting evidence about where the revenue from international students was being invested.

Dr Salvatore Babones, Associate Professor at the University of Sydney, provided evidence to the committee that “over the past decade Australian universities had expanded their research capacity using international student income but had not invested the revenue into the university student experience.”

Given the challenges facing Australian universities, the report notes on page 22 that the committee is concerned with the vast disparity “between the salaries paid to senior university administrators and the casual and insecure payments made to so many of the staff who actually conduct the teaching and research in universities.”

In the current system many University Vice Chancellors are paid 25 or 30 times more than many of the people undertaking the core work of universities.

The committee has recommended that this matter should be reviewed by the Auditor-General.