Study finds an uncounted AUS$1 billion in Australian education exports

The Australian government launched an ambitious “whole-of-sector” international education strategy this week. The strategy is notable both in its ambition - to host, for example, 720,000 foreign students in Australia by 2025 - and in its comprehensive view of international education and education exports. It draws in part on analysis from Deloitte Access Economics and the consulting firm has also recently produced a detailed study as to the size and economic impact of the sector in Australia. The value of international education to Australia aims to expand on established estimates for Australia’s education exports, in particular those produced by the Australian Bureau of Statistics (ABS). Deloitte points out that while the ABS figures capture most of the country’s export activity for education, they also exclude at least two significant components:

• Revenue from offshore campuses or other in-market delivery;
• Expenditures for both fees and living expenses by ELICOS students (English Language Intensive Courses for Overseas Students) on non-student visas.

The firm takes the ABS valuation for 2014/15 as a baseline. For that fiscal year, the Bureau valued Australia’s education exports at AUS$18.8 billion (US$14 billion), and, by extension, ranked education as the country’s third-largest export sector. All told, Deloitte estimates that the actual value of sector exports is as much as AUS$935 million (US$700 million) more than the ABS estimate. This increment includes the following additional sources of export revenue for 2014/15:

• Expenditures of AUS$205 million by ELICOS students on non-student visas (factoring in AUS$112 million in tuition fees and AUS$93 million in living expenses);
• Direct tourism spending of AUS$282 million by visiting friends and relatives who came to Australia explicitly to visit an international student;
• 2014 revenues of AUS$434 million related to offshore campuses; and
• AUS$14 million in revenue from international study tours at Australian public schools (2015 estimate).

Adding in all such additional revenue sources, Deloitte concludes that the actual value of education exports for 2014/15 was nearly AUS$1 billion more than calculated by ABS for a revised total of AUS$19.7 billion (US$14.73 billion) for 2014/15. (We note as well that ABS subsequently updated its 2014/15 estimate with a valuation of AUS$19.65 billion for the 2015 calendar year. Simply adding the Deloitte increment to that updated estimate suggests that the actual value for the year may have been closer to AUS$20.6 billion. - ed.) Commenting on the report, Minister for Tourism and International Education Richard Colbeck said, "International education is already one of our top two services exports, along with tourism, and is one of five key super-growth sectors that will support our transitioning economy into the next decade…The growing importance of international education to Australia is evident from the jobs it creates and the businesses that benefit from it - directly and indirectly across the retail, hospitality, property sectors and more." Of particular note in these figures is the more comprehensive value associated with ELICOS studies as well as, for the first time, a revenue value attached to offshore campuses and in-market delivery. The report has it that AUS$382 million of the AUS$434 million attributed to offshore programming is derived from higher education programmes, with the balance (AUS$53 million) coming from vocational education and training courses. It notes as well that there were about 112,000 international students enrolled in offshore higher education programmes in 2014 (about 23% of those in distance education), and another 50,000 in VET programmes (2013 estimate). These figures, when related to an "onshore" enrolment of roughly 500,000 foreign students in 2015, reflect both the scale of current offshore and online programming and the significant potential for these modes of delivery going forward. Australia’s newly released international education strategy clearly anticipates a significantly expanded role for both offshore and online delivery and argues, "The traditional demarcation of the sector into onshore and offshore or transnational reflects a division that will be challenged as 2025 students access the skills and knowledge they require at the time they chose, through the channel that optimises their learning experience, be it in Australia, online, or in-market as part of course delivery or on-the-job learning." For the moment, at Deloitte’s revised valuation of AUS$19.7 billion for 2014/15, the sector is estimated to support more than 130,000 full-time equivalent jobs throughout Australia and to contribute AUS$17.1 billion to the country’s total GDP (after factoring out imported goods and services consumed by foreign students in Australia). The study also projects that Australia’s current international enrolment will yield as many as 130,000 skilled migrants for the country’s workforce, and that this "increase in human capital" will result in a further increase of AUS$8.7 billion to the country’s GDP. The report is also careful to set these direct economic benefits in a wider context of social, cultural, academic, and diplomatic advantages that accrue to Australia as a result of its substantial international education sector. It highlights in particular, "the ability of international education to encourage local students to engage with foreign cultures…at both an institutional level, through the internalisation of the curriculum and professional development for staff, and at a personal level, through individual interactions with students, host families, and the community" and advocates forging closer connections still between international students and local communities in Australia.