Market intelligence for international student recruitment from ICEF
19th May 2021

“2022 will be ugly”: Australia announces budget cuts, says border closures will reach into next year

Short on time? Here are the highlights:
  • A new federal budget is dealing blow after blow to Australia’s university and vocational training sectors, which have already been devastated by Australia’s continuing border closures during the pandemic
  • New South Wales is far along in plans to bring in hundreds of international students as early as this August – with other states actively planning as well – but all state proposals for student return will need federal approval to go forward

Australia’s national government has introduced a new budget with significant cuts to post-secondary spending in the coming years. The 11 May budget documents include an assumption that Australia will now not welcome a larger-scale return of international students until mid-2022.

Overall, the government continues to send confusing signals around international student arrivals. Shortly after the budget was released on 11 May, Prime Minister Scott Morrison said at a 16 May media briefing that international students would be the “next step” for his government once vaccinated Australians could travel more freely.

Budget cuts on the way

Australia’s new federal budget includes cuts of nearly 10% to universities over the next three years as well as a 24% reduction in TAFE (vocational) funding.

The TAFE sector had already been demoralised by government cuts before the new budget, and universities suffered a AUS$1.8 billion hit to revenues last year, with another AUS$2 billion loss expected this year. Through a series of rule changes to the broad-based JobKeeper programme last year, public universities have also been excluded from receiving financial relief that was provided to many other business sectors.

Australian National University Professor Brian Schmidt wrote in the Guardian that universities “had ‘been left to bleed’ in what was one of history’s biggest spending budgets for other parts of society.”

Australian National University’s Andrew Norton offered a terse assessment in a tweet.

Universities Australia’s Chief Executive Catriona Jackson said,

“Australia’s university sector cannot sustain these losses without serious damage to national productivity and the country’s knowledge base.”

Borders won’t open significantly until mid-2022

Much of the damage to universities’ operating revenues last year stemmed from the inability of international students to enter Australia due to COVID travel restrictions. In a further blow to Australian educators, the federal budget assumes that borders will not be open to these students to any significant degree till mid-2022. This is even further in the future than Federal Education Minister Alan Tudge predicted last month; he had anticipated a large-scale return in the first quarter of 2022 at that time.

It is possible that some international students will be able to return in 2021 and early 2022, however. The budget report says that, “Small phased programmes for international students will commence in late 2021 and gradually increase from 2022.”

Be that as it may, the vague promise of small groups being able to come in provides no springboard for universities’ international enrolment planning nor any hope for strategic recruiting.

Ms Jackson adds,

“With assumptions around borders being shut until mid-2022 now baked into the Budget, the picture for universities will get worse. There will be significant flow-on effects for the nation’s research capacity and jobs inside and outside universities.”

Australia’s tourism industry stakeholders were similarly shocked by the announcement of a pushed-back international border opening. Margy Osmond from the Tourism Transport Forum said,

"We will see more job losses and we will see many, many business failures out of this and when the borders do finally open. In the absence of any additional ongoing support, we'll be lucky to have a tourism industry to welcome international tourists back into the country."

New South Wales pushes ahead

In New South Wales, there is a plan afoot to speed up the return of international students – ideally to see some return as soon as August 2021 (semester 2) – as the state government is losing patience with lack of traction on bringing students in. Phil Honeywood, CEO of the International Education Association of Australia told the Guardian Australia that “a 600-bed student accommodation site had been approved [by NSW government] to be converted into quarantine.” An additional accommodation site is also being explored. According to the plan:

  • Students would be required to quarantine for 14 days;
  • Students would arrive on chartered rather than commercial flights and counted “under a separate arrival cap and would not take away spaces from returning Australian citizens and other international arrivals”;
  • The first few hundred students would arrive in August to “prove the plan.”

NSW state treasurer, Dominic Perrottet, said of the plan, “This is about finding a way to bring students back but not at the expense of the weekly cap of Australian citizens arriving back in NSW … If we don’t address this issue then I believe we’ll have an industry on its knees and one that will look elsewhere.”

The NSW proposal will have to be approved by the federal government if it is to become a reality.

In a 17 May interview with Sky News, Education Minister Alan Tudge said again that the national government continues to take a long-term view on such state proposals.

“We certainly want to see those international students back. And there [are] good plans being developed by New South Wales, by Victoria, by South Australia, and we're working through those. My expectation is that we'll have some smaller scale pilots later this year. And then we've obviously made an assumption in the Budget that we'll have larger scale numbers in the second half of next calendar year. But we're just taking one step at a time.”

For additional background, please see:

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