Australia’s enrolment cap legislation is stalled. What happens next?

Australia's next federal election is expected to be held on or before 17 May 2025. It seems clear that all political parties are prepared to make immigration a key issue, which is to say that the election will be fought in part over more restrictive immigration settings, including those affecting international students.

There is no better explanation than simple political expediency for the current government's proposed legislation, the ESOS amendment bill. That controversial legislation includes a number of measures – the headline item being a cap on international enrolments – and was itself hotly debated in the Australian Senate before the Senate recommended the passage of the legislation in a report tabled on 9 October 2024.

The bill progressed to debate this past week. It was expected to move to a Senate vote that would have led to its passage and to the implementation of enrolment caps beginning January 2025. In a surprising last-minute twist, however, the opposition parties signalled on 18 November that they would not support the ESOS bill, which means that it cannot be passed into law in the current parliamentary sitting after all. The bill has since disappeared from government order papers. While it is possible that it may yet resurface, for the moment it seems that the bill has been effectively withdrawn from debate for the remaining parliamentary sessions in this calendar year.

"The Coalition will oppose the Albanese Labor Government’s chaotic and confused education bill which will fail to fix the migration and housing crisis of the Government’s own making,"" said a joint statement of opposition shadow cabinet members. "Since the Albanese Government was elected, the number of international students studying in Australia has almost doubled, from 474,493 international students in May of 2022 to more than 800,000 today."

"According to the latest [data], net overseas migration is on track to have exceeded 1 million in just Labor’s first two years – a record level, and over 70 per cent more than in any other two year period…Labor’s piecemeal approach does nothing to address the structural issues it has created. The proposed cap in the Education Bill before Parliament will not even touch the sides of this problem."

Other measures

As that rhetoric suggests, the political temperature around immigration to Australia remains very turned up. There is every indication that the current government will continue to work to restrict international student numbers, even if not by legislated enrolment caps.

For one, education minister Jason Clare has clearly signalled that should the ESOS bill fail to pass into law, the government will continue to rely on the equally controversial Ministerial Directive 107 (MD107). First introduced in December 2023, MD107 is an immigration framework that classifies Australian institutions into different risk levels and offers preferential treatment to “low-risk” institutions. The directive triggered a significant spike in visa rejection rates for students from some countries.

Immediately after the opposition's move to block the ESOS bill this week, Australia's Department of Home Affairs announced that was reopening evidence level updates under MD107. Those updates effectively set the risk level of each provider and bear directly on their visa approval rates.

"On 3 October the Department of Home Affairs published a notice advising the pause of the September 2024 Evidence Level update," says a statement from the department.

"Further to this notice, government has authorised the Department to proceed with an Evidence Level update, which will be implemented on the morning of Wednesday 20 November 2024.

The update is based on the immigration outcomes from the period 1 October 2023 to 30 September 2024. The Evidence Level update will reward those providers that have shown improved performance, while making minor adjustments to support genuine providers to adapt their processes and recruit for semester 1, 2025."

In other words, based on data for that period over 2023 and 2024, providers may move up or down risk ratings in this latest update. Importantly, the department adds that, "An exception is being made for those providers in the higher education, schools, and public vocational education and training sectors. These providers will remain paused at their current Evidence Level."

Commenting on that exception on LinkedIn, Lexis English's managing director, Ian Pratt, said that, "The Labor government has launched an extraordinary attack on the private international education sector by unfreezing Assessment Levels while exempting universities and TAFEs from the changes…It's impossible to surmise that this is anything but a blatant attempt to hammer yet another nail into the coffin of the private sector."

What does this all mean?

In the end, Australia's international education sector has been buffeted by rapidly changing and more restrictive immigration settings this year. Whatever its motivation, the government's approach to immigration policy, and the way it has engaged with the sector, has undeniably created a great deal of confusion, hardship, and uncertainty for providers, agents, stakeholders, and students.

Tracy Harris, an industry consultant and frequent contributor to The Koala News, said this week, "Is anyone else feeling like this year has just been a colossal waste? Waste of time, energy, resources, worry, emotions, etc. If the Government had properly engaged with the sector from the start and held genuine consultations, instead of treating us like adversaries, I’m certain we could have come up with a sustainable alternative."

And now going forward, there is every indication that the government will rely on MD107 as a means to further manage inbound student numbers, even to the point of targeting specific education segments as this week's announcement would suggest.

An 18 November statement from Universities Australia puts it plainly: "Confirmation today that MD107, described by Minister Clare as a 'de facto cap', will remain in place means universities and the economy will continue to experience serious financial harm at a time Australia can’t afford such a measure."

Universities Australia chief executive officer Luke Sheehy added, “Australia’s universities are again being used as a political football in the migration debate. It beggars belief that one of our country’s biggest export industries is being treated this badly."

"MD107 has already stripped an estimated AUD$4 billion from the economy and our universities and is putting thousands of jobs at risk right across the economy…This appears to be lost on both sides of politics as they continue to treat international students as cannon fodder in the political battle over migration and housing.”

Commenting on the lack of policy clarity to ABC Radio this week, International Education Association of Australia chief executive Phil Honeywood said, "We're only a couple of months out from the start of the academic year, and this sends all of the wrong messages overseas."

For additional background, please see:

• "Australian Senate report recommends passage of ESOS amendments bill with national enrolment cap"
• "Criticism mounts as Australian Senate committee hears it is 'wrong to go ahead' with ESOS amendments bill as is"
• "Australia: Private VET providers receive 'devastating' enrolment cap allocations for 2025"
• "Australia announces cap on student commencements for 2025"