ACIL modelling used by Sydney University fundamentally flawed
Jul 6, 2024
This Sydney Morning Herald article reports on ACIL Allen modelling undertaken for Sydney University which concludes that in 2025, there will be around 60,000 fewer international students enrolling compared to 2023 and will lead to job losses of around 22,000. The rationale for this is based on a flawed understanding of how Net Overseas Migration works.
Referring to the ACIL Allen modelling, Sydney University in its submission to the current Parliamentary Inquiry into amendments to the ESOS legislation, states that:
“Based on the Government’s stated targets for Net Overseas Migration (NOM) and data from its 2023 Population Statement, it is obvious that a significant contraction in international student numbers is being considered for 2025. Preliminary economic modelling undertaken for the University by ACIL Allen Consulting demonstrates the following impacts in 2025 from a 30 per cent reduction in international students in 2025 compared to 2023.”
The submission goes onto state:
“Net Overseas Migration will reduce from a peak of 510,000 in 2022-23 to around 255,000 in 2025-26. Based on ABS visa data, the potential impact would be a 30 per cent reduction in international student visas – from 190,000 in 2023-24 to 130,000 in 2024-25. Using 2023 as the base year, this would see around 63,500 fewer international students enrolling in 2025 nationally, resulting in $1.1 billion lost revenue”.
These statements appear to confuse enrolment numbers, the number of student visa holders in Australia, onshore and offshore student visa grants and student flows that underlie Net Overseas Migration.
The statement that there “would be a 30 per cent reduction in international student visas – from 190,000 in 2023-24 to 130,000 in 2024-25” does not to relate to either offshore student visas grants or onshore student visa grants.
In 2023 there were 342,180 offshore student visas granted. That figure for 2023-24 would be slightly less but we do not know the final figure as that has not yet been published. The figure for 2025 is also likely to be lower than in 2023 but there is no evidence that it would lead to a ‘contraction in student numbers’.
In 2023, there were 147,109 onshore student visas granted. The figure for 2023-24 would be higher as there has been a large surge in onshore student visa applications in the first part of 2024.
What ACIL Allen have done is assume that the growth in student enrolments in 2023 would continue in 2025. Given unprecedented growth in the student contribution to Net Overseas Migration in 2023 and in 2024, with the overall stock of student visa holders hitting an all-time record high of over 700,000, there was no chance the Government was going to allow that to continue.
But a fall in the student contribution to Net Overseas Migration does not mean a ‘contraction in student numbers’. As long as the student contribution to Net Overseas Migration remains positive, by definition, the number of student visa holders in Australia would continue to grow unless:
- the number of students moving to another onshore visa is greater than the student contribution to net migration; plus
- the number of other temporary visa holders securing onshore student visas.
At end December 2022, there were 456,970 student visa holders in Australia. By end December 2023, there were 547,175 student visa holders in Australia, an increase of 90,205. That number continued to grow to 673,981 by end May 2024 (not including student visa applicants in the rapidly growing onshore bridging visa backlog) and at one point in early 2024 was over 700,000. That growth was despite massive policy tightening and a sharp increase in refusal rates.
As the Government’s forecast of the student contribution to Net Overseas Migration remains significantly positive, the number of student visa holders will continue to trend upwards, albeit somewhat more slowly, rather than decline by around 60,000 as claimed by ACIL Allen.
Even if some in the industry assumed the 2023 rate of growth would continue, there are serious questions about the capacity of the industry to cope in terms of the number of teachers, classrooms, student accommodation, etc required. That is unless the industry cares only about revenue and little about the quality of education delivered or the welfare of students.
The straw man ACIL Allen have set up also makes its claim of 22,000 job losses, as well as massive economic losses, just nonsense. These conclusions should have been peer reviewed by Sydney University before going to the media or used in its submission to Parliament.
Abul Rizvi PhD was a senior official in the Department of Immigration from the early 1990s to 2007 when he left as Deputy Secretary. He was awarded the Public Service Medal and the Centenary Medal for services to development and implementation of immigration policy, including the reshaping of Australia's intake to focus on skilled migration, slow Australia's rate of population ageing and boost Australia's international education and tourism industries.
Contributions to Pearls and Irritations
Your contribution will fund quality independent comment and analysis in Pearls and Irritations
Contribute
