JOHN MENADUE. From little things, big things grow, but problems can arise.

In 1984 the number of international students in Australian was minimal and I found Australian University Vice Chancellors very sceptical about encouraging international students to study in Australia .They feared the displacement of Australian students. But in the Department of Trade we pressed on and now there are almost 700 000 international students in Australia. International education is now our third largest export earner, over $30 b per annum and rapidly rising, year on year.But there are problems

The benefits from our export of educational services have been spread across Australia. It is estimated that each international student spends over $40,000 p.a. in fees and living expenses. Chinese, Indian and Nepalese students represent over 50% of overseas students.  The growth has been extraordinary and is likely to continue.

This spectacular increase in education exports is far beyond anything that we imagined in the Department of Trade in 1984 when we first considered the promotion of international students . As a percentage of total exports they hardly then appeared on the graph.

Education exports are now third after iron ore and coal. Export services are tipped to make us very soon the second most popular world destination for overseas students after the US. The UK is slipping back as will probably the US as a result of the Trump factor

With our export of education services in its infancy in 1984 we examined in the department the reasons for our poor performance in exports generally and how we could respond. We continued to rely on resources booms every decade or so. The inflated dollar had put our manufacturing sector under great pressure. Between 1965 and 1982 we had not created one new job in manufacturing. Our economy as well as our society was insular and inward looking.

Whilst we had a large services sector in Australia, particularly in education and health it was overwhelmingly focused on the domestic market. Our exports of services were very low in world terms. Yet we had world-class education institutions and the middle class of Asia was growing. We were not taking advantage of that opportunity and we compared very unfavourably with educational institutions in the US and UK who were performing much better than we were in expanding their role in our region.

In the Department of Trade we could see clearly that we were missing out and we focused our attention on how we could lift our exports from our well-reputed institutions and particularly our universities. The mindset in our education sector was then overwhelmingly domestic.

In addition to seeing the possible economic benefits of expanded education exports, I also saw increased numbers of Asian students as a way to improve Australians attitudes to Asia. As a student at a university college in Adelaide, I had roomed with students from Malaysia. They changed my attitudes on White Australia and relations with our region. My experience with these and other students who came to Australia under the Colombo Plan was I believe an important factor in helping to transform community attitudes about Asia and  White Australia. Until those Asian students came to Australia there was a fairly widespread view of Asians as poor and unskilled and a threat to our living standards. But the Asian students studying here in the 1950’s and 1960’s were young, well educated, spoke good English and not at all threatening.

So I saw Asian students at our universities and schools as offering both economic and social benefits.

But to get the ball rolling we first had to convince Australian universities about the possibilities of substantially increased Asian students on their campuses. In my autobiography in 1999, ‘Things you learn along the way’, I wrote about my first approach to Australian Vice Chancellors.

‘In the department in 1984, we commenced a study on the export of educational services. After we had completed the study, I spoke at a dinner with 19 vice-chancellors of the major Australian universities in the Scarth Room at the ANU about our thinking and plans for the export of educational services. I outlined ways in which I thought we could promote education services offshore and encourage more Asian students to come to Australia. The Americans and British had been doing it very successfully. We were not serious competitors. With the universities under financial pressure, this was a commercial opportunity for them. It would also transform university campuses and, hopefully, student attitudes towards Asia.

The dinner at the ANU, turned out to be a frost. The vice-chancellors were not impressed with my commercialism. My main critic was Professor Peter Karmel, Vice-Chancellor of the ANU. He had been my mentor from Adelaide University days. We held similar views on most public issues but we didn’t agree on this one. He was upset at commercially exploiting educational services on such a scale. After the dinner, Karmel buttonholed me on my proposal. His concerns also came back to me through an old friend, Frank Hambly, Secretary of the Vice-Chancellors’ Committee: ‘What is Menadue up to in advocating selling overseas educational services in this way?’, he had asked his colleagues.’

You always remember the speeches that don’t go well but in retrospect it helped quicken reform. In the mid-1980s education exports were minimal. They will be  over $30b this year!

The remarkable growth in education services has not been trouble free. With cutbacks in government funding mainly for our universities, institutions have become too dependent on fee-paying overseas students.

The evidence on this is very worrying. Auditor Generals in the states have drawn attention to this heavy dependence particularly on Chinese and Indian students . The NSW Auditor General has told us that two universities in NSW secured over 73 % of their overseas revenue from China alone. The Queensland Auditor General reported that the University of Queensland receives more of its revenue from international students that domestic students. In Victoria 39% of full time fee income comes from international students. Both UNSW and Sydney University have increased their very heavy reliance on Chinese students.

It is unfortunate that the number overseas students from close neighbours ,  Indonesia and Malaysia is so small.

In some cases I think academic standards have been compromised. Students might be forgiven for thinking that if they pay $30-40,000 per annum for a course that they are entitled to a pass!

Universities also do not seem to effectively encourage social mixing of international and Australian students.

We need also to face the prospects that as educational institutions in our region develop, fewer students will come to Australia,

With universities desperate for overseas students  many students have  also seen  a student visa as a back door entry for permanent residence. With international students able to work part time  many have been exploited by dodgy employers.

But in 1984, when I spoke to the 19 Vice Chancellors, I could not have envisaged the dramatic changes that were to come. The seed I sowed with the Vice Chancellors fell on stony ground but it survived and flourished.

Now we need to urgently review the downsides of our heavy dependance on overseas students.

John Menadue was Secretary Department of Trade 1984-86.


John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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8 Responses to JOHN MENADUE. From little things, big things grow, but problems can arise.

  1. R. N. England says:

    I think that what the old vice-chancellors objected to was the subordination of the culture which they stood for to economics. Economics is part of our culture. Our culture isn’t a part of economics. Western economics is deeply individualist, rooted in what Marx famously called “egotistical calculation”. Macro-economics tries to sum these personal interests, forgetting that personal interests are always in conflict. The old vice-chancellors saw universities as engines of the universal culture, spreading it far and wide, ensuring that it thrives well into the future. The interest of a culture is not the same as that of an individual who sees his qualification as a ticket to a higher personal status than his rivals. The old vice-chancellors always hoped that those who sought university qualifications for personal economic reasons would, by accident, become civilised.

  2. Dr Jennifer Grant says:

    With respect, the whole plan of making money out of overseas students was flawed from the start. Very sad to watch the consequences, mostly unintended, over the past thirty years.

    • Philip Ludington says:

      I agree with you Dr. Grant, however it is not just making money out of overseas students that is the problem. Our universities are now heavily dependent on foreign student income to survive, as governments have used this easy cash cow to shirk funding responsibilities under their ideological “smaller government” mantra. Also, academic integrity has been undermined, and sub standard students are graduating, as every faculty member knows that it is unwise to fail a full fee paying student. There are many such shortcomings in the system, however probably the biggest underlying issue is that we have put a large part of the funding of our universities pretty much in the hands of the Chinese government. Being a very authoritarian outfit, they can easily throttle back student numbers if displeased by future Australian government actions, or even stop them altogether if they wish. Not an ideal situation to be in with your third biggest export earner – or with what’s left of your universities for that matter.

  3. Do not forget the ice–breaking role that some of us played pushing the Colombo Plan in the 195os.

    Gregory Clark

  4. Anthony Pun says:

    John Menadue is indeed a visionary for sowing the seeds of Australian Education as an export commodity, which now totaled almost $30b per annum. I was a product of Australian education in the 1960s and John’s experience with Malaysian students creates mutual understanding and in the same way but from an opposite side, I learned much about Australians.
    In relation to the current problems (back door visa & English proficiency), my views have been published in the SMH blog. The main theme is my comment is the exposure of foreign students to our way of life (including politics) and the future influence it may have on them when they return to their country as leaders, is far more valuable then just money. Once they had been a student here, there is a 90% chance that he/she is a friend of Australia and would remember us fondly.

    Story: Universities hit back at criticism of growing reliance on China
    Australia’s immigration policy and criteria is non-discriminatory and if there exists a pathway in the Immigration Act for foreign students to study, find work, and to seek residency, then it is a legitimate opportunity. Australia is an immigrant country (like US, NZ, Canada) and cannot be compared to countries which are not looking for immigrants ie. China & India. Objections to these applications should not be based on race. Australian immigration criteria is tough and for skill migration, applications must possess high English proficiency. My experience in teaching overseas students at Uni indicated that those with poor English can still pass the exam if they understood the subject using their own thought patterns and in their own language. That was in the 1960, and some current crop of students do have grasping problems in English but as they mature in our country, they learn fast. The use of “temporary residents for ‘cheap’ labour” has been discussed elsewhere by Abul Rizvi, a former Dep Secretary of the Immigratioin department (see
    Story: ‘Ticking time bombs’: Unis accused of compromising English standards
    Most comments on foreign students have negative connotations, including those of A/Prof Salvatore Babones but maybe they had ignored the history of the great Australian Colombo Plan of the 1950s where Asian students came to study in Australia. These students came and were exposed to liberal democratic values and when they returned home as served as leaders, some of the Australian democracy principles may be understood better and perhaps adopted. It also gave Australia A1 status in Education in the Asia Pacific regions. The Colombo Plan subsided, followed by flood of Asian students from former British colonies in the 1970-1990. The next wave was from China, which saw Australia as a great provider of western education for their young and they sent them here and now numbering 200,000.. The China Panic, US hegemony & containment of China and the US-China trade war; and now the Hong Kong protesters, all have negative impact on China by the western media starting in Dec2016. In the last 20 years, Australia has prospered economically and China became the largest trading partner. There is double jeopardy here (1) Why do we give up influencing Chinese students to our western values, despite their socialist education? Early Chinese communist leaders were influence as foreign students in Europe. (2) Do you want to further strain the Australia-China policy and lose out economically? By letting thousands of students living here, we have undoubted influence their thinking forever. If these students become residents, it is a gain for Australia, for they can also influence their country of origin. The most acceptable public statement today is “we can be wary of China but we must not be led to war by the US” [added – or go into an economic recession led by the US].

  5. Kien Choong says:

    Ha ha, I am a beneficiary of your policies,

    I see lots of international students in Malaysia three days, and hear very similar. complaints about private sector institutions “bending backwards” to help international students pass their exams.

    That said, I firmly believe Malaysia is better off having international students. If nothing else, it is at least a way for Malaysia to help other countries. If Australia doesn’t want international students, send them to Malaysia!

  6. Chris Borthwick says:

    You might, I think, add something on the downsides; of which one is the cover the overseas student money gave to Australian governments to cut back on their own spending on universities, which has plummeted. The semi-privatisation means that the only responsibility education ministers now have is to exhort V-Cs to live the strenuous life and take lots of cold showers. Liberals enjoy this rather more than Labor, but nobody’s proposing to spend taxpayer’s money on ivory towers.
    And, second, our university sales are largely premised on graduates getting citizenship, which means that we can’t reduce our migrant intake without taking a (cold) bath on uni funding. This means that Treasury won’t support lower numbers lest we enter a technical recession and break the streak. I’m not saying that a high migrant intake is bad, pressures on public services notwithstanding, but I am saying that keeping it up for a reason like this is utterly insane, and not necessarily something you foresaw….
    But in any case, the universities you came up through, and the universities you were pushing in the eighties, were very different creatures from the businesses we have now – and how would you assess the gains and losses? Do you remember, for example, the old Professorial Board?

  7. Why are Indonesian enrolments so low – around 20,000? That’s less than Nepal and Brazil. While waiting for some research here’s a few suggestions:
    Fear. Racist rants in Australia tend to get well covered in Asia.
    Morality: Conservatives worry about their kids getting seduced by our well-publicised ‘free sex’ lifestyle.
    Image: Australia is anti Indonesian – a left-over from the East Timor referendum.
    Visas: Families who want to visit their student kids have to go through a tortuous and expensive visa application process, not imposed on Malaysians and Singaporeans.
    Cost: For the rich, why bother with Oz when European and US campuses carry more prestige?

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