Overseas students are driving rapid population growth

Foreign students are contributing more to Australia’s excessive population growth in the capital cities than any other group of migrants. A new report warns that universities are driving the expansion in numbers from overseas and that young Australians are suffering.

In a study that breaks new ground by exposing the role of universities as national population boosters, Australian demographer Dr Bob Birrell notes that overseas students now account for 44% of net overseas migration.

Over the six years to 2018, foreign students holding higher education visas were by far the largest factor in Australia’s rapidly rising population, Birrell’s research has found.

Writing in The Australian Population Research Institute, Research Report, Birrell says that overseas students who obtained permanent visas during that time were the largest contributors to population growth in the inner cities of Sydney and Melbourne.

In fact, the student numbers jumped from 25,700 in 2011-12 to almost 105,000 in 2017-18, a startling rise of nearly 80,000.

“[Without] the increasing contribution of overseas students, Australia’s net overseas migration would actually have declined to around 150,000,” Birrell says.

“Falls in migration from New Zealand and those holding temporary work visas were swamped by the rising tide of overseas students.”

Widespread debate

Debate among Australians centres on the continuing population rises and who is responsible for the overcrowding in the big capital cities, where rapid population expansion is forcing people to live further and further from the centre and from their workplaces, the building of schools and hospitals cannot keep up with demand, where traffic becomes so dense that travel times increase markedly, and where public transport becomes so overcrowded that commuters end up having to wait for the next trains because they can’t board the one they want.

In the case of Melbourne and Sydney, neither the state governments nor the local councils are able to meet all the demands of the citizens. Birrell says in both cities the major factor in the population growth is the rapidly rising number of foreign students – although their impact tends to be localised and is concentrated in the inner city areas.

The federal government announced plans to reduce the impact of overcrowding on Sydney and Melbourne by diverting some migrants with permanent visas to regional areas.

But Birrell says the debate has focused on the permanent resident component when “the far more important size of the overseas student component has barely rated a mention”.

Yet it is these students who are the largest contributors to population growth by far in inner Sydney and Melbourne.

Birrell says most commentators believe that because Australia’s permanent entry migration programme is set at 190,000 a year, this must be the main source of the rising migrant population.

“It is not,” he says. “Nearly half of those receiving a permanent entry visa in 2016-17 were already residing in Australia when granted the visa. As a consequence, they are not included in the count of migrant arrivals.

“The result is that overseas students are far more important contributors to Australia’s population growth than the net inflow of permanent entry visa holders.”

Birrell says the seeds of the problem were laid in the early 2000s when the then coalition government, partly in response to universities lobbying, first allowed – and encouraged – overseas students to apply for permanent residence after completing their courses.

“The universities thought that this would promote overseas student enrolments, thus providing them with another source of revenue. It was the start of the slippery slope to the current extraordinary degree to which universities are dependent on the fee revenue from overseas students to finance their operations.”

According to Birrell, foreign students have also become far more important to university revenues because of the high fees they pay, up to AU$40,000 (US$28,000) a year.

Overseas students ‘prioritised’

The result, he says, has been that the institutions “have prioritised the recruitment of overseas students over domestic students because of the much higher fee revenues”.

In the five years to 2017, the share of commencing overseas students compared with the total number starting in Australia’s universities grew from less than 22% to almost 29% overall – and in the Group of Eight top universities the ratio has hit an astonishing 40%.

Across all universities the number of overseas students grew from 304,000 to 487,000 in that period, compared to a 15% rise in the number of domestic students, from 831,000 to 958,000.

Catriona Jackson, CEO of Universities Australia, defended the rise in international students.

“International education is about strengthening Australia’s ties with our region and being part of the global community. When international students choose to study in Australia, they build relationships with our students and our country that last a lifetime,” she said.

“We welcome international students from across the globe and equip them with a world-class education. Along the way, they develop a strong affection for Australia.

“International students also have similar levels of success and completion to domestic students when it comes to their studies.”