Madeleine King jetted off to Japan this week. Her third visit as federal resources minister to one of Australia’s most essential trade partners.
There to underscore the closeness of the relationship, her central message was that Australia will continue to be a reliable shipper to Japan of LNG, iron ore and coal. Those things generated a combined $99 billion in revenue in 2022-23.
“We will not let Japan down. We will help keep the lights on,” she promised.
King’s assurances didn’t make headlines in Australia, but they are taken very seriously in Japan, which forecasts a steep surge in its energy needs over the coming decade as the resources-poor industrial giant embraces power-hungry artificial intelligence and data-hub revolutions.
Which is why the prospects at the next election of a Labor-Greens-Teal minority government hostile to Australia’s gas export industry is concentrating minds across Japanese industry and government.
King’s visit is an example of the care with which both sides of politics usually take to protect and nurture the resources sector. As they should.
Which is why the current parliament’s apparent rush to smash another export giant — one that generates more direct jobs than the resources players do — is so baffling.
Shocking even.
Partly born of a scare campaign over how to handle a post-pandemic recovery in immigration numbers, the government’s solution is to hit universities with mandated limits on how many fee-paying foreign students they can accept.
This is like punishing ice cream makers for brain freeze.
Because the government is reluctant to address the rise in immigration numbers by reforming skilled migration, another idea that would have hurt businesses screaming for workers, they opted for hitting politically-unloved universities.
Normal logic up-ended
Universities, we’re told by both sides of politics, brought this upon themselves by becoming addicted to foreign income. Instead of maintaining their status as bastions of elevated learning, they’ve prioritised the business of education and are led — shock horror — by people who think of themselves as chief executive officers.
Another charge is that they have compromised standards in the rush to pass foreign students.
Many of these criticisms are valid, but it’s not clear the student caps will fix these things.
Standards should be addressed head-on. Some courses are likely used as a sham migration pathway.
Skilled immigration needs to be managed better, says pretty much everyone. But loading the fix on universities smacks of scapegoating.
And just when did we decide that being a successful global market player is now a problem?
Education Minister Jason Clare. (ABC News: Matt Roberts)
As the Senate considers Education Minister Jason Clare’s reforms, one can’t shake the sense that the caps are a grievous act of economic self-sabotage. They undermine Australian universities competing against attractive offerings in the UK, Canada and US.
Limiting how many fee-paying foreign students each university can enrol up-ends the normal logic of government intervention.
It’s akin to telling a baker how many loaves of sourdough she can sell, and to whom and when, even as demand is strong.
Prior to the pandemic, education was the fourth-biggest source of export income, according to DFAT data, earning the country $37.8 billion in 2018-19.
Only natural gas, coal and iron ore brought in more (at $50 billion, $70 billion and $78 billion respectively).
If progressive and younger voters have their way, those high carbon emitting exports will eventually be extinguished.
What, pray tell, should take their place?
A robust globally competitive education sector should be near the top of any answer. Particularly if we’re to create a future — as many seem to be demanding — that is less reliant on “dig it and ship it” industries.
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States will be watching the numbers
While the government continues to defend its caps, there is a growing backlash underway, including from within.
Labor-run states and their treasurers struggling with large budget deficits have particular cause to be aggrieved by the federal government’s anti-growth agenda on education.
In 2023, tertiary exports brought in $17.9 billion for NSW, equivalent to 13 per cent of the state’s foreign income, according to Universities Australia calculations based on ABS data.
In Victoria, the proportion is even larger, at 23 per cent, or $14.9 billion. In South Australia, it’s 14 per cent and in the ACT a staggering 57 per cent.
All are Labor states, and all will have noted warnings from the Reserve Bank of Australia that the caps could hurt their economies.
Analysts estimate they could trigger a 40 per cent drop in education exports that would shave 0.7 percentage point of economic growth next year. For context, gross domestic product growth was 1.5 per cent in 2023-24.
Criticism from the sector is getting louder. Privately there’s a view that Clare is too focused on equity issues and ensuring secondary and primary schools build the foundations that will lead kids to higher education.
Though worthwhile, this means he’s missing a more “rounded focus” on universities, some argue.
Foreign students deliver more revenue per head than locals do. Already, vice chancellors are cutting jobs and cancelling courses.
Former Victorian premier and now chancellor of Victoria University Steve Bracks gave the federal education department’s top bureaucrats both barrels this week at an annual university governance conference in Melbourne.
An “absolute debacle”, Bracks said, according to attendees.
University leaders fear governments are planning more interventions, instructing them on how their councils are constituted and the courses they should offer.
Whether those reforms achieve their goals is a question for the future.
The idea that limits on foreign students will somehow fix Australia’s housing shortage is close to delusional.
The rush to fill those empty student dorms and city studios with families looking for permanent homes will no doubt be overwhelming.
Higher education policy is a complex space. It deserves better.
