Coalition ducks and weaves on how universities should make up for lost foreign student income

The Coalition says its plan to cap foreign student numbers at Australian universities will help free up thousands of homes — but has declined to specify how universities should plug the funding gap. 

When approached by Crikey to discuss the matter, education spokesperson Sarah Henderson responded by saying that Australia’s leading research universities have “$45 billion” in assets, and pointed to vice chancellors’ salaries, which she claimed were “often beyond $1 million a year”. 

However, when asked if Henderson was proposing universities should sell off assets or cut salaries, her office denied that was what she meant without providing further clarification.

Labor and the Coalition both claim limiting the number of international students would ease the stress on the housing market — Labor last year told the Department of Home Affairs to slow down student visa application processes beyond a certain cap. That came after the Coalition and the Greens teamed up to oppose a bill that would have placed a limit of 270,000 international students for 2025. 

But the fact Peter Dutton opposed Labor’s bill doesn’t mean he disagrees with its underlying goal. Last week, he announced a pledge to limit international student numbers to 240,000 per year. 

Labor’s Education Minister Jason Clare and Home Affairs Minister Tony Burke reacted to the announcement by calling it a “con” and said their reforms had already caused a 31% reduction in the number of student visa applications.

“Nothing in the Liberal Party’s announcement will stop universities and other education providers from enrolling more international students if they enrol more domestic students,” the ministers’ joint statement said.

During this week’s Sky News debate, Dutton was asked by a man in the audience whether his son’s university fees would go up as a result of the proposed cap. 

“The short answer is no, because what we do as a government is we provide that funding to universities, and obviously, there’s a help scheme where students are paying for part of their own education as well,” Dutton responded. 

Crikey asked Henderson to expand on what the funding was that Dutton was referring to, but her response did not address that question.

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“The government sets the maximum student contributions for domestic students, which are legislated. So universities cannot increase fees for Australian students,” Henderson said. 

“The Albanese government opened the floodgates to record levels of foreign students, which are fuelling the housing crisis.

“The Coalition’s plan to reduce permanent migration by 25% and cap foreign students will free up almost 40,000 homes in the first 12 months.”

She then mentioned the wealth of assets held by the Group of Eight (G8) universities. 

“According to their annual reports, the Group of Eight universities alone hold assets valued at over $45 billion. The G8 took in $5.7 billion in revenue from international student fees in 2023,” Henderson said.

“It is important to remember vice chancellor salaries are often beyond $1 million a year.”

She added that the Coalition policy aimed at supporting “a balanced international student sector in the national interest”.

The G8 universities have warned that caps on foreign enrolments could be “quite damaging” to the sector, because those students pay the majority of fees despite making up a minority of the student body.

University of Queensland, for example, got 72.5% of its student income from international students in 2023, even though nearly two-thirds of students were domestic enrolments. 

“Not only are international students contributing skills to our economy, they’re also funding a large proportion of our national research effort,” G8 chief executive Vicki Thomson told the ABC last year. 

Peak body Universities Australia has warned the caps would “damage” the wider Australian economy as well.

“The proposed cuts would worsen existing challenges for universities and compromise Australia’s long-term ambitions,” chief executive Luke Sheehy said in a statement last Sunday. “Curtailing growth in international education puts at risk our national priorities — from research and innovation to skills development and economic growth.”

Meanwhile, researchers have argued it would be unfair to blame international students for Australia’s housing crisis. 

A University of South Australia study last month found “no link between international student numbers and the cost of rent”, according to ABC News. 

Labor’s campaign did not reply to a request for comment from Crikey.

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