In recent years, international students have become an easy target for various societal issues in Australia, from housing shortages to job market pressures. However, this narrative overlooks a crucial fact: the vast majority of international students do not stay in Australia permanently. This misplaced blame not only distorts public perception but also risks undermining the significant economic and cultural contributions these students make to Australian society.
The reality of international student retention in Australia is far from the popular narrative. According to various reports and studies, only about 16-18% of international students transition to permanent residency after completing their studies. This means that over 80% of international students return to their home countries or move elsewhere after graduation. The concept of 'permanently temporary' migration, as noted by Emeritus Professor Peter McDonald from the ANU Migration Hub, is largely a myth when it comes to international students.
Despite this, recent policy changes suggest a misunderstanding of these dynamics. The Australian government's decision to cap new international student enrolments at 270,000 for 2025 appears to be based on concerns about population growth and pressure on services. However, this approach fails to acknowledge that the majority of these students will not contribute to long-term population growth.
The Grattan Institute's report provides further insight into the challenges faced by those international graduates who do attempt to stay. Less than one-third of temporary graduate visa holders transition to permanent residency, down from two-thirds in 2014. Of those who remain, many struggle to secure full-time employment in their field of study, with half earning less than A$53,300 a year. These statistics hardly paint a picture of international students as a burden on the Australian job market or social services.
Moreover, the focus on limiting international student numbers overlooks the substantial economic benefits they bring. International education is one of Australia's largest export industries, contributing billions to the economy annually. In 2022 alone, international students contributed $25.5 billion to the Australian economy. This economic injection supports jobs, funds research, and enhances the quality of education for domestic students as well.
The cultural enrichment that international students bring to Australian campuses and communities is equally valuable. They contribute to the diversity of ideas, perspectives, and experiences that are crucial for a globally competitive workforce and a multicultural society. By fostering international connections, these students also play a role in Australia's soft diplomacy, building long-lasting relationships that benefit the country's international standing.
Instead of scapegoating international students for complex societal issues, Australia would be better served by addressing the root causes of these problems. Housing shortages, for instance, are more closely linked to planning policies, investment patterns, and domestic population movements than to temporary international residents. Similarly, job market pressures are influenced by a wide range of factors, including economic policies, industry trends, and technological changes.
The Reality of International Students in Australia: A Temporary Journey
The perception that international students flood the Australian labor market or overstay their welcome is far from the truth. According to the Australian Bureau of Statistics, a mere 2% of international students studying in Australia on a student visa apply for a work visa or permanent residency after completing their studies. This figure starkly contrasts the popular narrative that most international students are angling to secure long-term residency in Australia.
Several factors explain why the vast majority of international students return to their home countries once their studies are complete. Family ties, cultural differences, and better career opportunities back home are among the primary reasons. Many students view their time in Australia as a temporary period to gain valuable education, after which they return to their home countries armed with qualifications and skills that can boost their careers. This movement reflects the transient nature of international student migration.
Despite this, a small percentage of students do remain in Australia. Between 16-18% of international students transition to permanent residency after their studies. These individuals often stay in the country through skilled migration programs, filling critical gaps in sectors such as health care, IT, and engineering, where Australia faces skill shortages.
The Myth of 'Permanently Temporary' Migration
A significant misconception surrounding international students in Australia is the belief in the so-called "permanently temporary" status—that students linger in Australia on temporary visas for years, never quite leaving but also not securing permanent residency. This idea has been debunked by experts such as Emeritus Professor Peter McDonald of the ANU Migration Hub. In his research, McDonald highlights that few international students remain in this limbo for more than ten years, dismissing the myth of 'permanently temporary' migration.
McDonald’s findings align with broader trends in migration. While some students extend their stay through work visas or additional studies, the vast majority do not. Most who remain transition to permanent residency through skilled migration pathways, which Australia has long relied upon to address its labor market needs. However, even the skilled migration pipeline has seen significant changes, particularly with the government’s recent announcement to cap international student enrollments.
Capping International Student Numbers: A Response to Growing Concerns
The Australian government has announced plans to cap new international student enrollments at 270,000 by 2025. This move is part of a broader strategy aimed at managing population growth and addressing concerns about the pressures placed on public services and infrastructure. For many Australians, this cap represents a solution to the perceived challenges associated with a high influx of international students.
Yet, the Grattan Institute's recent report highlights that this cap may be addressing the wrong issues. According to the report, less than one-third of temporary graduate visa holders now transition to permanent residency when their visa expires, down from two-thirds in 2014. The report further notes that one in three international graduates return to further study—often in vocational courses—once their visa expires, prolonging their stay in the country temporarily.
Crucially, the report underscores the fact that only half of these graduates secure full-time employment. Many of those who do find work are employed in low-skilled jobs, with half earning less than AUD 53,300 annually, compared to one-third of all graduates. These findings challenge the assumption that international students pose a threat to local workers or dominate high-paying jobs.
Economic Contributions of International Students: A Critical Asset
While the debate over the long-term presence of international students in Australia continues, their short-term contributions to the Australian economy are undeniable. In the 2023-24 financial year, international student expenditure contributed AUD 50.5 billion to Australia’s exports, making education the country’s fourth-largest export industry. This expenditure includes not only tuition fees but also spending on accommodation, food, transportation, and other services.
International students also play a crucial role in key sectors of the economy, such as hospitality, tourism, and retail. Many international students work part-time jobs, filling essential roles in industries that have long struggled with labor shortages. In fact, during the COVID-19 pandemic, international students became lifelines for businesses facing dire staffing challenges.
In addition to their direct financial contributions, international students help sustain the educational infrastructure of Australian universities. Tuition fees paid by international students allow universities to invest in research, facilities, and academic programs that benefit all students—both domestic and international. Reducing the number of international students through restrictive caps could threaten the financial stability of many institutions and diminish the quality of education offered across the country.
Addressing Misconceptions: International Students Are Not the Problem
The prevailing narrative that international students are responsible for Australia’s economic and social woes is misplaced. Rather than overwhelming public services or taking jobs from locals, most international students come to Australia for a temporary period to gain a high-quality education. Upon completing their studies, the vast majority return to their home countries or move elsewhere, contributing to Australia’s global reputation as a world-class destination for education.
For the minority of international students who do stay, their presence is often a boon to the Australian economy. Skilled migration pathways allow Australia to retain top talent in sectors where local labor is insufficient, contributing to the country's innovation and growth. Moreover, international students often work in industries where employers struggle to find local workers, filling essential roles that might otherwise go unfilled.
The current push to cap international student numbers, while politically popular, risks undermining the very fabric of Australia’s thriving education sector. Rather than focusing on restrictive policies, the government should aim to maintain a balanced approach that recognises the valuable contributions of international students while addressing legitimate concerns about infrastructure and services.
Looking Ahead: Striking a Balance Between Growth and Regulation
Australia’s relationship with its international student population is at a crossroads. The debate over capping student numbers and restricting migration reflects broader concerns about population growth, housing, and infrastructure. However, it is essential that policymakers strike a balance between regulating the flow of international students and preserving the benefits they bring to Australia.
One potential solution is to refine visa pathways for international students, ensuring that those who wish to stay in Australia permanently are meeting the country’s labor market needs. This approach could help alleviate concerns about overpopulation while still allowing Australia to attract top talent from around the world. Similarly, by investing in housing, public transport, and other infrastructure projects, Australia can better accommodate both international students and the growing population.
In the end, the conversation about international students in Australia should not focus on blame or restriction but on opportunity. International students are not the root cause of Australia’s economic challenges; rather, they are an integral part of its solution. By fostering a welcoming and well-regulated environment, Australia can continue to benefit from the talents, skills, and contributions of international students while ensuring a sustainable future for all.
It's time to shift the narrative away from blaming international students and towards recognising their positive contributions. Policymakers should focus on enhancing the experience of international students while they are in Australia, improving pathways for those exceptional graduates who could contribute significantly to the country's skill needs, and ensuring that the benefits of international education are maximised for all Australians.
By acknowledging the temporary nature of most international students' stay and the value they bring, Australia can maintain its position as a leading destination for global talent while addressing domestic challenges more effectively. This balanced approach will not only benefit the education sector but also contribute to a more informed, fair, and prosperous Australian society.
