Why not rescue our biggest export?


In 2011 I published an article in the Australian Financial Review and in The Melbourne Review here. With a delicate international economy I asked why is it that the perception Australians were creating of the country was neither accurate nor helping economically or socially.

Why not rescue our largest export?

Recent ABS statistics reveal a drop in population growth from 2.2% to 1.5%.

As natural increase has stayed relatively level, this drop is a result of a dive in net overseas migration – largely from international students. Whilst some may be relieved on the easing of pressure on our infrastructure, is this drop really a good or bad thing for Melbourne and Australia?

Education is Melbourne’s second largest and formerly largest export. It is a larger export earner to Australia than gold, natural gas, wheat, and even beef.  Education is so big that Access Economics equates it to around 1% of GDP; providing around 100,000 jobs to the economy, or about one job for every two higher education students in Australia.

Put another way, for every two international students lost, we lose one Australian job.

Curtin University’s report ‘The Economic Implications of Fewer Higher Education Students in Australia’, showed international education was worth $10 billion to the broader Australian economy.  Roughly 20% of the impact being in retail, 30% on accommodation and 33% on educational fees, with the remainder in day-to-day expenditure.

The fall in offshore applications for all education markets has seen a drop of nearly 23,000 students in 2011. That is 11,500 Australian jobs lost.

If the current drop is not cause for alarm, then the future projections out to 2015 should be. By 2015, some forecasts predict a drop of nearly 70,000 students against future expectations. If this comes true it would mean 35,000 fewer Australian jobs in the broader economy.

Alarmingly, 20% of these jobs would be in retail. That is 7,000 jobs in a sector in dire need of support.

So why are we not strongly fighting to protect this industry?

Rather than being concerned about jobs, for some reason our nation appears so fearful on population growth that we applaud the drop in arrivals without fully understanding the broader economic impact.

Perhaps we feel fluctuations in the dollar are the cause and are hard to control. This is only partially true.

Visa changes, while rightly reducing  the poor quality education product, have also impacted on the high quality education product. By closing the door to the shonky operators, have we over-reacted?

An additional factor is more saddening.

Glenn Withers, the chief of Universities Australia said that the negativity surrounding Australian public debate on population, migration and refugees is “creating an impression that we are not welcoming students or even welcoming visitors.”

These three factors are all coming together in, as a recent Deloitte Access Economics report says , in a perfect storm for the sector.

We must work urgently to alter the two that are in our control.

There is little at the macro level we can do on the dollar, we must work on the visa issues and we must reverse the negative brand image of Australia as unwelcoming.

As global uncertainty envelopes all industries, we must not see the education sector as an isolated victim, rather a strong indicator of threats to the broader economy.

It would be naive to think that negative perceptions of an unwelcoming are only affecting education.

Those involved in business, small, medium and large know that good reputation is critical to form successful business partnerships.  When given a choice, people prefer to do business with people they like. It is human nature.

People, when given an alternative, may not want to do business with us, if we have created an impression that, to put it bluntly, they don’t like.

If the education sector is the canary in the cage, and if the framing of national debate on population, refugees and immigration is portraying Australia as an ‘unwelcoming’ country, there is no doubt this will impact the broader economy and cost Australian jobs. If the estimation of 37,500 Australian jobs being lost by 2015 from the international education effect is true, how many more jobs will be lost in the broader economy if we do not reverse the image impact?

The perception of being unwelcoming derives from the views of some who say multiculturalism has not worked in Australia. They say that a reduction in migration would be a good thing.

Those who say such things are wrong.

We are a welcoming and well functioning multicultural country and we must promote this image to protect our economy, most urgently in the education sector.

Australia has nearly half its population born overseas or with at least one parent born overseas.  Whilst large proportions are from Europe, many are from Asia, South Asia, Africa and all over the world.  Some of the oldest non-indigenous communities are the Afghanis and Chinese who arrived in the middle of the 18th century.

According to surveys we are the world’s second most multicultural nation behind Luxemburg and equal with Switzerland – a land with four official languages and 22 Cantons.

Australia is ranked as the second most liveable country in the world, with Melbourne considered as the second most liveable city with less multiculturalism ALL ranking below us. Multiculturalism, albeit not perfect, has worked and is one of the great selling points for our economy.

So why do we allow an opposite impression to flourish and harm our reputation – and our business?
More discussion like this is in: : 

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