Australian education export

As far as Australia economy concerns, education is the third largest export contributing AUD 14 billion a year according to 2007-08 statistics from ABS, following coal and iron ore.

Recent government's call to end the "study-residency" link is likely to temper the third largest earner for Australia economy. If handled carelessly, it will have significant long term impact.

All of this started from a series of attacks on Indian students in Melbourne and a handful of dodgy education providers tarnishing the industry.
As a result, government called on radical changes to protect the reputation of Australian education industry.

In brief, government officials proposed that international students should be forced to return home and wait two years before being allowed to apply for permanent residency in Australia.

They claimed that this will decouple the link between study and permanent residency. This does sound like a probably outcome if implemented. However, this is also likely to cost Australia billions of export dollar.

Let's leave the debate about the rationale of the proposal aside and focus on the fundamentals.

The reason why so many international students are fond of Australia being their preferred education destination is largely because of the "study-residency" link.

Many will argue that Australian education attracts international student because of the quality of education provided here. I won't argue. But instead I would like to ask:

"how well does it compared with countries?"

At least for those international students I knew of had clear intention of using education as a mean of obtaining residency.

So decoupling such link is likely to mean significant reduction in interest amongst prospective international students.

It is not difficult to imagine what this will do to the education industry.
The story does not end here. There will be ripple effects.

The reduction in international student enrollment will mean less demand for student related services e.g. accomodation.

A potential weakening demand especially in areas surrounding universities may lead to weakness in pockets of the residential property markets. This may well manifest itself into a broader market since many experts attributes growth in immigration being one of many reasons underpinning Australian property market.

Obviously good news for some bad news for others.

Of course, all is at best hypothesis at this stage. Nothing is set in the stone yet.

However, often perception alone can become self-fulfilling and manifest itself to cause the same effect even if the proposal remains proposal.