Australia’s Great International Student Market Illusion, By Paul Walker
The great international student market illusion in Australia boils down to this: what policymakers and universities tout as a booming $50+ billion "export" industry is largely a statistical mirage, masking a system that functions more as a population replacement pipeline than a genuine export earner.
Leith van Onselen's Macrobusiness.com.au piece from late last year, dismantles the Australian Bureau of Statistics (ABS) headline figure of $51 billion in education exports for 2024, which combines student spending on tuition (~$20.6 billion) and goods/services (~$30.2 billion). This number has been celebrated as Australia's fourth-largest export, propping up university budgets, government narratives on economic growth, and migration policies.
But as van Onselen highlights — and recent data confirms — the figure is wildly exaggerated for structural reasons:
The Export Illusion Exposed
1.Local Earnings Inflated as "Exports": International students earn substantial wages in Australia, which they then spend locally. The Reserve Bank of Australia (RBA) estimated $13.4 billion in earnings for 2023-24, with students working roughly three-quarters the hours of the average working-age Australian (around 15 hours/week in 2024, up from pre-pandemic levels). Many from India and Nepal participate at higher rates, often in gig economy roles (Uber Eats, delivery) that were under-captured until the Sharing Economy Reporting Regime kicked in mid-2024. Experts like Salvatore Babones argue these figures are conservative due to under-the-table cash work.
A December 2025 ABS technical note admitted the flaw: roughly one-third of recorded "education export" spending stems from wages earned domestically — money that never enters as foreign exchange but is recycled internally. The ABS' methodology treats all student spending as an export under Travel services, regardless of funding source, leading to overstatement.
2.Remittances as a Hidden Import: Much of what students earn flows out as remittances to home countries. World Bank data pegged net remittance outflows from Australia at ~US$10.1 billion (~A$15 billion) in 2024, with India as a top recipient (US$4.8 billion from Australia alone). Indian and Nepali students frequently cite work rights as a key draw (over 90% for Indians per Jobs & Skills Australia), and many send money home — directly offsetting the "export" gains.
3.Net Impact: Demand Over Supply: The RBA's July 2025 Bulletin notes international students add more to demand (housing, food, services) than supply (labour), though the gap narrowed post-pandemic. Many students struggle financially: reports from ABC, SMH, and Allianz highlight reliance on food banks, with University of Sydney's FoodHub seeing 93% international users in 2024 amid cost-of-living pressures. Up to 78% from low-income countries depend on paid work as primary income, often working multiple jobs at the expense of studies.
In short: The "export" revenue is partly circular (local wages spent locally) and partly leaked (remittances abroad), while students compete for entry-level jobs with young Australians and strain housing/infrastructure.
The Real Game: Population Replacement via Student Visas
Australia's low fertility rate (~1.6 children per woman) and ageing population mean natural increase barely sustains growth. Net overseas migration (NOM) fills the gap — and international students are the primary vehicle.
In 2024-25, NOM fell to 306,000 (down from peaks of 500k+ post-COVID), with temporary students still a major driver (~157,000 arrivals).
Many transition to skilled visas or permanent residency: Around 30% of former students apply for temporary graduate visas, comprising ~one-third of permanent intake in recent years.
Policies under Albanese (e.g., Australia-India agreements on education, mobility, qualifications recognition; lowered risk assessments for Indian visas) actively boost inflows from high-remittance countries like India (second-largest source, record enrolments in 2025).
2026 projections: Student commencements rise to 295,000 places, with tighter integrity checks but continued emphasis on "sustainable" growth.
This isn't accidental. The student visa program serves as a backdoor migration channel — attracting young workers from Asia (especially India/Nepal) who study briefly, work extensively, and often stay via skilled pathways. It offsets demographic decline, fills labour shortages (hospitality, retail, gig economy), and boosts university revenue, while the "export" label justifies the scale.
Critics argue this creates a dependency loop: High migration sustains GDP figures and university funding, but exacerbates housing shortages, wage suppression in low-skill sectors, and social pressures. Genuine education exports (e.g., online/distance learning) exist but pale beside the onshore model.
Bottom Line in 2026
The international student "boom" isn't a clean export triumph — it's a subsidised population import dressed up as one. With NOM moderating but student pathways expanding, Australia continues replacing ageing locals with temporary-turned-permanent migrants. The illusion persists because it serves powerful interests: universities get fees, governments get growth stats, businesses get cheap labour. But for young Australians facing job/housing competition and taxpayers footing infrastructure costs, the "great export" looks more like a costly demographic fix.
If the goal is true economic gain, reform should focus on genuine foreign-funded education — not using students as a migration workaround. Until then, the numbers will keep looking shiny, while the reality stays strained.
