Australia’s international education sector should be a global powerhouse, but there is instead a story of squandered promise. This is a story that can be changed, but only if governments and sector leaders are willing to confront some uncomfortable truths and act decisively. The sector has enviable legacy, institutional depth and the geographic advantage to lead the world.
However, Australia also has a very compelling record where policy choices are made that demonstrate a profound confusion and misunderstanding over how to regulate a sector that is simultaneously based on market principles while being socially‑embedded and heavily driven by business and not the public sector.
In the early 1990s the sector was a human‑centred project that evolved into a quasi‑market, thus entering a phase of slow, steady and relatively healthy expansion through public institutions and a smaller number of independent institutions.
These institutions cautiously built capacity, with fee‑paying students diversifying revenue without capturing institutional strategy. Numbers grew, and policy guardrails attempted to keep an alignment of educational, diplomatic and social goals. The sector was shaped by market forces while not being captive to them, proving that balanced expansion was possible when policy supported it.
But after a brief period, international education in Australia came to be treated as a quasi‑market, regulated through mechanisms seeking command‑and‑control structure over both demand and supply.
As a result, it quickly became an inherently dysfunctional market for institutions, students and business. This kind of regulatory model is confused and inherently unstable. It neither trusts the market enough to allow genuine, responsible adjustment, nor offers sufficient oversight to prevent exploitation and perverse incentives.
Consequently, the sector suffers from permanent cycles of boom and bust: substantial growth, political panic, then ad‑hoc regulatory tightening, with collateral damage to students, providers and business.
Governments attempt to pull levers on student numbers, visa categories and provider behaviour as though they are managing a state‑owned utility, not a complex ecosystem of public institutions, independent institutions with different regulatory constructs, agents, landlords and employers all responding to different price signals. This is a model doomed to fail from the outset.
It is a structure that neither trusts the market enough to allow genuine innovation and adjustment, nor offers effective enough oversight to deter exploitation without damaging genuine institutions. In trying to do both, it does neither well.
Overlaying this has been an obsessive focus on the dollar value of international education, that is, on the dollar value of international students. For years, the sector has been lauded in terms of billions contributed to GDP. This is of course not the least bit trivial for Australia and our economy. But by placing it as the foremost benefit and relegating the socio‑cultural and foreign relations gains to the margins, Australia has effectively commodified what is a sector based on human benefits.
Students are not line items in trade statistics, they are neighbours, colleagues, future leaders and long‑term partners in diplomacy. Policies designed with the export figure as the primary success metric will, inevitably, treat international students as a commodity. And students and their families notice.
Once commodified at a political level, it is unsurprising that the sector became fertile ground for non‑genuine actors outside the formal education system. The rise of visa mills, unscrupulous agents, and rent‑seeking intermediaries was not an accident.
These things are almost inevitable consequences of a regime that places a high price on international students, celebrates their financial contribution above other contributions they make, and leaves gaps in enforcement.
The fallout has been severe: provider closures, job losses, reputational damage, and a palpable decline in Australia’s international standing as a study destination. Trust, once lost, is hard to regain.
So how do we correct this course which is so embedded?
First, government must reset the policy narrative. International education needs to be framed explicitly as a strategic good for the nation. That is, the sector is part of Australia’s strategic export priorities, a key aspect of Australia’s foreign policy, and a core social project.
Doing these things means redesigning the way Australian governments and their agencies think about regulation and investment with three equally weighted objectives in mind. Educational quality. Student experience & wellbeing. Strategic Growth.
Second, regulatory architecture must be modernised to match a complex market-based structure of the international education landscape. Australia needs clear, stable rules that protect students and integrity without micro‑managing provider behaviour. This requires sufficiently nuanced focus rather than broad-based clampdowns that result in regulatory deadweight with little to zero benefit.
A key feature must also be an industry-driven oversight mechanism of education agents, better coordinated and far more transparent student visa settings as well as more coherent and modern settings across immigration and employment.
Third, Australia’s student visa pricing should be brought back into a more competitive positive when compared with competitor nations. Charging the level of Australia’s premium of student visa fees is only defensible if the lived student experience is at a commensurate premium above competitive nations. While Australia is a top-level destination, it is a not a 300% level better destination.
Finally, there must be honest, sustained collaboration between governments and sector stakeholders. The current pattern of reactive policy, short or non-existent consultation and fragmented implementation must be shelved and make way for a new shared, long‑term strategy that views international education as a social, diplomatic as well as economic institution.
A new strategy must articulate how Australia can skill our region, drive innovation and growth alongside partners and domestically and ensure international education is an embedded part of the Australian narrative. A strategy must see us grow, not shrink.
For Australia’s international education sector to become a genuine global powerhouse, a deliberate move away from commodification is required. Governments must treat domestic and global stakeholders with respect. This is a sector that demands a shift from confused regulatory control mechanisms to intelligent, principled regulation, led by a genuinely long‑term vision.
Felix Pirie will discuss these issues and more at The PIE Live Asia Pacific (28-29 July) in the session ‘Room 101: what would you change about the industry if you could?’. View the full agenda here.
