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Australia work rights setup “has become Ponzi scheme”

The way in which international students are afforded uncapped work rights in Australia has “become a bit of a Ponzi scheme”, a leading international education executive has said.

The subcommittee also to discussed the role of agents, and the wider exploitation of workers and dependents at Parliament House. Photo: Pixabay

The subcommittee hearing comes ahead of an expected crackdown

A joint standing subcommittee on foreign affairs, defence, and trade commenced a public hearing between April 18-19 to hear evidence from universities, student accommodation, education agents, and professional bodies about sector recovery and future growth.

Addressing the committee, Phil Honeywood, CEO of the International Education Association of Australia said changes to work rights were fuelling current migration behaviour.

“The former federal government announced out of the blue, not long after they opened the borders, that they are going to allow full fee paying international students to work full time while they were meant to be studying full time, concurrently.

“Clearly in a global community coming out of Covid, this was manna from heaven for a lot of families doing it tough in countries, particularly in our region, where Mum and Dad’s family business in the Punjab or in Kathmandu may have been suffering.

“Suddenly we have this situation in which a Western country is offering Australian dollars with unlimited work rights.

“It’s become a bit of a Ponzi scheme which is attracting the wrong motivation for young people,” Honeywood told the committee.

There have been widespread media reports in recent days of five Australian universities implementing bans of student applications from specific states in India.

The subcommittee hearing comes ahead of an expected crackdown to be announced by the Department of Home Affairs.

Since the re-opening of Australian borders to international students in the wake of the pandemic, the sector is reporting greater abuse of the visa system with significant amounts of students never enrolling or switching to private institutions on arrival.

“Coming out of Covid, this was manna from heaven for a lot of families”

The Department of Home Affairs has cited an increase in fraudulent documents and incomplete visa applications specifically from Indians, resulting in over 94% of applications from India being rejected in February 2023.

“More importantly, many genuine students have also come under mental health pressure from family back home who say,  ‘if you can work 100 hours a week while you study 120 hours a week, then we want you to jump out of the university course and go into it cheaper [with a lower cost institution]’,” Honeywood pointed out.

The issues have been plaguing Australian HE for some time – The PIE recently reported on the trend of students switching courses to vocational or private colleges in order to access unlimited work rights.

Canada has also experienced similar issues of late, with an agent being arrested for forging acceptance letters resulting in many students facing deportation – the real number affected is still unclear.

Genuine education agents in Australia have expressed concerns about the exploitation of vulnerable students by immigration consultants seeking to abuse the Australian visa system.

“There is potential rorting and unethical practices occurring principally overseas”

The subcommittee also discussed the role of agents, and the wider exploitation of workers and dependents in migration trends.

Peter Hendy, who leads Independent Higher Education Australia, discussed how more regulation of agents would be welcome in the sector.

“Our membership collectively have a view that there is potential rorting and unethical practices occurring principally overseas.

“It may not be limited to that, but we do see an issue specifically on the subcontinent with respect to agents that we’re very concerned about,” Hendy asserted.

Honeywood explained that exploitation often happens when international students do not successfully integrate with wider society, instead remaining in shared accommodation, word-of-mouth jobs roles, and with support from advisers who have ulterior motives.

He also noted that another danger lies in swinging from one end of the spectrum to the other through a possible overzealous response from the government.

“If we go from black to white, from uncapped to suddenly capped work rights, it’s going to create a whole range of issues, such as students not being able to afford their tuition fees,” he explained.

Victoria University, Edith Cowan University, the University of Wollongong, Torrens University, and Southern Cross University are all reported to be among the institutions now imposing bans by perceived regional visa risk.

Communications previously seen by The PIE reveal that the Indian states of Punjab and Haryana were seen as the highest risk by Edith Cowan University and subject to an institutional ban from application. 

Australian media has also focused on the alleged abuse of the immigration system in recent days, with the Financial Review calling it “a mockery of the system” and The Sydney Morning Herald signalling a ‘crackdown on bogus applicants”.

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