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International student expenditure in WA drops by $761m in 2020

Expenditure by international students in Western Australia declined by $761 million in 2020 when they contributed $1.34 billion to the state’s economy, a fall of 36% compared to 2019, research has revealed.

The WA economy is expected to contract by $527.9 million in 2022 if borders remain closed, the research suggested. Photo: Unsplash

For each international student enrolled at a WA education institution, the state's economy benefited by $48,608 in 2020

The total loss of economic output from a 6.5% decrease in international student enrolments at institutions across the state was equivalent to almost 20% of the total output from the hospitality industry in the 2020 financial year.

The results are the findings of a StudyPerth report, which also found that 2020 was the first time since 2014 that total WA international student enrolments were below 50,000 – with institutions recording 49,681 international student enrolments.

The research, conducted by ACIL Allen, will assist StudyPerth in strengthening the state’s recovery “by detailing the scale and the channels through which international education in Western Australia helps grow the economy and create jobs”, the association said.

The report also warned that the WA’s economy will contract by $269.7m in 2021 due to labour shortages stemming from borders being closed to international students. It will be even greater in 2022, when the full year impact with reach $527.9m, it estimated.

The report estimated the direct contribution of international students to the WA economy in 2020 was $373m, while indirect contributions were $971m.

“Overall, it is estimated that expenditure by international students contributed $1.34 billion to the WA economy in 2020, a decline of $761m (36%) compared to 2019,” the paper read.

For each international student enrolled at a WA education institution, the state’s economy benefited by $48,608 in 2020, the report noted, with each dollar spent by a student generating $3.60 in value added across the WA economy for the year.

Expenditure by international students in 2020 directly supported 2,701 full-time jobs, and a further 4,835 were created indirectly, the research found.

“It is estimated the decline in international students resulted in 4,399 fewer direct and indirect jobs”

“It is estimated the decline in international students resulted in 4,399 fewer direct and indirect full time equivalent jobs supported by the international education sector compared to the previous year,” it read.

“To put this into perspective, the lost full-time jobs from the decline in international student numbers in Western Australia in 2020 was equivalent to more than 12% of all full-time jobs in the state’s hospitality sector last financial year.”

Expected declining student numbers in the state over the next few years “extends beyond the reduced levels of spending in the economy”, StudyPerth noted.

“International students are also a valuable source of labour for critical industries, including in hospitality, retail, administrative support and education and training,” it said.

“The reduced supply of labour to these sectors has economic consequences to Western Australia, particularly in the current environment where labour and skills shortages are becoming more pronounced.”

Other benefits of international students that stakeholders highlighted in the report include their impact on the cultural life of cities and the “vibrant role” they play in Perth’s cultural and entertainment precincts, the links they allow with leading international networks, the vital research they undertake, as well as the ambassadorial role students play both “within Australia and internationally”.

“International education was identified by the WA government as a key component of its plan to grow and diversify the state’s economy,” said StudyPerth chief executive officer Philip Payne.

“The benefits of welcoming an increasing number of international students to WA go well beyond the purely economic”

“Sadly, the pandemic has led to the plan being shelved, until international students can be welcomed back to the state.

“While the financial impact of international education is significant, the benefits of welcoming an increasing number of international students to WA go well beyond the purely economic.”

In addition to the diversity and cultural richness they bring, international students help build the state’s links and relationships with other countries, especially trade partners, Payne continued.

“This report highlights the continued contribution of international students and, crucially, the implications for the sector, the economy and the community more broadly if borders remain closed to international students.”

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