Speaking to The Daily Telegraph, sources suggested that the government is considering including these policies in its migration strategy, set to be released in the next month.

They also indicated that international students would be taxed under the new policies, a proposal featured in the Australian Universities Accord Interim report released earlier this year.

However, CEO of IEAA Phil Honeywood has confirmed that there will be no cap on student numbers.

The idea of a levy on international student fee income has been rejected by all but three universities and was referred to as a “spiky idea” by the education minister, Jason Clare. Initial reaction from the sector up to this point has suggested that the government would not go ahead with a levy but no announcement has yet been made by Canberra.

Along with the migration strategy, the government is set to release its final Australian Universities Accord report in December. Ahead of the publication of the two reports, there was speculation as to what the government is planning.

In the year up to June 2023, 590,304 student visa applications were lodged, with India accounting for 109,676 and China for 95,561, government statistics show. A total of 577,295 were granted.

There were 568,753 study visa holders in the country as of June 30, up from 357,919 the previous year.

Directors from the Grattan Institute have blamed Australia’s accommodation shortages largely on immigration – a trope that international educators worldwide have found themselves dealing with in recent years.

They said the government should raise student visa fees to “discourage students intending to complete cheaper, low-value courses from coming to Australia” rather than apply a levy to international student fee revenues. Additionally, raising student visa application fees from $710 to $2,500 would raise some $1 billion a year which could fund support for vulnerable renters.

Authorities in the UK raised fees for the Immigration Health Surcharge and visa applications as part of a package to raise over £1 billion to fund public sector pay rises earlier this year. The 65% fee hike in the Immigration Health Surcharge during a cost of living crisis is already known to have hit talented but less well off international students in the UK.

The Grattan Institute’s analysts claim that the visa fee hike to $2,500 would not discourage talented students from choosing to study at one of Australia’s top universities as they “already pay upwards of $150,000 for a bachelors’ degree”.

However, such a policy is expected to limit access to higher education, especially among students from less privileged backgrounds.

Local media in Australia has suggested that the country is following Canada’s lead in considering limiting the number of student visas it grants.

Sector stakeholders in Canada have also said that a cap would be difficult to coordinate or enforce. They have – like in Australia – emphasised that accommodation shortages are not a problem across the entire countries, but largely limited to major cities.

The Student Accommodation Council in Australia urged the government to rule out tax on international students, saying that the “short-term thought-bubble” ignores the reality of the nation’s housing supply deficit.

“Australia needs to be a magnet for global capital and the best and brightest from around the world,” Property Council Group executive for policy and advocacy Matthew Kandelaars said.

The international student levy would “have far reaching effects in the Australian economy”, impacting the industry that was worth $40 billion pre-pandemic, he said.

Kandelaars said that focus should be on housing students rather than taxing them, with purpose-built student accommodation offering a “strong pipeline of beds”, taking nearly 80,000 people each year out of the wider residential rental market which in turn reduces demand and eases affordability.

“Instead of imposing taxes on students who contribute significantly to our community, the government should work with industry to expand the supply of this housing category as a priority.

“Planning approvals, removing taxes like foreign investor fees and planning systems that prioritise student accommodation close to places of study should all be a top priority for policy makers,” he said.

Stakeholders have previously highlighted that local government planning rules can be limiting for housing providers, with federal MP for Bruce and co-chair of the Parliamentary Friends of International Education in Australia, Julian Hill, saying during AIEC in Adelaide, “It is ridiculous to blame international students for the country’s housing crisis.”

“It’s important that we have a strong pipeline of new PBSA assets in Australia to ensure our vital international education sector can continue to grow, and our CBDs are given a leg-up in their recovery,” Kandelaars added.

The Independent Tertiary Education Council Australia has also called on Canberra to “unambiguously rule out” a tax for international students.

“The case for the international student tax has not been made,” said Troy Williams, ITECA chief executive.

The Australian Universities Accord Interim Report failed to detail exactly what the funds generated by a tax would be used for, ITECA suggested.

“Like many other countries, Australia has established itself as a global education hub, attracting students from all over the world. Imposing a tax on the fees these students pay for their education could make Australian education less attractive and less competitive worldwide,” Williams added.

“The imposition of a student tax could lead to higher costs for international students, making Australian education less affordable. This could result in declining international student enrolments, negatively affecting universities, colleges, and the broader education sector.”

GMT 12:29 Nov 30: This article has been updated with comments from Phil Honeywood and the headline amended.