The government tells us that it has introduced the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 to improve the quality, integrity and sustainable growth of Australia's international education sector, and I support the parts of the bill that do that. The reason I cannot support this bill in its entirety, however, is that it goes way beyond this intention, and I can't find any legitimate justification for why it does so. The bill gives the minister the power to cap international student enrolments by course and by university. As far as I can see, this power is not about sustainable growth of the sector; it's in response to our domestic housing crisis. Reducing the number of international students will theoretically free up some accommodation. I am concerned that these measures will do very little to free up housing and instead will have grave ramifications for Australia's international reputation and an important export industry.

Australia has a long and proud history of international education. From way back in 1950, when the Colombo plan was set up to advance international relations, it was decided that one of the best ways to build relationships and influence was by bringing students from Asia-Pacific to study in Australia. In the 1960s, Australian universities started working offshore, assisting universities and teaching colleges in nearby countries to help develop curricula and research labs. Then in 1986 the Australian government allowed universities to accept full-time fee-paying international students to come to Australia to study, which coincidentally—or not—was about the same time that higher education stopped being free for Australian students. The then Minister for Employment, Education and Training saw an opportunity and an eager and willing market of international students to establish university education as an Australian export industry. Fast-forward to today, and education services are our fourth-largest export, after iron ore, coal and gas. However, unlike with material commodities such as iron ore and coal, increasing education export means more people arriving in Australia, which means an increase in the net overseas migration number. In the midst of a housing crisis, this doesn't play well politically.

That brings me to the detail of the bill in front of us. The government says it needs to determine the appropriate settings for the size, shape and focus of the international education sector, taking into account Australia's broader economic and social considerations. The government says it has introduced this bill to improve the quality of the international education sector, to improve the integrity of the sector and to improve the sustainable growth of the sector. I want to examine how these three objectives are addressed.

The bill uses schedules 1 to 6 to address concerns about whether education agents and providers are legitimate. It sets out more regulations to ensure that private education providers are providing a genuine education service. I support these measures as a response to problems within the international education sector. I've heard many stories about dodgy colleges, inadequate student preparation, student poverty and student exploitation. The proliferation of private education providers that take advantage of international students to make a profit has to stop, and I think stronger regulation of the system is needed. These parts seem to fulfil the first and second objectives of the bill about improving the quality and integrity of international education providers.

I'm also pleased that parts 1 to 6 seem to respond to issues identified in the Nixon review and the government's migration strategy, which, amongst other things, recommend addressing integrity issues within the international education sector and assisting regulators as they address unscrupulous provider behaviour through further legislative changes. There's clear evidence for why these measures are needed, and the legislation responds to recommendations from a comprehensive review. If this bill was just about parts 1 to 6, I'd be voting to pass it today.

But it is parts 7 and 8 of the bill that are problematic. These measures introduce new ministerial powers to regulate the provision of education to overseas students by giving the minister the ability to set course and university caps for international students. I understand the concerns that a booming international student sector can result in dodgy courses and a pay-for-degree mentality. And I absolutely think we need more checks and balances to ensure that our university degrees are quality courses. But limiting numbers doesn't solve that, in which case: is this the government's response to the objective of sustainable growth?

I looked for external sources to try to work out the reasons behind these measures. The explanatory memorandum points to the 2024 Australian Universities Accord, the Strategic Framework and the prebudget government announcements as background to the government's decision to limit international student enrolment numbers. But, on closer reading, the accord notes only the financial concerns about capping international students. The strategic framework sets out the concern that unmanaged growth in international education, with a rise in integrity issues, might threaten Australia's reputation, which seems to be the reason for this heavy-handed approach that is being proposed. I'm not clear how the strategic framework results in providing the minister with these powers. Perhaps the answer is in the bill.

I note that when setting course-by-course enrolments for each university the minister will take into account the relevance of courses to Australia's skills needs and the supply of purpose-built student accommodation available to both domestic and international students. This suggests that the real purpose of the measure is to make sure we're getting the right skills taught in Australia and that students aren't contributing to domestic housing pressures. But is this bill the right way to achieve those two purposes?

The need for international students to study courses that respond to Australia's skills needs seems nonsensical, given that 84 per cent of international students return to their home country at the end of their studies. It also doesn't take into account the need for Australian courses like business or tech degrees to respond to skills shortages in countries of origin. People who will spend most of their working lives in non-Australian labour markets should be free to take courses that reflect their own interests and career plans. It's arrogant to think that Australia can dictate what products its international education customers will buy on the basis of what Australia needs, not on what these customers want. They'll surely go elsewhere.

If the purpose of this section is to allow international students to remain in Australia only if they've completed a course relevant to Australia's skills needs then surely this can be engineered by using visa conditions and migration laws. Far more concerning, however, is how this bill is conflating Australia's housing crisis with the arrival of international students. Let's be clear: the housing crisis has not been caused by international students. As we've discussed time and time again in this House, this is a problem formed over decades of policy choices, and we need new, bold policy decisions to ensure Australians can afford to own a house. Reducing international student arrivals is not one of these bold decisions.

A Property Council report has shown that international students make up only four per cent of the rental market and, unlike families, most students prefer to live in student accommodation and apartments in CBDs and close to universities. As already stated, 84 per cent of international students go home at the end of their course. Yet both the government and the opposition have attributed housing stress to the post-pandemic surge of international students. In reality, student numbers are currently at about 786,000. That's pretty close to the pre-pandemic levels of around 756,000 in 2019. There may have been a surge from the very low pandemic numbers, but we're pretty much back on track in relation to pre-pandemic enrolments. I worry that this short-term attempt to reduce housing stress will have much bigger long-term ramifications for the Australian international education sector.

First, there are economic ramifications. The international education market has been extremely profitable for Australia. According to the Department of Education, in 2022-23, international education was worth $36 billion to the Australian economy. Universities Australia was slightly more generous in their calibrations, attributing 48 billion in export dollars in 2023. International students accounted for almost a quarter of all GDP growth over the year to March 2024 and employed more than 200,000 people. It's also worth considering that the powers the bill proposes would allow the minister to shut down significant parts of the international education sector with little or no warning. These powers represent incredible levels of state control over an export market, powers that would put education providers at legal and financial peril without recourse.

Second, there are long-term ramifications in relation to our research and development capabilities. Universities now rely on income generated by international students to supplement reduced government funding and an increase in domestic student numbers. International student fees are used to fund university infrastructure and research and development. In 2022, revenue from international student fees across Australia's 41 universities made up nearly 25 per cent of total university revenue. More than half of the $12 billion the universities invest in research each year is funded by international student fees. The government could decide to increase public funding to you at universities, which I would support as a long-term investment in our future prosperity. But, if this is not going to happen, then capping income from international students will affect Australia's ability to invest in essential research and development.

Finally, there are ramifications for our international reputation. In a submission to the committee on this bill, the Business Council of Australia's second recommendation was:

The Government recognise the role of international students in enhancing Australia's reputation and fostering relations within the region.

Australia should be proud of its international education sector, which has evolved into a globally competitive export. It's an international market, but the commodity is not a rock or some gas; it's services—and services mean people. Changing the rules will affect people's lives, and this means relationships on personal, diplomatic and business levels. If we make this change, it won't be easy to change back. It will change global perceptions of Australia as a study destination. Education is a globally competitive market. Creating this level of uncertainty will mean students will choose to study their chosen course in Canada, the US or New Zealand—not a course that Australia has chosen at a regional university.

So what needs to change? If the government is serious about sustainable growth for universities, it should go back to the drawing board, or, in this case, the Universities Accord, and set caps via mission based compacts between individual universities and the Department of Education. If the government wants to reduce net overseas migration, it should use the migration and visa system to achieve this aim rather than inserting itself into the university sector. And if the government wants to address the housing crisis it needs to introduce measures that increase housing supply, including incentivising states to build more houses. I've mentioned my concern that this new ministerial power is an overreach. Capping international enrolments takes another step away from a rules driven higher education system in which students and education providers can make decisions based on known legal criteria. The introduction of caps will require legislation, but the specific caps will be decided administratively.

International education has always been subject to changing migration policy, but this bill takes it further, to allow politicians and bureaucrats to interfere in the specific decisions of students and universities. This distorts the free market in a way that undermines certainty for universities and students, may deliver courses for which there is no demand, limit courses for which there is demand and make Australia a less desirable study location. Because of my concern with the application of parts 7 and 8, I'll be moving an amendment to have these parts removed from the bill. Without these parts, this is a perfectly sensible piece of legislation that will improve the integrity of our higher education sector.

If this amendment is not accepted, pragmatically, I've also proposed an amendment to the timing of the implementation of the bill. As it stands, it allows the minister to issue an instrument in relation to caps any time before 31 December this year for 2025 enrolments. This is way too late and shows no understanding of how the international education market works. Most universities report that the international student enrolment process can take more than 18 months. Leaving students hanging until the eleventh hour will not only create uncertainty for 2025 but make Australia less attractive in the following years. Agents are likely to promote countries that can provide certainty sooner. For similar reasons, I'll also be proposing an amendment to delay the implementation date from 2025 to 2026, so that government can undertake appropriate stakeholder engagement, avoid undermining the higher education market with uncertainty, and plan and communicate caps appropriately.

In conclusion, I'm all for parts 1 to 6 of the bill, to restore integrity in the higher education sector and address unscrupulous behaviour. But parts 7 and 8, imposing course-level caps for international students at each university or education provider, are an overreach. This will undermine the sector, could ruin our reputation and could distort a flourishing market. The timing is also impractical. It looks like a poorly thought out, knee jerk reaction to current housing pressures, which will not solve the problem anyway, and could create a whole new suite of other problems. For these reasons, without appropriate amendments, I will not be supporting this bill.