Student drop hits economy

TOUGH new immigration rules for foreign students are hitting Australia's economy, with more than 125,000 fewer international students expected to come in the next 12 months, costing more than 31,000 jobs nationwide.

Confidential Immigration Department figures showing new visa applications suggest that Victoria, the state that is most reliant on foreign students, will be hardest hit, with 40,250 fewer students in the next year.

Modelling by Access Economics suggests this will cost 10,100 jobs in Victoria and punch a $1.17 billion hole in the state's export income, more than a quarter of the total value of the state's biggest export industry.

The figures show a 47 per cent drop in the number of visa applications from India alone in the nine months to the end of March.

The Australian Council for Private Education and Training believes export income nationally will take a $3.6 billion hit from the fall in student numbers.

''We've been talking about it for a while, but it's here now,'' the council's national executive officer, Andrew Smith, said.

International student plans were thrown into disarray by changes announced in February by Immigration Minister Chris Evans, which made it tougher for students to obtain a study visa, and also cracked down on their ability to gain permanent residency after graduation.

Last month, Senator Evans cut a number of popular courses, such as hairdressing and cookery, out of the Skilled Occupations List, which is used to decide who can migrate to Australia.

Before the changes were announced, international education was a $17 billion industry nationally, and brought $4 billion every year into Victoria.

''It's affected the entire international education market. India has dropped significantly, there's been a slowdown from China and drops from other key markets, Vietnam, Malaysia, Korea,'' Mr Smith said.

His organisation, which represents private colleges, has warned that big and reputable schools are already feeling the pinch. ''We've got a lot of good genuine students and businesses being hurt,'' he said.

The government has made it more difficult for overseas students to gain student visas. It has increased the sum of money they needed to hold in bank accounts to pay for their expenses, and it has rejected a larger number of applicants on integrity grounds.

Mr Smith said these measures had increased the level of uncertainty for applicants. Potential students were responding by applying to Canada, Britain or the United States instead. ''People have lost faith in the Australian market,'' Mr Smith said.

A spokeswoman for Senator Evans did not respond to questions about the economic impact of the changes, but she said genuine international students were still welcome. However, the immigration program ''cannot be determined by the courses studied by international students''.

State Education Minister Bronwyn Pike would also not be drawn on the economic impact to Victoria, saying only that ''we are closely monitoring the impacts''.

Tony Fritsche, whose Mint Group provides job-ready candidates for a number of industries, said the shortage of new immigrants would soon filter through to a shortage of labour.

Source:http://www.theage.com.au/national/student-drop-hits-economy-20100605-xly1.html