Australia¡¯s government should only bail universities out of their coronavirus-induced financial crisis if they refocus on the needs of domestic students and industry, a new report argues.

Melbourne demographers say Australian universities¡¯ drive to maximise revenue from international students has come at the expense of domestic enrolments, with foreigners¡¯ claiming almost half of commencing places at the nation¡¯s most prestigious institutions ¨C a situation about to be overturned by the pandemic, with up to half of overseas enrolments set to vanish by mid-2021.

The , by independent thinktank the Australian Population Research Institute, says universities now ¡°want to return to the government fold¡± after going ¡°out on their own¡± to pursue income from overseas students.

¡°Not much can be done about the export revenue at least for the next year or so, but the government can contribute to universities¡¯ educational and research expenses,¡± it says. ¡°If this is to occur, the universities should be required to deliver educational and research activity relevant to Australian domestic students and to Australian industry needs.¡±

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The report found that by 2018, foreigners typically comprised over 44 per cent of commencing students at the nation¡¯s six most highly ranked institutions ¨C the universities of Melbourne, Monash, Queensland, Sydney, UNSW Sydney and the Australian National University ¨C up from less than 27 per cent in 2012.

¡°[They] have used what capacity they had to increase student commencement numbers to accommodate overseas students¡­not to train more domestic students,¡± the report says. ¡°It was the universities¡­that chose to put all their financial eggs in the overseas student revenue basket [and] to ignore any responsibility to train extra domestic students.¡±

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The claims contradict a frequently expressed view that far from taking university places from Australians, international students subsidise locals¡¯ study. ANU policy expert Andrew Norton told a Times Higher Education forum that universities had not reduced their domestic cohorts under the demand-driven funding system, even though they were no longer required to admit minimum numbers of locals.

Professor Norton said a focus on prestige as well as revenue had discouraged some universities from rapidly expanding their domestic numbers, which would have forced them to accept school-leavers with lower tertiary admission scores. ¡°The big test, though, will be in the next few years where we may well get some increased funding for domestic undergraduates,¡± he added.

¡°We¡¯ll have all these vacant spots in lecture theatres that international students are not taking. Will universities say, ¡®we¡¯ve got no choice but to increase our domestic student enrolments¡¯?¡±

University of Sydney historian Julia Horne has argued that far from being a recent phenomenon, privately funded overseas students have been in Australia for almost a century and vastly outnumbered government-sponsored overseas students during the 1950s and 1960s heyday of the Colombo Plan.

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Writing in , Dr Horne said international students had only become significant revenue earners for universities from the early 2000s, after a decade of reduced government outlays: ¡°Since government funding no longer covered the full costs of expensive research or the strong growth in domestic students, universities had to find funds from elsewhere.¡±

But Professor Norton¡¯s suggested this was only partially true. ¡°The growth in international student revenue, which delivers huge profits, has vastly outstripped cuts,¡± he said.

¡°In international markets, universities are doing much more than just making up for some lost government funding.¡±

john.ross@timeshighereducation.com