Australia's booming education export industry could be threatened by a federal government decision to increase the fees foreign students pay for their visas and their university courses.

Although education minister Brendan Nelson promised to spend an extra A$113 million (?45 million) to "support and expand" international education over the next three years, the money will largely come from the foreign students he hopes to recruit.

Under the changes to come into effect on July 1, new students will have to pay a A$400 (?160) visa application fee - a rise of per cent - plus A$55 for the right to work while studying.

The National Liaison Committee for International Students said the visa charge five years ago was A$285 and included work rights. Since then it had risen 60 per cent.

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Convener Adrian Wong accused the government of taxing international students since 1996 when it introduced a A$30 "student information services charge" to fund overseas programmes. Mr Wong said the latest increase would make Australia the most expensive country for students applying for a visa.

Institutions running courses for foreign students have to be registered with the immigration department and will pay higher registration charges. Annual registration fees will increase from A$16,000 to more than A$250,000 for larger universities, and the additional costs will be passed on to students. Instead of the sliding scale, the new registration charge will include a fixed A$300 impost plus A$25 per student enrolled.

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Deryck Schreuder, president of the Australian Vice-Chancellors' Committee, estimated that countrywide this would add A$90 million to registration costs.

Overseas education is worth A$5 billion a year to the Australian economy and universities earn more than A$1 billion in fees from the 150,000 foreigners they enrol. Institutional incomes look certain to rise, given predictions that overseas numbers could double over the next decade - up from the 280,000 enrolled last year.

Professor Schreuder said vice-chancellors had rejected the international education package and he called on the government to reconsider. He said the increases could not have come at a worse time, with growing international travel uncertainty associated with terrorism and the severe acute respiratory virus (Sars) epidemic.

The nation's main student recruiting organisation, IDP Education Australia, warned the increased charges could harm Australian competitiveness. IDP chief operating officer Greg Gallaugher said prospective students took note of visa and tuition fees, and made comparisons on a country-by-country basis.

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The Australian University Quality Agency is to undertake regular audits of universities' overseas operations. The government has allocated A$35.5 million to establish four international centres of excellence, including $8.8 million for a centre in Asia Pacific studies. Some 80 per cent of Australia's international students are from the Asian region.

The government also announced an A$8 million scholarship scheme to attract high-performing foreign students.