Why the sector’s real impact is being missed in the public debate
If you listened only to the noise, you would think international students caused Australia’s rental crisis, pushed inflation higher, and crowded out local workers. The data tells a different story. The Reserve Bank’s most recent Quarterly Bulletin is unambiguous that international education is now one of Australia’s largest export earners, close to fifty billion dollars in 2023–24, and that students play a positive, stabilising role in both demand and supply across the economy. The Department of Education’s financial year figures confirm the headline value and make plain what this means in practice: tuition paid from overseas and daily spending in Australian communities are counted properly as exports because the money flows into the country and supports local incomes. Strip away the politics, and a clearer picture emerges: international education has been a crucial buffer for growth at a time when household spending slowed and business investment wavered.
International education has grown from a significant export earner to a major pillar of the Australian economy. From generating $3.7 billion in 2000, the sector's value grew exponentially before experiencing a temporary setback due to the global financial crisis (GFC) and a more significant one during the COVID-19 pandemic.
The fourth largest export, explained in human terms rather than abstractions
An export sector measured at roughly fifty to fifty-one billion dollars can sound abstract until you track where the dollars go. They show up in a fee payment that keeps a laboratory running, in groceries bought on a Tuesday that help a small retailer meet payroll, in rent that makes a new build-to-rent project bankable, in public transport trips that underpin service frequency, and in weekend shifts at aged care services that keep rosters whole. The central bank’s assessment sets the context, education is now Australia’s fourth largest export category behind iron ore, coal and natural gas, a ranking confirmed by trade and education data that distinguish between tuition flows and broader goods and services spending while counting both as exports because the money originates offshore. In short, this is not statistical manoeuvring; it is how national accounts recognise the reality that students bring foreign income into Australia and spend it here.
What changed after borders reopened, and why timing mattered for growth
The return of students from late 2021 aligned with a complicated economic moment. Domestic households were tightening belts as interest rates rose, and savings built during lockdowns were unwound. Students, by contrast, typically arrived with pre-funded budgets and immediate needs, accommodation, furniture, devices, public transport cards, food, and campus life purchases. That pattern created counter-cyclical momentum, not from credit expansion but from external demand arriving precisely when local demand was weak. The Reserve Bank describes this as a positive, broad-based impulse, one that supported jobs in education itself and across hospitality, retail, construction and transport while the economy found its footing after pandemic shocks. For a sector often discussed only in terms of visas and headcounts, it is important to recognise how the spending profile of new arrivals stabilised growth when other engines were spluttering.
The rental story that survived headlines but not evidence
It has become common to hear that student arrivals drove rents higher. The Reserve Bank’s analysis does not support that claim. The central bank’s July 2025 paper finds that while more students add to demand for rentals, the contribution to recent rent inflation has been modest relative to supply constraints and broader population dynamics. Australia entered the post-pandemic years with a thinned pipeline of new dwellings, higher construction costs, labour shortages on building sites, and very low vacancy rates. In that context, it is unsurprising that rents rose, and it is inaccurate to attribute the bulk of that movement to one temporary visa group. Independent coverage of the Reserve Bank’s work reached the same plain conclusion: the rise in international students was not a major driver of higher rents or inflation. For policy audiences and the public, that distinction matters because the remedy for tight rental markets is mostly on the supply side, unlocking planning, financing and delivery capacity rather than restricting education exports that are helping to keep growth positive.
Supply, not scapegoats, is the binding constraint in housing
If we follow the evidence on housing, the national supply system fell behind during and after the pandemic, and is only now beginning to recover. The national housing agencies have documented an ongoing shortfall in net new dwellings in 2023–24, with forward projections showing gradual improvement rather than an immediate surge. The National Housing Supply and Affordability Council’s baseline report and Housing Australia’s analysis both point to persistent impediments in approvals, cost of finance, and construction capacity. Those factors explain more of the rent story than headcounts in students alone. Any accurate account of rental pressures must start there, where projects are initiated and delivered, not at the airport arrivals gate.
Purpose-built student accommodation is part of the solution when done well
There is another point lost in the heat of debate: growth in purpose-built student accommodation has absorbed demand that would otherwise spill into the general rental market. Industry research shows a significant pipeline of new PBSA beds through the middle of the decade and a penetration rate that is still low by international standards, which means there is room to grow without displacing family housing. The major real estate advisors are frank about the imbalance; demand outstrips supply in the student segment, and even with new projects, meaningful unmet need will remain near the largest campuses. A policy that accelerates well-located PBSA can ease pressure on private rentals and lift standards for student housing at the same time. That is what a systems view requires, understanding that better targeted supply can support both the education export and the local rental market rather than presenting them as adversaries.
Labour market contribution that is broader than the stereotypes
Students are often described as casual baristas or rideshare drivers. The labour market story is much more varied. The Reserve Bank’s paper is explicit that international students provide labour that helps businesses meet demand, particularly in services where staffing flexibility matters. Health support roles, disability care shifts, hospitality teams that run seven days, logistics and retail hours that peak outside nine to five, all benefit from an available, motivated, and multilingual workforce. In parallel, growing numbers of students work in roles aligned to their fields of study, accounting support during peak lodgement periods, technology service desks that require both technical troubleshooting and cross-cultural communication, and research assistant roles that deepen capability while supporting Australia’s research output. When you look at the current settings on work hours and post-study rights, you can see the balancing act. The government has tightened some temporary measures introduced during the pandemic and has realigned post-study visas while maintaining pathways that support genuine graduates. That recalibration has policy logic, but it should not erase the core point that student labour fills real gaps and builds the skills base we say we want.
Follow the money, and you find tax and revenue benefits as well
Exports count because they are new money. Once here, that money circulates and is taxed. Goods and Services Tax applies to much of students’ day-to-day consumption, employees hired to teach and support students pay income tax, and the institutions that grow to meet demand pay payroll tax and invest locally. While estimates vary, government briefings and sector statements consistently reference hundreds of thousands of jobs supported by international education and a revenue contribution that is significant at the Commonwealth and state levels. Even allowing for definitional differences across datasets, the picture is consistent, the sector is a net contributor to public revenues, and those revenues fund the public services the whole community uses.
Regional Australia sees gains that rarely make headlines
One of the simplest mistakes in the public conversation is to treat international education as a two-city story. Regional economies have seen strong proportional growth in student numbers and have leveraged that demand to sustain services that benefit the entire community. Accommodation developments that would not stack up without student demand can unlock broader housing opportunities, regional public transport services improve when weekday and evening demand rises, and small businesses find year-round trade that reduces off-season closures. Regional university networks have long documented these spillovers in local GDP, jobs and capability building, and while methodologies differ across studies, the direction of the effect is clear: a healthy education export lifts regional economies along with the capital city corridors. For regional TAFEs and dual-sector providers, this matters because vocational programs aligned to local industry need consistent demand to justify delivery and investment in specialised facilities.
The soft power dividend that strategy documents assume but rarely quantify
Numbers are not the whole story. When students return home, they take relationships, allegiances and professional ties with them. Those alumni linkages drive trade, make research collaborations easier to form, and open doors in government and business that a cold email never will. Australia’s international education strategy leans on exactly this logic, positioning education as a people-to-people platform that supports diplomacy, investment and regional cooperation. That dividend becomes more valuable when geopolitics is volatile, and it argues for consistency in policy settings and communications. It is hard to preserve trust if students and their families are confronted with rule changes mid-stream or contradictory messages about their value.
What the VET community needs to know, because this is not just a university story
As high managerial agents in the VET system, we see up close how international education is distributed across sectors. Departmental data for 2025 shows higher education enrolments growing strongly year-to-date, with the VET share stabilising after a period of heightened scrutiny and integrity work. That stabilisation is positive, because the VET offer, work-integrated, practical and aligned to skills lists, is exactly what employers say they need. The compliance lens is rightly sharp, quality and integrity matter, but the economic logic that applies to universities also applies here, international VET students rent in local markets, shop in main streets, work lawfully within their conditions, and graduate into roles that address real shortages. For providers, the message is to hold the line on quality while making the economic case for what you do in language that communities understand.
Clearing up three persistent misconceptions using current evidence
First, the sector is a drain on infrastructure with little return. The national accounts and trade statistics point the other way; this is the country’s fourth-largest export, and the money arrives without the public subsidies needed to stimulate many other forms of economic activity. Second, that students are the main cause of rent increases. The Reserve Bank’s modelling shows their contribution is small relative to the dominant story of constrained housing supply and strong population growth more broadly. Third, that students displace local workers. The Bank’s own framing is that students provide labour that businesses need, particularly at the hours many Australians prefer not to work, while also contributing to the stock of future skilled workers through study and post-study pathways. These are not sector talking points; they are conclusions drawn from the best available public data.
Policy settings that either unlock value or undermine it
For international education to keep doing the stabilising work it is doing now, settings must be stable, clear and competitive. In the last two years, Australia has made significant changes, lifting the student visa application charge in July 2024 and then again in July 2025, and rolling back the temporary extension to post-study work rights while realigning graduate visa streams. Government can rightly argue these adjustments were needed to rebalance migration and restore integrity, but price and pathway signals also influence destination choice in a very competitive global market. The evidence is that education exports remain strong despite headwinds, yet there is no guarantee that they will continue if uncertainty or cost escalations outpace improvements in quality and experience. The policy question is not whether to regulate, but how to calibrate so that integrity is protected without dulling an export that keeps Australian GDP growing.
What credible stewardship looks like from providers, peak bodies and governments
Stewardship starts with candour about quality. High-profile integrity failures damage trust and invite blunt policy responses that hurt everyone. The VET sector, in particular, has lived through cycles where a small subset of providers cut corners and the whole market pays. The answer is not simply tighter rules; it is active quality management that treats international learners as people with rights and aspirations, not as headcount. That means rigorous admissions, genuine orientation, transparent work-rights guidance, and assessment that is valid, sufficient and authentic. It also means telling the economic story locally. Chambers of commerce, local councils, and regional development bodies need to hear how many jobs are supported and how much new money is spent in their area because an RTO or a campus hosts international cohorts. National strategy documents cannot carry that message alone; communities trust providers they know when the evidence is specific and close to home.
The accommodation question, approached with evidence and practical solutions.
Housing is where tempers flare, so it is where evidence and solutions matter most. The PBSA pipeline should be accelerated where demand is concentrated and transport is strong, because every bed designed and priced for students reduces pressure on nearby rentals. State planning systems can help by identifying student-suitable sites and providing clear, predictable assessment windows. Councils can partner with providers to ensure that transport, lighting and active travel links make new developments safe and convenient. Institutions should continue to publish transparent data on student housing need and the occupancy of their own residences to support investment cases. At the same time, governments should deliver the broader housing supply and affordability agenda that will move the dial for the whole community. The central bank’s work is a reminder that the rental crisis is primarily a supply story, and student policy should be set with that reality front of mind.
The consumption surge that keeps local businesses open
One overlooked feature of student demand is timing. Retailers and service businesses live and die on cash flow, and the student arrival calendar delivers concentrated periods of high turnover that carry many businesses through quieter months. Furniture stores, device retailers, phone and internet providers, pharmacy chains, supermarkets, and transport operators all see this pattern. Because the spending is funded largely by overseas savings rather than local credit, it does not crowd out domestic consumption; it supplements it. The central bank flags exactly this effect when it notes that student spending supports growth in ways that differ from the debt-financed consumption cycles that often raise policy concerns. For business owners staring down cost pressures and thin margins, that difference can be decisive.
Why the soft power dividend matters for skills, trade and research
A long view helps here. Graduates who return home as ambassadors for Australian training and education ease the path for trade, skills partnerships and research consortia that pay dividends for decades. Many of those relationships begin in laboratories and workshops where VET and higher education intersect, in placement experiences where Australian employers see the value of different perspectives, and in regional cities where community organisations learn to work with diverse cohorts. Australia’s education strategy situates that soft power in a broader agenda, diversifying source countries, aligning skills development to national needs, and keeping student experience at the centre. For the VET community, this is an invitation to design programs that are both world-class and locally grounded, producing graduates who can move between Australia and their home countries with credibility and confidence.
Scenarios that should guide planning, not scare communities
Looking forward, three trajectories are plausible. In a growth scenario, Australia stabilises policy, clears bottlenecks in visas and accommodation, invests in quality and student experience, and keeps education at the top of the global preference set. Exports rise toward the sixty-plus billion range later in the decade, jobs expand, and regional participation strengthens. In a stability scenario, exports hold around the current fifty-billion scale, with more value created per student through premium programs, deeper industry engagement, and stronger research links. In a decline scenario, policy volatility and cost shocks send demand elsewhere, exports shrink, and the loss is felt first in casualised services employment, then in institutional budgets for teaching, infrastructure and research. None of this is speculative scaremongering for its own sake. It is sober planning logic built on the evidence of how sensitive global student flows are to price, policy certainty, and perceived welcome. Recent official data and finance agency analysis confirm that exports remain near record levels today, which means the window for smart stewardship is open.
What the CAQA lens adds are practical steps that hold up in audit and in public
From a quality and compliance perspective, providers can act now without waiting for more policy announcements. First, be explicit about the economic story you can verify, use departmental export income data, local spending surveys, and employment figures linked to your delivery footprint when speaking with councils, industry partners and communities. Second, keep quality visible, admissions that check intent and capability, orientation that explains rights and responsibilities clearly, delivery and assessment that meet standards regardless of delivery mode, and support services that respond to the real pressures international learners face. Third, engage in housing conversations with evidence, use independent PBSA and housing supply research to frame discussions, and partner with local authorities on practical solutions that work for residents and students. Fourth, align VET offerings to the national skills agenda while maintaining international appeal, because the same programs that address local shortages are the ones that give graduates portable, valuable qualifications. Fifth, speak in the language of outcomes, graduate capability, employment, and community contribution, not only in the language of enrolments and completions. This is how trust is built, both with auditors who test your claims and with the public who live alongside your work.
A final word on evidence, fairness and Australia’s long game
It is easy to build a narrative on the anxieties of the day. It is harder to hold the line for evidence when that evidence complicates simple stories. The Reserve Bank’s work is careful and clear, the data from Education, Trade and the national accounts is consistent, and the conclusion is straightforward. International education is a major export that helped Australia avoid a worse slowdown; it is not the main culprit behind rent spikes, and it sustains jobs and investment well beyond university gates. Policy should recognise that reality, manage risks with precision rather than blunt instruments, and commit to a stable horizon that keeps Australia attractive to the students who will become tomorrow’s trading partners, colleagues and collaborators. If we can do that, we will preserve an asset that is doing exactly what good economic infrastructure should do: support growth, build resilience, and strengthen the social fabric. The numbers make that case. The communities that have seen the benefits up close make it as well. It is time our politics caught up.
