International students continue to play a major role, not just in our tertiary education sector, but also in the economy, contributing significantly to consumer demand and helping address labour shortages in key industries.
Following the reopening of Australia’s borders post-COVID, international student numbers rebounded rapidly and now account for a significant share of net overseas migration. Education exports were valued at approximately $50 billion in 2023-24, making education Australia’s fourth-largest export category. This recovery in student enrolments was underpinned by a surge in spending, especially on tuition, accommodation, and other essentials.
A new bulletin issued by the Reserve Bank of Australia highlights that international students add more to demand than to supply in the short term, mainly because they spend heavily on arrival, including upfront on fees and essentials, while their labour market contributions take time to occur. This means that rapid increases in student numbers can influence inflationary pressures in sectors such as housing and services, although the Reserve Bank notes international students were not a major driver of inflation.
As all international VET providers are already only too aware, one of the key insights from the bulletin is the declining share of VET enrolments among international students in recent years. While higher education has seen rising enrolments, new visa processing rules introduced in mid-2023 have disproportionately affected the VET sector.
Nonetheless, the sector remains important. International VET students have historically represented a substantial share of overall VET enrolments and they continue to play a vital role in industries such as hospitality, retail, and health care, where they contribute significantly to the workforce. For example, data shows a large proportion of international students work in accommodation and food services and retail, sectors often facing acute labour shortages. As such, VET providers are not only supporting student learning but are also critical to sustaining local economies and employer operations.
With the recent release of the 2026 ‘National Planning Level’ caps for international VET and higher education – a number of private VET providers have been granted modest increases in their new international student numbers and while TAFE Institutes have been given the same levels as for 2025 they will have priority processing for all of their student visa applications and the chance to increase their higher education enrolments if they are dual-sector institutes.
As the sector makes its way through these challenging times – the RBA data is another key data source pointing to the benefits of international education.
