Our universities - something wicked their way comes

Even though more than one million Australians and international students are enrolled in higher education and TAFE courses, the sector is rightfully worried about its future.

Large falls in enrolments of Chinese and Indian students will have dramatic knock on effects for university budgets in 2012-2015.

Last August, 77,000 mainland Chinese were studying in Australian universities compared with 21,100 Indians. Although Chinese numbers jumped by 17% this year and those from India fell by 23%, some observers are predicting enrolments of Chinese will drop by up to 40% in 2011.

A fall of say 25 percent in international student enrolments across the nation would knock about $4B out of the tertiary education sector and the domestic economy per year.

For every dollar an international student spends at an Australian university, he or she spends another two buying accommodation, food, clothes and entertainment - and all that before family and friends visit. This will hit real estate, retail and tourism hard.

Last October the Government signalled its intention to commission the Base Funding Review for Higher Education as an outcome of the Bradley Review of Australian Higher Education. Base funding is the amount of money each institution gets.

In 1995 about 65 per cent of higher education funding was public. In 2010, higher education receives approximately 43 per cent of its funding from the public purse. About 30 percent of the short fall comes from international students.

Monash Vice-chancellor Professor Ed Byrne said the university generated some A$450 million a year from its overseas students, out of an annual income of around $1.6 billion.

Many people in the sector are looking to redress decades of under-spending on higher education in Australia and I suggest many universities will try offset their international student losses by seeking money from Canberra.

It's a wicked problem: continual underfunding of the sector and a freefall in international student numbers and revenue, at a time when, cosmetically, it appears the tertiary education sector is performing well.

Yet in a parallel universe, according to the Prime Minister's recent address to the Press Club "… if we achieve our goal of 40percent of our young people gaining a Bachelor's degree or higher by 2025, the annual boost per person would be around $775perperson on average over the next thirty years. The estimated gain in jobs is up to 75,000 each year, on average, over the same period."

But if our international student market dives, who is going to fund the local students?