PETER VAN ONSELEN: Labor’s latest immigration move will bring one part of society to its knees – and there is a real danger the nation may never recover from the damage it does

Higher education insiders say the latest changes from the Labor Party are threatening a sector already on its knees, as economic data shows the economy grinding to a halt despite stubbornly high inflation.

This week’s national accounts show the Australian economy is on the brink of recession. Yet Labor’s higher education policies will severely hamper Australia’s second-largest export industry, the only sector that currently separates poor economic performance from recession.

While the latest quarterly figures for economic growth were in the doghouse at just 0.2 percent, service exports have pushed that figure up, with the university sector growing at an annual rate of 5.6 percent.

However, recent changes by Education Minister Jason Clare, which capped the intake of foreign students at elite universities at 2019 levels, will halt this growth.

Just as importantly, the new policy will destroy Labor’s signature higher education policy of increasing the number of Australians with university qualifications, which was announced with much fanfare ahead of the 2022 election.

For years, full-tuition-paying international students have been subsidizing underfunded university research and the influx of local students.

However, if a cap is placed on the number of international students paying full tuition fees, some universities will have to close entire departments and limit the number of domestic students they enroll.

This is because these students represent a per capita cost to the university, and foreign students who pay full tuition subsidize that loss.

Without the cash cow of full-fee paying foreign students, the Labour Party’s goal of better educating the domestic population simply won’t happen unless the government significantly increases university funding. But it won’t do that because of the pressures on the budget that are already there.

But that is not the only policy goal jeopardized by Clare’s disastrous policies.

Even the politically motivated motive of reducing the number of foreign students to limit immigration and relieve pressure on housing stock will not work if the government tries to squeeze foreign students from elite institutions into lower quality universities, in an attempt to help the lower-ranked institutions that have already suffered from previous Labour Party policy changes.

This is because foreign students will not tolerate moving to institutions with a lower reputation. They will simply take their business elsewhere and go to higher quality universities in other parts of the world.

Higher education is a competitive global business. It is almost as if the Minister of Education is unaware that we live in a globalised world.

According to sources, Daily Mail Australia has learned that the minister has been captured by Ben Rimmer, the deputy secretary of his higher education department. According to the source, Rimmer has “lost control and is leading the minister down a dead end”.

“The policy is disastrous for the university sector and terrible for the country,” the senior source told Daily Mail Australia.

“Its implementation is so flawed that it will achieve the opposite of what the government wants to achieve.”

University administrators unanimously oppose the government measures.

They have jointly warned the minister and his entourage that it will be damaging to elite universities, including by lowering their world rankings, but that it will not solve the problems that Clare Ministerial Directive 107 imposed on lower-quality institutions.

Ministerial Directive 107, imposed on the sector almost a year ago, prioritised visas for lower-risk, higher-quality institutions.

If we replace this with a quota system based on 2019 figures and limit intake to top institutions, this means that quality students will study abroad and only higher-risk students will get through the quota system to study at lower-quality institutions.

“It’s just a disaster,” another university official told Daily Mail Australia.

Lower quality students are also more likely to want to take advantage of the visa rules, making it easier for them to immigrate to Australia.

‘Only a small proportion of international students studying at top universities want to emigrate to Australia.

‘The vast majority return home with a qualification.’

But at the lower quality settings this is not the case.

“What Labor is doing will increase, not decrease, the number of international students who want to stay in Australia,” the university executive said.

This will put pressure on immigration, which is contrary to the government’s political objectives.

Now former Labor leader Bill Shorten has also thrown himself into this mess, which is entirely of government’s own making.

Next year he will become vice-chancellor at the University of Canberra, but until then Shorten will remain in Anthony Albanese’s cabinet.

The university sector hopes Shorten will become a forceful advocate for the problems caused by the Labor Party. However, the former Labor leader has indicated he will sit out Cabinet discussions on higher education while in government.

“Then we should ask him to take up the case because this policy change is an unmitigated disaster,” said a leading professor at one of Australia’s top universities.

If Labour’s policies continue, universities will be forced to make massive staff and faculty cuts to remain financially profitable.