Professor John Raine: International Education – Not just a Question of Re-opening the Border

The 20^th March NZ Herald article, “Hundreds of International students affected by visa delays”, does not reassure us that specialist capacity issues in Immigration New Zealand have been addressed. These were well known at least two years ago as international student business was re-opening.

Covid-19 lockdowns and the border closure caused massive destruction to our tourism and hospitality industries, but also widespread damage to many other industries, notably international education.

So, how significant was this? Between the early 1990s and 2019, New Zealand built up a remarkably successful international student business.  This spanned secondary school students, English language courses, polytechnic and other tertiary diplomas, undergraduate degrees, Master’s degrees and PhDs.  In 2019, over 117,000 enrolled students delivered the country a total economic benefit of around $5Bn.  Leaving off the wider economic benefits of having these students in New Zealand, tertiary sector base international revenue was ~$1.5Bn or ~1.8% of NZ exports of goods and services.   

University international 2019 student fee revenue was about $600m, or around 15% of universities’ total revenue.  International students pay up to five times the domestic student fee rate. For example, at AUT, where I worked in 2019, international students made up 18% of the student body but delivered about 48% of student fee income.

With this proportion of annual revenue coming from international enrolments, the Tertiary Education Commission requirement that universities generate a 3% financial surplus throws the sector’s dependence on international students into stark relief. 

Covid-19 dramatically reduced the number of international students studying within New Zealand, partly replaced by students enrolled for on-line studies. Mid-2020, universities faced a year-end financial shortfall from lost international enrolments of about $200m, and this was expected to rise to $400m in 2021.  On-line enrolments softened the expected impact, but the consequences were massive, with substantial staff losses across several institutions.

There was little apparent concern from the last Government about the sudden interruption to the flow of international students, but there were several consequent issues that needed consideration in 2021-2022. While, by the end of 2023, international enrolments had typically regrown well to 80% or more of 2019 levels, these issues are worth revisiting:

·        During the Covid lockdown/border closure period, the loss of international revenues could have been lessened by using student accommodation as MIQ facilities for vaccinated students, and perhaps by building low-cost decentralised MIQ housing outside our main centres at locations such as military bases. The Government did not want to consider such options. 

·        The missing revenue from students spending in the community hastened the demise of small retail businesses – rows of deserted shop premises in Queen Street, Auckland, were sorry reminders of this economic damage.

·        Students enrolled for on-line courses do not bring to New Zealand the economic multiplier revenue arising from their living in the community. Around two-thirds of the associated total economic benefit is lost. 

·        Many staff have been subsequently laid off or taken voluntary severance, for example at Otago University, Victoria University of Wellington, Massey University and AUT. Some private tertiary institutions had to severely curtail their operations or close. The many hundreds of person-years of teaching and research experience lost to NZ have been damaging to the scope and quality of our taught degree and research programmes. 

·        Across Computer Science, Engineering and Mathematics, at AUT in 2019 international students made up over 28% of undergraduate and Masters enrolments, and 73% of PhD enrolments. These figures were broadly similar at other universities. To maintain the international ranking of our universities, and our national research performance, these international postgraduate enrolments must be rebuilt to pre-Covid levels, not least because Science and Engineering graduates continue to be in high demand in our high-tech industry sector.  

·        The USA, Canada, the UK, and Australia re-opened their international student business ahead of New Zealand, seizing a market advantage which slowed the recovery in our international enrolments and delivered New Zealand a mid-term economic penalty.  

·        International students enrich cross-cultural connections and understanding at our secondary and tertiary institutions. This is something to value and maintain. 

·        The Colombo Plan which ran from 1950 to 1983 brought hundreds of students to New Zealand from South, North and Southeast Asia.  Malaysia was a notable example.  Colombo Plan graduates from our universities worked their way into senior Government and business roles in their home countries but retained a strong affection for New Zealand and helped build reciprocal trade. Many sent their own children to study in this country. These ties raised New Zealand’s profile internationally and delivered economic benefits far beyond just those from the historical connections.

Source countries for international students such as China increasingly provide university education for their own students, but we should nonetheless intensively rebuild international education in New Zealand, but with an eye on the future sustainable size of this business, probably not more than around 20% of all enrolments. International student business is volatile and very vulnerable to geo-political and economic events.  We need to think about how to make this business more resilient without simply choosing to cap it at a modest size.  

Perhaps this will be partly through a mix of in-country and on-line enrolments that will benefit both the economy and our wider society. Ideally there should be less reliance on a couple of countries - in 2019, 37% of international students were from China and 22% from India. In any event, enduring links with New Zealand forged by a new generation of international graduates will boost our future international relations and trade. 

A key part of building resilience is to have a Government Immigration Department that has the breadth and depth of expertise to offer rapid and effective response to student visa applications.  A slow response means that students accept places at universities in other countries. 

How is it that, when Public Service employee numbers ballooned from 48,000 to over 64,000 between 2017 and 2023, Immigration New Zealand has not recruited and trained sufficient staff to manage the well-anticipated volume of international student visa applications?  We can do better than this.  Let’s get cracking and remove any roadblocks to faster re-growth of this high value export industry.

John Raine is an Emeritus Professor of Engineering who held Pro Vice Chancellor or Deputy Vice Chancellor roles in three New Zealand universities.  He formerly had responsibilities for international student operations and international relations at Massey University and the University of Canterbury.