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Australia's education boom a boon to population growth, economy

Published 23/02/2016, 10:00 am
Australia's education boom a boon to population growth, economy
AUD/USD
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VET
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* Education was a $14.2 bln industry in 2015

* Sector growth likely to stay solid - economist

* Weak currency helps lift Australia's appeal

By Ian Chua and Jarni Blakkarly

SYDNEY, Feb 23 (Reuters) - Australia's official population clock this month ticked past 24 million, several years sooner than expected, thanks in part to a booming education industry drawing students from all over Asia.

Growing numbers, particularly from China and India, are feeding an industry that in 2015 surged 17 percent to be worth A$20 billion ($14.22 billion), cementing its position as Australia's most valuable service-sector export.

Education is a bright spot for Australia's A$1.6 trillion economy as the end of a decade-long mining investment boom bites, slowing growth to a sub-par annual pace of 2.5 percent.

As income levels rise in Asia, families seeking good education for their children "are sending them to places like Australia", said Craig James, chief economist at brokerage CommSec. "We've had good growth up to now and likely to see good growth in the future."

In a bid to draw attention to Australia as a study destination, about 3,000 international students flocked to Sydney's Bondi Beach this month to set a world record for the biggest English lesson.

Net overseas migration, which reflects the flow of incoming international students, accounted for 53 percent of Australia's population growth in 2014-15, according to the statistics office.

TWO-STAGE PROCESS

In June, there were 374,566 student visa holders, up 10.2 percent from a year earlier. China and India together accounted for more than one-third, according to the Department of Immigration and Border Protection.

Student visa applications increased by 4.6 percent in 2014-15 from a year earlier, a fifth consecutive year of growth.

Many enter the country, which has the world's fourth lowest population density, on student visas and later take up residency, in effect remaining in the population count.

Amber Wang, a communications student at Melbourne University who came from China in 2014 on student visa, hopes to stay.

"I'm trying to make the most of the time I have and get a job here that will let me stay for longer," the 23-year-old said.

Nick Parr, professor of population and workforce planning at Macquarie University, said migration to Australia is a two-stage process for many.

"People arrive on temporary visas, student or temporary work visas and then later transfer to permanent residence."

ATTRACTIVE EXCHANGE RATE

Fuelling the industry, analysts say, are a simplified student visa application process and the weakening of the Australian dollar AUD= in recent years. The Aussie, worth nearly $1.11 in 2011, was below 70 cents early this year.

Preliminary estimates from the Department of Foreign Affairs and Trade showed that education accounted for about 30 percent of $62.8 billion in services exports in the fiscal year ended June 2015.

While the education boom has been good for the economy, it has spawned some problems and challenges for authorities.

In December, adult college group Vocation Ltd VET.AX collapsed two years after getting a share-listing, leaving some 12,000 students adrift with incomplete courses. This month, Global Intellectual Holdings Pty Ltd, which has 20 campuses around the country, filed for bankruptcy protection.

Retail chain 7-Eleven last year came under fire after local media reported widespread underpayment and abuse of workers, many of them are international students, by franchise owners.

The publicity sparked a Senate inquiry and forced the resignations of three senior managers of the Australian franchise.

($1 = 1.4063 Australian dollars)

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