Financial Daily from THE HINDU group of publications
Friday, May 09, 2003
`Education is worth wool and wheat' Dr Brendan Nelson, Australian Minister for Education, Science and Training
recently in Sydney
With overseas students becoming a major source of revenue for the Australian economy, a coordinated effort is to be made to attract more students from outside the country, says Dr Brendan Nelson, Australian Minister for Education, Science and Training.
Talking in Sydney to three Indian journalists invited by the Australian Department of Foreign Affairs and Trade, he said that the revenue from education is "worth as much as wool and more than wheat".
Excerpts from the interview:
How important is India to you in the education sector?
Extremely important. It is critically important that our country be engaged, in every sense of the word, with the rest of the world. India is, and is becoming increasingly, one of the most important countries for Australia and the relationships that we have with India in education and training is important for our future. At the moment India is one of the primary resource country for students but still there are only 10,000-14,000 Indian students in Australia.
How many does China have?
China is now our No. 1 resource country. Last year it was Singapore, but this year China is going to be No 1, with 25,000 students. We have 280,000 overseas students, of whom about 160,000 are in higher education onshore and offshore. Education and training is now our third biggest services export area, it brings in A$ 5.2 billion to the economy. To put it in context, education and training is worth more to Australia than wool and as much as wheat. And that reflects the degree of social change coming about in our society.
So it has become an important industry to you?
Yes, but more important than is that it forms the foundation of our diplomatic and cultural relationships with the world. We are engaged in a war against terrorism and as it has been said very appropriately, the root of all evil is ignorance and if we are to win the war against terrorism. It has to be fought not only through military engagement but also by combating ignorance.
Why is there such a huge difference in the cost of education for Australian and foreign students?
The Australian tax-payer pays about three quarters of the Australian students' cost and the student pays the other quarter. There are three bands in our education structure. Law, medicine, dentistry and veterinary science is in the top band, and Australian students pay A$ 6,136 per year for this band. Then we have science, engineering, computing, commerce, management and economics in Band II and the fees is A $ 5242, in the next band comes nursing, arts, humanities and social sciences for which the fee is A$ 3680 per year for Australian students.
Some 10 to 20 years ago even higher education in Australia was totally free, right...
When I went to the University it was all free, but in 1988, the then government in Australia amalgamated policies on advanced education... they were not polytechnics but teachers colleges, liberal arts colleges they amalgamated these colleges with the then universities to create a mass system of higher education. And with it came the realisation that the tax-payer could not pay for the university education of everybody who wanted it. So fees were introduced.
But we have a system here that if a student cannot pay the money, then the government pays the money to the University for them and the student repays it when he/she starts earning, along with the tax on the income.
And the interest would be very low?
It is the consumer price index. There is no interest rate and the loan is indexed to the inflation rate. If the inflation rate last year, as it was, is three per cent, the value of their debt increases by three per cent. But if they never earn more than the repayment threshold they never pay the loan back.
What percentage does not pay back at all?
We have only been in this system for 14 years and there will be only about 4 per cent of people from whom probably we will never get the money back. We currently have A$ 9 billion lent to Australian students. The net cost to the commonwealth is about $300 million dollars a year. We give students a 25 per cent discount if they pay upfront. We also have remissions, and write-offs on compassionate grounds. It is a fair and relatively inexpensive way of funding access to higher education.
There are changes in the offing for overseas students...
At present, we have 38 publicly-funded universities and 84 private universities. I will be announcing in the Budget some changes relating to overseas students. I have been developing a major package for the internationalisation of education. We want to take a whole approach to the promotion and marketing of Australian education. We released a branding exercise last year called Study in Aus. I want the Departments of Education, Foreign and Trade Affairs, Tourism and Industry to all work together to promote education in other countries in a co-ordinated manner. We will be announcing a significant enhancement to promotional activities, the resourcing of those activities and we will be making some changes in visa arrangements which are going to be well received by your readership.
What about scholarships for foreign students?
There will be some scholarships in the Budget, leaving aside the formal Australian universities, and which will not adversely affect overseas students. It will make Australian education even more attractive for overseas students.
Indian students are looking more closely to Australia. Not only is it cheaper to study here compared to the US, the UK or Canada but their acceptance is better in your universities...
Oh yes, I have a medical background and the medical system in this country has been built on the back of British and Indian doctors. This is a multicultural society but Indians are well respected as important foundations of a modern Australian society and that is reflected in the attitude towards Indian students.
How are Indian students doing in your universities?
Indian students do very well academically. I hear of problems all the time and I have never heard of problems with Indian students!
By 2020 you expect the number of Indian students coming to Australia to go up dramatically. What about the reverse traffic?
I couldn't agree more. My Budget will have some initiatives to encourage Australian students to travel to other countries, especially for undergraduate courses. At the moment, about 4 per cent of university students travel overseas as part of their studies. Only 0.68 per cent of Australian students are travelling overseas. This will be addressed in the reform package for higher education that I will be announcing. There will be initiatives to strongly support and encourage this trend. I'd be happy to work on helping to market India as an education destination for our students. At the moment we are in the process of negotiating an MoU with India on education and I'd be very happy, as a part of it, to look at what India can do as a good educational destination for Australian students.
Many Indian degrees are not accepted in Australia...
I think we've gone through a period here that it is rather ironic. The Australian medical system, for example, has been built on the back of British and Indian doctors. In the last 10-15 years we have gone through a period of firstly controlling the number of overseas medical graduates and focussing on the standards of those who come. And you find that some institutions have a terrific reputation and others do not.
We have been through some tough periods but are emerging from them now. In the last decade, there was a lot of national outpouring of grief and anger about some trade in goods and services, which was seen being at the expense of the livelihood of some Australians. But that is now behind us and we are looking at mutual recognition or sister relationships between Australian and foreign universities. We have already started with Europe and China, and need to do the same with others.
Also, there is a limit to how many overseas students, without compromising on standards here, we can physically train here. Logically the only way forward to realistically meet the demand will be for mutual accreditation so that a number of institutions in India might accredit institutions here and vice versa.
The other concern is on employment here as jobs are not readily available. Students who take huge loans need well paying jobs to repay those loans. Whereas if you study in American universities, a good percentage get absorbed in the work area there...
It is very difficult because Australians, like all human beings, welcome students coming to Australia. But if they think that their own children are not going to have a job because they have been educated in an Australian institution...
But if you get PR (Permanent Residency), then it's easier to get a job...
Of course. Once people have permanent residency or citizenship then they are treated equally. Coming to medical education, we train about 1,000 overseas trained doctors in our medical schools at the moment. Until very recently, once they graduated they had to go back to their countries, but now we have a shortage of doctors so the Immigration Minister has recently allowed these graduates to stay back and do their internship and residency in Australian Hospitals.
So in the same way an oversupply in one area of the labour market will result in overseas students having to go back, if there is a shortage in another area, we will welcome overseas graduates. You are constantly trying to balance what is right and just in the interests of students with what are the needs of our own society. But it is not easy.
Response can be sent to rasheeda @thehindu.co.in
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