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HUANG HOU HAO

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Yutian Lijia Wenxia Guojun Siyuan

211001171 900381346 210062155 211009403 210043817

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MPE711

Global Trade and Markets

Burwood

Lecturer: Aaron Nicholas Tutor: Aaron Nicholas

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2nd

12.Sep.2011

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MPE711
Global Trade and Markets Due date : 12.Sep.2011

Student Name & ID:

Yutian CAI

211001171

Lijia HUANG 900381346 Wenxia HOU 210062155 Guojun HAO 211009403 Siyuan Lai 210043817

Table of Contents
The new immigration points test system .............................................................................. 1 The new immigration system effects on education industry ................................................ 2 1. 2. Student ...................................................................................................................... 2 Teacher ...................................................................................................................... 3

Effect on enrolment of International Student....................................................................... 3 Immigration affects Australians economy in short and long-term ...................................... 6 Reference: ............................................................................................................................. 9

The immigration policy of Australia is changing every year. It became very hard due to the new testing system has been introduced. It could directly affect the education industry which is the third biggest industry of Australia. Since, many international students who want to immigrate might prefer other countries rather than Australia. Moreover, the economic and employment of education industry would have been effected in short term and long term.

The new immigration points test system

The new immigration points test system was introduced on 1 July 2011 in Australia (Australia Government, 2011). Under the system, it puts more emphasis on work experience and is bias to applicants who have higher level of educational qualification (Workpermit.com, 2011). In the new immigration point list, the number of nominated occupations will be decreased from more than 400 to 180. Occupations relating to engineering, medical, IT, and teaching remain listed on the schedule (Australian Government, 2011). There were many nominated occupation removed from the list including the major of MBA, Global Trade, Finance, Marketing which, ironically are subjects that are favoured by international students. Furthermore, occupation about humanities and translation are also removed from the list, as well as the popular occupations such as chef and hairdressing (Workpermit.com, 2011).

The objective of the renewed immigration policy is to ensure the Australia government is able to select the best migrants from the application pool as to service the Australia economic in the mid and long term (Workpermit.com, 2011). And new immigration point system also improves the requirement standard in a rigorous point in many aspects. For example, the applicant with IELTS score of 7 will gross 10 points under the new system; IELTS score of 8 will gross 20 points. Under the old system, IELTS score of 7 and 6 will receive points of 25 and 15 respectively (Australian Government, 2011).

The new immigration point test system will have a big influence on the education industry especially the international student market. As statistics show, over 51.6% of international students in Australia have chosen to study in business courses, especially the accounting major (Studiesinaustralia.com, 2011). In the new point test system,

many business courses are not on the list (Australian Government, 2011). Even though the accounting major is still on the nominated occupation list, it is now even more difficult than before for applicants to apply. These will result in those international students whose aim is to immigrate to Australia to choose another country to be their overseas study destination. Many private vocational colleges aimed to provide the international students courses that align with the nominated occupation course, and they are likely to be affected by the change of the new point test system. Those schools may be forced to close down.

The new immigration system effects on education industry

The immigration policy of Australia is a restriction and a promotion which is published to set the boundary and also another way to attract students, so that the country could limit the qualities and quantity of the overseas students at the same time.

In the past few years, because Australia is a comfortable and convenient country which is suitable for people to live in the world, so the number of incoming overseas students is increasing and once reached 450,000 (IDP, 2008). And every year, the Australian government would invest lots of money on the development of education system. However, because of the new immigration policy published, there comes a problem about employment which means there is a big threatens to the education system, and we could see this problem both from the student and teacher perspective.
1. Student

Because the threshold is set higher than before, it is becoming harder to apply the certificate to live in Australia as a permanent resident or as a citizen. There has being an elimination on the number of overseas students who are willing to come to Australia or stay in Australia after study. They dont think they could have a good future after graduating from the colleges and universities even they are hold the valuable certificates. So, most of them are choosing to get back to their own countries to serve as legal employments rather than staying in Australia. The decline was showed as 30 percentage (MJ, 2011) decreased in 2010 measurements. So the employment area which would like to attract fresh blood from the new graduates is now having a vacant position. And the profit is now happy. Because of the new policy,

the government is acting as a blamed target; the profit from this area has lost about $18 Billion (2011).

2.

Teacher

Because of the decline of the number of students, there also comes a related problem on the employment of teacher. Less enrolment of students in universities, more teachers are facing the occupation problems. Because the elimination of students, the profit of the university is not as good as before, so in order to make the balance, the universities would like to cut some sources from the school like some occupations. These years, the records showed there had been some schools closed because the profit becoming losses and these all because of the new immigration policy.

In the future, the impact would still continue and the decline might still last if the policy would not become more attractive or easier to apply like before. The impact is significant.

Effect on enrolment of International Student

The international education industry is the largest services export sector of Australia (Australian Government 2008). It provides considerable revenue each year to the government, Immigration counts for a large proportion of the reasons why many international students choose Australian University. This sector will provide some data to show the difference of international student enrolment in Australia in each year recently and try to explain the change by some economic theory.

Figure 1 International Student Enrolments in Australia from 2002 to 2010

2002
EnrolmentNumber

2003

2004

2005

206

2007

2008

2009

2010

273855 303324 322776 344815 383818 455185 543898 631935 619119 10.8% 5.9% 7% 10.9% 19% 20.7% 16.8% -2.03%

Change rate

Source: Based on Department of Education, Employment and Workplace Relations Figure 1 shows the number of international student enrolment in Australia each year. It can be seen that the enrolments of international students rise from 273,855 in 2002 to 631,935 in 2009 before a slight decrease in 2010. And the increase rate starts to decrease from 20.7% to 16.8% in 2008-2009. What's more, the increase rate even became negative in 2009-2010 which is -2.03%. According to the report from Embrace Australia, the enrolment of international student this year is 2.5% lower than this time last year (Robert Pearce). Simon Marginson (cited in Embrace Australia 2011) points out that the change of the visa program and policy of immigration is one of the reasons which stop the overseas students come to Australia. Organisation for Economic Co-operation and Development [OECD] (n.d.) indicates that there are two kinds of Immigration are distinguished by Australia: family members and skilled workers. Oberviousely, the education industry is more likely to be related to the skilled workers.

In the new Skill Occupation list, Australia government cancels the MODL list and CSL (Critical Skills List) have been withdrawn. And the number of new SOL (Skilled Occupation List) decreased to 181 from the old one which have 408(Australian Visa Bureau 2011). Although the new points test for skilled migrants is 65 which looks like much lower than the 120 in old system. But actually, if we consider the neglecting of occupation evaluation and other concepts, the 65 points in new system is suggested to equal to 130-140 points in old system which is higher. It can be seen as the hardest point test in 10 years in Australia for the applicants. The supply and demand curve can be used to explain this situation. Figure 2

According to the economic theory about the supply and demand curve, there are several factors will affect the demand curve and the preferences of people are one of it (McTaggart, Findlay and Parkin 2010). Look back into the practice, as we have mentioned above that it will be more difficult to apply the immigration through the method of skill workers. This means there will be a decrease by the students whose purpose of study in Australia is to immigrate. As the result, the demand curve will shift left as Figure 2 has shown.

Figure 3 Migration Program Statistics

Source: Australian Government Department of Immigration and Citizenship In Figure 3, it can be seen that the trend of total skill immigration budget of Australian Government is steadily. It shows that supply of skill workers' immigration places which provided by Australian Government is stable. The total amounts of relevant education chances are also planned to apply. As a result, the market of the immigration will get to equilibrium as Figure 2 has been shown. The total quantity of educational demand by international students is suggested to be lower after the new immigration law carried out.

Immigration affects Australians economy in short and long-term

According to our preliminary estimates, the number of international students is expected to decrease in following years. In the short term, the decreasing of international students has not too much impact on Australia economy. However, it must bring a great influence to Australia economy in the long run. Specific speaking, as the third biggest industry, education industry can bring hundreds billions income every year. During this income, the international students make the most important contribution. The contribution of international students to the Australian economy

includes the full fare tuition fee and the expenditure while they living in Australia, for example accommodation, food and transport and so on. In 2007-2008, according to ABS shows the average expenditure and tuition fees are $29,997 on goods and services and $19,657 respectively. In addition, every international student can bring a number of potential tourists, like parents and friends assist graduation ceremony.

However, the immigration policy becomes more and more constrictive, the trend of tuition fees increasing annually. Both of them pose a lethal threat to education industry. As noted early, most of international students study in Australia is for Apply for emigrant Australia. When the Australian immigration policy is getting harder and harder, the potential international students can have more options. Compare to the United States of America and the United Kingdom, Australia is a relatively less attractive country. In 2006, The United States of America and the United Kingdom accounting for 21.2 and 12.0 per cent of total international students respectively. However Australia only had 7.5 per cent and at that time the immigration policy was not tough as recent years. In addition, the currency of Australia is appreciated from 2010. Therefore, the cost of studying and living is increasing and more expensive by compare the United States of America. Without consideration about the immigration, the universities of American can provide higher quality and cheap expenses. The less attraction and the few overseas students choose Australia, the department of immigration offices data shows the number of applications was declined 18.9% by compare 2009-10 and 2008-09.

In the short run, the decrease of the international students can directly effect on education export industry obviously. In the long term, it would hurt the employment

rate and other industry is closed related to education industry. For instance, before the new immigration policy was adopted in 2010, a number of new schools like private school and language school were prepared for open. However, the new immigration policy leaded to the decrease of overseas students, those schools were bankrupt and the staff s loses their jobs. Not just private school but also top eight universities could lay off employees. Hence, the decrease of overseas students could hurt Australia economy in the long run and deeply.

Reference:
Australian Government Department of Foreign Affairs and Trade 2008, 'Australia in brief: Tourism and international students', retrieved 28th August 2011, <http://www.dfat.gov.au/aib/tourism_students.html> Australian Government Department of Immigration and Citizenship 2011, 'Migration Program Statistics', retrieved 29th August 2011, <http://www.immi.gov.au/media/statistics/statistical-info/visagrants/migrant.htm> Australian Government Department of Education, Employment and Workplace Relations 2011, 'International student data', retrieved 28th August 2011, <http://www.aei.gov.au/research/InternationalStudent-Data/Pages/default.aspx> Pearce, R 2011, 'International Student Numbers Down', retrieved 1st September 2011, <http://www.embraceaustralia.com/international-student-numbers-down-9308.htm> Marginson, S 2011, ' International Student Numbers Down', retrieved 1st September 2011, <http://www.embraceaustralia.com/international-student-numbers-down-9308.htm> Organisation for Economic Co-operation and Development n.d., Part 2 Comparative Analysis of The Legislation and The Procedures Governing The Immigration of Family Members in Certain OECD Countries, Organisation for Economic Co-operation and Development, retrieved 2nd September 2011, <http://www.oecd.org/dataoecd/20/12/41563157.pdf> Australian Visa Bureau 2011, 'Emigrate to Australia: Australian Skilled Migration', retrieved 1st September 2011, <http://www.visabureau.com/australia/emigrate-to-australia.aspx> McTaggart, D, Findlay, C & Parkin, M 2010, Economics 6th edn, Pearson Australia, NSW. How many students come to Australia, IDP Education-open to world,2008 <http://students.idp.com/ask_a_question/how_many_students_come_to_aus.aspx> Oz government blamed for decrease in foreign student enrolments in Australia, By Mary Jones, 2011 <http://www.canadaupdates.com/content/oz-government-blamed-decrease-foreign-student-enrolmentsaustralia-16196.html>