International colleges at risk of collapse due to immigration changes, experts warn

A number of private colleges are at risk due to immigration policy changes introduced by the Government, which will see Australia’s list of “in demand” occupations for immigrants scrapped and reviewed.

The changes will see some occupations, such as hairdressers, scrapped from the skilled migrant program. About 20,000 people who have applied for the skilled migrant visa under an occupation now scrapped from the list will have their visa fees refunded.

But international colleges which depend on international students studying these trades are angry, saying the changes are unfair and will result in the collapse of a number of private institutions.

The protests come after a number of private colleges have collapsed over the past year, including the Global Campus Management Group. Some industry analysts have said these colleges are running on thin budgets and low margins.

Dr Phillip Toner, a senior research fellow at the Centre for Industry and Innovation Studies at the University of Western Sydney, has said private colleges which rely on international students will be highly impacted by the changes.

“It’s obvious from the private college sector, because they’re saying they’re going to lose 50% of their students and so on. It’s the clearest demonstration as to what is driving the demand, and there will be effects.”

“One can imagine it’s going to be fairly competitive, the barriers to entry are going to be quite low and therefore there will be changes because of that.”

But Toner also said the changes could improve the market by ensuring a high quality of service offered by legitimate colleges, instead of institutions which act as a front for an unofficial immigration service.

It has been suspected some international students go through a college in order to gain private residency. The number of foreign students studying in Australia rose to 580,000 last year, representing an increase of 95% over the past five years, leading analysts to believe some colleges are being used as tools in order to gain permanent residency.

“The changes could benefit the private training market by reducing the incentives to offer low quality training by exposing a whole segment of the market, resulting in the overall improvement of quality in these sectors.”

Andrew Smith, chief executive of the Australian Council for Private Education and training, has said private colleges will be at risk due to the immigration changes.

“The new Skilled Occupation List (SOL) will not be released until the end of April and until this time businesses will not be able to make informed decisions about the future,” he said in a statement.

“In the absence of a revised SOL, businesses cannot properly anticipate their future resource and staff needs. Many of these businesses have been hard hit by the fall in demand from key source markets and this uncertainty will add to these pressures.”

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, has said there is still a place for these colleges if they are able to offer good, quality training, and not act as a front for an immigration service.

“If there are skills shortages in some of these industries these colleges are taking, such as hairdressing and cooks and chefs, then the work of these colleges is important to Australia’s labour market.”

“What we are saying is that the Government is right to focus its labour migration policy on the skill-needs of the Australian economy, but the Government needs to work more closely with industry to ensure that gaps in our labour supply are filled based on experience, not a checklist.”

Evans announced the changes yesterday, saying they would also involve a major shake-up to the immigration “points test” system.

“The reforms will deliver a demand rather than a supply driven skilled migration program that meets the needs of the economy in sectors and regions where there are shortages of highly skilled workers, such as healthcare, engineering and mining,” Evans said in a statement.

No details regarding the updated skilled occupations list have been announced. Skills Australia said in a statement the new list would be published on April 30.

“There are plenty of occupations where there is an adequate supply of young Australians coming through our schools, TAFE colleges and universities to take up new job opportunities. They must be given the opportunity to fill these vacancies first,” he said.

“But there are some occupations where there will be high demand for skills. Hospitals can’t go without nurses, country towns can’t do without a local GP and the resources sector increasingly needs skills”

More details about the changes will be released over the next few months.