The English language sector - back to growth but how can we make it sustainable?

- An opinion piece from English Australia's Executive Director, Sue Blundell, following the release of the report on the English language sector's performance in 2013.

In the recent past, the international education industry has looked to the English language sector with trepidation to see whether the barometer is rising or falling. This year, for the first time in half a decade, we bring glad tidings but not necessarily for all.

2013 was the best year in a long time for the English language sector, and 2014 has certainly started with more promise than previous years. This applies to all sectors of international education but, as with all statistics, the data does not always tell the whole story.

While the figures are good and getting better for higher education and other providers in the Streamlined Visa Processing pipeline, the prospects for non-SVP providers including stand-alone ELICOS are less encouraging.

The annual English Australia report on the performance of the ELICOS sector (that includes large numbers of students on visas other than student visas) shows many reasons to celebrate.  Student numbers were up by 19%. The number of course weeks delivered increased by 25%, and export earnings grew by 26%, amounting to over $1.8 billion.

Whilst this data conveys a picture of a thriving sector, it is worth considering how this growth is actually being experienced by individual providers.

The data shows growth across all major visa types and across all major source countries, however robust business models for providers have traditionally been based on access to all types of ELICOS students, from Japanese students here on a two week visitor visa to Saudi Arabians on a student visa for one year.

Drilling down further, while 62% of students are on student visas, this cohort accounts for a massive 80% of the course weeks delivered. If providers are unable to access these student visa holders as a result of restrictive policy settings, then, despite the seeming growth, many providers continue to face challenging times.

Why does this matter? If the universities and their partners are successfully riding the boom of the expanding Asian middle classes why worry about the rest?

Any industry subject to the vagaries and risks of international trade needs to be sufficiently diverse to cope with unforeseen downturns in particular markets.

An unbalanced international education industry too dependent on one sector will have adverse consequences both for the industry itself and more broadly for the Australian economy as a whole. We should be able to consign to history the destructive boom and bust cycles of the early years of the international education industry.

Too many eggs in one basket is never healthy. Higher education and international education are not synonymous despite the current SVP-driven trend.

We are repeatedly told that Australia needs to replace the wealth formerly generated by the mining and mining investment booms and Trade Minister Andrew Robb has identified international education as having the potential to make a greater contribution to export earnings and the economy as a whole.

In a recent report, ‘Positioning for prosperity? Catching the next wave’, Deloitte Access Economics identified International Education as one of the ‘Fantastic Five’ sectors that offer the best opportunities to drive economic growth for Australia.

But that potential will not be optimised if stand-alone ELICOS, private VET and TAFE continue to be constrained and treated in a discriminatory manner.

The ideal situation was expressed succinctly at the ELICOS industry scenario planning workshop late last year. The most optimistic of the four possible scenarios identified saw the future as the ELICOS sector contributing to an operating environment of:

'Strong alignment across all international education stakeholders supported by a focus on best practice in all aspects of business and academic practice.'

Unfortunately alignment is still an aspiration. At the federal government level responsibility remains split across the three portfolios of education, immigration and trade, as well as two regulators, with some key areas of state and territory responsibility such as student transport concessions treated inconsistently.

To be fair to the current Commonwealth Government, Education Minister Christopher Pyne has moved with alacrity to block mooted TPS fee increases, extended SVP to more low risk higher education providers and brought forward the review of the ESOS/national code legislative and regulatory package.

Nowhere is the lack of alignment clearer, however, than the government’s inability to expand SVP beyond higher education. 

It has been left to the international education industry to work together to make a joint submission for a comprehensive risk-based approach which will treat providers equally regardless to which sector they belong.

While the Commonwealth Government has taken some initiatives of its own and addressed some of the decision-making hangover from the previous administration, we are still awaiting a response to the Chaney Report which was a review of international education as a whole.

If implemented, some of the key recommendations would create a more cohesive structure and coordinated framework. This would enable our industry to achieve its potential which, as the 2013 English Australia figures demonstrate, can easily surpass the previous high point in 2009, whether measured in course weeks, raw numbers or export earnings.

However our Scenario Planning participants were quite clear on what will happen in the absence of a commonly held strategic vision and plan.  They described an industry focused on survival rather than growth with a 'small, stale and unexciting' education offering.

Australian international education industry has repeatedly shown the type of resilience which suggests that the encouraging signs contained in English Australia’s latest report will be translated into another period of sustained growth.

The extent of that growth and the size of its overall contribution to the Australian economy depend on some important policy decisions yet to be made.

With the right decision-making we can bridge the divide between higher education and the rest, and develop a balanced, diverse and innovative international education offering which will definitely consign government policy driven boom and bust scenarios to the past.