Australia’s international education sector proved instrumental in the nation’s post-COVID-19 economic recovery, acting as a significant counter-recessionary force. Following a sharp decline during border closures, the sector experienced a robust rebound, contributing tens of billions of dollars to the economy and driving a substantial portion of national GDP growth. International students, through their tuition fees and extensive living expenditures, have consistently ranked among Australia’s top exports. Beyond this direct financial injection, their crucial role in alleviating widespread labor shortages across various sectors, particularly in casual and entry-level positions, further underscored their economic indispensability. Despite these undeniable economic benefits, public discourse, often shaped by media narratives, frequently misrepresents international students, attributing to them issues such as the housing crisis or job competition, which are largely unsupported by empirical evidence. This report provides a factual account of their contributions and addresses these prevailing misconceptions.

The Indispensable Role of International Students in Australia’s Economy

Download Infographic

International students are not just visitors; they are a pivotal force in Australia’s economic vitality, especially highlighted in the post-COVID recovery. Their contributions extend far beyond campus, shaping the nation’s prosperity and resilience.

$51.03B

Education Export Value (FY 2023-24)

A new peak, underscoring massive financial injection.

0.8%

Contribution to GDP Growth (2023)

Driving half of Australia’s economic expansion in the year.

Key Role

In Averting Deeper Recession

“Almost singlehandedly kept us out of recession” – Universities Australia (2023).

An Economic Powerhouse

The international education sector has consistently been one of Australia’s top export earners, demonstrating robust growth and resilience. Its financial impact is a cornerstone of the national economy.

Education Export Income Trend

The sector saw a dip during COVID but rebounded strongly, reaching new heights.

Top Export Earner (FY 2023-24)

International education stands tall among Australia’s primary exports.

Beyond Tuition: A Multiplier Effect

The economic contribution of international students extends far beyond their tuition fees. Their spending on goods, services, and living expenses creates a significant ripple effect across the Australian economy.

Student Expenditure Breakdown (FY 2023-24)

A significant portion of student spending directly supports local businesses.

Fueling the Economy Through Work

~25%

Of Total Student Expenditure is Self-Funded

This amounts to approximately $13 BILLION (FY 2023-24) earned through local employment, directly reinvested into the Australian economy. This demonstrates a reinforcing cycle of economic activity.

Backbone of the Workforce

Post-COVID, Australia faced severe labor shortages. International students proved crucial in filling these gaps, particularly in essential services and the “odd job market,” stabilizing industries and supporting economic continuity.

250,000

Australian Jobs Supported in 2023

This is more than double the jobs in the iron ore, coal, and gas mining sectors combined, highlighting the sector’s vast employment footprint.

🧑‍🎓 > ⛏️

Key Policy Response: March 2020

Recognizing their vital role, the government temporarily relaxed work hour limits for students in essential services like aged care and supermarkets to address critical staff shortages during the pandemic’s peak.

Critical Support Across Key Sectors

International students provided indispensable labor in various sectors facing acute shortages:

🍽️

Hospitality & Retail

Filled part-time, casual roles; vital for business operations.

👵🏽

Aged Care

Ensured continuity of care during staff shortages.

👶

Childcare

Provided crucial support for childcare services.

✈️

Tourism

Underpinned workforce needs as the sector recovered.

The Disconnect: Narratives vs. Reality

Despite their significant economic contributions, international students are often unfairly blamed in media and public discourse for broader societal issues. This section contrasts common narratives with evidence-based realities.

Narrative: “Students Cause Housing Crisis”

Often blamed for rising rents and housing shortages.

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Reality:

• Constitute only 6% of renters nationally.
• Nearly 40% live in dedicated student housing.
• Research (UniSA 2024) found no statistical link to the rental crisis.
• An increase of 10,000 students correlated with a $1 decrease in weekly rents (other factors controlled).

Narrative: “Students Take Aussie Jobs”

Concerns raised about job competition and displacing domestic workers.

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Reality:

• Australia faced severe labor shortages post-COVID (2nd worst in developed world).
• Students fill critical gaps, especially in hospitality, retail, aged care.
• 85% of businesses couldn’t operate at full capacity due to shortages.
• Government actively encouraged student return to address workforce shortages.

Challenging Misrepresentation

“Media discourses tend to ‘commodify’ international students, valuing them for fees while marginalizing them… Students are often characterized as ‘temporary, expendable, or invisible’.” (Academic Research)

Initiatives like the film “Phoenix” see students reclaiming their narratives, offering lived experiences to challenge one-dimensional portrayals and foster recognition as integral community members.

Valuing Our Vital Contributors

The evidence is clear: international students are indispensable to Australia’s economic prosperity and social fabric. Their contributions as a major export earner, spenders in the local economy, and vital members of the workforce helped Australia navigate the post-COVID recovery and avoid a deeper recession.

It is crucial for public discourse and policy to reflect these realities, moving beyond misinformed narratives. A welcoming and supportive environment for international students is not just a matter of fairness; it’s an investment in Australia’s ongoing economic strength and global competitiveness.

1. Introduction: Australia’s Economic Resilience in the Wake of COVID-19

The onset of the COVID-19 pandemic presented Australia with an unprecedented economic challenge. The nation experienced a significant downturn, with real Gross Domestic Product (GDP) declining by a record 7.0% in the June quarter of 2020, leading to a 1.1% fall for the year to December 2020.¹ This marked the largest quarterly contraction on record, unequivocally pushing the Australian economy into recession and highlighting the severity of the initial economic impact.¹ This critical context establishes the economic vulnerability Australia faced, providing the baseline against which the subsequent recovery and the role of key sectors can be measured.

Sectors with a high dependence on the international movement of people, such as tourism, education, and airlines, were particularly affected by the stringent lockdowns, quarantine measures, and travel restrictions implemented to protect public health and prevent the spread of COVID-19.¹ The severe curtailment of international travel and a significant reduction in net overseas migration were explicitly identified as key sources of economic perturbation.² These restrictions prevented many businesses from operating at full capacity and forced numerous workers to cease employment or transition to remote work.²

In response to these strong negative economic consequences, both federal and state governments instituted various stimulus measures. These actions were designed to support businesses and maintain household finances, aiming to bolster the economy’s resilience against the pandemic’s shocks.¹ Australia’s economic resilience is inherently tied to the performance of its major export industries. While traditional exports like mining (iron ore, coal) demonstrated relative stability and continued to thrive amidst the disruptions ¹, the services sector, particularly international education, faced profound disruption due to closed borders and halted travel.¹ The subsequent rebound and recovery of these severely affected sectors, especially international education, were therefore critical for the broader national economic recovery and for averting a deeper or more prolonged recession. The speed and magnitude of their recovery directly influenced the overall pace and strength of Australia’s economic rebound.

2. International Education: A Cornerstone of Australia’s Economy

International education has a long-standing and profound significance as a major contributor to Australia’s economy. Its historical trajectory demonstrates a consistently growing industry, rather than a transient phenomenon. As early as 2007, education services exports had already grown at an average annual rate of approximately 14% in volume terms since 1982, displacing leisure travel services as Australia’s largest service export.⁶ By 2007, it had become Australia’s third largest export overall, behind only coal and iron ore, underscoring its established and substantial economic footprint.⁶

A critical aspect of this economic contribution is its onshore delivery. The vast majority of this export value – approximately 97% of $12.6 billion in 2007 – was generated through foreign students studying within Australia.⁶ This highlights that the economic activity is primarily injected directly into the Australian economy, stimulating local businesses and employment across various sectors, rather than being an offshore service.

Post-COVID-19 Rebound and Current Economic Standing

The COVID-19 pandemic and associated border closures severely impacted the international education sector. Its value approximately halved from $40.3 billion in 2019 to $22.5 billion in 2021.⁴ This dramatic reduction sent significant economic shockwaves through universities, which had developed a substantial reliance on international student fees.⁴

However, the sector demonstrated remarkable resilience and a robust rebound following the reopening of borders. In 2022, international education added over $29 billion to the economy, with the majority of this contribution coming from onshore students.⁷ This recovery continued strongly, with the sector contributing $48 billion to the economy in 2023, positioning it as the second biggest export behind mining.¹⁰ By the financial year 2023-24, the value of education as an export reached an all-time peak of $51.032 billion.⁹ This rapid and substantial recovery underscores its vital role in the national economic rebound.

The significance of this rebound extends beyond mere recovery; it became a critical driving force for Australia’s overall economic growth. Universities Australia explicitly states that international education “drove half of Australia’s economic growth in 2023,” contributing 0.8% of the total 1.5% GDP increase.¹⁰ Furthermore, it is asserted that the sector “almost singlehandedly kept us out of recession” in 2023.¹⁵ These strong statements indicate a direct causal link between the sector’s performance and the avoidance of a deeper or prolonged economic downturn.

It is worth noting that the ranking of international education among Australia’s top exports can fluctuate. While a 2007 report identified it as the third largest export ⁶, more recent data from calendar year 2024 and financial year 2023/24 places it as the fourth largest export.⁹ Conversely, 2023 data indicated it was the second biggest export behind mining.¹⁰ These variations are not contradictory but reflect the dynamic nature of Australia’s export landscape, influenced by fluctuating commodity prices (iron ore, coal, natural gas) and the specific reporting period (calendar vs. financial year). The consistent theme across all available data is that international education remains unequivocally among Australia’s top few exports (top 2, 3, or 4), generating tens of billions of dollars annually, which strongly affirms its profound and enduring economic importance as a cornerstone of the Australian economy.

Breakdown of International Student Expenditure

The economic contribution of international students extends significantly beyond tuition fees, demonstrating a broad economic ripple effect. As early as 2007, tuition fees accounted for only 39% of overseas student expenditure, with the substantial balance (61%) representing spending on a wide array of goods and services such as food, accommodation, transport, and entertainment.⁶ This pattern of broad economic stimulation continued post-COVID. In 2020, over half of the export income generated from international students came from their spending on goods and services, with 45% attributable to tuition fees.⁸ More recently, in financial year 2023-24, $30.2 billion was generated from goods and services expenditure, compared to $20.6 billion from tuition fees.¹³ This substantial spending on daily necessities and leisure activities directly injects capital into a much wider array of local businesses, creating a multiplier effect where money circulates throughout the economy. For example, student spending at a local cafe supports the cafe owner, their staff (baristas, cooks), their suppliers (food producers, transport companies), and so on. This broad economic circulation is crucial for understanding how the sector contributed to overall national recovery and resilience, far beyond just university budgets.

3. International Students: Catalysts for Post-COVID Economic Recovery and Labor Market Stability

Australia’s economy was undeniably pushed into recession by the COVID-19 pandemic, marked by a significant decline in GDP.¹ The robust and rapid rebound of the international education sector was instrumental in mitigating this economic impact and driving the subsequent recovery. Universities Australia explicitly highlights that international students “drove half of Australia’s economic growth last year” (referring to 2023), contributing 0.8% to the overall 1.5% GDP increase.¹⁰ This substantial contribution led to claims that the sector “almost singlehandedly kept us out of recession” in 2023.¹⁵ Such strong causal language underscores the critical role international education played in preventing a deeper or more prolonged economic downturn.

Government policies actively facilitated the return of international students, demonstrating a clear recognition of their economic and labor market value. The Morrison Government offered visa rebates to international students who returned in early 2022, and the Albanese Government prioritized clearing visa backlogs to accelerate their return.¹⁰ Both administrations explicitly encouraged the return of international students to “address critical workforce shortages and boost the economy”.¹⁰

Addressing Critical Workforce Shortages (“Odd Job Market”)

Post-COVID, Australia faced widespread and severe labor shortages, which were ranked as the second most severe in the developed world.¹⁷ This critical issue resulted in approximately 85% of businesses being unable to operate at full capacity, particularly impacting sectors like restaurants, cafes, and shopping malls.¹⁷ National shortages were identified in at least 332 occupations, including critical areas such as healthcare (with a projected need for 250,000 additional skilled healthcare workers by 2027 and a shortage of 70,000 nurses by 2035) and skilled trades like electricians and engineers.¹⁷

International students played a vital and flexible role in filling these gaps, especially in sectors heavily reliant on casual and part-time labor, often referred to as the “odd job market.” They are described as “critical” for supporting roles in tourism, hospitality, retail, aged care, and childcare.¹⁶ Many recent migrants, including international students and working holidaymakers, frequently take “lower-wage jobs” ¹⁷, which are essential for the smooth functioning of these industries. The presence of international students in these roles is not merely about them finding employment; it reflects their strategic utility during a crisis.

During the immediate crisis phase of the pandemic, the Australian government recognized this critical need. In March 2020, temporary changes were announced to relax work hour limits for international students in essential services like aged care and major supermarkets, specifically to address emerging staff shortages as other workers took leave or quarantined.¹⁹ This policy adjustment directly enabled students to significantly increase their labor market participation in areas of acute demand. This governmental action highlights a deliberate policy choice, indicating that international students were not merely a passive workforce but an active solution deployed by the government to mitigate economic disruption. This points to a deeper role for international students as economic shock absorbers. When the domestic workforce faced unprecedented disruption (due to illness, quarantine, or border closures), international students provided a flexible, responsive, and readily available labor pool. Their presence helped maintain essential services (such as aged care and supermarkets) and operational capacity in casual-heavy industries (like hospitality and retail), directly contributing to national resilience and preventing a more severe economic collapse. This demonstrates their essential function in maintaining the continuity of vital services and business operations during a crisis, thereby stabilizing the workforce.

Industry bodies such as the Australian Retailers Association (ARA) and National Retail Association (NRA) have vocally highlighted the indispensable role of international students for the $430 billion retail sector, not only as consumers but also as workers. They emphasize students’ crucial contribution to “part-time and casual roles” and their importance in solving the “retail labour crisis,” citing high job vacancies (25,600 nationally).¹⁸ The international education sector, through both direct and indirect employment, supported approximately 250,000 Australians in 2023. This figure is more than double the number employed in the iron ore, coal, and gas mining sectors combined ¹⁶, underscoring the sector’s substantial job creation capacity across the broader economy.

The economic contribution of international students is multifaceted. They serve as a major export industry through their tuition fees and living expenses ¹⁰, and simultaneously constitute a significant component of the labor force, particularly in casual and lower-wage jobs.¹⁶ A crucial connection between these two contributions is revealed by the ABS, which estimates that around a quarter of the total expenditure (approximately $13 billion in the 2023-24 financial year) is funded by international students working in Australia for Australian employers.¹² This means that a substantial portion of the export income attributed to international students is directly generated from their work within Australia. Their labor market participation directly enhances their overall export value, creating a reinforcing cycle of economic benefit. This integrated contribution makes international students uniquely valuable to the Australian economy, providing both a substantial foreign income stream (boosting national accounts) and a flexible, responsive workforce that can adapt to fluctuating labor demands, especially in the “odd job market” that domestic workers may not always fill.

The following table provides a detailed overview of how international students contributed to addressing critical workforce shortages in key sectors post-COVID.

Table 2: International Student Contribution to Key Workforce Sectors (Post-COVID)

Sector	Nature of Labor Shortage Addressed	Evidence of Student Contribution	Relevant Data Points / Policy Changes
Hospitality & Retail	General vacancies, part-time & casual roles, lower-wage jobs, inability of businesses to operate at full capacity	Critical for supporting part-time and casual roles, backbone of dynamic trading environments.18 Many international students take lower-wage jobs.17	85% of businesses unable to operate at full capacity due to labor shortages; 25,600 retail job vacancies nationally.17
Aged Care	Critical staff shortages, need for continuity of care as domestic workers quarantined/took leave	Temporary relaxation of visa work limits for international students already employed in aged care.19 Students helped fill critical staff shortages.19	Policy change announced March 2020.19 Projected need for 250,000 additional skilled healthcare workers by 2027; shortage of 70,000 nurses by 2035.17
Childcare	General staff shortages	International students are crucial for supporting roles.16	N/A (specific data not provided in snippets, but acknowledged as a sector supported).16
Tourism	Workforce support, particularly in casual roles	Underpins tourism sector.16 Businesses reliant on international travelers stood down staff due to collapse in demand.5	N/A (specific data not provided in snippets, but acknowledged as a sector supported).16
Overall Economy	Addressing critical workforce shortages, boosting economy	Government encouraged return of international students to address shortages.10 Supported 250,000 jobs nationally in 2023.10	250,000 jobs supported by international education (more than double mining combined).16

4. The Disconnect: Media Narratives vs. Economic Realities

Despite their profound and multifaceted economic contributions, international students are frequently subjected to negative media portrayals and public blame for systemic societal issues. This creates a significant disconnect between their empirically verifiable economic value and their public perception.

One of the most prevalent negative narratives positions international students as culprits in Australia’s housing crisis. They are often prominently blamed for ostensibly contributing to rising housing costs and the rental crisis.¹⁵ This narrative has been echoed by politicians, including the Treasurer, who suggested that increased numbers of foreign students “puts pressure on prices and rents”.²¹ However, academic research and industry data strongly challenge this assertion. A 2024 study from the University of South Australia found that international students are “not the culprits of the rental crisis” and “only constituted a small part of the puzzle”.²¹ This research, based on data from 2017 to 2024, found “no statistical relationship between international members and the housing crisis” and that an increase of 10,000 international students actually led to a corresponding decrease of $1 in weekly rents when other factors were controlled.²¹ The Student Accommodation Council further supports this, noting that international students make up just 6% of renters nationally, with almost 40% living in student housing.²¹ They are often at a disadvantage in the private rental market due to lack of rental history or immediate income statements.²¹ This suggests that the housing crisis is driven by “very complicated macro-level socio-economic reasons” rather than student numbers.²¹

Similarly, media narratives and political rhetoric have fostered concerns about international students creating job competition ²⁰ and framed them as “economic threats” ²⁴, implying they displace domestic workers. This contrasts sharply with the documented reality of severe labor shortages across Australia, particularly in sectors like hospitality, retail, and aged care, where international students are crucial for filling identified gaps.¹⁶

Furthermore, academic research reveals that Australian media, exemplified by current affairs programs like “Four Corners,” has misrepresented international students’ English language proficiency. These portrayals often assign them “responsibility for declining standards at universities” through simplistic and naive representations of their language use as problematic.²⁵ This discourse contributes to their discursive exclusion from the broader societal narrative.

Beyond specific issues, international students are frequently characterized in media and public discourse as “temporary, expendable, or invisible”.²⁴ Academic analysis indicates that media discourses tend to “commodify” international students, valuing them primarily for their fees, while simultaneously marginalizing them as the “excluded ‘other’” in Australian society.²⁷ This leads to a painful juxtaposition where they are welcomed for their financial contribution but simultaneously devalued and subjected to overt and covert racism, including being “spat at, yelled at with racist slurs, and being told to ‘go back home’”.²⁴

The impact of government messaging has also played a role in shaping these perceptions. The Australian Prime Minister’s public suggestion for international students to “go home” during the pandemic contributed to a sense of abandonment and undermined Australia’s reputation as an attractive destination.⁸ Such statements, along with policy changes like increasing visa fees ¹⁵, send a clear message that can contradict the economic reality of their value.

Research from the Australian National University (ANU) highlights that media narratives are often more effective at influencing public opinion than facts.³⁰ When people are exposed to negative immigration narratives, it reduces public support for increasing or maintaining current migration levels.³⁰ This underscores the importance of impartial media reporting, as emotive narratives can significantly shift public views and, consequently, political and policy outcomes.³⁰

In response to these pervasive negative narratives, there have been efforts to present a more balanced and fact-based perspective. Studies have explicitly refuted the claim that international students are the primary cause of the housing crisis.²¹ Universities Australia and other industry bodies consistently issue statements highlighting the substantial economic contributions of international education, emphasizing its role in GDP growth and job creation.⁷ Furthermore, international students themselves, through initiatives like the film “Phoenix,” are actively taking back their stories, offering lived experiences to challenge flat, villainous, or victimized portrayals.²⁴ These counter-narratives aim to foster recognition of international students as equals, colleagues, neighbors, and community builders, rather than merely fee-payers or temporary migrants.²⁴

Conclusions

The evidence overwhelmingly demonstrates that international students played an indispensable and multifaceted role in Australia’s post-COVID economic recovery, serving as a significant force in averting a deeper recession. Their contribution extends far beyond tuition fees, acting as a major export industry that injected tens of billions of dollars into the Australian economy through diverse expenditures on goods and services, thereby generating a substantial multiplier effect across various sectors. The sector’s rapid rebound to over $51 billion in export value by FY 2023-24 and its role in driving half of Australia’s economic growth in 2023 underscore its critical importance as a cornerstone of national prosperity.

Crucially, international students also served as vital economic shock absorbers and workforce stabilizers during a period of severe labor shortages. They filled critical gaps in essential services and casual-heavy industries such as hospitality, retail, aged care, and childcare, enabling businesses to operate and maintaining service continuity. Government policies that facilitated their return and relaxed work hour limits during the pandemic explicitly acknowledged their indispensable contribution to the labor market. The dual economic contribution—as a major export and a flexible workforce—creates a powerful reinforcing cycle, with a significant portion of their expenditure directly funded by their work within Australia.

Despite these undeniable economic and social benefits, public discourse and media narratives frequently misrepresent international students. They are often unfairly scapegoated for systemic issues like the housing crisis, despite empirical evidence demonstrating minimal correlation. Similarly, narratives of job competition contradict the reality of widespread labor shortages that students actively help address. Such misrepresentations, sometimes amplified by political rhetoric, contribute to their marginalization and can undermine Australia’s reputation as a welcoming study destination.

Moving forward, it is imperative for policymakers and public discourse to align with the economic realities. Recognizing and valuing the comprehensive contributions of international students, beyond their financial input, is essential for fostering a stable, resilient, and inclusive Australian economy. Policies should be informed by data that acknowledges their role in both national income generation and critical workforce support, rather than being swayed by misinformed narratives. Maintaining a supportive and welcoming environment for international students is not merely a matter of social equity but a fundamental component of Australia’s ongoing economic strength and global competitiveness.

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