Australia’s third largest export, education, is worth far more than we thought.
After a major data adjustment the Australian Bureau of Statistics (ABS) has pushed what was already a record $23.6 billion in annual education exports in 2016-17 up to $28 billion, a 19 per cent increase in value.
The revision also affects ABS data on tourism exports, which have been revised from $18 billion to $21.6 billion in 2016-17. As a result the total value of service exports in 2016-17 has leapt from $73.5 billion to $81.6 billion.
The massive upwards revision follows the ABS decision to shift to a new data set for measuring travel-related exports.
The ABS is now using the International Visitor Survey, carried out regularly by Tourism Research Australia in airport departure lounges, to estimate student spending instead of projecting numbers from one-off survey of international students spending habits which was done several years ago.
The export value of international education and tourism is measured by summing all money spent by international students and tourists in Australia, including tuition fees, living expenses, transport, entertainment and holidays.
The changes have also had a huge impact on the historical data for education and tourism exports, which are the Australia’s first and second-ranked service exports.
For example, the value of education exports over the past 10 years has instantly grown from $167 billion to $195 billion.
International Education Association of Australia CEO Phil Honeywood said his industry had “suspected for some time that the true impact of international education on the Australian economy has been underestimated”.
“We need to better communicate the economic benefits of international education to the Australian community,” he said.
He said that international students were spending money in new ways, with many taking domestic holidays to attractions such as the Great Barrier Reef in study breaks.
Mr Honeywood said international education also had a positive impact on ordinary tourism.
“There is an increasing trend for parents, siblings and friends to visit international students more than once during their time here,” he said.
Revision to GDP
The new data, which appeared for the first time in the ABS International Trade in Goods and Services figures published last Thursday, is part of a major revision to ABS economic statistics resulting from a shift to using new data sources across many industries.
It will affect the GDP figures which will be reported in the September quarter national accounts, due to be published on December 6.
The number of international students in Australia is booming with a record 685,000 students enrolled in courses in the first half of 2017, 15 per cent more than the previous year.
Education is Australia’s largest service export and third overall behind iron ore (worth $62.8 billion in 2016-17) and coal ($54.3 billion). It is larger than gas ($22.3 billion) and gold ($19 billion).
The university peak body Universities Australia argued that the upgraded value of international education was reason for the Senate to reject the Turnbull government’s plan to save $2.8 billion over four years from higher education funding.
“We know that [education] quality is our drawcard – it’s absolutely central to our ability to attract international students,” said Universities Australia chief executive Belinda Robinson.
“While tuition fees are a known quantity, this reveals that international students are making an even bigger contribution to Australia’s broader economic health than previously thought.”
“So it’s arguably even more important that we safeguard quality and our global reputation for excellence, and that funding cuts are shelved – in fact, it’s absolutely critical to Australian prosperity.”