Department of Jobs, Skills, Industry and Regions submission

The Victorian Government’s Department of Jobs, Skills, Industry and Regions (DJSIR) welcomes the opportunity to present a submission to the Joint Standing Committee on Foreign Affairs, Defence and Trade’s inquiry into Australia’s tourism and international education sectors (the Inquiry).

This submission presents the position of DJSIR in addressing the Inquiry Terms of Reference. The Victorian Government’s comprehensive position on the related topics of migration and employment has been set out in other submissions made to the Commonwealth Government, including responses to the Commonwealth’s Employment White Paper, the A Migration System for Australia’s Future review, and responses to requests for input on the size and composition of Australia’s annual migration program.

The Victorian Government notes that the Inquiry is being held concurrently with the Australian Universities Accord process, the Commonwealth’s comprehensive review of Australian higher education. The Victorian Government intends to contribute to the Australian Universities Accord process, which it understands will include an examination of international education.

About DJSIR

The Department of Jobs, Skills, Industry and Regions leads the Victorian Government’s focus on driving a strong and resilient economy that benefits all Victorians – by creating more opportunities for people through jobs and skills; supporting businesses and industries to grow and prosper; and building vibrant communities and regions.

Sport, Tourism and Events

Within DJSIR, the Sport, Tourism and Events group works to strengthen Victoria’s status as Australia’s leading sport, recreational, tourism and events destination by building the resilience of the experience economy to adapt to change and to provide more secure jobs and diverse experiences for Victorians and visitors.

Global Victoria

Global Victoria is the Victorian Government’s trade facilitation and promotion agency with a mission to build the skills and knowledge of people and businesses to help them achieve their global ambitions. As a gateway to global economies and communities, Global Victoria connects Victorian businesses and education providers to new opportunities and international markets, advocates for greater market access and promotes doing business with Victoria globally. With 24 offices strategically located in Victoria’s key export markets, the Victorian Government Trade and Investment (VGTI) Office network is the largest of its kind among Australian states and territories. Study Melbourne and International Education, within Global Victoria, leads the Victorian Government’s efforts to support international education providers and international students through diversifying export markets and products; providing support to providers to expand their export market focus; and maintaining Victoria’s position as a destination of choice for students. The work of Study Melbourne and International Education is directly aligned with and supports delivery of the vision, goals and actions in Victoria’s International Education Recovery Plan 2025.

Tourism sector

Background

Victoria is considered a national leader in the visitor economy. In the year ending December 2019, before the COVID-19 pandemic, total tourism expenditure in the State reached $32.5 billion, and Victoria welcomed 100.4 million visitors. Of this, international visitor expenditure contributed more than $8.8 billion to the state’s economy and visitation numbers reached 3.1 million.

Since 2020, international tourism has been hard-hit by the pandemic and associated travel restrictions in Australia and overseas, while many tourism providers have also been impacted by a series of natural disasters.

In 2021, to help the tourism and travel sector to recover from the dual impacts of the 2019–20 bushfires and the pandemic, the Victorian Government delivered the Visitor Economy Recovery and Reform Plan 1 (the VERRP). The VERRP serves as a whole-of-state visitor economy strategy, with a goal of reaching $35 billion in annual visitor spend and generating 300,000 additional jobs by June 2024. This goal is supported by an investment of $633 million across four years.

Informed by the findings of the Regional Tourism Review in 2019, the VERRP is strengthening the state’s tourism offering by developing new experiences, products and infrastructure and attracting more international, interstate, and intrastate visitors through events and effective marketing.

The VERRP focuses on six key themes:

1. Products and infrastructure: invest in and develop experiences that attract more visitors, who spend more during their stay.
2. Industry strengthening: rebuild and strengthen the industry and workforce to support high-quality visitor experiences and build resilience to future shocks.
3. Destination marketing: rebuild demand through effective collaborative marketing, so Victoria becomes the top choice for tourists as the industry recovers.
4. Events: revive Victoria’s calendar of world-class events, to drive demand by strengthening our position as a global events destination.
5. Strategic collaboration and planning: strategic collaboration and coordination across community and industry, and local, state, and Commonwealth governments.
6. Data and insights: use data and insights to drive robust decision-making.

The September 2022 National Visitor Survey (NVS) shows Victoria’s visitor economy is recovering but not yet recovered. Total tourism spend in Victoria has returned to 84 per cent of its pre-pandemic level, reaching $26.5 billion in the year ending September 2022. International spend is almost back to a third (28 per cent) of pre-pandemic levels at $2.5 billion, while international overnight visitors have been slower to rebound at 20 per cent of pre-pandemic levels. Total domestic spend has fully recovered above pre-pandemic levels (+5%), reaching $24.0 billion in the year ending September 2022.

Response to the Inquiry Terms of Reference

1. Challenges and opportunities for growth in tourism and how Australia can reassert itself as a leader in the international tourism sector

Workforce

Prior to the pandemic, and certainly since, attracting and retaining skilled (and relatively unskilled) labour in the tourism industry has been problematic. The closed borders during the global pandemic compounded systemic workforce issues, with most Victorian industry sectors now seeing labour and skill shortages. In Victoria there were 126,600 reported job vacancies in August 2022 – an increase of 111 per cent from February 2020.

As part of VERRP, the Victorian Government commissioned a Visitor Economy Workforce Planning and Skills Review, which identified key issues and opportunities for the visitor economy workforce. The review confirmed the workforce and skills challenges facing the industry are multi-layered, complex, and require levers at both the state and federal level.

The most critical workforce issues facing the industry, and inhibiting businesses from growing or operating at full capacity, include deficiencies in the areas of:

• skilled and adequate workforce to cater for surging demand
• regional accommodation for workers
• visitors with work rights (e.g., Working Holiday visas, student visas, Temporary Work (Skilled) visas (subclass 457))
• local workforce due to longstanding issues with remuneration, working conditions, professional pathways, and job security.

Victoria is taking steps to address skills and workforce issues through implementation of the VERRP. This has included providing each Regional Tourism Board with $60,000 to deliver tailored workforce development plans or projects to address local workforce issues, drawing upon the findings of the Visitor Economy Workforce Planning and Skills Review. The Victorian Government has also partnered with the Young Tourism Network to deliver a pilot Young People in Tourism program that aims to attract more young people to a career in tourism.

While the VERRP’s industry strengthening programs will help to address some of Victoria’s workforce and skills issues, reforms to housing and Commonwealth migration policy settings may also be required to alleviate the shortfall in the supply of labour to critical tourism related industries.

Aviation

International spend as a component of the visitor economy has been one of the slowest areas to rebound. This trend is partially attributable to the slow return of aviation capacity to Australia. Operational constraints are increasing the uncertainties around the timing for re-establishing international routes to Australia with many airlines  deferring decisions to resume or grow services. This has been compounded by fare price hikes due to high demand and high jet fuel prices.

Prior to the pandemic, Victoria had built a strong offering of direct international aviation services, with 37 international airlines flying directly into Melbourne Airport. Victoria is starting to recover its international services and in December 2022 there were 28 international airlines flying into Melbourne. Direct services to Australia, and Victoria in particular, are critical to the recovery of the sector and the reactivation of the major events calendar, return of international students, and transportation of cargo. The Victorian Government is working actively to secure the re-establishment of international airline flights and capacity from Victoria’s key markets.

Infrastructure investment

Government investment in infrastructure and projects activates tourism opportunities, including opportunities for the private sector to leverage these investments. As part of the VERRP’s Tourism Infrastructure Program, the Victorian Government has funded:

• $120.6 million for 19 flagship infrastructure projects across Victoria that will create a halo effect and spur private investment and new products in surrounding areas.
• $150 million for 80 projects under the Regional Tourism Investment Fund grants program to increase visitation to Victoria, dispersal across regional Victoria, and visitor yield by developing and delivering strategic tourism infrastructure projects and leveraging private sector investment.
• $10 million for an Enabling Tourism Fund that will support the development of a pipeline of strong, market ready tourism products.
• $30 million under the Regional Tourism Infrastructure Projects program for nine key infrastructure projects in regional Victoria to stimulate local economic activity.

The Australian Government can focus on new world class experiences that are sustainable competitive strengths for Australia. The key experience pillars that provide significant opportunities for growth in Victoria are: nature; food and drink; wellness; arts and culture; First Peoples’ led experiences; design, fashion and retail; and sport and events. Foundational principles for sustainable tourism include creating products that protect and give back to the natural environment. There are opportunities for further investment in self-determined First Peoples’ tourism that encourages international visitors to connect with Australia’s storied heritage.

Industry Excellence

Victoria is focused on building a strong and resilient industry, where businesses are enabled to succeed in the modern visitor economy. There are opportunities for industry strengthening, to encourage businesses to adapt to new market conditions and changing consumer demands, engage more effectively with consumers and develop innovative tourism products. Victoria has invested in digital capability for small businesses, such as connecting to sales channels, promoting businesses and regions, and understanding markets.

Global uncertainty

Global uncertainty reached high levels at the beginning of the COVID-19 pandemic and remains elevated. These risks and uncertainties could continue to dampen Australia’s international tourism performance. As a long-haul destination, Australia is particularly vulnerable to the continued delays in restoring aviation capacity and uncertainty surrounding air travel. Inflation both in Australia and overseas has also increased the cost of international travel to Victoria, and negatively impacted the discretionary spend of international visitors. These impacts could encourage international visitors to reconsider visiting Australia in favour of closer, cheaper destinations.

Prospects

Despite some uncertainties, the prospects for international tourism are positive. There is a strong pent-up demand to travel now that restrictions on travel have eased. Australia has maintained its appeal as a safe, aspirational destination. International visitors to Australia are expected to return to pre-COVID-19 levels in 2025, with a projected 11.0 million visitor arrivals in Australia by 2027, while international spend is projected to exceed pre-pandemic levels by 2024 (Tourism Research Australia, Tourism Forecast 2022, published December 2022). Addressing priority supply issues, enhancing the visitor experience, and engaging emerging markets will enable Australia to meet the projected numbers of international visitors.

2. The effectiveness of recent tourism campaigns overseas

In 2020 and 2021, Visit Victoria maintained a presence in key international markets to build momentum and consideration of Victoria as a travel destination. The Get Set to Melbourne campaign was also integrated throughout domestic and global broadcasts and featured on the Australian Open’s on-site screens. In March 2022, Visit Victoria increased its marketing activity in key international markets where no quarantine restrictions were in place for returning holiday travellers, consistent with Tourism Australia’s approach. In Victoria, the value of international media generated was $44.5 million (year ending 30 June 2022).

International tourist numbers have remained well below pre-pandemic levels since the reopening of borders in February 2022. Chinese and Australian travel restrictions on travel from China, Australia’s largest source market, have only recently been lifted entirely, which has contributed to this slow return of international visitors. It is anticipated international visitors to Australia will return to pre-COVID levels in 2025 (Tourism Research Australia, Tourism Forecast 2022, published December 2022). The recovery of international arrivals to Australia is expected to be uneven across visitor markets, with the strongest recovery expected from New Zealand, India and USA. Expansion is expected from more established Asian markets such as Singapore, Hong Kong, Malaysia, Indonesia and Korea, and fast-growing emerging markets like the Philippines, Thailand, and Vietnam.

Competition for the international visitor continues to be incredibly strong. It is important Australia continues to be represented and marketed as a multi-stop destination. Historically, Commonwealth Government-led international campaigns have presented a homogenous picture of the visitor experience of Australia, with an emphasis on beaches and the outback. While nature-based travel is a strategic advantage for Australia, Visit Victoria has developed a profile of Victoria’s target international visitor markets. These high value travellers are seeking layered experiences in both cities and regional areas. This presents opportunities for joint promotions between the Commonwealth Government and states on new travel routes, events attractions, longer travel packages and itineraries.

3. Promotion of regional Australia as a world class international travel destination

There has been a significant and appropriate focus on promoting regional tourism during recovery. Victoria’s VERRP has been informed by the findings of the Regional Tourism Review, which identified opportunities to grow tourism in regional Victoria. The implementation of the recommendations of the Review are increasing Victoria’s regional offerings and accelerating recovery. In 2021-2022, in an environment with limited international travel, domestic overnight spend in regional Victoria was eight per cent higher than the pre-pandemic performance, at $7.8 billion. Intrastate overnight expenditure to regional Victoria increased 6 per cent compared to the prepandemic period (year ending December 2019). Victoria’s regional tourism offering is strong, but we can further promote its strengths in natural attractions, arts and culture, epicurean experiences, and sport and events to the international market.

To promote regional Australia, Victoria is creating a supportive environment that incentivises investment in tourism experiences, events, and attractions. Key market gaps and opportunities in Victoria include new avenues for visitor participation and spending (regional visitor facilities, nature based and First People’s tourism products), expanding specialisations (culinary experiences in regional areas, wellness and luxury experiences), longer stays (regional accommodation and connected experience) and growing industry capability.

There are also significant opportunities to increase the tourism benefits of events, including dispersal of visitors, length of stay and yield. Large scale, high value events are mostly concentrated in Melbourne with opportunity to extend their impact throughout the state. Victoria’s renewed investment of $20 million in the Regional Events Fund will support regional events across the state over four years. Victorian Government investment in regional capability and capacity would benefit from the Australian Government attracting more business and major events to the regions.

In 2026, the Victorian regional hubs of Geelong, Bendigo, Ballarat, Gippsland and Shepparton will host the Commonwealth Games. The Games will feature a program of cultural and business engagement experiences including a state-wide and integrated program of attractions and events, welcoming visitors to every corner of the state.

The legacy of the Games will demonstrate the benefits of hosting major events in regional communities. Victoria 2026 will build social and affordable housing, world-class sporting facilities, attract future sporting events to regional Victoria, and enhance community use of sporting facilities.

Australia’s regional tourism growth requires strong offerings from cities, both as key transport links and as drivers of economic growth from migration and international students. However, to date, the key markets of Melbourne and Sydney have been undervalued as key drivers of tourism to both domestic and international markets. Victoria relies heavily on Melbourne to power its visitor economy. The Victorian Government is working with the City of Melbourne to support its recovery and growth following the COVID-19 pandemic, including through the $200 million Melbourne City Revitalisation Fund. Investment in capital cities will drive awareness of events, press and PR, business, and house international students.

4. Role of Australia as a hub in support of tourism in the Asia Pacific region Australia is yet to establish itself as a hub in the Asia Pacific region, relative to highly developed and centrally located economies such as Singapore and Tokyo. Instead, Australia has been seen as a destination endpoint based on the practicalities of international aviation.

As future growth is more likely to come from emerging Asian economies like India, Vietnam, Malaysia, and Indonesia, Australia can plan for the years ahead by building strong major, regional, and business events calendars and innovative marketing activities. These include marketing upcoming world class events (Brisbane 2032 Summer Olympics, FIFA Women’s World Cup, Sydney WorldPride 2023) to extend their impact throughout the Asia Pacific and encourage multi destination visitation.

Support for the business events sector will help build confidence with planners and key decision makers across Australia to plan and book their events in. The Victorian Government helped to fuel the business event industry’s revival by hosting the first international tradeshow since Australian international borders reopened – the Asia-Pacific Incentives and Meetings Event (AIME). From 21-23 March, AIME 2022 brought together more than 2,000 local and international buyers to access 225 exhibitors from around the world. Business events are a high yield of the visitor economy and over one million international business visitors to Australia are expected by 2027. Through the Business Events Program, Victoria will provide $42.9 million over four years (2021-25 inclusive) to support the attraction of business events to the State.

Australia can also drive future growth in the Asia Pacific market by leveraging strong Visiting Friends and Relatives (VFR) connections and international education. The New Zealand market is expected to return to pre-COVID levels faster than other markets due to its proximity and strong ties with Australia, which will drive VFR travel, as well as the strong rate of return in aviation capacity on the trans-Tasman route. The Indian visitor market to Australia is expected to almost be back at pre-COVID-19 levels by the end of 2023 (97 per cent of 2019) to reach 457,000 visitors by 2024. Victoria is expected to maintain its high market share of Indian visitors to Australia, fuelled by a strong rebound in aviation connections, VFR visitation and recovering international education.

5. Other related matters

There is an opportunity for government and industry to work together to improve existing and coordinate new research and data insights. Data and insights are key enablers to drive robust decision-making, however, the absence of Australian Government investment and coordination in this area is creating inefficiencies. Increased investment in traditional tourism indicators, such as the International and National Visitor Surveys, and better coordination of new and emerging data would support informed private and public investment.

International education sector

Background

Victoria’s international education sector

International education is Victoria’s largest single export and its largest services export. In 2019, prior to the COVID-19 pandemic, the sector generated $13.7 billion in export revenue, comprised around half of Victoria’s services exports, and contributed around 63,000 full-time equivalent (FTE) jobs in Victoria.

Around one-third of Australia’s international students choose Victoria for an education. In 2019, the state welcomed 250,000 students from around 160 countries. Victoria’s share of total international student enrolments in Australia has remained steady at around 30 per cent in the last 20 years, reaching a peak of just over 307,000 enrolments in 2019.

In addition to revenue and jobs creation, international education has many flow-on benefits for the Victorian economy. The sector supports Victoria’s aviation, accommodation and hospitality industries through goods and services consumption. International education also makes a significant contribution to Victoria’s visitor economy.

Pre-pandemic (2019), international education visitors accounted for 46 per cent of all international visitor expenditure in Victoria and contributed to the visiting friends and relatives (VFR) segment. According to Tourism Research Australia7, in 2017, one in seven VFR travellers reported visiting a student or relative studying in Australia.

The impact of COVID-19

In 2021, Victoria’s education exports dropped to $6.9 billion, a decline of 34 per cent compared to 2020 and a decline of 50 per cent compared to 2019. In 2021, international student enrolments fell by 27 per cent, compared to 2019, to just over 227,000. In the same period, Victoria’s international student commencements dropped nearly 50 per cent, down to 86,600 (Student number data represents an estimated head count of individuals that have studied on a student visa within a reference period. International student enrolments and commencements are a measure of the study activity a student does while on a student visa, and since a student can study more than one course in multiple sectors in a reference period, the enrolment and commencement count will always be greater than the student count. See https://www.education.gov.au/international-educationdata-and-research/international-student-numbers-country-state-and-territory).

In response to the impacts of the pandemic, which were felt across the entirety of Victoria’s international education sector, the Victorian Government provided the largest support package of any Australian state or territory. Notable investments included: the $33.4 million International Education Short-Term Recovery Plan 2020-218; the $45 million International Student Emergency Relief Fund; the $50 million International Education Resilience Fund; and the $350 million Victorian Higher Education State Investment Fund. Between 2020-2022, the Victorian Government provided $2.5 million in food relief for more than 66,000 students from over 130 countries and, through the Study Melbourne Hub Victoria, supported more than 10,000 students with complex case work, free legal aid, financial relief and referrals.

Multiple missed intakes of international students as a result of the pandemic and prolonged border closures will require years to flow through the system. This disruption to the international student pipeline will continue to impact the pace of recovery, with declines in student commencements since the beginning of the pandemic impacting overall student enrolment numbers. One example of this is the flow on effects of a significant reduction in students enrolled in English Language Intensive Courses for Overseas Students (ELICOS). Victoria’s ELICOS providers, which rely heavily on international student enrolments, saw a drop of 77 per cent in student numbers between 2019 and 2021 (Economic impact of COVID-19 on the ELICOS sector in Victoria, English Australia 2022, commissioned by the Victorian Government). The drop in ELICOS enrolments is likely to impact the recovery of the sector as a whole, given around 70 per cent of ELICOS students on student visas have historically transitioned to further studies in the schools, vocational education and higher education sectors.

There are several factors impacting the return of international students to pre-pandemic levels in the short to medium term. These include reputational damage as a result of the perceived lack of support for international students during the pandemic; travel constraints due to limited aviation supply and affordability; local COVID-related policies; visa processing issues; and increased international competition.

Ongoing impacts from the pandemic and prolonged border closures signal a slow recovery for the sector. While the recovery trajectory for the sector is not yet clear, there are positive signs that Victoria is well positioned to return to growth. As at 14 November 2022, 80 per cent of Victorian student visa holders were located onshore (around 106,400 students), and 20 per cent offshore (around 26,100 students). Nearly 50 per cent of Victoria’s student visa holders located offshore were from China (12,500 students). Compared with data prior to Australia's borders re-opening to international students (15 December 2021), Victoria’s proportion of onshore students has increased by 24 percentage points, up from 56 per cent, or 38,100 additional students onshore.

Victoria’s International Education Recovery Plan

Victoria’s International Education Recovery Plan 2025 (the Recovery Plan) released in September 2022, outlines the Victorian Government’s strategy to drive international education sector recovery and growth. Supported by $52.9 million in funding over four years, the Recovery Plan articulates a vision of Victoria as a global leader in education, recognised for quality, innovation and inclusion. This vision is supported by three goals, five pillars, and 19 actions. The Recovery Plan is appended at Attachment A.

Informed by extensive consultation across the international education sector, Victoria’s International Education Advisory Council and multiple tiers of government, the Recovery Plan reflects the Victorian Government’s vision and strategy for the sector, including initiatives that will build Victoria’s performance as a leader in education excellence and student experience in a post-pandemic context.

Response to the Inquiry Terms of Reference

1. Challenges associated with the loss of international student numbers as a result of the significant disruption caused by the COVID-19 pandemic and effective measures to attract and retain students to Australia

Challenges associated with the loss of students

The financial impact of COVID-19 is uneven for different types of education providers due to the larger numbers of international student enrolments in some sub-sectors, and varied proportions of international enrolments, relative to domestic student enrolments, across international education sub-sectors. In 2019, around half of Victoria’s international enrolments were in higher education, followed by vocational education and training (28 per cent), English language training (15 per cent), non-award courses (4 per cent), and schools (3 per cent). Prior to the pandemic, revenue from international students accounted for 27 per cent of university revenue. As such, universities are heavily impacted in terms of volume, facing significant challenges relating to their revenue model and the required workforce adjustments (Forward impact of COVID-19 on Australian higher education, Australian Government Tertiary Education Quality and Standards Agency 2022). Private providers across several sectors, particularly those which have a higher proportion of international student enrolments relative to domestic enrolments, such as ELICOS, are reporting similar impacts.

International students and graduates support Victoria’s skills and workforce needs through employment during and after graduation, and high calibre international graduates can contribute to addressing Victoria’s knowledge and skills gaps. In 2021-22, 88 per cent of all Victorian Government nominated skilled migrants held an Australian qualification (around 3,300 applicants). For the first half of 2022-23, around 64 per cent of nominees held an Australian qualification (Note that in 2021-22 only onshore skilled migrants were eligible to apply for state nomination given border closures due to Covid. In 2022-23 the Victorian Government’s state nomination visa was re-opened to offshore applicants and continued to be available to onshore applicants). The loss of international students has exacerbated labour market shortages in Victoria, notably in professional graduate positions and the hospitality and tourism sectors. Coordinated recovery efforts across all levels of government are required to mitigate the risk of Australia and Victoria losing global talent to competitor study destinations.

International students also contribute to Australian businesses through goods and services consumption. Across Australia, an estimated $5.5 billion – equivalent to 36 per cent of international student annual expenses – goes towards retail and hospitality. A further $5.5 billion is spent on property. Local cafes, supermarkets, entertainment venues, and student accommodation providers, have been impacted by the loss of international students, particularly in suburbs that had a high proportion of international students pre-pandemic. In 2019, international students made up more than 10 per cent of the resident population in 11 Melbourne suburbs, including Melbourne’s CBD, where 38 per cent of the resident population was international students (Issues Paper: International students vital to Coronavirus Recovery, Peter Hurley, 2020).

Challenges associated with a decline in student numbers go beyond losses in economic terms. International students are critical to Victoria’s diversity and vibrancy, enriching its social and cultural fabric and supporting more inclusive communities. The impact of declining international student numbers has been felt across Victoria’s cities and regions.

Measures to attract and retain students

Key to attracting the best and brightest students to Victoria is to maintain and promote the quality of the education offering and a positive student experience. These are important elements of Victoria’s value proposition that contribute to positive international student sentiment, and increase the propensity of international students, alumni and diaspora to recommend Victoria as a preferred study destination.

Elevating Victoria’s reputation in education, training and research excellence is clearly outlined in Victoria’s Recovery Plan as one of the three goals for the sector through to 2025, supported by three actions under Pillar 3 – Promotion of Victoria’s offering (see Attachment A). In addition to promoting Melbourne’s education offering and its status as Australia’s Best Student City (QS Best Student Cities 2023) and most liveable city (Economist Intelligence Unit Global Liveability Index 2022), Study Melbourne, through its innovative marketing campaigns, also promotes the strength of regional Victoria’s offering. Study Melbourne is leveraging opportunities afforded by Victoria’s hosting of the 2026 Commonwealth Games in Geelong, Bendigo, Ballarat, Gippsland and Shepparton to profile the diverse study options, affordable lifestyle, cutting-edge facilities and strong industry linkages offered by education providers in Victoria’s regions. Victoria’s Global Education Network (see Attachment A) also plays a critical role in promoting Victoria as a world-leading study destination and the capability of Victoria’s international education sector across key markets.

Another important measure to attract and retain the best and brightest global talent is to enhance student employability and ensure that competitive post-study work rights are enabled through prudent adjustments to migration policy settings. Outstanding international students and graduates are likely to become more employable if equipped with relevant industry connections and a good understanding of Australian work culture. This is why the Victorian Government places a strong focus on student employability and return on investment – and has made this a key pillar of the Recovery Plan (Attachment A). Section 3 below provides a brief overview of key Study Melbourne programs and initiatives that support international student employability and graduate employment outcomes. The Victorian Government welcomed the expansion of post-study work rights for graduates with select degrees in areas of verified skills shortage, and additional funding to resolve the visa backlog, announced by the Commonwealth Government at the Jobs and Skills Summit in September 2022.

2. Online innovations in education delivery and potential opportunities to strengthen the sector’s resilience

The return of international students and student visa application rates are evidence of the fact that a strong market remains for onshore international education in Victoria and Australia. However, given student expectations for flexibility and choice have increased, the sector must think creatively about how to engage effectively with students through online and hybrid offerings. Online education should be seen not as a substitute for on-campus study, but rather an avenue to grow the overall number of international students from diverse market segments studying an Australian qualification and strengthen the sector’s resilience in the long-term. Victoria, as home to high-quality education institutions and a leading hub for innovation and digital technology, is well-positioned to address the opportunities to grow the overall international education sector through online education.

While there is a clear difference between emergency online teaching born out of necessity and high-quality online education innovation, the adoption of online and hybrid delivery models has been accelerated by the pandemic and lifted visibility on the flexible delivery options that online learning affords. Young international students are digital natives with increased expectations to study some, part, or all of their course online or offshore, at various points of their qualification.

Opportunities also exist to reach a broader spectrum of students and untapped market segments, considering different demographics (e.g., mid-career professionals), delivery price points (appropriately adapted for the country, course and delivery mode), and personal preferences (e.g., non-award and short courses versus full qualifications).

Offered at scale, online education also enhances accessibility. A strong market for online education products exists amongst students who are unable to travel overseas, or who are unable to afford a premium in-country experience, and are looking for more accessible and flexible options. One example of the potential scale of the online education opportunity is the rapidly growing demand for tertiary education in Africa and the potential for online education to address such demand. According to the United Nations, by 2030, 42 per cent of the world’s youth aged 15-24 will live in Africa. However, many African countries do not currently have adequate tertiary education capacity to meet this demand and study abroad remains a luxury for many households (Diversifying student recruitment – Africa focus, Studyportals and Eduquator 2020).

The Victorian Government welcomes more flexibility around online, hybrid, and offshore education delivery models as a timely response to shifting student preferences and varying student needs. Providing such flexibility supports Victoria and Australia’s competitiveness amidst increased global competition and enables Victoria’s world leading EdTech companies and education providers to maximise opportunities for education innovation. However, Victoria and Australia must ensure that quality remains at the forefront of its value proposition for international students, whether they are studying online, hybrid or in-person.

3. Initiatives to ensure positive international student experience and support pathways to build their skills and contribute to Australia’s prosperity

Remaining a leader in the student experience and student return on investment is another key goal for Victoria’s international education sector through to 2025. This goal is supported by eight actions under the Recovery Plan through Pillar 1 – The student experience, and Pillar 2 – Employability and student return on investment (see Attachment A).

Through Study Melbourne, the Victorian Government offers programs and support that are available throughout the international student journey with Victoria (Attachment A, p.10). Students have equitable access to inclusive services, ranging from pre-departure briefings and welcome programs to wellbeing support, employability initiatives and alumni engagement. With the establishment of offshore Study Melbourne Hubs, Victoria’s international students in select markets also have access to tailored student programs to support their study and career journey.

Recognising the importance of post-study outcomes for international students, improving employment outcomes for international students and graduates is another key priority for the Victorian Government. Currently, there is disparity in graduate outcomes between international and domestic students, with 43 per cent of Australia’s international undergraduates in full-time employment 4-6 months after graduation compared to 69 per cent for domestic graduates (QILT Graduate Outcomes survey 2021). While highly capable, international students and graduates can often be excluded from equal employment opportunities in Australia due to standardised recruitment practices and perceived barriers. Through Victoria’s Commitment to Action, the Victorian Government is working closely with employers, industry associations and education providers to address employment barriers and promote post-study career pathways for global talent. Victoria aspires to providing high-calibre international graduates with access to excellent global career possibilities in their chosen fields either in Victoria, back home or in their destination of choice.

Other key initiatives of the Victorian Government to ensure a positive student experience and support employment outcomes include:

• Study Melbourne Hub Victoria – (formerly the Study Melbourne Student Centre), established in 2004 and based at 17 Hardware Lane, Melbourne, providing timely information and confidential, free case-work support and programs and events for international students in Victoria.
• Offshore Study Melbourne Hubs– connecting and engaging current, prospective students and alumni across China, Vietnam, Malaysia, Latin America and South Asia, while offering a dynamic space free of charge for Victorian international education stakeholder engagements in-market. This industry leading initiative was recognised as a finalist and Highly Commended at the PIEoneer Awards 2022 (Student Support category).
• International Student Employment and Accommodation Legal Service – based out of the Study Melbourne Hub, Victoria, providing students with free and confidential legal advice on employment or accommodation concerns.
• International Student Travel Pass – improving affordability and access to public transport by offering discounts for eligible international students in Melbourne and regional Victoria. New program to be launched in early 2023.
• Study Melbourne Inclusion Program – promoting the wellbeing of international students, including through activities that support greater inclusion of women, LGBTIQ+ communities, people of colour and all faiths, people with disability and those from a broad spectrum of socio-economic backgrounds.

4. Opportunities for international education to support strategic and foreign policy objectives

Founded on long-lasting people-to-people links and institutional partnerships, international education is uniquely placed to be an enabler of strategic and foreign policy objectives. Through research collaboration in areas of mutual benefit, staff and student mobility, or joint training programs, the sector promotes not only Victoria and Australia’s education and research credentials but also Victoria and Australia’s values and way of life. The Study Melbourne Research Partnerships Program (an initiative under the International Education Short-Term Recovery Plan 2020-21, delivered in partnership with VESKI) is an outstanding example. Driving 15 strategic joint research projects between Victorian institutions and their international partners, the program helped establish new institutional partnerships and deepened existing collaborations across key priority areas, including renewable energy, artificial intelligence, social inclusion.

Thanks to the significant reach of Victoria’s Global Education Network, which is embedded within the Victorian Government's Trade and Investment (VGTI) overseas office network (see Attachment A), Victoria is well-positioned to contribute to strategic and foreign policy objectives. The VGTI network seeks to maximise education, trade and investment outcomes for Victoria through building global connections, supporting Victoria’s inbound and outbound delegations and trade missions as well as high-level visits, bilateral and multilateral events and fora, and international expos. Dedicated education representatives based at VGTI offices also foster meaningful alumni engagement, recognising international alumni as excellent ambassadors for Victoria and Australia.

There are opportunities to align international education offerings with areas of strategic focus and competitive advantage for Victoria and Australia. For example, Victoria’s Study Melbourne Hubs harness Victoria’s reputation as a global leader in major events, hosting student and industry engagement activities alongside the Australian Open, Melbourne Fashion Festival, and the Australian F1 Grand Prix.

Additionally, the Victorian Government welcomes new opportunities arising from bilateral and multilateral trade agreements with strategic partners, recognising the key role education plays in enabling mutually beneficial economic outcomes. Thanks to agreements such as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) and the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), the global reach of Victoria’s education and training ecosystem is set to further expand and its influence deepen. With improved market access and favourable policy settings, ample opportunities exist for Australian education providers to establish new models of transnational education or offshore campuses while contributing to social and economic development outcomes in the region.

Attachment A

Victoria's International Education Recovery Plan 2O25