Following concerns about the potential economic impact of a restricted cap, Jason Clare declared that overseas education was “incredibly important” to Australia.

A report that the government will cap the number of overseas students enrolled in universities at 40% has been denied by the education minister due to fears that such a severe cap could contribute to Australia’s recession.

Labor will assist safeguard the “social license” of the overseas education sector and ensure that a “incredibly important national asset” is not harmed, according to Jason Clare, who stated on Thursday that Labor was “not intending” a cap of that scale.

The Albanese administration, under fire from Peter Dutton’s Coalition, just stated in May that it plans to cap the number of foreign students it accepts.

In an additional attempt to reduce net immigration from 528,000 in 2022–2023 to 260,000 by 2024–2025, Labor more than doubled the non-refundable application cost for overseas students in July.

The suggested cap has not yet been finalized by the government. Some in the government have resisted a more stringent cap because they believe that protecting Labor from assaults on immigration shouldn’t come at the expense of economic growth as Australia’s economy weakens.

The Australian Financial Review revealed on Tuesday that the proposed restriction may be as low as 40% of total enrolments, with universities anticipating learning the amount in a matter of days.

Clare, however, rejected the report.

” That is incorrect. Those reports have been seen by me. We do not intend to do that, “he told reporters in Sydney.

Australia’s fourth-largest export sector, foreign education, is “an incredibly important national asset” that “makes us money,” according to Clare.

It also forges friendships between us, as students who come to study in Australia and fall in love with the country, or perhaps with a particular someone, bring that love with them back home.

In addition to safeguarding the system’s integrity, which is crucial, we are also preserving the social license that allows the system to function.

In the coming weeks, Clare promised to have “more to say about the levels that will be set” in parliament.

His remarks follow alarmist statements from institutions regarding the planned cap on foreign enrollment during a Senate committee meeting on Tuesday.

Luke Sheehy, the CEO of Universities Australia, described the measure as a “political smokescreen,” “ministerial overreach,” and “rushed policy.” According to him, the purpose of it was to provide the government the advantage in “the battle over immigration ahead of the election.”

“More than half of Australia’s GDP growth [last year] came from international students, almost single-handedly saving [the country] from recession,” he claimed

“A decrease in the number of foreign students studying here could lead to employment losses, slower economic growth, and less funding for indigenous research and teaching initiatives.

“We should think carefully about what we stand to lose if we tell them to stay at home.”

Prof. Richard Holden, an economist at UNSW Business School, reportedly conducted an analysis for the Sydney Morning Herald that indicated a return to 2019 levels of international enrollment will cost Australia’s economy $11.6 billion in 2025, or around 0.5% of GDP.

According to reports, he stated, “That could easily be enough to tip Australia into an actual recession.”

Vicki Thomson, the Group of Eight’s CEO, said before a Senate committee on Tuesday that restricting foreign enrollment for Go8 members to levels seen prior to the pandemic in 2019 would have a significant effect compared to post-pandemic enrollment rates in 2023.

The group predicted that it would cost the country more than $5.3 billion in economic production and 22,500 jobs.