Politicians have claimed that students who come to Australia to study in person are exacerbating the housing affordability crisis. The Coalition claims that its newly-announced policy to reduce new international student enrolments will ease housing costs in “major metropolitan markets”. Having voted against Labor’s own proposal to cap student numbers last year, the Coalition is now promising to limit the number of international students to 25% of all new commencements. It claims this will reduce the number of international students by about 30,000 more than Labor’s current settings, which give the minister powers to deprioritise student visa processing and impose what higher education experts have called “a de facto cap”.
The idea that international students are responsible for rent hikes in the capital cities is nonsense. Everyone from the Business Council of Australia to the National Union of Students are on record as saying that international students make up a small proportion of the rental market (around 4% last year by most accounts).
When a Senate committee asked Treasury officials whether they had modelled the effect of international student caps on rent costs in capital cities, they acknowledged that they “haven’t specifically done any modelling on that, no”.
If political leaders were serious about improving housing affordability, they would tackle supply constraints as well as housing-related tax concessions, which exacerbate demand. Australia Institute research shows that the 50% discount on the Capital Gains Tax, as well as Australia’s generous negative gearing tax deductions, have “tilted Australia’s housing market away from homeowners and towards investors”.
Can the Coalition point to any modelling showing that international student caps would lower house prices more significantly than reforms to negative gearing and capital gains discounts? If not, they should stop punching down on a group of people who can’t punch back with their vote.
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