Mass layoffs at Australian universities could be imminent, observers fear, after a Senate committee approved legislation to cap overseas student numbers.

The Australian National University (ANU) said a projected A$22 million (£11 million) loss of revenue due to next year’s enrolment quota, which constrains it to 572 fewer international admissions than last year, contributed to budget cuts that will claim 50 jobs this year.

The National Tertiary Education Union (NTEU) said the 50 acknowledged job cuts were “the tip of the iceberg”, with the ANU’s target of A$100 million in salary savings equating to the equivalent of 638 full-time jobs. The university has confirmed that it plans “further changes” in 2025.

Institutions in poorer financial shape than ANU expect the caps to affect them every bit as severely. Federation University, which recorded an A$81 million deficit last year – compared with ANU’s A$135 million surplus – says the enrolment limits will cost it A$47 million by 2027.

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Federation, Victoria’s smallest public university, has already announced cuts of  – more than one-tenth of its workforce – and reduced its international admissions in an attempt to improve its immigration risk rating. The strategy backfired when a planned update to the risk ratings was postponed, leaving the institution with one of the lowest caps of any university and in the lowest priority category for visa processing.

Charles Sturt University said its cap will lower its international enrolments, which generated about A$150 million a year before the pandemic, by two-thirds.

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Charles Sturt, which recorded a A$73 million deficit last year, said it has already lost more than A$40 million this year from an international enrolment downturn caused by visa processing delays and rejections.

Victoria University, which experienced an A$18 million deficit last year, expects its cap to cost it about A$17 million next year alone. Angel Calderon, a strategic analyst with nearby RMIT University, has estimated that the losses across the sector will total between A$650 million and A$750 million.

The NTEU said the University of Sydney and UNSW Sydney face “very significant reductions” to their 2024 intakes, while Murdoch University faces a large cut from 2023 and Federation, CSU, Central Queensland University and Southern Cross University – all regional institutions – will be capped below their 2019 intakes.

“Job losses are a potential outcome at all of these affected institutions,” the NTEU told a Senate committee. The University of Melbourne and Queensland University of Technology, both A$1 billion-plus operations, also said they faced job losses because of the caps.

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Meanwhile, Universities Australia (UA) has calculated that ministerial direction 107, which it blames for the visa processing delays and soaring refusal rates, is costing the country A$19 million a day in broad economic impacts. The government has said it will replace the directive when the bill to cap foreign enrolments receives final approval.

With the Senate next sitting on 18 November, UA said the costs from the visa processing logjam will accumulate by at least another A$722 million. “This is a cap by stealth that is damaging…the national economy [and] causing serious financial harm to our universities,” said chief executive Luke Sheehy.

In its September meeting, the board of the Reserve Bank of Australia warned that the caps would “weigh on services exports”. A downturn in student arrivals would be likely to reduce overall demand for housing “but also lower growth in population and therefore the economy’s supply capacity”, according to .

Independent senator David Pocock cited research findings that the legislation to cap foreign enrolments would reduce economic growth by 0.7 per cent next year. “The Senate hasn’t even begun debate on this bill and the government wants it to start on 1 January next year,” he told parliament. “It’s untenable and creates enormous risks.”

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But the Treasury offered a different assessment. “We do not see any impacts of this bill from a macroeconomic sense and we do not expect any job losses as a result of this bill,” deputy secretary Sam Reinhardt told the Senate committee.

First assistant secretary Adam Cagliarini said the department had not yet modelled the impacts of the caps, but that they would make no difference to its economic projections because they were “consistent” with its earlier forecasts of net overseas migration.

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john.ross@timeshighereducation.com