Promoting NZ universities to the world ‘could help save economy

Chief economist Eric Crampton said the country should reopen its borders to foreign students, with mandatory and well-monitored quarantine systems.

It should also capitalise on New Zealand’s international reputation as being more successful than most at controlling Covid-19, and look to attract more.

The number of international students at New Zealand universities has increased sharply over recent years. In 1999, there were 11,740 attending. By 2018 that had risen to 60,810.

They have a significant influence on universities’ financial fortunes because the fees they pay are higher than those of domestic students.

Crampton said Canterbury University had 13,022 domestic full-time equivalent students in 2019 and 1869 international. But it made $48 million from international fees, compared to $78m from domestic.  

A Bachelor of Arts student at the University of Auckland would pay about $36,000 for their degree, compared to about $6000 for domestic students.

International students would often also pay for accommodation at universities.

In 2016, Infometrics estimated that the onshore component of international students’ education generated $3.8 billion in foreign exchange earnings, directly contributed $1.9b to GDP and made an overall contribution of $4b to GDP after accounting for indirect effects.

Statistics New Zealand estimated that international students studying for fewer than 12 months spent $3.9b in the year to March 2019; overall international tourist expenditure in the same period was $17.1b. Student spending includes student course fees, living costs, and airfares on resident airlines but would not include other expenses, or spendnig by students staying for more than a year.

“International student expenditure here is substantial,” Crampton said.

Crampton said students deciding where to go to study would currently be deterred from applying to exclusive British or American universities because of Covid-19 concerns.

“New Zealand’s response to the pandemic is an opportunity to make New Zealand a kind of lifeboat, largely free of Covid-19 and able to contain any outbreaks through rigorous track, trace and quarantine policies. While life will not return fully to normal for some time, New Zealand will be the least disrupted place in a rather disrupted world. Students who might otherwise have looked to the UK or US will be more likely to consider New Zealand because of that far better student experience.”

If that pushed up student numbers, universities might need to hire more staff.

But they would be in a good position to have their pick of highly qualified people, because foreign academics were facing a tough job market.

“The Covid-19 crisis gives New Zealand’s tertiary sector a real opportunity to become more desirable as a destination for foreign students,” he said.

“But it cannot happen unless the Government prioritises re-opening the border to international students, with appropriate quarantine provisions, while encouraging speedy visa processing. There is substantial opportunity for benefits extending well beyond the university gates.”

Foreign students would not want to travel home during breaks as they might normally, and would instead spend their time travelling around the country, supporting domestic tourism.

While a two-week quarantine period would put off most tourists, it would be insignificant for people who planned to be here for a semester, year or entire degree.

Universities would struggle without international students,  Crampton said. They relied heavily on the income and it was hard for them to vary their costs in the short term. “This is a way of helping the tourism, hospitality and university sectors in one go, instead of bailouts for the university sector.”

Chris Whelan, chief executive of Universities New Zealand, said foreign students provided a level of funding that helped make it possible for young New Zealanders to attend universities at discounted rates.

 “They also bring broader perspectives, a taste of different cultures and a wider world view to our campuses. International education has massive benefits for everyone.

“As well as reducing the cost of running universities for taxpayers, international students also bring nearly $700m a year of additional spending in sectors such as accommodation, food, entertainment and travel. When international students graduate, most continue to have a relationship with New Zealand personally and promoting it to others for tourism, further education, trade, research collaborations, and in diplomacy,” he said.

“Their presence here is also a key reason why every New Zealand university is world-ranked and can provide every domestic student with a world-class education.

“Welcoming international students back to New Zealand—when the time is right and all risks can be properly managed—would be an opportunity for New Zealand to grow our share of the international student marketplace.”

University of Otago director international Jason Cushen said New Zealand was uniquely positioned as a destination in terms of safety and international student experience, given its response to the pandemic.

“The University of Otago’s response has been to focus on the wellbeing of our international students as well as minimising the disruption of the pandemic on their academic progress. By providing them with a range of possible study options, including online delivery, international and domestic students have also had the option to return home and study.”

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