With fewer overseas students, Australia must fully fund research
In recent weeks and months there has been almost endless speculation about proposed policy changes that may cap the number of international students coming into Australia.
This week, the government increased the cost of international student visa applications to a non-refundable $1,600, a rise of over 100%, making Australia the most expensive for student visas compared to our global competitors – the US, Canada, New Zealand and the UK.
At the same time, Politicians love to laude the global standing of our universities – with nine in the top 100 according to the QS World Rankings.
This international competitiveness is largely built on Australia’s research success – and this success is what attracts highly talented international students to our best universities, and it is the revenue from these students that allows Australian universities to spend in order to sustain research productivity.
World-leading breakthroughs, like the HPV vaccine developed in Queensland or the artificial heart developed in Melbourne, are just a tiny example of the downstream impact of discoveries made by Australia’s researchers.
So, the relationship between research excellence and attractiveness to international students is a symbiotic one.
And this is the reason the research community is currently very nervous. Every time external forces arise such as the pandemic, or the current debate in Canberra over international student quotas – there is an immediate threat to that revenue and the research and innovations it fosters.
Are memories really that short? The direct causal relationship between international student revenue and research support at our universities was brutally exposed by the pandemic. And we are still recovering from that: deficits remain in most research-intensive universities, but the bigger impact has been the inspiration numbing year-on-year savings targets and cost saving measures needed to keep the books balanced.
The post-pandemic lack of investment and curtailed risk-taking is seriously damaging innovation, as well as the creative endeavour and morale of our incredibly talented researchers who continue to get out of bed because this may be the day they discover something that will lead to new therapies and treatments.
For many researchers, getting out of bed every day has become harder – with the added shadow of the downstream economic impact of visa restrictions making Australia the least likely destination for the world’s smartest students and researchers – they now go to bed worried about whether the resources will be in place so they can do their best work and, quite frankly, their job security.
So, what can be done? If limits are imposed on universities’ ability to enrol international students, then it is necessary to consider how to avoid unintended consequences on research and innovation. The most obvious solution is to couple this policy with one that determines to replace the lost revenue.
This can be done by adopting international best practice in the form of an evidence based Full Economic Cost (FEC) approach, linking research funding to the full costs of government commissioned research. This would effectively buffer our world class research capacity from any variabilities in the international student market.
Typically research funding comprises two revenue streams: one for the direct costs such as salaries and laboratory expenses; and one for indirect costs that includes access to state-of-the-art laboratories, infrastructure and specialist equipment, the technical professional staff needed to run the environment, as well as all the usual HR, finance and administrative costs. Together, these two funding streams represent the FEC of research, but how different countries support the indirect costs varies considerably.
In most analyses, these indirect costs are estimated to be about 100% of the direct costs. So, for a 4–5-year grant where direct costs are $1 million, the full economic cost of the research project is $2 million. In the US and UK, FEC is built into their research funding models, so the host institution receives the full (or close to it) $2 million. By comparison, in Australia, the institution receives approximately $1.2 million. It is this funding gap in indirect costs that needs to be plugged by revenue from international students.
So let’s be smart in the development of Higher Education policy by joining the dots between international student revenue and our country’s success in research and innovation.
Any policy that proposes to regulate the numbers of students needs to be coupled to increasing revenue for indirect costs so the host institutions can pay for the research, research that is largely commissioned by Government funding agencies.
Such joined up policy making will be necessary if Australia is to continue to excel in research that drives innovation and our nation’s future economic prosperity.
Professor John Carroll is the Director of the Monash Biomedicine Discovery Institute and Dean of Biomedical Sciences at Monash University
This OpEd was published in The Times Higher Education
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About the Monash Biomedicine Discovery Institute
Committed to making the discoveries that will relieve the future burden of disease, the Monash Biomedicine Discovery Institute (BDI) at Monash University brings together more than 120 internationally-renowned research teams. Spanning seven discovery programs across Cancer, Cardiovascular Disease, Development and Stem Cells, Infection, Immunity, Metabolism, Diabetes and Obesity, and Neuroscience, Monash BDI is one of the largest biomedical research institutes in Australia. Our researchers are supported by world-class technology and infrastructure, and partner with industry, clinicians and researchers internationally to enhance lives through discovery.