Universities in Australia have welcomed the "timely" decision by the country's federal government to review its student-visa system in light of the recent collapse in demand from overseas students.

Ministers announced the review last week alongside an immediate package of measures designed to ease restrictions that have been partly blamed for the decline in applications from key markets such as India and China.

Although other factors such as the global recession, the strong Australian dollar and the fallout from attacks on Indian students have also hit enrolments, the government has come under pressure to change its visa policy.

One particular criticism has revolved around a sudden increase in the amount of money students must find to support their visa applications. The sums required had not changed for several years before a rise of 50 per cent was implemented recently.

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Concerns have also been expressed that the Australian government was giving overseas students the impression that it was not "open for business", with the result that students were heading for competitor countries such as the US, Canada and the UK.

Peter Coaldrake, chair of Universities Australia and vice-chancellor of Queensland University of Technology, said the latest figures on international enrolment in Australia showed a "clear decline" after year-on-year increases of 11 per cent for the past eight years.

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"This review must show that Australia is serious about improving its procedures and correcting the negative perception that has arisen," he said.

"This will send a strong positive signal to source countries and to prospective overseas students."

The immediate package of measures announced by the government included a lowering of the "assessment levels" required for student-visa applications made by people from 38 countries, including India and China, from April 2011.

Ross Milbourne, chair of the Australian Technology Network of Universities and vice-chancellor of the University of Technology, Sydney, was "particularly pleased" to see the change in the assessment levels, which dictate the evidence required by students to support visa applications.

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He said research commissioned by his network - whose members educate one in four of the international students currently studying in Australia - shows that there are anomalies among the requirements for different nationalities. The level of financial proof demanded of Chinese and Indians was "more onerous" than for their Singaporean and Malaysian peers, he said.

Professor Milbourne added that the review, which will be carried out by Michael Knight, a former minister in the New South Wales government, should possibly consider recommending a visa specifically for ÖйúAƬ students, but only after "detailed analysis" of its potential impact.

Meanwhile, the state government of South Australia has revealed that it is in talks with the US private provider Laureate International Universities about setting up a new institution in the region, with an announcement possible early next year.

Laureate, which has built a large network of universities worldwide, often by taking control of existing institutions, currently operates two leisure-management schools on the east coast of Australia.

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simon.baker@tsleducation.com.