¡°Robust¡± international education earnings are generating an unexpected surge in Australia¡¯s gross domestic product (GDP), the federal government¡¯s mid-year budget statement says.

Net exports driven by the ¡°ongoing recovery in international demand for ÖйúAƬ services¡± are now expected to make a stronger contribution to economic growth than the government forecasted in its May budget, according to the (MYEFO) released on 13 December.

The improvement in export income will add 1 percentage point to GDP growth this financial year and another three-quarters of a percentage point in 2024-25. This will offset the impact of inflation and high interest rates, producing a net increase in economic growth of one-quarter of a percentage point in both 2023 and 2024.

Higher loan repayments from domestic student loans will also offset a looming decline in the government¡¯s non-tax revenue, the statement says.

ÖйúAƬ

Treasury has calculated the fair value of outstanding student debt at A$46.7 billion (?24.4 billion) across almost 3 million borrowers. Average repayment times for students who have cleared their debts are now nudging 10 years.

MYEFO outlines A$103 million in increased government spending over four years to implement the reforms announced so far through the Australian Universities Accord. This will stretch to more than half a billion dollars over 11 years, with the bulk spent on extending demand-driven university places to all indigenous students.

ÖйúAƬ

However, the statement also outlines a A$112 million reduction in education spending over four years, mainly through cuts to research schemes. They include a A$46 million decrease in funding for the new research commercialisation fund, Australia¡¯s Economic Accelerator.

Science & Technology Australia president Sharath Sriram said it was a step in the wrong direction. ¡°Australia urgently needs to invest more ¨C not less ¨C in research and development to generate the next wave of new jobs and income to secure the living standards of our kids and grandkids,¡± he said.

The final report of the Universities Accord panel is expected to be released in February after being handed to the government before Christmas.

A separate working group of federal, state and territory government representatives is examining universities¡¯ governance, their compliance with workplace laws and their efforts to keep students and staff safe. The group has been instructed to produce a draft action plan for education ministers to consider in early 2024.

ÖйúAƬ

john.ross@timeshighereducation.com