In my series of posts on why universities became financially reliant on international students I have, to date, focused on domestic factors. Research funding policy changes are the most important. Universities needed new discretionary revenue to finance government-supported research projects, and to pay the salaries of staff with teaching and research roles.

But universities did not need a nearly 500 per cent real increase in international student fee revenue since 2000 to fill these budgetary gaps.

Suppose annual Commonwealth research spending was 50 per higher across the last few decades, all of it paid through block grants rather than generating additional costs via competitive grants. Up until the year 2000, as the chart below shows, a 50 per cent increase in public funding would have covered all research spending. But in 2018 Commonwealth funding 50 per cent higher than it was would still have left over 40 per cent of research spending unfunded (although there is about $1.9 billion in non-Commonwealth research income).

Profits on international students have been used to help finance a massive increase in university research expenditure this century.* Growth on this scale was something universities chose to do, not a change forced on them by government policy.

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