Immigration visa changes threaten education provider MIT's viability

The Manukau Institute of Technology campus in Manukau. Photo / Nick Reed

The Manukau Institute of Technology has warned that proposals to tighten post-study work visas for overseas students could threaten the institute's financial viability.

Chief executive Gus Gilmore has told the Government that the proposed changes would halve the institute's fulltime-equivalent foreign students from 1000 to 500, cost 64 tutoring jobs and slash its revenue by $10 million a year, or 10 per cent of its $103m total revenue.

This comes on the top of declining domestic enrolments which pushed the institute into a $7m loss last year.

"The projected annual $10m reduction in revenue could lead to financial viability issues requiring Government intervention and cash injection," Gilmore said in a submission on the changes.

Waikato Institute of Technology (Wintec) says in another submission that its overseas student revenue would drop by $4.5m a year or 30 per cent.

Western Institute of Technology at Taranaki says it could lose up to 75 per cent of its overseas students and $1.5m in revenue.

Toi Ohomai, created in 2016 by merging Tauranga and Rotorua-based polytechnics, said the proposals would be "a huge blow for tertiary education providers", but it was developing "mitigation strategies" to cope.

Gus Gilmore says the proposed changes would drive away "exactly the target market that we think fill a skills gap". Photo / Supplied

The backlash from the polytechnic sector appears to have surprised the Government, as Labour's 2017 election policy said its proposed crackdown on student work rights would only affect "low-level courses at private training establishments".

"We do not expect them to adversely impact universities, polytechnics or schools," the policy said.

Labour promised to scrap work rights on student visas, and post-study work visas without a job offer, for most courses below degree level.

It said that would close a "loophole" that was letting unskilled migrants gain NZ residency by enrolling in low-level courses, and would cut net migration by between 15,000 and 22,000 a year.

Last month Immigration Minister Iain Lees-Galloway published detailed proposals to abolish the current two-year post-study work visa that is tied to a particular employer, keeping only a one-year open work visa for students who have studied for at least two years in sub-degree courses and a three-year open work visa for graduates at degree level and above.

Submissions closed on June 29 and the proposals are expected to go to a Cabinet committee this week.

The Government has not yet made any changes to students' right to work up to 20 hours a week while on a student visa, but it is due to consider that issue in October.

Lees-Galloway said last month that the post-study work visa changes would affect between 12,000 and 16,000 students and cut spending by overseas students by $260m a year.

However a May 16 briefing by Education NZ to Education Minister Chris Hipkins, obtained by the National Party under the Official Information Act, estimates a loss of 17,425 students worth $486m a year.

It says private training establishments would lose 12,465 students worth $320m, and polytechnics would lose 4960 students worth $166m a year, based on 2017 numbers of students in sub-degree courses who took up post-study work visas.

Gilmore said the biggest impact for Manukau would be on students in graduate diplomas at Level 7 of the qualification framework, where students have degrees from their home countries but are treated as sub-degree students here.

Half of the institute's current overseas students, and 60 to 70 per cent of overseas applicants, are pursuing one-year graduate diplomas mainly in engineering, information technology or business aimed at adapting their qualifications to NZ conditions.

"They are the sorts of students we want," Gilmore said.

"They have been successful in their own school and university systems. They have an international focus. They are exactly the target market that we think fill a skills gap."

The Manukau Institute of Technology could lose 500 students, 64 tutors' jobs and $10 million a year through proposed changes to overseas students' post-study work rights. Photo / Supplied

Private training providers are even more alarmed. Aspire2 International, the country's largest private tertiary provider with 3500 students in Auckland, Tauranga and Christchurch, said the proposals would drive away 90 per cent of its students with "a strong possibility that we will not be able to remain in operation".

Chief executive Clare Bradley said that even though not all sub-degree students took up post-study work rights, most would go to other countries such as Australia and Canada if those rights were removed here.

National MPs Michael Woodhouse and Simeon Brown said the Government should restore post-study work rights for postgraduate diploma students.

Lees-Galloway said he received over 2000 submissions.

"We have taken these submissions into account and our final proposals will reflect the feedback we received," he said. "An announcement will be made in the near future."