FIRB fees for foreigners who buy property here could harm the education sector, according to a report in the Australian Financial Review. The intended measures indicate a lack of understanding of the full contibutions of foreign students to Australia.

The fact is overseas students often buy property as a short to medium term investment to cover their accommodation needs and provide a decent return which potentially could cover some if not all of their education costs. They benefit, but so does Australia.

However the government’s move in February to introduce a minimum fee of $5000 to foreign property buyers is short-sighted and will send the wrong signal to overseas students – that “they are not welcome”, says the senior economist at Fairfax- owned Domain Group Andrew Wilson.

Australian education exports are worth a lot and we “need more of these revenue sources, not less” Wilson told the AFR.

“…xenophobia is alive and well in certain sections of the community, and certain sections of the media want to stir it up. And yet there are so many positives about overseas students on temporary visas buying property in Australia. If they don’t buy property here and only rent, it pushes up rent,” says Wilson.

Wilson adds that foreign student buyers of property are providing substantial stamp duty revenue for state governments.

Fees paid by foreign students rose 11% to $16.3 billion in the 12 months to September last year – close to the $16.4 billion peak reached in 2010. The growth is the strongest recorded since that peak.

AMP Capital chief economist Shane Oliver notes that these figures do not include the flow-on effect to other economic sectors.

“If you have more students coming in, more lecturers are employed and it reinvigorates the university sector generally, Oliver says. “Students pay rents and spend at shopping centres and there is tourism from visiting parents.”

Perhaps one of the most understated benefits of these foreign students is that they return to their countries with a deep understanding of Australia and its people which they then pass on to the next generation of students.