Catch-22 as international students continue to flow into Australia
Australia welcomed 26,210 international students in May 2025, up from 24,270 in May 2024 and 22,500 in May 2023, according to new data from the Australian Bureau of Statistics.
As the rate of international student arrivals steadily increases, AMP chief economist Shane Oliver expects Australia's tertiary education industry to begin leapfrogging its way up the ladder of prominent national exports – a catch-22 for the Australian government, which announced it would place caps on total international student numbers in late 2024.
'We have been moving towards services, exports, particularly education,' Mr Oliver said.
'That's why we've got to be careful here that Australia doesn't shoot itself in the foot by restricting immigration that turns off the education export sector.
'I suspect if things had continued as they were, we would have found a situation where, in the next few years, education would be our second highest exporter ahead of gas and coal and still just behind iron ore – but it was always in a position to potentially become No.1.'
Meanwhile, ABS data shows a minor lift in Aussie tourism, with 11,000 more people arriving from overseas than the previous year's reporting period.
The figures also revealed other insights, particularly regarding short-term travel destinations for Aussies leaving the country and also the national origins of our most commonly welcomed tourists.
The top three countries Aussies returned from in May were Indonesia (149,080), New Zealand (83,020) and Japan (82,920), followed by the US, China and Thailand.
Indonesia and Japan were the only countries Aussies toured for short-term travel that greatly exceeded pre-Covid travel levels, while the US was notably the only country in the top 10 that experienced a significant decrease from pre-2019 levels.
Indonesia is in the middle of its dry season, and as the ongoing cost-of-living crisis continues to strongarm Aussies into avoiding big-ticket trips like Euro summers, short-term trips to islands like Bali are becoming more feasible for those hoping to seek offshore adventure.
New Zealand experiences autumnal weather during the month of May, so while snowfall in popular ski areas is minimal, the proximity to Australia makes our small neighbour a popular tourist destination all year round.
Fair summer weather paired with a drop-off in Yen value resulted in large numbers of Aussies making their way to and from Japan in May, with almost 24,000 more returns reported than in May 2024.
The majority of those visiting Australia came from New Zealand (117,250), China (67,350) and India (47,940), with the only significant lift from 2024 traveller numbers coming from China.
The majority of travel to and from Australia came through NSW across all measurements.
Overall, the ABS reported 611,000 short-term visitor arrivals and 970,000 short-term residential returns.
There were 1.66 million total arrivals and 1.68 million departures, meaning the overall population shrank by a relatively small fraction.
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