Controversial government powers to cap international student numbers have passed the lower house despite being labelled an “egregious overreach” and “shockingly bad policy” by members of the crossbench.

A bill introducing a number of education sector reforms, including new powers for the Education Minister to impose caps on the number of people entering Australia to study, was debated in the House of Representatives this week.

The bill passed the lower house on Tuesday with the backing of the Opposition.

A committee inquiry will table a report on the controversial measures before it is debated in the Senate.

The Greens and some independent MPs voted against the bill due to the international student cap powers included in it.

Amendments put forward by the crossbench to scrap the powers entirely or to end them after two years were voted down by the two major parties, while independent MP Monique Ryan secured a review of the legislation in two years.

The Education Services for Overseas Students Amendments (Quality and Integrity) Bill 2024 includes some largely non-controversial reforms to education providers and agents in Australia.

But it also hands new powers to the Minister for Education to determine the maximum number of overseas students that can be enrolled with a provider or a class of provider, or in a course or class of courses at a provider.

The federal government has said these new powers are necessary to rein in the unprecedented number of international students coming to Australian shores in recent years, with the Coalition backing this by claiming a drop in migration is needed to address the housing crisis.

“We need to manage the sector’s growth in a way that benefits Australia and our institutions whilst maintaining the sector’s social licence,” Education Minister Jason Clare said in Parliament.

“What this bill does is allow for the management of the number of international students a provider can enrol at a provider level, a course level, or both.”

But members of the Greens and Crossbench labelled these powers “extraordinary” and cautioned against further government intervention in the space.

Greens MP Max Chandler-Mathew said the party does not support the new ministerial powers to cap international student numbers, and labelled this an “unprecedented government intervention in the university sector”.

“The government is attempting to write extraordinary powers for itself in legislation, allowing the education minister to set limits on uni enrolments down to specific providers, courses or locations,” Chandler-Mathew said.

“This is an extraordinarily heavy-handed approach. Capping international student numbers is shockingly bad policy.

“It meddles with the independence of higher education institutions and totally disregards the needs, welfare and interests of international students.”

Sledgehammer for a walnut

Some independent MPs also criticised the student caps, with Zoe Daniel labelling it a “sledgehammer to crack a walnut – and the wrong walnut”.

“The tertiary sector tells me [that] the uncertainty surrounding this legislation is leading to prospective students going to other countries, including the United States,” Daniel said.

“Create uncertainty and people will reconsider their options.

“By reducing the number of overseas students in this pre-emptive way, we will be creating reputational and business risks for the tertiary sector as well as broader problems for an already troubled economy as unintended consequences.”

Member for Wentworth Allegra Spender labelled the caps an “egregious overreach from a government into the running of private organisations”.

While a number of Liberal and Nationals MP said that a cut to migration is needed to help address Australia’s housing crisis, a recent report by the Property Council found that international students are not to blame for this issue.

The report found that international students make up just 4 per cent of the rental market, while contributing $25.5 billion to the economy.

If the legislation is passed and student caps are introduced, the education sector may be forced to cut nearly 10 per cent of its workforce, equating to about 22,500 jobs, the Senate inquiry to the bill heard recently.

This would cost the economy about $4.3 billion, Universities Australia CEO Luke Sheehy told the Committee.

At the start of this financial year, the federal government also more than doubled the non-refundable application fee for international student visas, from $710 to $1,600.