Labor will increase visa application costs for international students to $2,000 to help pay for its big-spending election promises.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher unveiled Labor’s election costings on Monday afternoon, revealing a slight improvement of $1 billion to the budget deficit over the forward estimates, despite the number of policies announced in recent weeks.

This will be achieved in part thanks to a 25 per cent increase to international student visa application costs that will come into effect from 1 July.

“We think that’s a sensible measure that really prizes, I think, the value of studying here in Australia,” Chalmers said.

Fees triple in 12 months

It will see the non-refundable cost of these applications increase from $1,600 to $2,000, and comes after the Labor government more than doubled the fee from $710 in mid-2024.

It means the cost of student visa applications has nearly tripled in less than a year.

Labor’s costings predict this fee hike will rake in $760 million over the forward estimates.

Labor also plans to save a further $6.4 billion over the same period from reduced spending on consultants, contractors and labour hire, along with non-wage expenses such as travel and hospitality.

Even before the student visa increase announced this week, Australia’s fees were far higher than any other comparable nation.

The fee to apply for a student visa in the United States is $306, in Canadia it’s $472, in New Zealand it’s $695 and in the United Kingdom it is $1,047.

The increase has been criticised by the International Education Association of Australia, while former Deputy Secretary of the Department of Immigration Abul Rizvi said it was “really poor policy”.

“That will make Australian fees many, many times higher than the next highest in the world,” Rizvi posted on LinkedIn.

“[It] means we become even less competitive for the best students…we keep shooting ourselves in the foot.

“We desperately need a holistic policy framework for the overseas student program that focuses on quality and integrity while minimising the numbers of students and former students stuck in immigration limbo.”

International students targeted during election

International student visa fees under Labor will still be far cheaper than if the Coalition wins the upcoming election, with Opposition Leader Peter Dutton pledging to increase them to $5,000 for Group of Eight universities, and to $2,500 for all other institutions.

Immigration and the number of international students in Australia has become a key election topic in recent weeks.

The Coalition earlier this month announced a plan to limit the number of international student enrolments per year to 240,000, which would be 30,000 less than Labor’s plan.

This would be done through the implementation of a cap of 25 per cent of students enrolled at public universities coming from overseas from next year.

The Labor government last year announced a cap on international student commencements at 270,000 per year.

In the face of these changes, the number of applications for international student visas dropped by more than half late last year.

Government data showed that the number of international visa applications made offshore in August last year was 15,270, compared with 30,703 in the same month in 2023, a drop of more than 50 per cent.

This was also the lowest number of applications made in August since 2015, excluding the COVID-19 pandemic years.

The number of higher education applications dropped by 40 per cent in this period.

Legislation giving the Education Minister the power to impose caps on the number of people entering Australia to study, at either a provider-level or in terms of specific courses, was rejected in Parliament.