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longer outweighed those costs. It was a measure of short-term internal financial

administration: it was estimated that the $ 1 ,500 fee would save the Gov

ernm

ent $330,000

in 1 979/80, which would increase to $ 1,320,000 in 1982/83 as students were admitted

I,lIlder the new fee policy. There were four groups exempt from the fee. The first exemption

was for students from the South Pacific region. Pacific students studied in New Zealand

long before Asian students arrived here: the low educational standards in the South Pacific

meant

that,

since the 1 930s, a proportion of the region's secondary school students were

educated in New Zealand. Furthermore, the education-as-aid motivations toward South

Pacific countries continued long after this

aim

had dissipated from New Zealand's dealings

with Asia (Cook, 1995). The other three groups exempted were students on special study

progr

amm

_{es, students who were already studying at a tertiary institution, and private}

overseas students who were attending secondary schools, but would later attend a tertiary

institution in New Zealand (Beng Ghee Ang, 1 992).

At this stage, the fee was not seen as a revenue-generating exercise, as much as necessary accountancy: the books needed to be balanced (Cook,

1 995).

A Caucus Committee of the Third Labour Government balked at a suggestion by the Interdepartmental Committee into Overseas Students that education should be sold to students from the South Pacific and ASEAN countries (Cook,

1 995).

However, there

were

significant economic reasons to introduce fees. Neville Bennett

( 1 998)

argues that pre-full-cost-fees for international students, the subsidies of New Zealand tax-payers money went to students who came from affluent families and who - more significantly - were unlikely to become New Zealand tax-payers in the future. In

1989,

international students paid the same fees as domestic students of

$ 1,000.

The subsidy for international students was calculated at

$23

million. Therefore, Bennett

( 1998:2 1 )

argues, while Monash University was charging fees on a scale between

A$7,000

and

A$ 14,000

and Sydney University charged

A$8,000

for English as a second language or

A$9,250

for an

MBA,

New Zealand was "handing out virtually free university education" to its sixteen hundred undergraduate international students in

1 986.

With questions being asked and objectives being renegotiated, meetings of the Cabinet External Relations and Security Committee on

27

March

1 985

and

1 6

May

1 985,

drew up the following guidelines to enable officials to establish a framework for overseas student entry.

1. Suitably qualified New Zealand students should not be deprived of the opportunity for

tertiary study;

1 1 . The number of overseas students (except graduate students and those meeting the full costs of their education) to be admitted to tertiary institutions and secondary schools should be controlled by quotas;

iii. Overseas students should be admitted in these categories in the following order of priority:

a. Students funded under approved bilateral assistance programm_{es and under other} approved international programmes;

b. Students from South Pacific and ASEAN countries, including those sponsored by their home government and private students, assisted by the New Zealand Government to the same extent as New Zealand students (except for Tertiary Assistance Grant);

c. Tertiary students from all countries who would meet the cost of their education;

d. There should be provision in 7fh forms for overseas students who wish to proceed to further study in a New Zealand tertiary institution (Cook, 1 995 :39; citing

Russell Marshall, Minister of Education. Memorandum for Cabinet External Relations and Security Committee, 'Overseas Student Policy' 2 October 1 985, Treasury File 62/9/1 T)

Of these points, the first appears to have come to fruition; or at least, demonstrating that New Zealand students have been deprived of attending university because of international students is difficult to prove. The fact that there are now no quotas on the admission of international students to universities (although particular courses may have general quotas for all students) makes displacement of domestic students unlikely. Finally, while some international students do attend universities under aid programm_{es, that number, as}

evidenced by the recent changes to the ODA scholarships, is decreasing (Ministerial Review Team, 200 1 ), while private full fee paying students are increasing, both nationally and internationally (cf. Ministry of Education, 2002c).

The recent significant increases in private fee paying students are part of an overall increase in international students worldwide. The total enrolment of foreign students in the

US,

France, Germany,

OK,

Canada, and Australia was fourteen times greater in 1 990 than it was in 1 950. In 1 990, there were almost 800,000 international students in these countries (Back et al, 1 998). The same is true of New Zealand: the sixteen students in New Zealand under the Colombo Plan at the end of 1 95 1 had grown to 52,700 foreign-fee paying students by July 200 1 (Ministry of Education, 2002c).

Internationally, in 1 995-6, the key market providers of the

USA,

Canada,

OK,

Australia, and New Zealand had over 1 00,000 European international students and over 360,000 Asian international students (Bennett, 1 998). By the mid- 1990s, there were one-and-a-half million international students worldwide and it is predicted that by 2025 there will be five million international students worldwide (Back et al, 1 998). In the mid-1 990s, 46% of these international students were from Asian countries with 63% of these students travelling to an English language destination (Back et

at,

1 998). This growth can be attributed to the demand for an international education as much as to the recognition of universities of this demand and subsequent marketing to this growing market.

In 1999, the United States had half a million international students. In Australia, the average number of international stUdents per university is the highest average in the world: 1,800 (EduWorld, 200 1 ). Australian figures predict that by 20 1 0, 53% of international students to Australia will be from Asia (Back et

a1,

1 998). In New Zealand, there was an increase in international students by two-and-a-half thousand between 1959 and 199 1 . There was a further two-fold increase in students by 1 997 (cf Back et a1, 1998; McGrath, 1 998), and between 1999 and 200 1 there was an 86% growth in numbers of international students in New Zealand (Ministry of Education, 2002c) In 200 1, there were 52,700 international students in New Zealand; the majority of whom came from Asia (Ministry of Education, 2002c) . .

With increasing numbers as significant as these, the former notions of international education were being challenged. The reality of education-as-trade was increasingly incompatible with the notion of education-as-aid, as Neville Bennett ( 1 998:23-4) argues:

[T]he governing ethos of education was of planning, regulation and quotas, all married to the idea that it was a free good, or at least a heavily subsidised one for local and foreign students. The concept of restricted entry to popular courses obviously rested on some bottlenecks in capacity; but there was a feeling that the planners knew best . . . . The providers wanted to dominate and guide consumers: an occupational hazard for educators. Within this structure, overseas students were welcomed as applicants for aid - provided that they came from the right countries . . . . The 'aid' attitude was underpinned by a widespread sentiment that education should not be commercialised. Selling services was commonly perceived as _{the thin edge of the wedge to creeping commercialism.}

The perception of the 'thin edge of the wedge' was astute, but neither quotas nor any other forms of restriction could prevent the shift toward commercialisation. As argued more fully in the next chapter, the emerging political philosophy was neo-liberalism: a user-pays market-driven philosophy, which affected education as it did every other area of New Zealand life at that time. In 199 1 , with the Education Amendment Act, domestic tertiary students were still subsidised (albeit not as heavily as before); international tertiary students were not.

These changes were incremental rather than substantive. It was a reactive rather than a pro active approach: the numbers of international students grew and the political philosophies changed and the changes in the international education industry responded to

this growth and change rather than planned ahead for them. Rather than stepping forward with long-term objectives, the Government was caught on the back-foot responding to (initially) short-term crises.

The introduction of full-cost fees dates from

1 987.

In

1987,

the Market Development

Board commissioned Sir Frank Holmes to examine the potential and concept of foreign exchange earning from exporting education services. The report, launched in November

1 987,

concluded that there was substantial scope for exporting education (Beng Ghee Ang,

1992).

Holmes identified a trend that was less a deliberate plan and more a product of philosophies and events of the time. Nevertheless, this report was the road to the introduction of full-cost fees. The direction of New Zealand's policy toward international education had been changing for some time, but this report served as a signpost of things to

come.

UNDER PRESSURE: _mE NEW PERILS

As the 'red peril' served as an engine for early policy on international education, so new perils were suggested as brakes for later policy. This call to put the brakes on came from non-governmental lobby and pressure groups. Historically, non-governmental involvement has taken the form of concern over the welfare of international students and their access to New Zealand educational institutions; these concerns continue to the present day. While for some, opposition to policies was altruistic, for others it was also ideological, particularly when full-cost fees were introduced (Cook,

1 995).

One such pressure group was the New Zealand University Students' Association. It identified controversies in Britain and Australia over the use of recruitment techniques of international students and suggested that a code of practice be introduced, to protect the quality of education received by both domestic and overseas students. It suggested that international students should not be recruited unless they were guaranteed admission to a quality education programm_{e, that the information provided to prospective students should} be accurate and realistic, and that preparatory courses should be provided (Cook,

1995).

The Association of Commonwealth University Staff also expressed concerns about the deterioration in quality, as well as the establishment of what they referred to as 'national

ghetto institutions', namely private education providers catering solely for international

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