The report focuses on seven universities: Melbourne, ANU*, Sydney, UNSW, UTS, Adelaide and UQ. Babones points out that China is the largest source of inbound international students, making up more than half. These make up 13% to 22-23% of student fees for the universities.
Australian universities have a high proportion of international students from one source. However, much of the cost of teaching students is variable: as the revenue from students drops, so does the cost of teaching them.
While Australian university have a high proportion of international students in comparison with other countries, they only make up 25% of the student population. If the half of these from China were suddenly to cease this, would only reduce student numbers by 12.5%. That would be a serious concern for some areas of universities, particularly business studies, but not the university overall. There would be some excess teaching space, however, this is currently undergoing reconfiguration and replacement, as lectures are replaced with flexible learning. Universities would not need as many short term contract and casual staff to undertake the teaching.
Based on my study of education, as an international online student, I suggest a larger concern for universities should be the changes taking place in the way education is provided, and what forms of qualifications will be demanded by the workplace. Universities have argued that there is a synergy between their education and research roles. This was always a questionable link, as researchers do not necessarily make good teachers. Also the shift to at least partly online education undermines the logic of providing international education in a host country. The demand for smaller, even micro, credentials, also presents a challenge for universities.
* Declaration of interest: I teach international students at the ANU (last semester 85 Master of Computing students). However, as an honorary lecturer I receive no payment for this.
Babones, Salvatore. The China Student Boom and the Risks It Poses to Australian Universities, Analysis Paper 5, , Sydney, Centre for Independent Studies, August 2019