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The federal government's bill to crackdown on the intake of international students will cost Australia up to 14,000 job losses in the sector, Universities Australia chief executive Luke Sheehy told a Senate inquiry on Tuesday.

In the past year, the government cut down visas by 23%, which was a drop of nearly 60,000 students, Sheehy said. Citing recent data from the Home Affairs, he said the impact of less than 60,000 students arriving in Australia meant an economic loss of AU$4.3 billion and the loss of thousands of jobs in the university sector, reported ABC News.

The government is planning to implement the new rule from Jan. 1, but is yet to decide on the details of the cap. Apart from limiting the number of students, the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 also grants power to the minister to limit the students' intake by provider, course, or location and delay the registration of new providers or courses.

A spokesperson for Education Minister, Jason Claire, denied reports that the government planned to cap the intake at 40%, adding that the proposed limit has not been finalized.

The university peak bodies have criticized the move as "ministerial overreach."

Vicki Thomson, chief executive of the Group of Eight, described the government attempt to cap international students as "draconian, interventionist and amount to economic vandalism."

If the bill is passed, student enrollment to the Go8 universities would be limited to that of pre-pandemic levels, costing the country more than AU$5.3 billion and over 22,500 jobs, she added.

Appearing before the Senate, Janageeth Logeswaran, an international student at the Flinders University and a member of the national student union, said thousands of international students were denied or their visas were delayed after the ministerial order.

"This sends a strong message to the world that international students are not welcome here. I speak to hundreds of students, and a lot of people are reconsidering their decisions and they're considering more welcoming countries," he said.

According to a report by News.com, the National Tertiary Education Union (NTEU) has urged the government and universities to prevent job losses; however, the agency called out Sheehy on using it as "a bargaining tool."

"Threatening to slash 10% of the university workforce as a bargaining tool against the federal government is a cruel and callous way to treat staff," NTEU President Alison Barnes said in a statement. "It's absolutely outrageous for the vice-chancellors' lobby group to be threatening the jobs of 14,000 academic and professional staff who are an indispensable part of our higher education system."

The sector amounts to AU$50 billion of Australia's economy, Thomson said. With the international students joining the workforce in Australia, they contribute beyond visa and course fees, she added.

The Business Council of Australia (BCA) told the Senate inquiry that the bill would threaten the broader economy. Pointing to the government reason that the student cap would bring down the high rent, BCA called it a "detraction" from the "real solution."

"International student revenue provides considerable income for businesses, delivers higher revenues to governments, supports universities to offer high-quality education for domestic students, is critical to maintaining our research capacity, and is a major channel for soft diplomacy, especially in the Asia Pacific region," the BCA said.