In presentations earlier this year I told audiences that the government will try again to impose provider-level caps on international students. Its 2024 attempt failed due to a surprise Coalition-Green alliance in the Senate. The basis of my statement was ATEC ‘s legislation, which said that it would ‘allocate a maximum number of international student commencements to ESOS registered providers’ (emphasis added).

But for unexplained reasons the government is backing away from tough provider-level international student enrolment limits. The Universities Accord (Opening the Doors of Opportunity) Bill 2026 gives ATEC a role in allocating commencements to higher education providers, but it is something closer to current national planning level allocations for new overseas student commencement (NOSC) than a hard capped system.

The basic process will be that the minister sets a total allocation pool of international student commencements, and ATEC then decides on the distribution between universities and other higher education providers.

As described in detail below, this process has very high levels of ministerial and ATEC discretion, to the point of both being able to reduce allocations after the students have started their courses.

While there should be much better processes than those set in the bill, at least for non-public university providers it is not obviously significantly worse than what we have now.

Legislative references are to the Universities Accord (Australian Tertiary Education Commission) Act 2026 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.

International student allocation pool

As for domestic students in Commonwealth supported places, the minister for education will start by setting a total pool of ‘overseas students that may commence a course of education with ESOS registered higher education providers during a specified period’: new section 46B(1).

What does the minister take into account when setting the international student allocation pool?

The minister is not required to consider any factors or consult any persons or organisations when setting the international student allocation pool. This is unchanged from the national planning level system.

ATEC has no direct power to advise the minister on the number of international students. Possibly it could do so indirectly via advising on meeting future skills needs and on the size of the system: current section 41(1)(d)&(e). But the minister is not obliged to take any notice if it does.

If the minister gives a direction to ATEC that affects VET the minister must first consult the Commonwealth VET minister and the state and territory VET ministers: current section 71(3). But there is no parallel provision to consult the immigration minister, even though this law is part of the government’s efforts to reduce the number of temporary migrants in general and international students in particular.

International student allocation pool – automatically excluded students

The allocations do not include school students, foundation program students, English language students, or VET students, even if a higher education provider offers courses to such students: new section 5A(2).

Included courses must lead to AQF qualifications, which I presume excludes higher education exchange students: new section 5A(1)(a).

International student allocation pool – optionally excluded students

The international student allocation pool determination may provide that ‘overseas students of a specified class’ are not to be counted for the purposes of the allocation: new section 46B(2).

This clause will probably be used to continue current exemptions for postgraduate research students, students from the Pacific Islands, and various others.

What conditions can the minister add to guide ATEC’s allocation of commencing places?

The minister can guide how ATEC makes its decisions.

The bill creates a broad power to specify ‘matters that the ATEC must comply with in making an allocation for the period’: new section 46B(1), emphasis added.

New section 46B(3)(b) creates a softer power to specify ‘matters that the ATEC must take into account when making an allocation’, emphasis added.

While these broad powers could include almost anything, the minister is expected to continue with current priorities, such as increased engagement with Southeast Asia and more student housing.

In future it could include matters such as source market diversification and contribution to skills needs (explanatory memorandum p. 84).

Type of provider

More specifically, the matters may specify the ‘kind or kinds of ESOS registered higher education providers to which ATEC may make an allocation’: new section 46B(3)(a).

This leaves it open to the minister to say that certain kinds of providers – presumably private or for-profit providers from this government – cannot receive an allocation. I will return to the enforceability of such determinations later.

When does the minister have to make a decision?

In the original ESOS capping bill, the minister had until 1 September before the year of allocation to make a decision. This bill does not set a deadline. The reason is that the bill envisages the minister varying the allocation. No specific provision authorises a variation but a statutory note points to section 33(3) of the Acts Interpretation Act 1901, which provides a general scope to alter legislative instruments.

Variation could create layers of problems, but an initial issue is that higher education providers need to know their allocation well in advance so they can make offers.

As there is an added bureaucratic step, through ATEC, before allocations are determined this suggests the minister’s deadline should be earlier than 1 September.

Aligning the international student allocation pool with the domestic student allocation pool would make sense. This would create a 30 June deadline. The release of the 2027 planning level on 3 July 2026 sets a mid-year precedent that should be written into law.

Is there any scope for review of the minister’s decision?

While the allocation pool will be implemented via a legislative instrument it is not subject to disallowance by the Senate or House of Representatives: new section 46B(5).

There may be some limited administrative law remedies if the minister exercises his power for an improper purpose. But the fact that the bill does not specify a purpose for the allocation might make that difficult.

ATEC’s decision-making on international student commencements

Once the international student allocation pool is determined by the minister ATEC must allocate them to one or more ESOS providers: new section 46C(1).

The bill removes the word ‘maximum’ from the original ATEC Act 2026‘s international student places function and talks instead about ‘numbers of international student places’: new section 11(h).

ATEC can specify a method for determining the number of international student commencing places: new section 46C(2). Potentially this could be formula-driven as for Commonwealth supported places, such as the previous year’s allocation or actual usage in a specified time period. The use of formulas, however, may be constrained by ATEC also having to pursue matters specified by the minister.

A method could form the basis of ATEC’s initial negotiating position with Table A and Table B institutions, but ATEC must consult first, then allocate, and then give the university 10 business days to respond: new section 46D(1).

For Table A and Table B providers, who are subject to the mission based compacts regime, performance against the compacts will be a factor in the allocation: new section 46D(2)(b)(ii)&(iii).

For other providers there is no statutory requirement to consult on the initial allocation.

In making an allocation, ATEC must ‘take into account’ the extent to which a previous allocation was exceeded: new section 46D(2)(b)(iv). This section refers to a previous ATEC allocation, so the non-university providers that have exceeded their current national planning level are not affected by this provision.

Varying an allocation

The most chaotic part of the international student provisions is the power to vary allocations of commencing places.

The apparent purpose, as stated in the explanatory memorandum, is to be able to ‘respond to changing circumstances throughout the year and to ensure that allocations reflect student demand’ (p. 84). This implies that the power is aimed at moving places from providers that cannot use them to providers that can. But nothing in the bill itself says this.

Within the original ministerial allocation, ATEC can vary an allocation at ‘any time before the end of the period to which the allocation relates’: new section 46F(1).

Unlike with initial allocation of commencing places, ATEC must give a provider at least 10 business days notice before an own-initiative reduction in places: new section 46F(4) interacting with new section 46F(5)(c). ATEC must take into account any response given: new section 46F(6).

However the bill gives no guidance on what factors ATEC must consider on an own-initiative reduction. It does not rule out a scenario in which a provider adheres to its allocation and then has its allocation reduced.

As noted, the minister can vary the total allocation pool. New section 46E(1) says that the minister can direct ATEC ‘to consider varying the allocation’. Read as flowing on from new section 46D this seems to mean ‘an’ allocation to a provider. And it does not really mean ‘consider’, as in they might or might not. Under new section 46C(5) ATEC’s allocations cannot exceed the total pool, so if the allocations already made exceed the new total they must vary some existing allocations down.

The purpose of new section 46E seems to be to let the minister, as with the initial allocation, to tell ATEC what matters is must comply with and what matters it must take into account: new section 46E(2).

As with the initial allocations, there are no constraints on the minister’s decision making – no factors he needs to take into account, no persons or organisations he needs to consult. He can reduce the allocated number of commencements after the students have already started their courses.

Ironically, the reason the explanatory memorandum gives for not allowing Administrative Review Tribunal appeals against allocation decisions is that, within a fixed total, an ART decision to increase places at one provider would force ATEC to reduce places at another. That should not happen because it could have a ‘negative financial impact’ on the second provider (p. 83). Exactly.

The bill needs a section prohibiting reduced allocations if the provider has already issued confirmations of enrolment within its original allocation.

Publication

The minister is not directly required to publish his initial or varied allocation. However these are both legislative instruments and so the legislation.gov.au website will publish them.

ATEC must publish any allocation within 28 days: new section 46C(6).

Delegation

The minister can delegate his power to make the overall allocation to an ATEC Commissioner: effect of current section 73(2)(a).

The minister can delegate his power to make the overall allocation to an SES employee in the Department: effect of current section 73(2)(b).

In the original 2024 ESOS capping bill there was no delegation of this ministerial power.

ATEC can delegate its functions and powers, including on international student allocations, to an ATEC Commissioner or to an SES employee of the Department who has been assigned to ATEC: new section 73(1A).

Penalties for exceeding an allocation

The weirdest aspect of the international student amendments – or perhaps what makes the deficient processes described above less concerning than they seem – is their flimsy enforcement.

As noted, the word ‘maximum’ is being removed from ATEC’s international student commencement allocation function.

There is no attempt to revive section 96 of the 2024 ESOS capping bill, which suspended ESOS registration for providers that exceeded their cap, preventing them from enrolling additional students or letting students who had enrolled start if they had not done so by the time the cap was reached.

There is nothing equivalent to the de facto fines of the student contributions of over-enrolled domestic students.

The main constraint will be slow visa processing, with the government confirming that the visa processing priority system will be retained. ATEC could increase visa processing times by reducing an allocation. For example, under the current system there is priority one (fastest) visa processing up to 80% of the provider’s allocation, priority two from 80% to 115% of the allocation, and priority three (slowest) after that.

Say a provider was allocated 1000 commencing places and enrolled 1300, with priority three starting at 1,150. As punishment their allocation could be reduced to say 800 places, so priority three would start at 920 places instead. That would certainly make things more difficult for the provider and its students. But with a number of providers already at level three in 2026 slow visa processing is not necessarily an insurmountable obstacle to increased enrolments.

For Table A providers exceeding an allocation has a greater potential to cause problems.

The main power ATEC has is to allocate or not allocate Commonwealth supported places. But ATEC risks undermining its own equity and skills objectives for domestic students if it refuses to allocate CSPs due to an international student overshoot.

An international student allocation cannot be a term of a mission-based compact: new section 29(4)(c). While the penalties for breaching the term of a compact are also unclear, this further reduces the scope for negative consequences from taking too many international students.

What is the point of these changes?

In the end, these changes to ATEC’s legislation may be little more than a bureaucratic tidying up.

If ATEC is discussing the direction of universities through compact negotiations and annual allocations of CSPs it makes some sense to also discuss international students, rather than this being a separate process between universities and the Department.

And as ATEC has responsibility for the broad direction of higher education, including non-university providers, it makes some sense for them to handle their international student allocations as well.

The main mechanisms for reducing international student numbers will remain migration measures, such as last week’s increase in visa application fees.