Australia's complex immigration system needs to be streamlined to help attract and retain international students and researchers, the peak body for universities says.
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Research students are waiting up to three years for a visa processing outcome and less than one third of international graduates use their post-study work rights.
Universities Australia chief executive Catriona Jackson said the current system, with about 100 visa subclasses, was overly complex and not fit-for-purpose.
"The current settings are slowing the flow of skilled workers and researchers who drive our economy and progress and are holding back international students who make us stronger," Ms Jackson said.
"Our world-class universities attract hundreds of thousands of international students each year, yet only 28 per cent use their post-study work rights and just 16 per cent become permanent residents."
In its submission to a review of Australia's migration system, Universities Australia has called for temporary graduate visas to be automatically granted to all international students when they complete their studies.
It calls for a priority system, similar to the green card in the United States, to introduce flexibility in the system, and for expert academics to be exempt from the skills assessment process.
It recommends a reporting protocol to give education providers, employers and visa applicants up-to-date information on applications.
It has also called for a genuine temporary entrant visa requirement to be replaced with a genuine student visa requirement so that prospective students can have the ambition to live in Australia long-term.
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An international student at the University of Canberra, Milap, who preferred not to give his surname, said prospective students had to prove they were intending to return home after studying even though they would get a work visa upon graduation.
"It's a sort of double-standard system," he said.
"Even after living here and when we know there is a skills shortage and worker shortage."
Milap, who is from India, was still considering his options for when graduates with a bachelor of environmental science next year.
International student arrivals in October were more than 40 per cent lower than 2019, according to Australian Bureau of Statistics data.
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