This is from Australia, but the same issues are in New Zealand. The credentials from a top 500 university have a value, and are thus seen as something you don't need to fund. You can instead consider the universities exporting education: or you can support (using different language) educational tourism.
The consequences to locals -- including far more expensive degrees, decreased access, and lowered quality of education as you have to teach English as a Second Language (which was less of a problem when kids did high school then university) are not mentioned. Nor is the fragility of the system when educational tourism stops.
Our universities were set up for locals by locals. When did this happen? Here Australia is an example of how incrementalism leads to perverse outcomes.
From the 1950s, children of Chinese diaspora parents from countries such as Indonesia, Singapore, Malaysia and Hong Kong began to arrive in Australia to study.
This rarely mentioned cohort of private overseas students studied alongside students supported by the well-known Colombo Plan – an intergovernmental effort to strengthen economic and social development of member countries in the Asia-Pacific region.
In fact, so prominent was the Colombo Plan’s efforts in bringing students to study in Australia, it is still incorrectly believed to be the first major source of overseas students.
Historian Lyndon Megarrity estimates the Colombo Plan brought less than one-fifth of overseas students to Australia in the 1950s and 1960s. The vast majority came as private overseas students.
They went to Australian schools, sat for university matriculation and for those who passed, proceeded to university either funded by the generous Commonwealth scholarship scheme or by paying substantially subsidised university fees, just like Australian citizens.
By 1966, archival research shows private overseas students constituted 8.9% of full-time university enrolments and their numbers were growing. Immigration restrictions were also loosened to mean citizenship was available to private overseas students who had lived in Australia for at least five years.
Most met the conditions after attending two years of high school and the three year minimum for a degree.
While some stayed, of those I interviewed for a UNSW survey of overseas students who studied at the university in the 1950s and 1960s, it seems most returned to their home countries where an Australian university degree promised excellent career prospects.
There was obviously something about Australian education and society that appealed to our Asian neighbours, and pulled them to Australia where they lived for five years and more.
An unofficial government policy
In 1990 the Australian government introduced full fees for all international students. John Dawkins, the then Minister for Employment, Education and Training, saw an opportunity to establish university education as an export industry.
The year 1990 is significant because the Australian government was in the process of implementing the Dawkins reforms which reorganised the once diversified public higher education sector into a single national system.
The aim of the Dawkins reforms was to encourage more Australian school leavers to attend university and, on graduation, become part of a highly-skilled and educated national workforce.
To help fund this vastly expanded system and rein in costs, the government introduced HECS. Students could postpone subsidised and interest-free fees until their salary reached a certain level when they would repay the loan through the taxation system.
International student fees at this stage were not a significant source of university income. But they became so from the early 2000s after a decade of reduced government funding and a significant expansion of local student numbers.
Since government funding no longer covered the full costs of expensive research or the strong growth in domestic students, universities had to find funds from elsewhere.
It can be said that international student fees have become an unofficial part of the funding policy of consecutive federal governments.
Government actions and inactions that led to such a reliance on international fee income have created a system that challenges a belief many of us hold dear – public universities should be able to draw on public funds for their operations.
Where in 1989 universities derived more than 80% of their operating costs from the public purse, now it is estimated to be less than 40% – a figure well below the OECD average for public investment in tertiary education.
Julia Horne, The Conversation