THE international education industry - now Australia's fourth-largest export, worth more than $17 billion a year - can be traced to May 1979, when cabinet decided to make overseas students pay fees. Then there were about 12,000 foreign students; today there are more than 500,000.

The Education Department opposed the introduction of fees on the grounds that it would reduce numbers from countries such as Indonesia and restrict entry to children of the wealthiest families. But the Finance and Immigration and Ethnic Affairs departments, which argued strongly for fees, won the day.

Masters and PhD students were charged $2500 a year, those studying medicine, veterinary science and dentistry $2000 and other undergraduates $1500.

Until 1979, the ''private'' intake of students - those not placed by the Australian government - was limited to courses not available in the student's home country.

Cabinet broadened the criteria and changed the program's objective to advancing Australian interests overseas, with priority given to Association of South-East Asian Nations countries, Papua New Guinea, the South Pacific and the Middle East.

A cabinet submission argued that to meet the program's goals of ''improving communication, understanding and sympathy for Australian policies'' students should be required to return to their home country on the completion of their course and be prevented from migrating for at least two years. This recommendation was not adopted.

Cabinet rejected reintroducing university fees for domestic students, which had been abolished in 1974 by the Whitlam government. The Education and Finance departments cited the inequity of taxpayers paying to educate people who would command above-average incomes and calculated a $1000 fee could yield $185 million. The government had made an election commitment in 1977 not to reintroduce fees. A decade later, the Hawke government brought in the Higher Education Contribution Scheme.
 

（www.eduwo.com, Anna）