A lesson in economics

Sheesh.

Closet pro-Situ and former ALP student political hack Darren Ray seems to lurch from one corrupt business to another. After overseeing the collapse of the Melbourne University Student Union in 2002 and 2003, Ray has most recently emerged in a new but possibly temporary role as a slumlord. According to Simon Kidd in the June 13 edition of The Melbourne Times (‘VCAT imposes fine for students’ filthy house’):

The appeals tribunal has ordered the former head of the failed [MUSU] to pay $6700 to landlords because clients of his rental service left a Hawthorn East house in a “disgustingly dirty” state.

[VCAT] member Ian Proctor ordered Darren Ray, trading as Victorian Student Housing (VSH), to compensate the property’s landlord for damage to the house’s kitchen and bathroom…

Previously, Chris Johnston referred to VSH in an article on living and working conditions for Melbourne’s population of approximately 18,000 Indian tertiary students (‘City’s new underclass forced to suffer in silence’, May 19, 2007):

The tenants’ union campaigned last year against a company called [VSH], run by former heads of the failed [MUSU], Benjamin Cass and Darren Ray. The tenants’ union claimed they were renting inferior properties to Indian students. The company is no longer operating.

It appears that the business plan for VSH was fairly simple, and aimed at taking commercial advantage of Indian student’s difficulties in finding rental accommodation. As VSH itself puts it:

For a newly arrived student, obtaining a rental property can be a very difficult task. Finding the right property that is within your budget, close to public transport and your campus is only a small part of the problem. The real issue is how do you get your application approved?

Real estate agents will always look for two things; good rental history and employment. Newly arrived students can provide neither which is why they find it so difficult to secure a property.

Consequently, keen-eyed entrepreneurs Cass and Ray, with “the support of key student organisations, education agents and community groups”, all of which remain unknown, signed leases on nine properties around town, and simply sub-let these to students (40 in total, according to VSH). Well… kinda. According to Deborah Gough (‘Ex-uni leaders accused of bullying students’, The Age, July 9, 2006) the leases were actually transferred to debt collectors:

Students claim, and documents show, that intimidatory tactics were used against them over visas, credit rating and debt collectors who sublease properties from VSH. Mr Ray denies the claims, and says VSH complies with the Residential Tenancy Act.

The promotional video on the VSH site claims that lowest prices are “guaranteed”, and even includes a list of names of current, presumably satisfied, VSH clients: Manoj Dharmaraj, Amit Timbrewal, Aseem Nangia, Gagan Gogia, Aman Bhandari, Karanuir Sadhra and 28 others.

In the short-term, such business schemes, competently-handled, would appear to be potentially quite lucrative, especially when focused on attracting customers from the lower end of the student market. (That is, students from India. Students from China and other Asian countries tend to be from wealthier backgrounds, and are quite capable of paying the high prices inner-city flats, a preferred form of accomodation, typically lease for.) On the other hand, exploitation of this kind, as well as that experienced by students in the workplace and at tertiary institutions, places longer-term strain on the viability of the foreign student market as a whole. Interestingly, evidence of student resistance to this exploitation is also beginning to surface, as a report from March this year indicates:

Student hunger strike over treatment as ‘cash cows’
Adam Morton
The Age
March 15, 2007

MORE than 60 overseas students went on hunger strike yesterday amid claims they would be forced to pay thousands of dollars extra to finish their degrees after being examined on material they were not taught.

It is the second time in a year that international students have protested about their treatment at the Lonsdale Street “shopfront” campus of Central Queensland University.

The students, mostly from India, started protesting last Friday and held an all night sit-in on Tuesday after learning they would have to sit a supplementary exam in June to pass their masters degree…

Students last year said the university was treating them as “cash cows” and was providing inadequate facilities.

Note that “About half of CQU’s 24,000 students are international, full-fee paying students — the biggest proportion of international students of any Australian university.” And in the sector as a whole, according to one ABC report (‘Foreign students inject $1.9b into universities’, January 6, 2006):

New Education Department figures show Australian universities collected more than $1.9 billion in fees from overseas students in 2004. The statistics show revenue from international students has increased by more than 140 per cent since 1999…

In a context of government deregulation, and subsequently loose oversight of educational standards, living and working conditions for foreign students, ‘over-exploitation’ emerges as a real issue. And to the extent that the education industry is dependent on foreign earnings, such over-exploitation places the future of the industry in real question, as rival markets emerge and students exercise their much-vaunted ‘choice’ to study elsewhere. The consequences this has for local students — and the financing of the tertiary education sector as a whole — is obvious… unlike, say, the reasons Benjamin Cass and Darren Ray can continue to engage in highly questionable business practices — with apparent impunity.

    See also : The State of the Union, “The State of the Union is a documentary capturing the bloodiest [sic] election in the history of student unionism [that is, Melbourne University Student Union, 2003]. The film provides an illuminating and often humorous insight into the microcosm that is university politics.”

PS. Cass and Ray appear to have laid the groundwork for their business in 2004 (‘Towards a chequered career abroad’, The Hindu, August 12, 2004): “The Career Guidance Cell of the Yadava College organised a programme on August 9 on ‘student progression to higher education in Australia’ for undergraduate and postgraduate students. Students were enlightened on an overview of study life in Australia by Benjamin Cass, Director of Students Services Inter-National, Australia, and Darren Ray, Chief Operations Officer. Mr. Cass said Indian students were being given freedom to live and lead in Australia without any compromise on their likes, culture and customs. They also had the freedom of selecting their own subject modules and the country offered good courses on information technology and management at affordable cost…”

About @ndy

I live in Melbourne, Australia. I like anarchy. I don't like nazis. I enjoy eating pizza and drinking beer. I barrack for the greatest football team on Earth: Collingwood Magpies. The 2018 premiership's a cakewalk for the good old Collingwood.
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10 Responses to A lesson in economics

  1. Dr. Cam says:

    There’s a correction on page 2 of Saturday’s Age (top left corner) regarding the Age int. students tenancy article. Apparently the company is possibly still operating?

  2. @ndy says:

    Hmmm… that’s interesting. We must have different editions though, ‘cos my copy contains no such correction.

  3. liz says:

    Hi,

    I’d dispute the blanket assertion that students from China etc are necessarily richer than Indian students. There are plenty of Chinese students living many to a house, in debt before they arrive. Many that are living in those flats live 8 persons to a 2 bedroom – the lower cost of outer suburbs can be outweighed by transport costs.
    When working in student bureaucracy, I also came across weird work schemes for Mainland Chinese students whereby a Chinese accounting firm would pay for the education of rural kids, facilitated through Australian TAFE schemes in China (which included exhortations to obey the law of the People’s party complete with an RMIT logo! – I shit you not – will try to find the document on line at the RMIT website, though I have a hard copy), on the promise of paying back the debt accrued upon return – of course the fail rates are really high for most of the business courses (for everyone) cos they are overcrowded and the Chinese in particular are treated like an infectious disease by staff and fellow students alike.
    And that’s plenty of Yuan worth of debt if you’re paying per subject and re-doing and re-doing them.
    Predictably, many try to escape and end up studying to be chefs or bouncing around in other work classifications in an attempt to escape both DIMIA and “the firm”. Mainland Chinese and Indian students are on the same low rung of the racialised student visa classification system and therefore have to come up with the same high amount of fictitious family bank loan money before coming out here. There are particular restrictions in place since the early 00s on the particular types of bank loans that Indian students can use (they are probably the most closely scrutinised category of student visa holders), but they and the Chinese students are still on the same visa assessment category level (3) I believe.

  4. @ndy says:

    “I’d dispute the blanket assertion that students from China etc are necessarily richer than Indian students.”

    So would I. On the other hand:

    “Students from China and other Asian countries tend to be from wealthier backgrounds” than Indian students seems to me to be a more reasonable statement.

    ===

    The Age reported two weeks ago that the City of Melbourne, the State Government and Melbourne University were grappling with the explosion in city apartment blocks populated almost entirely by South-East Asian students, mostly from China.

    Research warned that the $300-a-week apartments were fostering racial segregation and the students were cut off from the wider Melbourne community.

    There is no such concern for Indian students, however. Most attend cheaper tertiary institutions and live out of the city, in the cheaper western and northern suburbs. They “suffer in silence”, according to Mr Gupta.

    ===

    Foreign students living on edge of society
    Adam Morton
    May 5, 2007

    Given the life span of a city, segregation on the northern fringe of the CBD happened in the blink of an eye.

    Over the past seven years, 31 apartment blocks sprang up in the area, many on Swanston Street, creating a spine of high rises between RMIT and Melbourne University.

    Nearly 10,000 students live in them. Almost none are Australians. On Swanston Street, 95 per cent are from overseas – a reflection of a booming market in fee-paying students from South-East Asia that has seen the number of foreigners studying in Victoria pass 100,000.

    Most apartments are small and among the most expensive real estate in Melbourne. And they are creating racial segregation in a city that prides itself on multiculturalism, according to Melbourne University research, backed by the State Government and Melbourne city council.

    Urban planner Kate Shaw, one of eight researchers investigating the lives of international students in the city, said many in the high rises were young, lived alone and had been sent straight into a block by overseas agents.

    http://www.theage.com.au/articles/2007/05/04/1177788399027.html

    ===

    I don’t dispute that some students from China, Hong Kong or Singapore (for example) come from poorer backgrounds, nor that some students from India come from wealthier backgrounds. Unfortunately, I’m not aware of any figures calculating the real income levels of families of students from other countries, and it would appear that many of the institutional arrangements that are made with regards this particular market are kept in commercial confidence. In any case, the scheme you refer to sounds remarkably similar to others involving the importation of Chinese workers to Australia and, to a lesser extent, the trafficking of labour across the globe — and wherever such conditions obtain, there are always figures equivalent to those of Benjamin and Darren, who are only too happy to exploit them.

    And obedience to the law is freedom.

  5. Dr. Cam says:

    Sorry, bud, it was actually Friday’s paper:

    In a story about marginalised Indian students published on Saturday, May 19, it was reported that a company called Victoria Student Housing – run by former heads of the failed Melbourne University Student Union, Benjamin Cass and Darren Ray – was no longer operating. Last year the Victorian Tenants Union alleged the company had rented inferior properties to Indian students. In fact, the company is still registered. The mistake was made by the reporter.

  6. @ndy says:

    That’s odd. A correction to an article published a month later? I guess it must’ve been prompted by the article in TMT (also a Fairfax publication). Also “registered” is one thing; operating another. And it’s VictoriaN; not Victoria.

  7. Dr. Cam says:

    re: VictoriaN; not Victoria. Don’t blame me – blame The Age!

  8. ambrose says:

    @ndy any chance you can link me a working link to state of the union, this one seems to be dead.

  9. @ndy says:

    Hmmm. I have a copy of the DVD in storage … I’ll try and fish it out s/time in the nxt wk or two.

  10. Bort says:

    State of the Union is on Youtube now

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