Australian here too, just graduated along with my partner (who was an international student). You're right about the long-term consequences for the university, but I would also add that universities actively undermine their international students at every turn (perhaps because there's little profit motive to help them succeed in their ludicrously expensive education).
The thing that pisses me off the most is that the student services usually provide very little guidance to international students about their legal rights in Australia, leading to massive wage exploitation (this is a global problem -- I have friends in the EU -- namely Finland -- and the US that have suffered from this too). Fears over their visas being revoked mean that they are also very unlikely to report abuses by the university or their employers to anyone. I've had to plead with friends to report their employer to Fair Work for outright wage theft, and I know many people who were lied to by their employer into thinking they can work more hours than they can (which was then effectively used as implicit blackmail -- "if you report my abuses, I can get you kicked out of the country"). They didn't know better, because they weren't told by anyone.
And then there's work experience. Many degrees (especially in engineering fields) require practical work experience in order to complete your degree, but employers are incredibly reluctant to give international students unpaid internships (let's not get into the fact that unpaid internships are actually illegal in Australia, except for the specific case of university degrees it seems). My partner has dealt with employers who have explicitly said that they don't accept international students (which is not legal as it is discriminatory), and others have done it more slyly (international students can only work 20 hours a week during semester, so they put on the job description that you must work 21 hours a week). And universities don't help here either, in fact I'm going to name and shame UTS here. At a UTS Career Fair a few years ago, they specified which employers accepted international students and which didn't on the maps (only about a quarter did) and then they gave all of the international students different coloured name badges to local students. The net result was that international students were ignored when they came to any of the "local-only" booths. I don't know if they continued this behaviour, but I sent a complaint about this when I heard about it. Absolutely disgraceful.
Sorry, I just felt the need to rant.