PurposeThis paper aims to explore how the Australian Government represented issues of sustainability in Australian international higher education (IHE) policies and how it framed efforts to foster enhanced strategies for sustainable development of IHE. This research calls for a change from one-dimensional economic sustainability to a more multi-dimensional conception of sustainability, including emphasizing the role of the political sphere in issues of sustainability.Design/methodology/approachThis paper uses discourse analysis of policy documents, specifically Bacchi’s (2009) “what is the problem represented to be” approach, to explore the problematization behind selected government policies related to IHE in Australia.FindingsThis research identified existing challenges and factors that have affected the sustainability of Australian IHE and examined how the Australian Government constructed this issue. In light of this approach, a theoretical model is proposed from internal resource analysis and external industry and foreign market structure analysis to help foster more sustainable development of IHE.Research limitations/implicationsThis study is based on policy document analysis. Consequently, future empirical research is needed to examine the impact of these policies and further substantiate the findings of this study.Practical implicationsThis paper proposes a theoretical model for strategy making that helps gain and maintain sustainable competitive advantage in IHE from a more integrated perspective; such an approach enables more systemic thinking on strategy proposals and offers a reference for future practice. This research will contribute to policy design for the sustainability of the Australian IHE industry and promote change from a one-dimensional economic sustainability to a more multi-dimensional sustainability approach, thereby offering a point of reference for other countries that face similar issues.Social implicationsThis study points out the need to broaden the business focus, expand the value created from shareholder value to the common good and change “inside-out” economic perspectives to “outside-in” integrated perspectives for business, including the IHE industry.Originality/valueThe sustainability of IHE has become an important concern in Australian policies but is an area for further inquiry in academic discussion and research. By closely examining government policies, particularly from a discursive approach (after Bacchi), this paper makes a contribution to policy design for the sustainability of the Australian IHE industry, helping to promote a more multi-dimensional approach to sustainability.