Mr Joyce made the comments when asked whether a drop in international student numbers at Otago University, revealed at its latest council meeting, was evidence the Government's aim of doubling the value of international education to $5 billion by 2025 was ''unrealistic''.
Vice-chancellor Prof Harlene Hayne revealed at the meeting international full-fee enrolments had dropped 3.7% on last year to 1191 equivalent-fulltime students this year.
This is the third year in a row of declining international numbers at Otago University since they peaked at 1664 at the end of 2011.
Labour's tertiary education spokesman, Grant Robertson, said the figures showed the Government's aim to double the value of international education was ''unrealistic'' and setting ''universities up to fail''.
''I think really what it highlights for me is the danger of universities being so reliant on international students for their funding,'' Mr Robertson said.
This overreliance was as a result of Government underfunding, he said.
Mr Joyce said Mr Robertson ''doesn't know what he's talking about'' and the Government had put in much thought before setting the aim of doubling the value of international education.
This included looking at how Australia's top universities - known as the Group of Eight (G8) - performed in terms of international education.
''Most, if not all, of the G8 universities attract much, much larger sums of international income than both Otago and Auckland [New Zealand's top universities] do.''
New Zealand universities, including Otago, were now ''putting quite a lot of effort'' into international education, but had been guilty of ''dropping of the ball'' for a couple of years.
''We are starting a bit behind the eight ball,'' he said.
Concern over universities' handing of international education was one reason for the Government's proposed changes to university councils.
He was pleased with the direction Otago University was taking, but it would have been preferable if it started ''a bit earlier''.
''They have lifted [the cap on international student numbers from 12% to 15%] and they are now determined to fill it, but there is a bit of catch-up to do.''
Mr Robertson's assertions about universities being overreliant on funding from international students were false, he said.
''I think it's the exact reverse. We are increasing the funding ... and if anything the international income is not keeping up with the increases that the Government is putting in.''
Otago University international pro-vice-chancellor Prof Helen Nicholson said the university ran an extensive recruitment and marketing campaign aimed at international students and was ''committed to providing a quality education and superior campus experience''.
Despite the overall decline this year, there were some positives, including more students from China (up 31 students), Iran (up 20), Brazil (up 10) and Norway (up 9).
