For me as a small business owner I'd prefer to take on someone who would genuinely be considered a "junior".
Firstly there's no risk of someone coming in with an attitude/mindset they've gained through previous long term employment in larger organisations, eg. an Indian graduate who has worked in a call centre for Dell throughout their Uni studies. Secondly I think it would be more rewarding for me and for a younger person (like a TAFE student, who I specifically mentioned in the ad as an "ideal candidate") to enter a type of mentorship arrangement.
That way I can make sure things get done in the way I want because I'd be guiding them through things more. It probably means there'd need to be more oversight from me but that is something I am willing to take on if it means that the end result is better.
Making assumptions about the financial side of things is silly. At the end of the day as has already been mentioned, if a position is advertised as "junior" and someone with their Masters applies, then they shouldn't expect more than a junior wage/rate.
What has frustrated me most so far is how little effort people put into cover letters or even their CVs. I'm not just talking about foreign born people for whom English is a second language, but even the "Anglo Aussies" who can't put sentences together properly.
I don't really care what people's background is with regards to where they come from or what languages they are proficient in. In fact I have respect for people who can speak multiple languages, but if you're going to apply for a job here and the ad makes it pretty clear that the (especially written) language component is so important I'd have hoped people would put more effort into it... English wasn't my first language, but I'd never use that as an excuse for anything, and I definitely put a lot more effort into writing better job applications than any those that I've seen.
Then again when I see some of the correspondence from native English speakers in the "professional" (probably talking my own field up a bit with that word) business world I probably shouldn't be annoyed by what I see from any job applicants.

It sucks that we live in a country where people can (by choice) essentially stop learning their own language at 15 or 16 years of age.