A review panel in Australia has proposed a levy on income derived from international student fees. The levy would purportedly serve as a safeguard against economic shock and fund priorities such as R&D.
A review panel in Australia has proposed a levy on income derived from international student fees. The levy would purportedly serve as a safeguard against economic shock and fund priorities such as R&D.
The proposal to impose a tax on revenue generated by universities from international students has sparked controversy within the higher education sector in Australia.
The notion, put forward by a review panel examining the future of higher education, has been met with criticism for being deemed both “abhorrent” and “unsustainable” as a means of financing research endeavors.
The review panel, which convened last month, proposed the notion of a levy on income derived from international student fees. This levy, according to the panel, could potentially serve as a safeguard against future economic or policy shocks, or alternatively, fund national and sector-wide priorities such as research and infrastructure development.
However, critics have voiced concerns that such a levy would have adverse effects on universities’ recruitment of international students. Vicki Thomson, CEO of the Group of Eight, an association of leading Australian universities, labeled the proposed tax as an “envy tax.”
The approach, she said, would essentially require more universities that have been successful in attracting international students to subsidize research activities at other institutions.
Joanne Wright, University of Sydney’s Deputy Vice Chancellor for Education, regarded the proposed tax as a diversion from the true issue: the lack of proper research funding. She argued that the substantial revenue pool generated from international students, approximately $13 billion in 2019, could be better allocated to address research funding shortfalls rather than implementing a tax that might deter potential students.
Wright further emphasized that introducing such a levy would convey a negative message to prospective international students, potentially leading them to seek education opportunities elsewhere due to financial implications.
The same sentiment was echoed by Adam Shoemaker, Vice Chancellor and President of Victoria University, who found the idea of taxing international students for their own services as “abhorrent.”
Advocates for research funding reform have suggested alternative means of securing resources for universities. For instance, increasing taxes on industries such as gambling or implementing road user charges were mentioned as potential options by Shoemaker.
However, proponents of the levy, including Andrew Parfitt of the University of Technology Sydney and Alex Zelinsky of the University of Newcastle, argue that the funds generated could be distributed to benefit all universities, contributing to a more equitable research funding landscape.
Catriona Jackson, CEO of the lobbying group Universities Australia, dismissed the levy as unsustainable, emphasizing the need for stable and consistent funding mechanisms to support research endeavors. Jackson highlighted the volatility of the international student market and the potential for a decline in enrollment to disrupt funding projections.
Despite the controversy, Mary O’Kane, who leads the accord panel conducting the review, explained that the inclusion of the levy in the interim report aimed to stimulate discussions and encourage the exploration of alternative ideas for future research funding.
The prospect of implementing a tax on university revenue derived from international students has ignited a passionate debate. While some proponents argue that such a levy could aid in research funding redistribution, critics contend that it would convey the wrong message to prospective students and may not be a sustainable solution in the face of potential economic fluctuations.
The ongoing discussions surrounding this proposal highlight the complexities of balancing financial sustainability with the pursuit of quality higher education and research.
