It’s out there. Universities Australia chair and UniSA vice-chancellor David Lloyd said it at his group’s annual conference in Canberra yesterday. There are “spicy” things in the Universities Accord review released at the weekend.
The review’s call for an impost on some university revenue – mainly the international student fees on which the elite universities have gorged for the last decade – Lloyd declared is “particularly spicy”.
It’s an “envy tax” according to the Group of Eight universities which earn over half of the estimated $10bn a year which all 37 public universities earn from international student fees.
Many less wealthy universities are attracted in theory by such a move to soak the rich. But some hold back from open support because many details are still to be determined. What would be the structure of the tax? And what would it be levied on? The review suggests it would affect international student fees, domestic fees from unsubsidised students, and investment and interest income. A Higher Education Future Fund – to fund infrastructure and provide emergency relief to universities in black swan events – would be set up with $5bn from the tax and another $5bn from matching government money.
Accord review chair Mary O’Kane makes it clear the fund is intended to be redistributive, to help rebalance the gap between have and have not universities. So how exactly would it be shared?
Setting aside for a moment the exact details of how the fund, and the tax, would operate, there are fundamental issues to think through. For example: in a public university system how much resource imbalance is acceptable between the most wealthy and least wealthy institutions? And when not-for-profit public institutions such as universities, which are also tax deductible charities, build large and profitable businesses within their walls should this commercial activity continue to be screened from the tax system?
Expanding on the latter question; we rightly expect that export of Australia’s resource wealth should yield a public benefit through taxes. Why is the export of education any different when conducted by universities? Universities would reasonably reply that their earnings give public benefit because they are not-for-profit bodies and their surpluses fund education and research.
Part of the problem is that, because of the slow erosion of research funding, international student fees have become essential to supporting research. International student revenue is no longer just a nice bonus to have in the budget. It’s become critical for many universities, not just in the Group of Eight.
Is there a solution? It could be to go ahead with a redistributive tax, but also to introduce new structures to fund research at a reasonable level.
The Accord holds the ingredients for such a grand compromise if all sides wish to get there.
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