University heads unite against ‘Robin Hood tax’ proposal

University vice chancellors have united against a proposed “Robin Hood tax” on billions of dollars in international student fees, which is being considered by a landmark review of tertiary education.

One of the tax’s key backers, however, says many university chiefs privately support the controversial idea.

Universities have rejected the proposed international student levy. Credit: Brook Mitchell

The proposed levy would force universities to pay some of the fees they receive from international students to the federal government, which Education Minister Jason Clare said could work “a bit like a sovereign wealth fund”. He suggested the levy funds could be redistributed to help pay for research or student housing but it has been labelled an “envy tax” by the country’s largest universities.

Just three universities have publicly backed the proposal for a levy on almost $10 billion in international student revenue. Thirty-one public universities have rebuffed or expressed reservations about the contentious proposal, suggesting Australia could lose students to rival markets such as the United States and Britain. A further three have no stated position.

University of Newcastle vice chancellor Alex Zelinsky, with University of Technology Sydney vice chancellor Andrew Parfitt, first proposed the levy, which was then included by the expert-led Universities Accord panel in its interim report.

James Cook University in North Queensland is the only other institution to show support for the concept.

Zelinsky, who has since proposed an efficiency dividend on total revenue as an alternative, said some colleagues privately supported the concepts but were unwilling to go public with their support.

“They are doing their advocacy behind closed doors,” he said. “I’ve kept my public argument because my university made an Accord submission about the concept. I haven’t heard a good argument back.

“We need to be realistic about [funding all the good ideas in the Accord] given the fiscal challenges from the government.”

The Group of Eight, which represents top institutions such as Sydney University, UNSW and Melbourne University and takes in billions of dollars in revenue from international students, quickly and loudly rejected the proposal when first floated in the review.

They said the proposal risked undermining Australia’s reputation in the international student market, labelling it an “envy tax”.

The Regional Universities Network, which represents seven universities, warned such a tax could erode the competitiveness of the international student industry.

“The proposal does not adequately define the explicit purpose of such a levy, nor how such a levy may be applied, redistributed or safeguarded against political interference,” its submission to the Accord interim report read.

Zelinsky said he was yet to hear any viable alternatives from those against the levy to raise the money needed to fund the review’s ideas.

The Universities Accord panel has been charged with sparking discussion about how universities can service 1.8 million more students by 2050 and boost participation from disadvantaged students. It is expected to hand its final report to Clare in December.

Its interim report released in July surprised the sector with the inclusion of the international student levy, but little detail of how it would be implemented was included.

Murdoch University in Perth warned that the money generated by a levy would end up as government revenue and future governments may find increasing the levy a “handy way of generating additional revenue from non-voters”.

“We strongly oppose such a levy. Such a Robin Hood tax is unlikely to have any positive benefit for the sector as a whole,” the university said.

“The universities earning this revenue are already using it to fund infrastructure and research, and a ‘just-in-case’ fund would require the wisdom of Solomon to administer.”

Macquarie University said the levy would work to the advantage of the few most highly ranked universities who are better able to pass on the cost through higher fees.

Queensland University of Technology contended that due to its low proportion of international students and high research performance, it would likely benefit from such a tax.

But it still rejected the proposal, saying it posed a risk to the international student market and Australia’s reputation in a “fragile geopolitical world order”.

James Cook University said a scale levy could be applied to international student fees “as a focused redistribution” method to fund the sector.

A spokesperson said that the current funding system penalises regional universities, which, by virtue of their location, simply cannot scale in size through domestic or international student numbers.

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