International students say a proposed levy on their studies could cause major damage to Australia’s reputation and cement the idea individuals are used as “cash cows” for profit.
The levy proposal, which would impose an export tax on international students, was raised in the Universities Accord interim report as a means to address calls for increased funding towards research and infrastructure.
With the final report due to be handed down next month, here’s what you need to know about why the proposal has divided the sector.
What is the levy?
The education minister, Jason Clare, has described the proposed levy as a “sovereign wealth fund” that could protect the sector from future economic shocks and fund priority areas.
The idea, akin to a GST on education, has been backed by institutions including the University of Newcastle, the University of Technology Sydney and James Cook University.
Speaking on ABC’s Afternoon Briefing on Tuesday, Clare said the levy was “one of about 70 ideas” in the interim report released in July.
“There’s no magic money tree here, and so we’ve got to look at how we do it, and this is just one of the ideas in that report,” he said.
How would it work?
Two levies already exist on international students – relatively small sums to fund specific government services that support international students and providers.
What’s different about this levy is the fee stream would be much higher, and it’s less clear how international students would benefit.
Instead, it would collect funds from institutions that receive large incomes from international student fees and redistribute it to those that don’t.
Why has it been called for?
Australia’s universities have become increasingly reliant on cross-subsidising revenue with international student fees, with government expenditure on research and development among the lowest in the OECD.
The University of Sydney received 38% of its income, or around $1.3bn, from international students in 2021.
In its submission to the accord, the University of Newcastle argued the redistribution of funds was justified as “international student income is Australia’s third-largest export, contributing nearly 30% of sector revenue in 2019, however, it is primarily focussed in capital cities”.
The top five universities for international revenue are all prestigious Group of Eight (Go8) institutions in major cities, while the bottom five are all regional.
The Greens say the levy is an excuse for the federal government to avoid increasing funding across the board.
The party’s education spokesperson, Mehreen Faruqi, said: “Forcing international students to do the heavy lifting on higher education funding must end.
“The government must properly fund our universities, not deter or punish students from studying here.”
What are the dangers?
Policy experts have warned the levy poses a “major risk” of reputational damage to the sector that would “seriously undermine” diplomatic achievements and dissuade international students from studying in Australia.
A report published by the Melbourne Centre for the Study of Higher Education said the levy would “exacerbate negative sentiments among international students that they are seen as ‘cash cows’”.
The Property Council of Australia’s student accommodation council, the Australian Business Deans Council, Queensland University of Technology and the Go8 universities have similarly expressed their concern it would damage Australia’s reputation as an international student destination.
Australia also already collects a large amount of revenue from the international student sector, including more than $2.6bn per year on post-study work visas alone.
At the same time, international students and post-study work visa holders are ineligible for most public services including healthcare, welfare and concession cards.
Gwilym Croucher, a higher academic researcher at the University of Melbourne and co-author of the report, said Australia had to be careful about what signals it sent international students.
“The decision to study overseas is not taken lightly – if we want to welcome them, we must be welcoming,” he said.
“It would be a big change in the way we do things and the devil is in the detail – in the short term we may end up finding we have to reduce things, including the size of the workforce.
“There might not be anything else [internationally] that looks like it.”
What do students think?
International students have voiced strong opposition to the levy.
In an open letter, the Sydney University Postgraduate Representative Association (Supra), which represents international students, said the levy would “erode [student] wellbeing” and place an additional strain on individuals facing economic pressures.
Its president, international student Weihong Liang, said the levy was another burden on a cohort already paying fees higher than domestic students and taxes to study.
“It won’t be linked to our educational experience, so it’s unfair,” he said. “It looks really bad. We’ve come here to study, not as customers, it’s not good for cohesion or inclusivity, and it’s bad culturally.
“No one [on the accord panel] asked any questions of us. It’s hard to find anything impressive in the interim report about how to improve the international experience.”
When can we expect the accord?
The Universities Accord ministerial reference group is holding its final meeting on Thursday before the report is handed down in December.
The federal government will publicly respond early next year.
What comes from the report is hailed to bring the greatest reform to the university sector in more than a decade.
Clare told Guardian Australia it included a range of different ideas – “some big, some small, some uncontroversial, some a bit spiky”.
“I have been clear that government can’t fund everything,” he said. “We can’t do everything. But I’m asking the accord panel to tell us what are the top priorities that we should try to implement now and over the next 10 years and how do we fund them.”
