The Independent Tertiary Education Council Australia (ITECA) is calling on the Australian Government to unambiguously rule out an international student tax. This idea of a tax on international students is a policy option raised in the Australian University Accord Interim Report, with the final report to be presented to the Australian Government in the coming weeks.
"The Accord Interim Report suggests that revenue from such a tax could be generated by placing a levy on the income from international students. A number of ITECA Higher Education members have referred to this as an international student tax which is understandable because, at the end of the day, students will foot the bill," said Troy Williams, ITECA Chief Executive.
It is noteworthy that the Australian Universities Accord Interim Report is unclear on what the funds generated by such an international student loan tax would be used for. Suggestions include insurance against future economic, policy or other shocks, or to fund national and sector priorities such as infrastructure and research.
"Given such broad and diverse objectives that lack definition, it does appear that the proposal at this stage at least lacks sufficient rigour. In that context, there is of course the ever-present risk that without clear and defined outcomes, funds could be used on a discretionary basis to fund political priorities of the day. The case for the international student tax has not been made," Mr Williams said.
ITECA Higher Education appreciates that to some policymakers, an international student tax may seem appealing as a potential source of revenue for funding infrastructure and other priorities; however, it is crucial to consider the unintended consequences that such a student tax may have on both the international education sector and the broader economy.
"One of the major concerns with the proposal is the potential negative impact on the international education sector. Like many other countries, Australia has established itself as a global education hub, attracting students from all over the world. Imposing a tax on the fees these students pay for their education could make Australian education less attractive and less competitive worldwide," Mr Williams said.
ITECA Higher Education notes that international students contribute significantly to the Australian economy through tuition fees, accommodation, and other expenses.
"The imposition of a student tax could lead to higher costs for international students, making Australian education less affordable. This could result in declining international student enrolments, negatively affecting universities, colleges, and the broader education sector," Mr Williams said.
ITECA Higher Education notes that Australia's international education sector contributes significantly to the country's soft power and global reputation. Attracting international students fosters international connections and creates goodwill between nations.
"Imposing a student tax would send a negative message to the international community, potentially damaging Australia's reputation as a welcoming and inclusive educational destination for international students," Mr Williams said.
Instead of relying on a tax on international student fees, ITECA Higher Education recommends that alternative funding sources be considered to support infrastructure and national priorities.
"The government can consider increasing public investment in these areas, exploring public-private partnerships, or implementing more targeted taxation measures that do not negatively impact students and the international education sector," Mr Williams said.
The issue of the international student loan tax is of critical importance to the independent higher education standard that in 2018 supported 18.0% of all international higher education student enrolments. In that context, ITECA Higher Education has advised the Australian Government that the proposal for an international student tax should not be progressed.
