The implementation of a proposed levy on international higher and vocational education student fee income, according to economic modelling from Victoria University’s Centre of Policy Studies (CoPS), would have negative consequences for the sector and the Australian workforce. Researchers from CoPS, Xianglong Locky Liu, James Giesecke, and Jason Nassios, found that a five percent levy on international student fees would increase the foreign currency price of export education by about two percent. This increase would result in a 6.6 percent reduction in demand from international students, leading to decreases in tertiary education and technical and vocational education.
The researchers stated that the introduction of the levy would contradict the objective of assisting the education sector by reducing student and staff numbers. The study was conducted in response to the Australian Universities Accord Interim Report, which considered the imposition of a levy on international students to fund national and sector priorities. While the adverse impacts on the education sector could potentially be offset by channeling the levy revenue back to the sector, this would introduce administrative complexities.
Furthermore, the reduction in international students would also lead to a decrease in the Australian workforce supply, negatively impacting the economy. Many international students secure permanent positions in the Australian labor force, and by reducing their numbers, the levy would reduce the workforce flow and the size of the Australian economy. Additionally, international student income is used by the education sector to fund research, and the levy risks reducing research funding, which could have longer-term consequences for Australia’s economic productivity growth.
The proposed levy has faced opposition from the Group of Eight (Go8), which consists of Australia’s leading research-intensive universities. Go8 CEO Vicki Thomson stated that the levy would have unintended consequences, damage the higher education sector, and harm Australia’s international reputation. The interim report identified five priorities, including the creation of Regional University Centres, the removal of the pass rate requirement, and more reporting on student progress. The government has committed to implementing these priorities and will consider the recommendations of the final report.
In conclusion, the proposed levy on international student fees in Australia’s education sector would have a detrimental impact on the industry, workforce supply, and research funding. Opposition from universities and concerns about administrative complexities and unintended consequences highlight the need for careful consideration before implementing such a levy.