Why Australia wants to tax international students?

According to international students studying in Australia, a proposed tax on the international students on their tuition might do significant harm to the country’s reputation and bolster the notion that people are used as “cash cows” for financial gain.

The levies idea, which would impose an export tax on international students, was brought up in the interim report of the Universities Accord as a mechanism to meet calls for higher financing towards increased spending towards research and infrastructure.

Here is all you need to know about why the idea has divided the industry ahead of the delivery of the final report, which is scheduled to take place the following month.

Jason Clare, the minister of education, has referred to the planned fee as a “sovereign wealth fund” that has the potential to shield the industry from any future economic shocks and finance key areas.

The proposal, which is analogous to imposing a Goods and Services Tax (GST) on education, has received support from a number of educational establishments, including the University of Newcastle, the University of Technology Sydney, and James Cook University.

When Clare was asked about the levy on Tuesday, she stated that it was “one of about 70 ideas” in the interim report that was presented in July.

He stated, “There is no magic money tree here, and so we have to look at how we do it, and this is just one of the ideas in that report.” The paper has a total of eight proposals.

There are now two fees that are assessed to foreign students. These fees are quite low and are used to pay particular government programs that are designed to assist international students and providers.

The difference with this levy is that the revenue stream would be significantly greater, and it is not entirely apparent how benefits would accrue to overseas students.

Instead, it would collect cash from educational institutions that have significant earnings from fees paid by international students and then redistribute those funds to educational institutions that do not have such large incomes.

As a result of Australia’s government spending on research and development being among the lowest in the OECD, the country’s universities have become increasingly reliant on the cross-subsidization of money through the fees paid by international students.

In 2021, international students contributed 38% of the University of Sydney’s revenue, which was equivalent to almost $1.3 billion.

The University of Newcastle claimed in its submission to the accord that the redistribution of funding was appropriate since “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.” This was one of the university’s main points.

The top five universities in terms of foreign revenue are all prestigious institutions that are part of the Group of Eight (Go8) and are located in large cities. The universities that come in last place are all located in smaller towns.

The Green Party contends that the charge is nothing more than an excuse on the part of the federal government to avoid raising spending all around.

Mehreen Faruqi, the education spokesperson for the party, stated that a stop must be put to the practice of making overseas students shoulder a disproportionate share of the financial burden of higher education.

“The government must adequately fund our universities and must refrain from discouraging or punishing students who choose to study here.”

Policy experts have issued a warning that the levy creates a “major risk” of damaging the sector’s reputation, which would “seriously undermine” diplomatic successes and discourage international students from attending universities in Australia.

In a research that was put out by the Melbourne Centre for the Study of Higher Education, it was stated that the fee will “exacerbate negative sentiments among international students that they are seen as ‘cash cows.'”

In a similar manner, the Property Council of Australia’s student accommodation council, the Australian Business Deans Council, Queensland University of Technology, and the Go8 universities have all stated their fear that it will tarnish Australia’s reputation as a destination of choice for international students.

Additionally, Australia currently brings in a significant amount of money from the industry of international students, including more than $2.6 billion annually from just the sale of post-study work permits.

At the same time, overseas students and those who hold employment visas after completing their studies are not eligible for the majority of public services. This includes healthcare, welfare, and concession cards.

Co-author of the paper and higher academic researcher at the University of Melbourne Gwilym Croucher stated that Australia needed to be cautious about the signals it conveyed to international students.

“The choice to attend school in another country is not one that is made flippantly – if we want them to feel welcome here, we must make them feel welcome,” he said.

“It would be a significant shift in the way that we carry out our operations, and the devil is in the details. In the short term, it is possible that we may discover that we need to cut back on things, including the number of people on our staff.

“It’s possible that there is nothing else [elsewhere in the world] that even remotely resembles it.”

Students from other countries have been quite vocal about their resistance to the charge.

In an open letter, the organization that represents international students at Sydney University, the Sydney University Postgraduate Representative Association (Supra), stated that the charge will “erode [student] wellbeing” and create an additional strain on individuals who are already experiencing economic challenges.

Weihong Liang, an international student who serves as the organization’s president, stated that the charge was an additional financial hardship for a group of people who already pay tuition that is more than that of domestic students as well as taxes to study.

“It won’t be linked to our educational experience, so it’s unfair,” he added. “It’s not fair.” “It seems to be in pretty poor shape. Because we are here to learn and not as customers, this environment is not conducive to group cohesion or inclusivity, and it is also detrimental to the culture.

“No one [on the accord panel] inquired about anything that we had to say. Finding anything particularly outstanding in the interim report on ways to make the international experience better is difficult.

This Thursday will be the penultimate meeting of the ministerial reference group for the Universities Accord, which will take place before the report is handed down in December.

The response will be made public by the federal government in the beginning of the next year.

The recommendations that come out of this research are being heralded as the most significant change to the way universities operate in more than a decade.

According to what Clare shared with the Australia, it contained a variety of distinct concepts ranging from “some big, some small, some uncontroversial, and some a bit spiky.”

“I have been clear that the government can’t fund everything,” he said at one point. “We are unable to accomplish everything. But I want to know how we can fund the top goals that we should try to achieve now and over the next ten years, so I’ve asked the accord panel that question.

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