Australian institutions have hit back at proposals to introduce a levy on international student fee income. 

The idea was initially suggested in the Universities Accord interim report, released in July, as a way to protect against future economic shocks and tackle some of the sector’s funding shortfalls. 

But organisations representing Australian institutions have criticised the proposal, comparing it to a tax on the sector. 

“Imposing a levy on international students burdens international students financially and diminishes the attractiveness of Australia as a destination of choice,” said Troy Williams, chief executive of ITECA, which has recently announced a new higher education division.  

“As one ITECA member said, if this levy looks like a tax and smells like a tax, let’s call it what it is … an international student tax,” he added. 

The report suggested the money raised could be invested in research, where government funding has fallen in recent years. 

But sector representatives argued that the problem of research funding should be tackled directly instead of relying on international students.

Writing on LinkedIn, Vicki Thomson, chief executive of the Group of Eight, said the focus should be on “addressing the underlying issue of research funding, not grasping at revenue raising measures which are in effect a tax on ourselves”. 

“I don’t think we can subcontract the investment in research to international students”

“The underlying problem is the distorted funding model we have in this nation whereby the national university research effort – 70 percent of which occurs in The Group of Eight – is underwritten by international fee income and that is simply neither acceptable nor sustainable,” she wrote.  

Peter Varghese, chancellor of the University of Queensland chancellor, said the proposed levy “fundamentally deepens the challenge we’ve got rather than resolves the challenge we’ve got”. 

“I don’t think we can subcontract the investment in research to international students, which is essentially what a tax on international students would be and would certainly appear to be.” 

Stakeholders are invited to respond to the interim report before September 1 2023.

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