Tertiary Heads Pan Proposed Tax on Universities

A Monash University sign is seen on a building in Melbourne, Australia, on Oct. 30, 2023. Susan Mortimer/The Epoch Times

Some of Australia’s highest-ranking universities have criticised a government proposal to create a $10 billion (US$6.6 billion) higher education fund, saying it would impose a “bureaucratic tax” on universities and undermine their international standings.

This comes after the federal government released a 400-page Universities Accord report (pdf) that outlined a reform roadmap to make the country’s higher education system “better and fairer.”

Among the report’s recommendations was the establishment of the $10 billion Higher Education Future Fund (HEFF) using contributions from the federal government and universities.

The fund is expected to be managed by the Future Fund Board of Guardians, a corporate body responsible for managing the investments of the Australian Government investment funds.

The Board will use the fund’s returns to invest in higher education projects, such as constructing and maintaining learning and teaching infrastructure, using advice from an independent panel.

The report suggested that the contribution from each university would be based on their financial capacity, meaning well-off education providers would need to contribute more.

Following the report’s release, Monash University Vice-Chancellor and President Sharon Pickering rejected the idea of establishing a new higher education fund.

“The proposed Higher Education Future Fund is a costly, complicated, and cumbersome tax on our world-class universities,” she said.

“Imposing an inefficient bureaucratic tax on universities is not the way to deliver on the aspirations of the accord ... it will have the opposite effect and diminish Monash’s ability to deliver on the accord’s objectives.

“Monash opposes measures that will impair the international standing of Australian universities and blunt the economic and social impacts of university education and research.”

Echoing the sentiment, University of Sydney Vice-Chancellor Mark Scott said the fund’s revenue redistribution scheme was a “wealth tax.”

Victoria University also raised concerns about the HEFF and other funding proposals in the report, saying they would likely result in a redistribution of federal government financial support in the sector.

Government’s Response

In an interview with the Australian Broadcasting Corporation, Education Minister Jason Clare defended the HEFF proposal.

“There are some universities who hate it, there are other universities who love it,” he said.

“What this is, is a fund where the Commonwealth would chip in money, where taxpayers chip in money, but also unis chip in money as well.

“Whether this is the way to do it or some other way, I’m keen over the next few weeks and months to talk to universities and others about whether this is the way to do it.”

Students sit on the lawn near the Faculty of Law building at The University of Sydney, in Sydney, Australia, on May 8, 2013. AAP Image/Paul Miller

While the Business Council of Australia welcomed reforms that strengthen the skills of the workforce, the peak industry body was cautious about the potential impact of the funds on the higher education sector’s stakeholders.

“We need to encourage more business engagement with universities to turn the best research ideas into reality—creating new markets, new jobs and new opportunities—and we know levies can hinder partnership and investment and, in this case, potentially act as a deterrent for universities trying to innovate and broaden their funding sources,” council CEO Bran Black said.

“We look forward to further consultation on how this Future Fund could work. It will be essential that if it is established, it does not deter business engagement or philanthropic support for universities.”

An Ambitious Reform

The report had an ambitious goal to raise the percentage of Australia’s workforce with a VET (vocational education and training) or university qualification from 60 percent to 80 percent by 2050.

In addition, it wanted the government to increase the proportion of university-educated Australians aged 25 to 34 years to 55 percent, and those with a tertiary VET qualification to 40 percent by 2050.

Other targets included increasing enrolment of students from regional areas, lower socio-economic and Indigenous communities, who were under-represented in the current system.