The Government is pushing through a 'tax' on export education without industry consultation, many private education providers say. We look at their concerns.

A government discussion paper on the proposed export education levy was released on 17 October. It gives people four weeks to make submissions.

The paper seeks feedback on proposals to: set the levy at 0.5% of the tuition fee received from foreign fee-paying students; establish a work programme funded by the levy; and develop an industry-wide body. The levy would go to a ring-fenced, industry development fund worth $3.9 million annually by 2005.

According to the Association of Private Providers of English Language chairperson Barbara Takase, export education will be New Zealand’s only industry with a government-imposed industry tax.

"Every other industry requires balloted industry approval of a business plan before a levy can be set by the relevant Minister. Without industry support, it’s not a levy it’s a tax," she said.

"The export education industry delivered six times the export income of the wine industry last year, and achieved 50% growth without an industry tax. Mr Mallard has many solutions but no problems.

"The Government knows it is selling a lemon so it is not even planning any consultation meetings. We all know that the decisions have been made."

New Zealand is the only one of its competitors — Australia, Canada, the UK and the USA — to have such an industry tax, Ms Takase said.

Education Forum policy adviser Norman LaRocque said it was unfortunate that there had been no external input into the discussion document because there were many good ideas that should be tested against industry needs and priorities.

"The levy may well have positive effects but without input from the experts on the industry being levied — the education providers themselves — outcomes are uncertain.

"The level of detail in the budgets is minimal and no performance objectives are suggested — not even for the tripling of the generic promotion budget."

Between 1990 and 1999, New Zealand was the third-fastest growing destination in the OECD for tertiary international students, behind only the UK and Australia. Since 1999, growth in student numbers has further accelerated.

In 1999, the education sector was New Zealand’s fourth largest service export earner and 15th largest foreign exchange earner overall, according to estimates from the Ministry of Foreign Affairs and Trade.

Government figures show that in 2001 more than 50,000 foreign fee-paying students studied in New Zealand and contributed an estimated $1.5 billion to the economy. This represented a 36% increase over 2000 numbers (38,753) and an 86% increase over 1999 numbers (28,340). Indications are that growth has continued at a similarly rapid pace in 2002.

Mr LaRocque said the industry was too valuable to New Zealand to put at risk through hasty and untested policies.

"There are good reasons why industry levies have been reduced or stopped in other industries."

The discussion document can be accessed here at the Ministry of Education.

An Education Forum briefing paper on New Zealand export education can be accessed here at our Briefing Papers section.

The Ministry of Education’s international education web page is at this link.

A website set up by the New Zealand International Education Marketing Network to brand New Zealand international education and to encourage international students to come here is at: www.mynzed.com.