The Labour-led Government is currently working on more tax hikes, this time one which could have a dramatic impact on the International Education Sector, National’s Associate Tertiary Education, Skills and Employment Spokesperson Simeon Brown says.
“Consultation on proposals to nearly double the levy for Private Training Establishments from 0.45% of tuition fees to 0.83% has recently closed.
“An increase of this size increases the overall amount of tax that many of these providers will be paying by up to 30 per cent with many providers operating on small margins. These increases are unwarranted, and an enormous burden to bear for many providers which could lead to even more PTEs either going out of business or having to cut staff.
“While more than $1 million was raised for the levy in 2017, the Minister himself now admits it has been used. Individual businesses that drew on the levy are primarily at fault, and now good providers are having to subsidise the bad ones.
“The Minister’s own actions aren’t helping the situation. Earlier proposals around post-study work rights threatened to rip 1,000 jobs and $1.4 billion out of the export education sector.
“International education is worth over $5 billion a year to our economy, and PTEs alone employed more than 7,500 staff last year. Despite the size of the industry, such a significant increase on the levy will greatly affect the profitability of a number of these institutions, particularly small education providers.
“National understands the need for quality assurance and the costs associated with maintaining a strong international education brand for New Zealand, but mismanagement of the fund is what has led to its depletion, with funds being spent on activities which could be easily cut. The Minister needs to focus on creating an environment where PTEs can thrive, and not just putting the burden of more taxes on the sector.”