The UK’s mooted levy on international students’ tuition fees could be better than the alternative, and universities should “be open” to the concept rather than reflexively shooting it down, according to the proponents of a similar idea floated in Australia in 2023.

University of Newcastle vice-chancellor Alex Zelinsky said that after the Australian sector had mobilised against his idea for an international education levy, Canberra had “half-implemented” the mechanism anyway through steep hikes to student visa application fees.

“People didn’t want a levy. Then they got a cap. The cap wasn’t implemented. And how has the government responded? It effectively raised a levy [that was] far greater than what we were advocating in the first place. And the worst part of it is that the money’s not going to universities.”

Australia expects to reap another A$760 million (£368 million) by raising the visa fee a further A$400 in July, after it increased the charge from A$710 to A$1,600 last year. “That’s money…that’s been taken from universities,” Zelinsky said.

̽����Ƶ

The levy, as originally conceived by Zelinsky and University of Technology Sydney (UTS) vice-chancellor Andrew Parfitt, would have diverted about 2 per cent of overseas tuition fee earnings into a sector-wide pool. Zelinsky said it could help “equalise income” in a sector of almost 40 publicly funded universities where close to half of international education earnings – often the only viable source of revenue growth – goes to the richest five institutions.

The Australian Universities Accord panel included the idea in its July 2023 interim report, saying a levy could pay for infrastructure or research or help insure the sector against future “shocks”. But following a hostile response from the sector, with rich universities deriding the concept as a “wealth tax”, the panel’s final report instead proposed a future fund with government co-contributions.

̽����Ƶ

Education minister Jason Clare cited the levy as one of the accord’s “spiky ideas” worth consideration but has barely mentioned the future fund proposal. Monash University policy expert Andrew Norton said the levy proposal had been undermined more by a change in the political winds than by opposition within the sector.

Norton said that after immigration became a political headache in late 2023, the government had started “pulling every lever it could think of” to trim overseas arrivals. “All the political and bureaucratic energy switched over to controlling net overseas migration,” he said.

A similar fate could await the UK’s proposal for an international education levy, a surprise inclusion in a White Paper about immigration rather than education. While the UK government said the proceeds would be reinvested in higher education and skills, it also estimated that the levy could reduce applications from international students by 7,000 a year.

Norton said a levy might impose “incidental effects on student demand but it wouldn’t be big enough to solve any overseas migration problem on its own”. Mechanisms with bigger effects on migration might also have bigger effects on universities – particularly the “poorer” ones.

̽����Ƶ

“For most institutions in the UK, the levy is probably preferable to an increase in the visa application fee,” Norton said. “[Britain’s] current visa application fee is significantly below what Australia’s will be soon. That’s…a competitive advantage for the UK which they probably don’t want to forgo.”

He said cash-strapped UK universities that stood to gain from a redistribution of levy earnings could “lose more” from the migration changes. “Their students are, like in Australia, more sensitive to the migration rules and less sensitive to the status of the institution.”

UTS boss Andrew Parfitt said UK universities should greet the levy proposal as an opportunity for a “more meaningful discussion” about international education – a revenue stream often dismissed as a “plaything” even though it bankrolled infrastructure, course offerings and enhancements to the student experience, as well as research.

Parfitt said negotiations about a levy could help generate “mutual agreement” about international education and how its proceeds should be used. “It’s not a plaything, so let’s have a conversation around it. “Get around a table as a sector [with] government, and have a conversation.

̽����Ƶ

“That’s what I’d say to the UK. There may be many bridges that can be rebuilt through that conversation.”

john.ross@timeshighereducation.com