Export education levy will punish successful businesses
The proposed export education levy will mean successful education businesses becoming responsible for the debts of
unsuccessful ones - causing reductions in their worth and less investment in the education sector, according to
Education Forum policy advisor Norman LaRocque.
Speaking at an education and science select committee hearing on Wednesday , Mr LaRocque said making successful
businesses responsible for the debts of unsuccessful ones was unheard of in other industries and was damaging to good
business.
He said it should also be recognised that successful businesses were being asked to assume this potential liability even
though they had no control over the entry of institutions into the sector and no mechanism for penalising institutions
that got out of line.
"In fact, the levy is unnecessary - the private sector has developed a number of ways of addressing the issues that the
levy is attempting to resolve, both before and after the fact.
"For example, institutional and group branding - such as membership in Independent Tertiary Institutions - provides
students with information about institutional quality, while fee protection insurance and placement of students address
the fall-out from institutional collapse.
"If there is a case for a levy - and it is not clear there is - to protect the reputation of New Zealand education, then
the benefit will accrue to all institutions - public and private. Hence, any levy should apply to both," Mr LaRocque
said.
Successful polytechnics had not been asked to front up for the more than $100 million provided to the many polytechnics
assisted in recent years. In the case of Wanganui Polytechnic alone, this assistance had amounted to $40 million in one
year.
"The export education levy was a bad idea in the first place, with very little rationale. The proposed change will make
it worse.
"This cannot be in the interests of students, institutions or New Zealand generally and it certainly will not help
prevent another Modern Age - on the contrary, it will only make another one more likely," said Mr LaRocque.
The Education Forum's submission on the Education (Export Education Levy) Amendment Bill is online at http://www.educationforum.org.nz/