Universities report says students add $1.5 billion to Treasury revenue
SMH by Eryk Bagshaw 14 August 2018
Universities will use a new report that shows graduates are adding $1.5 billion each year in income tax revenue to pressure the Turnbull government to reconsider its funding for the sector.
The London Economics report, commissioned by the Group of Eight universities, found graduates contribute $13,000 extra in net income tax revenue over their lifetime compared to those who did not attend university after accounting for education costs, foregone student loan debt and social security payments.
Group of Eight chief executive Vicki Thomson said the report showed funding for the university sector was an investment, not a cost.
"For every $100 million spent on research there is an economic impact of $1 billion while a funding cut of $100 million means an economic reduction of $1 billion - the benefits to the economy are obvious – the return on investment for the government is apparent," she said.
There are more than 1 million students studying at Australian universities and the sector is expected to grow despite pressure on international student enrolments and government funding.
The report found the annual contribution of Australia's top eight universities to the economy was $66 billion, compared to operational costs of $12 billion - a cost-benefit ratio of 5 to 1.
Group of Eight chair and UNSW vice-chancellor Ian Jacobs is expected to use the figures to push the economic contribution of universities in front of policymakers at the National Press Club on Tuesday, as the sector urges Canberra to repair relationships with Beijing.
Despite efforts to expand into Vietnam and India, Australia's top universities remain over-exposed to the Chinese student market and have strongly lobbied the Prime Minister to tone down his rhetoric over Chinese political influence.
London Economics found the average net tuition fee income associated with overseas masters students was $53,000 per student while undergraduates generated net tuition fee income of approximately $80,000 per student.
Those students then contributed an average of $51,000 each in non-fee income through rent, food and house supplies, utilities, transport costs, medical and health costs.
Ms Thomson said the figures underscore the critical role of international students in supporting small businesses and jobs.
"The report supports the long-time assertion that government policy formulation must value universities as generators of economic strength and wealth – as Australia’s competitor nations do – and not as a drain on taxpayers."
The lobbying push comes as the government faces another hurdle to get stalled higher education reforms through the Parliament.
In October, the Senate shot down a $2.8 billion package that would have led to university fees increasing by 7.5 per cent, the HECS repayment threshold falling from $52,000 to $42,000 and university funding being cut by 2.5 per cent through a new "efficiency dividend".
New Nationals senator Steve Martin crossed the floor on Monday to vote against the legislation to lower the threshold for student loan repayments, honouring the commitment he made when he joined Parliament last year as a member of the Jacqui Lambie Network.
“I have informed my colleagues in the Coalition government that I remain opposed to the legislation,” Senator Martin said.
“Some would say I would be crossing the floor against my party, however I see it as staying true to my word.”