International students in Australia contribute billions of dollars to services that they cannot access, and a proposed levy on their fees would make things worse, according to new research.

University of Melbourne academics estimate that Canberra collects more than A$2.6 billion (?1.4 billion) a year from foreign students and graduates via income and consumption taxes and visa fees. Yet despite being taxed at the same rate as Australians, international students and post-study work visa holders are ineligible for public services?such as welfare support and subsidised healthcare.

Now a mooted international education levy could see them paying out hundreds of millions of dollars more. ¡°Students might rightly ask whether they are receiving value for money,¡± observes a??published by the Melbourne Centre for the Study of Higher Education (CSHE). ¡°Were a levy to cause a major drop in Australia¡¯s share of the international education market, it may ultimately be a self-defeating policy.¡±

The interim report of Australia¡¯s major higher education review, the Universities Accord, says?a levy ¡°could provide insurance against future economic, policy or other shocks, or fund national and sector priorities such as infrastructure and research¡±. To achieve such aims, it would need to dwarf current mechanisms such as the Tuition Protection Service (TPS), which collects around A$6 million annually to finance refunds for students of bankrupt colleges.

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By contrast, a 5 per cent fee levy would cost individual universities up to A$68 million a year, the CSHE paper estimates. The accord panel is rumoured to be contemplating a levy of 15 per cent of international education earnings above some threshold.

It is unclear whether the threshold would apply to individual fees or aggregated institutional earnings. Chris Ziguras, co-author of the CSHE paper, said there would be ¡°complications¡± either way.

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¡°The problem is that we¡¯re taking money from international students to fund things?that there¡¯s no reason¡­they should be paying for,¡± he said. ¡°They¡¯re a convenient group that can be taxed, and they don¡¯t vote, to put it bluntly.¡±

Professor Ziguras warned that the proposal would have an ¡°enormous¡± impact on student sentiment while undermining a policy push to reconceive international education as more than a commercial enterprise. ¡°It runs the risk of taking us a long way backwards in that whole effort to broaden our thinking about the benefits of international education.¡±

The levy proposal would differ from mechanisms?such as?the TPS in that the revenue would be redistributed among institutions rather than funnelled into public revenue.

¡°It will be a difficult task to explain to international students why they should be paying fees that will be transferred to support other universities in which they will not be studying,¡± the paper notes. ¡°If there is a funding shortfall, international students may reasonably ask, why are we the ones that will be taxed to fund it?¡±

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The paper estimates that half of the levy would be collected from just five institutions, and almost three-quarters of universities could be net beneficiaries from the proposal. ¡°Despite this, very little support for the levy has been forthcoming from any quarters.¡±

Professor Ziguras said the lack of institutional supporters reflected ¡°wariness¡± about how the proceeds might be spent. ¡°That pot of money is very vulnerable to the government steering it to other purposes [outside] the sector,¡± he said.

¡°Until there¡¯s [a] more concrete idea about what that fund would do, transparency about where it¡¯s going to be spent and guarantees it is going to be spent that way for the foreseeable future, I don¡¯t think any institutions are going to be coming out in support of it.¡±

john.ross@timeshighereducation.com