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Levy Hike for Private Education Providers Absurd

3 December 2003

Levy Hike for Private Education Providers is Absurd

The government's decision to hike levies for private education providers by fifty-five percent defies logic, Education Forum policy advisor Norman LaRocque said today.

"Education minister Trevor Mallard claims that this tax increase for private education providers will allow the government to recover costs when it steps in to bail out failed outfits like the Modern Age academy.

"The hypocrisy is breathtaking. Will Mr Mallard hold polytechnics financially responsible when polytechnics get into financial trouble and require government bail out?

"In recent years, the government has provided financial assistance of one kind or another of at least $100 million to bail out polytechnics that were in financial difficulty. In 2001/02 alone, the government appropriated $40 million to sort out the mess with Wanganui Polytechnic. Will Mr Mallard be bringing in legislation to recoup those costs from polytechnics?

"Mr Mallard has double standards. It's perfectly fine for taxpayers to prop up failing education institutions if they are state-owned, but if you're in the private sector and successful, expect to pay an enterprise tax.

"This fee hike is not going to prevent another Modern Age-style collapse. Increasing levies until the sector is too expensive to enter is an absurd way of 'protecting' students.

"This is not a 'student fee protection mechanism' as Mr Mallard claims - it is a 'private sector punishment tax', which will achieve very little," Mr LaRocque said.


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