Export ed levy will punish successful businesses

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/

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