6 December 2018

Labour confirms increased tax on PTE’s

The Labour-led Government has confirmed it will follow through with more tax hikes, this time one which will have serious impact on the International Education sector, National’s Associate Tertiary Education, Skills and Employment spokesperson Simeon Brown says.

“The Government has today announced its decision to nearly double the levy for Private Training Establishments from 0.45 per cent of tuition fees to 0.83 per cent.

“An increase of this size will see the overall amount of tax that many of these providers pay increase by up to 30 per cent. This is a serious blow to the sector, particularly some of the providers who are operating on small margins.

“These increases are unwarranted, and an enormous burden to bear for many providers which could lead to even more PTEs cutting staff and going out of business.

“While more than $1 million was raised for the levy in 2017, the Minister now admits it has been spent. Individual institutions that drew on the levy are primarily at fault, which means good providers are subsidising the bad ones. This isn’t the way to support the sector.

“International education is worth over $5 billion a year to our economy, and PTEs alone employed more than 7500 staff last year. Despite the size of the industry, such a significant increase in the levy will greatly affect the profitability of a number of these institutions, particularly the smaller education providers.

“National understands the need for quality assurance and the costs associated with maintaining a strong international education brand for New Zealand, but mismanagement of the fund is what has led to its depletion, with funds being spent on activities which could be easily cut.

“The Minister needs to focus on creating an environment where PTEs can thrive, and not just putting the burden of more taxes on the sector.”

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