‘Levy is for Investment, not indemnification’

‘Levy is for Investment, not indemnification’

Education New Zealand: Media Release 26/11/04

‘The public interest in international education is best served by developing the industry, not by diverting its hard won resources into the Treasury’s coffers’ said Robert Stevens, Chief Executive of Education New Zealand. ‘We applaud the Governments decision not to increase the export education levy. However, we are very disappointed that Levy money is being siphoned off to indemnify the Government for the Paramount case – a Government that has enjoyed the benefit of hundreds of millions of dollars of tax revenue flowing in as a result of international education.’

Robert Stevens was commenting on the Governments announcement today that whilst they would not increase the export education levy, they would divert some of it into a fund to compensate the Government for monies it paid out to students and homestays when the Paramount Institute collapsed.

‘When the Government accepted our argument against the proposed increase to the Levy earlier in the year, we made it quite clear that using Levy monies for indemnification purposes was unacceptable. The reason for this is quite simple. The taking of money from sound law abiding institutions to potentially bail out institutions that must have flouted the regulations if a bail out is required is sending the message to industry that you will be penalised if you comply, and can evade your responsibilities if you do not.’

‘Penalising institutions in this way is analogous to sending all motorists a traffic ticket if one of them gets caught speeding’ said Robert Stevens. ‘At a time when the industry needs all the investment it can get to develop new markets and compete effectively in current ones, the siphoning of Levy money is the worst possible option. A far better plan than this reverse Robin Hood approach to the Levy would be to invest it in industry good activities such as expanded marketing programmes and product research.’

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