Union rejects plans for 10 per cent tax

February 26, 1999

A proposed goods and services tax (GST) threatens Australian higher education funding, according to the national academic union.

In a submission to a senate inquiry into the tax, the National Tertiary Education Union said that universities at present receive 53 per cent of their funding from the federal government.

If federal government income from taxation falls as planned by $12 billion (Pounds 4.6 billion) in 2000-01 and most tax revenue flows to the states, the union doubts whether federal government will be able to meet its funding commitments to higher education.

Under the plan, money raised by the new 10 per cent flat-rate system will go to giving tax breaks for medium to high-income earners and the remainder to the states and territories.

But NTEU president Carolyn Allport said it was obscene that the provision of public services could be compromised by the introduction of a regressive tax coupled with income tax cuts to the wealthy. She said it was important the federal government maintained its responsibilities to universities, given the national benefits that flowed from them.

The NTEU submission called on the senate committee to reject the tax in favour of a progressive tax system to raise revenue. If the tax were introduced, the union says all education institutions should be tax-free, except for special commercial activities.

The submission also called for compensation for students, whose living expenses will rise under a tax. Similarly, it called for higher postgraduate scholarships and more funds for education institutions and non-profit organisations to offset the administrative cost of implementing the tax.

Ironically, many institutions will end up paying very little GST and yet will be involved in a massive process of keeping and filing returns, and paying out and reclaiming money, it said.

Textbooks will be hit by the tax, as will calculators, computers, journals, excursions or field trips, leisure and personal enrichment courses, membership of professional associations and teaching materials.

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