It’s time to tax international students


Australian university vice chancellors have united against a plan to levy a “Robin Hood” tax on international student enrolments.

Education Minister Jason Clare has said that the new levy may function “a bit like a sovereign wealth fund” by requiring universities to hand over a portion of the money they make from tuition collected from international students to the federal government.

Despite being called an “envy tax” by the country’s top universities, Clare proposed reallocating the levy monies to help pay for research or student housing.

Only three universities have come out in support of the plan to tax nearly $10 billion in international student fees.


The proposal has been met with strong resistance from 31 public universities, who claim the levy would cause Australia to lose students to competitors like the United States, Canada and Britain.

The plan was swiftly and loudly shot down by the Group of Eight, which represents major universities including Sydney University, UNSW, and Melbourne University and earns billions of dollars in revenue from international students.

The Group of Eight labeled it an “envy tax” and said it might hurt Australia’s standing in the global market for students.


I fully support a levy on international student enrollments.

Australian universities are non-profit organisations and currently do not pay tax (unlike other ‘export’ industries). This is despite universities acting like corporatised, profit-maximising businesses with senior leadership groups that get paid exorbitant salaries.

The universities, rather than taxpayers, are therefore ‘clipping the ticket’ and collecting the economic rents from Australia’s immigration system via student fees.

A levy on international students would ensure that Australians receive a financial cut from the trade, similar to how a sovereign wealth fund collects revenue from mineral exports.


In addition to a levy, the federal government should require that universities provide on-campus accommodation for international students in proportion to the number of enrollments.

This would take direct pressure off the rental market and ensure that the costs and benefits to universities and Australians from the international student trade are more aligned.

We must end the situation where Australian tenants are being driven into financial stress, forced to live in share housing, or pushed into homelessness while Australia’s universities make out like bandits from record international student enrollments.


We must stop universities from privatising the gains from record immigration while the costs are pushed onto Australians at large, most notably renters.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.