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Yet another Labor tax

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PRESS RELEASEJIM C A R L T O N Shadow Minister for Education


The Wran Committee's solution to the higher education funding problem is to introduce yet another new tax.

The Government's Green Paper on Higher Education argued that the burden on taxpayers in supporting higher education had reached its limit and that other sources of income had to be found.

The Wran Committee has failed to find them, and has recommended a new tax surcharge of 2% on the incomes of past students, whether they have graduated or not.

Those affected will in most cases already be paying tax at the highest marginal rates, and will already be paying more tax in dollar terms than average.

In future their marginal tax rate will be 51 cents in the dollar, up from 49 cents (before Medicare levy).

The additional tax revenues will not be available to universities and colleges to spend as they choose.

Nor is there any guarantee that there will be additional funds made available to higher education generally.

All that Is guaranteed is that the Government will collect more tax revenue.

Other problems with the new tax include*

· * ■ · . . . - _ Higher taxes on graduates who are already heavily taxed will act as a disincentive to individual effort and achievement and to economic growth.

The proposal conflicts with the Government's stated objectives of expanding higher education, as the prospect of being branded as a higher taxpayer for years after the course will discourage many students.

More students will move overseas to escape the tax. .

Although the Committee claims to have rejected lifetime tax surcharges, this will be the practical effect for many graduates in the high cost courses, many of whom do not earn very high incomes.

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• There is no reward for excellence. Gifted

students from low income families will be treated on the same basis as everyone else.

Stripped of the camouflage the Wran proposal is essentially a proposal to increase government tax revenues.

e It does not provide the universities and colleges with*the private sources of income they need for flexible management

e It gives no guarantee of additional funds for

higher education

e It introduces significant disincentives for students to study and to the future contribution of graduates to economic growth.

The Opposition policy is to provide Higher Education Scholarships for free places for students who qualify according to nationally agreed entry criteria. • ·

Institutions would then have the incentive to attract . „v additional students, either for first degree courses or for continuing education, on whatever fee basis they saw fit.

They would retain the additional funds thus obtained to spend flexibly on their own expansion and improvement programs.

Sydney, 5 May, 1988

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