In a blatant breach of a very specific pre-election campaign promise, the Rudd Government will today announce a $250 million new tax on Australian university students.
The funds will be collected by Universities and mostly spent by failed student unions whose membership seemed to average around 10% of the total student body. Despite this record of failure, these student unions – typically mismanaged by left-wing mediocre bureaucrats in their fifties on six figures salaries (plus car) and six hour work-days – have been mostly kept going by University administrations since the Howard government banned compulsory student union fees.
But – not wanting to waste their taxpayer and privately sourced money – they’ve been a lot more restrictive in dishing out the loot than the days when they were soaking students for it. Because of those restrictions, the student unions and University bosses have been united in their loud demand to reinstitute their ability to tax students, who are among the lowest income earners in Australia.
Prior to the last federal election, then Education spokesman Stephen Smith made it clear there would be no such new tax, whether deferred or not via the HECS system, in any shape or form.
Back then, Smith emphasised that a Labor government would ensure funding was made available for student services from the Commonwealth not by taxing students:
LEWIS: Mr Smith, Labor opposed the introduction of voluntary student unionism. If elected, can you give a commitment now that Labor will reverse the introduction of VSU?
SMITH: No, we wonâ€™t. Weâ€™ve made it clear we will allow students to voluntarily organise themselves. We think the key thing is the sustaining of the various services, whether that’s been sport and recreation or counsellingâ€¦
LEWIS: You opposed the issue when it went before the Parliament?
SMITH: And we don’t think there is an opportunity or a prospect of going back to where we started.
The key thing is making sure the services that have traditionally been sustained by the student groups are there for all students to enjoy into the future: childcare, sport and rec facilities and the like. Thatâ€™s the responsibility of the National Governmentâ€¦
SMITH: No, thatâ€™s the responsibility of the National Government and the universities to sustain those services. Those services are currently withering and dwindling on the vine. We will not allow that to occur.
NO FEES, NO NEW TAX ON STUDENTS, DEFERRED OR OTHERWISE, SAID PRE-ELECTION LABOR
After the idea was floated last year by the nearly insolvent National Union of Students – who want their members taxed to the tune of $250 million so that the nation’s many failed student unions can afford to pay them affiliation fees of a couple of million – Smith made it very clear at a doorstop that he was ruling out reconstituting these fees via the HECS system:
JOURNALIST: So on the funding side, have you canvassed, or are you contemplating some sort of loan or deferred payment?
SMITH: No, absolutely not. One thing I can absolutely rule out is that I am not considering a HECS style arrangement, particularly a compulsory HECS style arrangement.
I donâ€™t know where that came from, that may have been a suggestion made by one of the interested parties to the journalist concerned. But I certainly do not have on my list an extension of HECS, either voluntary or compulsory, to fund these services. So I absolutely rule that out.
JOURNALIST: So what is on your list then?
SMITH: What is on my list is that I believe that these services should be provided either by the Universities, or by the Commonwealth or both.
Instead of honouring Labor’s commitment, the Youth Minister Kate Ellis has foreshadowed the government’s intention to announce a regressive, flat $250 tax on students regardless of their income, regardless of their actual use of student services, regardless of the course they’re doing, regardless of their likely future income. It could raise as much as $250 million per annum.
The government has set a $250 cap on it, which is widely expected to be adopted by practically all institutions, even those who’d previously charged less.
For most students, it will be added to the tax debt their HECS payment already creates. HECS is a worthwhile and legitimate scheme but adding to it in an very challenging environment where many graduates will struggle to obtain finance to buy homes or start businesses or anything else seems poor timing at the very least.
Whatever the rights or wrongs of the policy and the obvious injustice of slugging some of the poorest people in the community with the bills for pampered and overpaid student union bureaucrats (many on six figure salaries), the policy is very clearly a blatant broken promise.
In these circumstances, the Senate would be well justified in blocking this measure until the government actually receives a mandate for it, if it is re-elected during the recession of 2010 after they’ve spent all of the other side’s surplus and then some.