We are consulting on a proposal to reintroduce the Export Education Levy on 1 January 2023 at the same rates as when the Levy was suspended of 0.50% of international student tuition fees for universities, Institutes of Technology and Polytechnics, and schools, and 0.89% of international student tuition fees for Private Training Establishments.
Consultation closes on 27 September 2022.
The EEL was introduced in 2003 using the principle of cost-sharing between government and the sector. It was introduced in the context of long-term concerns from both sides about insufficient industry investment in promotion, quality assurance and professional development.
The Export Education Levy (EEL) is collected from international education providers. It helps fund a broad range of activities and projects relating to the export education industry, including promotion and marketing, quality assurance, and reimbursements for international students caught out by programme and provider closures.
The EEL payment obligation was suspended for the 2020 and 2021 calendar years in recognition of the significant and unprecedented financial hardship being faced by the international education sector. A further suspension was agreed for 2022 following consultation with the International Education Sector, this was actioned by revoking Export Education Levy regulations.
Reintroducing the Export Education Levy will provide funding to support international education activities and re-establish sector contributions.
Alternatives to the Export Education Levy include reducing expenditure, Crown funding, and relying on providers to fund activities directly. There are several advantages and disadvantages to using the Levy.
Balancing the need for levy activities and the merits of a levy, the proposal is to reinstate the EEL from 2023.
EEL activities funded in 2019 including:
Total EEL revenue in 2019 was $6.96m, with an international student cohort of 110,000. At the end of August 2022 there were 15,000 students in New Zealand with student visas. The pace of student volume recovery is uncertain, the Ministry has looked at expected revenue if student numbers recover to 50,000 by 2025 (30,000 equivalent full-time students). On this basis we estimate around $6m would be raised over 3 years. As a result levy activities will be reduced and prioritised. The Ministry has looked at the levy rate needed to fund activities at the same level as 2019. This would have required levy rates of 1.1% - 1.3%, a decision is proposed not to set rates this high as the burden on providers would be too high.
We are expecting to prioritise the administration of the international component of the Education (Pastoral Care of Tertiary and International Learners) Code of Practice, and the funding of the Dispute Resolution Scheme.
The Education and Training Act requires a separate bank account and Annual Report for the EEL. The requirement of a separate EEL Annual Report and treatment akin to a separate entity creates significant additional administrative complexity and cost, duplicating accounting and audit effort. It’s unusual to require a separate Annual Report for levies, the Ministry School Insurance Scheme levy does not. MBIE has many levies, with accountability and reporting achieved with disclosures within the Ministry Annual Report.
Through this consultation we wanted to test whether you value EEL annual reporting or would prefer the inclusion of the information within the Ministry of Education Annual Report.
No changes are proposed to the International Student Fee. The ISF’s purpose is to reimburse the Crown for expenditure relating to international students in schools.
Please let us know if you have any feedback on this proposal.
Consultation closes on 27 September 2022.