4 Jun 2023

Language schools call government levy unfair

9:00 am on 4 June 2023
No caption

English New Zealand, the peak body for most language schools, said its members were unhappy. (File photo) Photo: 123rf

English language schools are protesting against a government levy on their income from foreign students.

English New Zealand, the peak body for most language schools, said its members were unhappy they paid nearly double the rate paid by schools and universities.

The Export Education Levy was 0.89 percent of international student income for private institutions, and 0.5 percent for public organisations.

The government paused collection of the levy for the past three years, but resumed it in January despite advice from the Ministry of Education that it should be revoked altogether.

English New Zealand chairperson Darren Conway said the higher rate for private tertiary institutions was designed to cover bail-outs of failed institutions.

He said those failures had been concentrated in organisations that offered vocational, business and IT qualifications, and English schools should not be lumped in with them just because they were private.

"We can't see why we have to pay double the rate of state sector when the language school sector in particular are not responsible for failures in this industry over the last decade or so.

"In addition we don't think it's a good idea to underwrite risky decision-making by agents and students by saying 'well if you go to a dodgy college, don't worry if it goes bust because the government will bail you out'."

He said paying nearly 1 percent of income was tough on institutions that made only 5 or 6 percent profit.

Conway said the government should at least reduce the levy rate for his sector, but ideally it should drop the levy altogether.

He said language schools got no value from activities funded by the levy.

"The money that they raise from it is wasted. It gets spent on projects that on the one hand make people in Wellington feel better, like they're looking after students, but are generally very ineffective."

Conway said English New Zealand members would delay their levy payments.

"A fairly sizeable chunk of the language school sector will simply pay it very late."

Get the RNZ app

for ad-free news and current affairs