What to do about not for profit, profits

Senator Rennick wonders whether universities should pay tax when they make money

Gerard Rennick (LNP Queensland) is a member of the Commonwealth Parliament’s Joint Standing Committee on Migration, which is inquiring into migrant settlement in regional Australia. He was asking questions as the committee heard evidence on Monday, about international students in regions. “Given that we already subsidise universities $17 billion, plus the HECS debt of over $60 billion, do you think that the university sector should be paying tax on that for-profit sector?” he asked. The witness replied he was not qualified to answer.

It’s a theme that interests Senator Rennick. In his first speech in the Senate, he suggested universities should underwrite student loans and fund “the economic cost” of housing international students, (CMM September 12).

There is occasional talk around the traps that universities should pay local government rates (most recently in Hobart and Adelaide).  However, Universities Australia presented the standard defence the last time tax on income got a run, in an inquiry into concessions for not-for-profits, in 2012. “Any income earned by public universities is ultimately put to the provision of public services such as subsidised education, not to the distribution of profit to individuals, which is why universities are not and should not be subject to any proxy income taxes.”


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