HUME NOW

Queensland is the best state in Australia 🇦🇺. It represents the frontier of Australia's future prosperity. It needs a government that recognises this economic potential. And is willing to take hard decisions to enact policies to secure it. I hope the David Crisafulli MP government is up to the task.

But the tax system is just that a system. So it ought to be reviewed as a system in whole, not in part. And this ideally would be done independently of Queensland Treasury to ensure its recommendations live up to what Crisafulli in his acceptance speech said he wants: frank and fearless advice.

"Exploration is at the heart of what our members do. This policy supports the industry and, at the same time, feeds into two key federal government strategies, the future Made in Australia and the Critical Minerals Production Tax Incentive (CMPTI).”

by www.aaibo.com.au Ravi Ragupathy

Immigration & International Students
Another nail in the international student export coffin.
Over many years, I have debunked the claim that international education is a major export industry for Australia.

According to the Australian Bureau of Statistics (ABS), education is Australia’s fourth largest export valued at $48 billion currently:

Around two-thirds of these reported exports come from goods and services spent by students, with the rest coming from tuition fees:

Universities and vocational colleges drive the majority of Australia’s purported education exports:

I have repeatedly shown that this $48 billion export figure is grossly overexaggerated.

First, the ABS wrongly counts all expenditures by those on student visas as an export even when the money used to pay for those exports is earned by working in Australia.

Second, the ABS treats those on student visas as non-residents for the duration of their visa—a treatment that is not ascribed to other visa holders. From the ABS website:

Third, how can education be considered a $48 billion export when migrant remittance data from the World Bank shows that Australia lost $US8.6 billion in 2023 in net remittances and inbound remittances are lower today than a decade ago?

Moreover, why does the outflow in net remittances track the rise in student visas on issue:

Surely, if international education was Australia’s fourth largest export industry, then Australia should be seeing a huge inflow of migrant remittances?

Yet, following the money flows suggests that international education may, in fact, be an import, not an export.

Another factor that contradicts the claim that education is a major export is the large sum of money paid by educational institutions to education agents abroad, which should also be considered an import.

2022 was a low year for international student enrolments owing to the pandemic, as illustrated below:

Even so, NSW universities alone paid at least $147 million in commissions to education agents in 2022:

According to The SMH’s article published in December 2023:

Together, Sydney University, UNSW, UTS, Macquarie University, and University of Wollongong spent $147 million on agent commissions last year, according to their financial statements and figures provided on request…

But the total figure for NSW public universities is probably far higher. Western Sydney University, University of New England, Newcastle University, Southern Cross University, and Charles Sturt University refused to reveal their commission spending or did not respond by deadline…

About 76% of 2022 international student enrolments at universities came to Australia through education agents, according to the latest federal government data, up from 61% 10 years ago…

No university revealed the percentage of international student fees it paid to agents in commission, but the peak body for education agents says the industry average for higher education is about 15 per cent of first-year fees…

Some students have reported being misled by unscrupulous agents who don’t disclose their high commissions and push students into courses they may not be suited to or provide deceptive migration advice…

Given the huge rise in international student numbers since 2022, it is safe to assume that commissions paid to offshore education agents have also surged.

As usual, there is no accounting for these commissions by the ABS in its rubbery calculation of education exports.

The ABS merely assumes that education exports = ( # international students x average tourist spend) + education fees:

Dr Cameron Murray delved into the rubbery calculation of education exports at Fresh Economic Thinking.

This issue matters because the education lobby, the media, and the government have used this erroneous export figure as fuel to argue for the largest concentration of international students in the world.

However, their argument is based on statistical trickery.

Australian Economy - By Ravi Ragupathy
Friday, 26 July 2024
Melbourne is becoming an economic wasteland.
According to data from the Australian Bureau of Statistics (ABS), Victoria experienced a net reduction of 7,606 businesses during the financial year 2022-23.

The rising cost of doing business in Victoria drove numerous companies to migrate interstate or internationally, with increased state taxes being one of the primary factors cited.

By contrast, Queensland saw the greatest net increase in businesses, expanding by 11,031 in 2022-23.

There are two main reasons why Victoria was the only jurisdiction to record a drop in business counts.

First, the Victorian government’s draconian Covid lockdowns likely closed many businesses, particularly those that are small and focused on people (think cafes, personal trainers, boutiques, etc.).

Second, the Victorian government included a payroll tax surcharge in the 2021-22 State Budget as part of a mental health and wellbeing levy, but only for businesses with a payroll of $10 million or more.

The State Budget for 2022–23 then raised payroll taxes on the same businesses as part of a 10-year Covid debt levy to help repay the government’s record borrowing during the pandemic.

I recently spoke with someone who works for a business valued at more than $10 million. They indicated that their company was prepared to relocate its headquarters from Melbourne to Brisbane, which has cheaper payroll taxes.

The Victorian government’s proposed increases to WorkCover premiums, which businesses pay for, run the risk of driving more businesses out of the state.

WorkCover is necessary if the actual or planned employee compensation exceeds $7,500, or if apprentices and trainees are hired.

Changes announced in May 2023 lifted premiums by 42%, from 1.27% to 1.8% of an employee’s compensation.

The Victorian Parliamentary Budget Office expects the amendments to cost businesses $17.8 billion over the next decade.

ANZ CEO Shayne Elliot recently referred to Victoria as “one of the toughest” places to conduct business.

The ABS data on business counts appears to back up these statements, with the state government successfully pushing business north, particularly to Queensland.

With this background in mind, it was unsurprising to read that Melbourne’s office vacancy rate has climbed to 19.6%, the highest since 1995.

Melbourne’s office market recorded a “negative net absorption” of 26,600 square metres—the size of medium-sized office building—meaning more space was left empty than freshly leased in the June quarter.

Steve Urwin, who runs tenant advocacy firm Kernel Property, offered a dire prognosis for Melbourne’s office market.

“Melbourne is a one-way slope and hasn’t hit bottom. There is worse to come”, he said.

Investor Shane Quinn, who chairs commercial property syndicator Quintessential, described Melbourne’s CBD office market as “a proper basket case, and it’s going to be a basket case for the next five years”.