Monday 23 July 2018

'Apple tax' could fix our college funding crisis

That €13bn windfall is the answer, says Joan Donegan, general secretary of the Irish Federation of University Teachers

Apple is due to begin initial payments on €13bn outstanding taxes to the Irish State in the first quarter of 2018. Stock picture: Getty
Apple is due to begin initial payments on €13bn outstanding taxes to the Irish State in the first quarter of 2018. Stock picture: Getty

Joan Donegan

Last week in the Sunday Independent, Dr Jim Browne, the outgoing president of NUI Galway, proposed to double student fees and introduce student loans to resolve the university funding crisis.

Fee hikes of this magnitude would inevitably impact on access to third level education for many students and families. It would also force many students into significant debt and make the dream of acquiring a family home even more remote for tens of thousands of our young people.

The Irish Federation of University Teachers (IFUT) believes that, instead, an opportunity now exists to allocate a designated portion of the Corporation Tax to be paid by Apple to seriously and realistically address the funding crisis in Irish third level education.

Apple is due to begin initial payments on €13bn outstanding taxes to the Irish State in the first quarter of 2018. While an appeal by the company may reduce that figure, very substantial sums will be paid to the State in the coming years, far in excess of what is needed to fix the crisis in third level.

The financial pressures under which Dr Browne and other university presidents have operated for the best part of a decade are due to persistent cuts in State funding. As Dr Browne stated, third level education is the 'forgotten child' and has survived on a "capacity to make do, the creativity and the adaptability of our staff".

Recent budgets have delivered far less than the additional monies identified as necessary by the 2016 Cassells Report on Funding of Higher Education, as the State continues to abdicate responsibility for funding the sector.

Ireland's higher education system is already over-reliant on non-state funding. The fact that certain universities now emphasise fundraising skills as much as teaching or research excellence when hiring and promoting academic staff illustrates the extent of the malaise. In some universities, more than 50pc of income already derives from student registration and fees, research-related investment and philanthropy.

Between 2008 and 2012 recurrent grant allocations to universities and colleges fell by 25pc. Since 2012, the public spend per third-level student has remained below that for second-level, with no sign of corrective budgetary policies by the current government.

A doubling of student fees to €6,000 a year would inevitably be a significant deterrent to college entry for many middle- and low-income families.

As an indicator of the likely impact, a 2011 study in the UK found that a £1,000 increase in fees there slashed participation by 3.9pc. And figures from the UK Higher Education Statistics Agency show part-time student numbers in England have slumped by 56pc since 2010, linked mainly to a raised cap on part-time fees to €6,750 a year.

Increased reliance on fees to fund third-level runs counter to developments elsewhere in Europe. In 2006, Germany began introducing third-level fees. This policy has since been totally abandoned and no German region retains fees.

Even at the current €3,000 a year, Ireland's university fee structure will be the highest in the EU following Brexit.

The IFUT previously proposed in a submission to the Working Group on Funding in Higher Education, that a set percentage of Corporation Tax be ring-fenced for the sector.

The monies to be paid by Apple offer the opportunity to deliver on this proposal and provide realistic funding benefits for our universities and our young people.

A working group comprising Revenue, the Department of Finance and the third level sector should immediately be established to address implementation of such a scheme.

Any future introduction of a loan scheme would need to be linked to rigorous monitoring of the impact on participation levels and its effect on disadvantaged sectors. It could also serve to drive increased graduate emigration and, under the model identified in Cassells, would create a significant medium-term drain on State resources.

Designating a set percentage of Corporation Tax from the unexpected Apple windfall would provide the most safe, secure and fair investment mechanism, while providing full transparency and not impinging on academic standards or independent research.

LETTERS, Page 29

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