TUI calls for application of corporate levy to tackle higher education funding crisis

By piofficer, Thursday, 24th March 2016 | 0 comments

The Teachers’ Union of Ireland (TUI) has called for the application of a 1% levy to corporate profits in order to generate additional funding for the resource-starved higher education sector. The union represents 15,000 members, including 4,000 members in Institutes of Technology.

TUI today highlighted that the corporate sector derives invaluable benefit from the Irish graduate labour pool. The levy would facilitate the employment of thousands of additional academic staff and could even be used to remove the €3,000 student registration fee.

Last month, TUI members in the sector took a day’s strike action over underfunding, understaffing, the precarious employment status of many staff and the resulting detrimental effect on the service to students.

The union’s Annual Congress takes place in Killarney next week.

Speaking today, TUI General Secretary John MacGabhann said:

‘All stakeholders acknowledge the huge funding crisis in the third level education sector. With student numbers within the sector set to continue to rise significantly, the situation will only worsen unless positive intervention is made.

In the first instance, it is important to stress that our recommendation is framed as representing a potential new source of funding and emphatically not as an alternative to exchequer funding of higher education. We would also stress that this would be a dedicated higher education levy rather than a general increase in the rate of corporation tax in order to ensure that the fund would only be used for the intended purpose.

The case for this levy is compelling. The corporate sector derives direct and invaluable benefit from the availability in Ireland of a highly skilled, graduate labour pool which is the product of extensive higher education provision. The establishment of a levy would further enhance the quality of the graduate labour pool, the capacity of institutions to recalibrate to meet evolving need and ultimately the sustainability of the enterprises that contribute to the fund.

Crucially, the levy would represent a tangible contribution by corporations to the achievement of public policy goals and would counter the perception that the corporate sector has no allegiances to the society in which profits are generated.

The revenue that would be generated by such a modest levy is considerable. At 12.5%, the standard rate of corporation tax in Ireland is low by international standards, having been reduced dramatically in the late 1990s and early 2000s. It is also usually acknowledged that the effective rate is lower than the standard rate. The application of a further 1% would represent only a modest readjustment and would not inhibit inward investment or employment generation.

In recent years, the application of a levy would have yielded the following additional funding for the sector:

2011 - €280m
2012 - €337m
2013 - €341m
2014 - €369m

To put this potential yield into context, funding for the Institute of Technology sector fell by €190m (35%) between 2008 and 2015. Over the same period, student numbers rose dramatically by 21,411 (32%) while 535 (9.5%) lecturing positions were lost. As a result, lecturer workload has reached unsustainable levels, staff morale has been severely damaged and the capacity to deliver a quality service to students has been adversely affected.

The additional funding provided by the levy would tackle the corrosive and damaging effects of cutbacks that have resulted in today’s students experiencing larger class sizes and less access to laboratories, equipment, materials, libraries and tutorials. It would allow the employment of the thousands of academic staff necessary to bring the teaching staff/student ratio in Irish institutions closer to the OECD average of 16:1. By contrast, the ratio in Institutes of Technology is currently 23:1 and continues to rise.

The levy would also generate a level of additional revenue sufficient to make a difference in terms of significantly improving participation rates by students from some socio-economic categories. Potentially, it could also be used to remove the current annual student registration fee of €3,000.’  

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