The Property Council of Australia’s Student Accommodation Council has cautioned against “short-term thought-bubbles” such as a levy on international students being proposed by a major higher education review, as Australia grapples with how to overcome a decades-long housing supply deficit.

Under the levy proposed by the Australian Universities Accord panel in its interim report, universities would pay some of their international student tuition fees into a central fund managed by the government. The fund would then channel funds from institutions that receive a lot of international student fee income to those that do not. The aim of the redistribution of funds would be to redress imbalances in funding for research and infrastructure, with some suggesting the funds could be used to pay for student housing.

It is predicted that universities would be likely to pass the levy onto international students, which may have the unintended consequence of some international students choosing alternative study destinations and Australia losing some of its share of the international education market.

The Student Accommodation Council expressed its opposition to a levy in its response to the Accord’s interim report, saying that it would reduce Australia’s attractiveness as a study abroad destination and negatively impact accommodation providers.

Property Council Group Executive Policy and Advocacy Matthew Kandelaars said the proposed levy ignores the reality of the nation’s housing supply and noted that PBSA alleviates strain on the housing market by taking almost 80,000 people each year out of the wider residential rental market. He called on the government to remove barriers to developing Australia’s PBSA pipeline:

“Instead of imposing taxes on students who contribute significantly to our community, the government should work with industry to expand the supply of this housing category as a priority.”

“Planning approvals, removing taxes like foreign investor fees and planning systems that prioritise student accommodation close to places of study should all be a top priority for policymakers”.

“It’s important that we have a strong pipeline of new PBSA assets in Australia to ensure our vital international education sector can continue to grow, and our CBDs are given a leg-up in their recovery,” he said.

The Universities Accord panel is set to release its final report this month.