1% levy on corporate profits to bridge 3rd-level fund gap

A 1% levy on corporate profits could secure most of the €600m needed to bridge third-level funding gaps, a teachers’ union claims.

The idea has been proposed by the Teachers’ Union of Ireland (TUI) which represents 4,000 institute of technology lecturers, as a solution to the higher education funding crisis and to ease staffing shortages in many sectors.

The union suggests it would raise nearly three times the €200m which the Department of Education suggests could be raised from 2020 by its proposal to increase a levy on employers to help meet funding shortfalls at third level.

The deadline passed yesterday on Education Minister Richard Bruton’s consultation process around the proposed hike in the National Training Fund levy from 0.7% to 1% of employees’ earnings on a gradual basis over the next three years.

The TUI said its own levy proposal could bring in €549m a year and is broadly consistent with the recommendation of last year’s Cassells report on future higher education funding that a structured contribution from employers should be a core element of bridging the gap in finances.

However, the Government appears to be veering towards securing the €600m said to be needed by the sector by 2021 through a more equal balance of increased investment by the taxpayer, employers and students.

A political decision will be required first, however, on whether students would be charged higher fees and whether a system of loans to cover those fees is to be introduced.

State funding for institutes of technology dropped by €190m, over a third, between 2008 and 2015 but student numbers rose and lecturer numbers fell in the same period.

TUI general secretary John MacGabhann said the cuts have had a corrosive effect, leading to unacceptably large class sizes and less access to equipment, materials, libraries and labs.

“Ultimately, students and their families would benefit from [our proposal], which would largely remove the need for a system of income-contingent loans,” he said.

Hundreds of TUI members will attend its annual congress in Cork next week.

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