Just over a week on my thoughts constantly turn to the people of Christchurch. I am thinking particularly of those who have lost loved ones. For many this is a time of unbearable heartache as they wait for news, any news, of their nearest and dearest, knowing all the while their likely fate. I have been close to two of these situations in the last week and it is truly testing the friends and families to endure the hurt, frustration and uncertainty. I also think of those who are homeless, or in wrecked homes or in streets, especially those in the eastern suburbs still without power, water and sewerage.
The people of Christchurch and their well-being is the chief concern of all in politics right now, whatever party we are from. In this past week we have all tried to pull together, as communities all around New Zealand have, to do our best for them. Government Ministers are working incredibly hard, as are local MPs of all parties and I want to acknowledge them all for that.
Part of the passing days is that discussion inevitably turn to matters that are more political. We had our first taste of that with the story about Bill English refusing to rule out cuts to Working for Families and changes to the interest free student loan scheme. John Key followed up today saying there was an ‘opportunity’ to look again at these policies. Phil Goff has responded saying that cutting incomes for families and increasing costs for students and graduates like this is not the correct response, and that there are other choices the government can make.
The mere fact of this debate has caused anguish for some. I accept that this is a sensitive area. As I said there are many people still waiting to learn the fate of their family members, and thousands of people doing it really tough every day. But the discussion about the future of Christchurch and what will be done is now in the public arena as likely costs are released by the government, and questions asked by the media and others. It does not, and should not stop the focus on rescue, recovery and ensuring the immediate health and safety of residents.
In fact it is important for our democracy that the debate is held. These are important decisions about the future of our whole country, especially Christchurch, but for all of us in the end. The choices that are made, and the priorities accorded to future spending need to be the subject of debate. There is need to hold the government to account, and to oppose and propose where necessary. This is not disrespectful to the people of Christchurch, it is in fact to support them and take further steps to recovery.
We must strive to work together for the people of Christchurch. We must be sensitive to an emotionally charged situation. But there will be debate and disagreement. That is a healthy part of our democracy. That is part of politics. And politics need not be a dirty word. It should be the mechanism by which we go about about finding the best outcome for the people and the future of Christchurch and the rest of our great country.
The Annual Report of the Student Loan Scheme is out, and it gives some pause for thought. Almost $14 billion has been borrowed since the scheme began in 1992, with about $6.4 billion being paid back.
I was one of those original borrowers. There were some quirks to the scheme back then that have been ironed out. You could borrow the money for your fees and choose if it went to your bank account or directly to your institution. I had two friends who developed a rapid interest and then equally rapid loss of interest in dentistry one year. That is now not possible. You were paid in large installments (quarterly?), but could call a phone number and get money earlier if you needed it. I recall a shouted conversation into the pay phone in the bottle store of the Captain Cook one night. Now the living costs are paid in fortnighly installments.
I strongly opposed the scheme on its introduction. It was symptomatic of a government pulling money out of the tertiary sector and make education less accessible. Fees were going up, allowances were disappearing. The interest, both while studying and afterwards was a horrific barrier to repayment and indeed for some to borrowing in the first place. Labour in office got rid of the interest, capped fees and widened eligibility for allowances, and the scheme became more acceptable. Yet still it shackles young graduates with a large debt as they start their working life. I can say from my electorate work, it is still having an impact on some people borrowing for first homes.
But what can we replace it with that does not create further inequities and is affordable alongside the rest of the government’s priorities? The longer the scheme goes on, the more difficult it is get rid off. Labour went into the 2008 election with a policy that would have given all students an allowance, phased in over a four year period. This would significantly reduce the debt burden on students, but it is expensive (the annual cost then was estimated at around $210 million annually) especially in tighter financial times.
Other options that are live internationally include graduate taxes that eliminates the upfront cost barriers and have a time limit on them. There are also systems with more scholarships, bonding and employer contributions. Of course the ultimate answer its to invest more into tertiary education to help create the skilled workforce and inclusive society we want and need. But it has to be balanced against, health, housing, super and all the other things governments must do.
We are working on our tertiary policy now. Labour’s policy remains to make tertiary education progressively more affordable and accessible. We also want a quality system, which means resourcing tertiary institutions well, and understanding the changing way that people are accessing education. In the fifth Labour government we put a lot of attention on student support, in the future we also need to ensure that overall quality is enhanced, and not just universities either, but vocational and industry training too.
Whatever, we do need to see tertiary education as an investment in our collective future well being, and an integral part of developing a productive economy.
The government has decided that for students to retain eligibility for student loans, they need to pass more than half their course over a two year period. Fair enough some might say (though I have some concerns re Maori and Pacific students particularly.)
But that’s not what this post is about. This post is about whether it is fair that 2009 grades will be forming part of whether students will be eligible for loans in 2011. Remember the government only announced this policy in the 2010 Budget. So students in 2009 had no idea that there would be this requirement, they can’t go back and work any harder, and yet those grades will determine their eligibility for loans next year. To me this is demonstrably unfair and raises issues of natural justice.
As David Do from NZUSA said on TV this morning it is like lowering the speed limit in an area from 100km/h to 80km/h and then giving everyone who drove on the road the previous year at 85km/h a traffic ticket.
One Polytechnic has estimated that 20% of its students may be at risk of losing their entitlement for next year. Many of those students have come from elsewhere having failed last year, and despite doing well this year if they drop one paper they will lose their entitlement.
I asked Steven Joyce in the House today as to why he made the requirement retrospective. He did not properly answer. He has explained the overall policy, but not why he is applying on the basis of performance in the year before the policy was announced. Students deserve an answer.
As an aside Steven Joyce misled Parliament about whether he personally had ever mentioned the retrospective element of this policy before today. He claimed his media statement and Q and A on Budget Day did this. I can find no evidence of Mr Joyce releasing a Q and A on Budget Day, and his media release definitely does not metion it. I am waiting for him to make his personal statement.
I hope Steven Joyce reads the feature story in the Dom Post this morning (not on-line so far as I can see). It is a story about the emerging importance of the Pasifika population in New Zealand to our future society and economy. Its an interesting read, but I was particularly taken by the story of Tristram Lupo-Samoa, a 23 year old of Niuean descent who is studying electronic engineering and computer systems at Victoria University.
He failed many of his core subjects in the first two years of a science degree. He’s now three years into a four year degree but it will take five years to complete as he had to repeat a first year paper.
This is the reality for many people, especially those from a background where there is no family history of tertiary education. Steven Joyce’s proposal to cut access to student loans (which Tristram relies on along with part-time work) if you fail more than half your course for two years is just too blunt an instrument. I am all for a merit based system, but not everyone starts from the same place. As Tristram says
Its pretty tough to be honest. I try to get help from everyone that I can. It was an unknown subject for my family, learning a whole lot of new things. It takes a lot of my time because it takes me a lot of time to understand concepts. Its hard for me but I am willing. I would rather have it hard than easy because I know it will pay off in the end.
Tristram sounds like a really sensible young man, but he says he sometimes asks himself why he is doing his study.
Because I want to achieve something, something great in my life. Something my parents and family can be proud of.
As a country we need to support and invest in Tristram, and not try to apply a one size fits policy that will deprive him and us of a great future.
For those who have not been following the saga. John Key appoints Steven Joyce as Tertiary Minister because there are ‘economic’ issues to deal with in the portfolio including on student loans. Key denies they are making any major changes, but then uses the PMs statement to Parliament to say that they are looking at tightening eligibility to student support, seemingly with time limits and linking to passing courses.
Steven Joyce repeats this in the Press this morning, and makes it clear that National has no real commitment to the interest free student loans policy, saying it was a “political call” to keep it.
But what really gets me about Joyce’s comments is his perpetuating of the myth that interest free student loans mean there is no incentive to pay back the loan.
“The simple point is, if you don’t pay interest on any loan – forget student loans for a second – then there is less incentive to pay it back than if you do pay interest.”
This totally ignores the point that the student loan, unlike any normal loan, is automatically paid back at 10c in the dollar once you earn more than the annually adjusted threshold, currently $19,084. Its not a question of an incentive to pay the loans back as that the law mandates that you do that, essentially as soon as you start working. If we are going to have a loan scheme, that seems to me to be a fair way of paying it back. I suspect Joyce is in fact concerned about the cost to the Crown of the scheme. If so, let’s talk about that, rather than perpetuating myths about how the scheme operates.
I have to say that when I saw that Steven Joyce had been appointed Tertiary Education Minister I thought it was probably not just about Anne Tolley struggling to handle her responsibilities. There were any number of other Ministers who could have taken the Tertiary portfolio, but it was handed to the Nats number one strategist and the PMs close confidant. This means that National want to “do” something in the tertiary portfolio.
Good. Tertiary Education is a vital area for our future, and it needs to develop and change in order to provide the graduates and the research that is so vital to our economy and society. But what is it exactly that National wants to do?
Well, a clue this morning from John Key on Sunrise. He says there are ‘economic’ issues in the portfolio including
whether the student loan policy works and whether there can be improvements made.
Now Steven Joyce is a clever political operator, and he knows how popular the interest free student loan policy is, but it is true that the Nats are worried about the liabilities that the scheme gives them. Also remember that National has never liked interest free student loans. John Key said they were “irresponsible” and he would oppose the policy “with every bone in his body”.
We can’t ask written parliamentary questions for another week. So some journalist out there might like to ask Mr Key or Mr Joyce just what changes are in store for student loans?
Last week I missed this little announcement from Peter Dunne that the threshold at which student loan borrowers have to start paying back their loan would not be increased. To my knowledge this has never happened before, the threshold is usually adjusted each year so that it stays the same in real terms. National promised at the last election to keep the student loan scheme as it is (keep interest free etc). This amounts to a broken promise, even if it is a very small one.
The amounts we are talking about are not huge, it will probably cost every student loan borrower about $20-$40 a year. But it does set a worrying precedent. Given National’s promise not to touch the loan scheme a statement from Dunne that talks about the “very significant cost of this $9.6 billion asset to the Crown” and noting this change is intended to “lower the overall costs of the scheme to the Crown” is particularly worrying.
