Borrow and Spend

October 13th, 2008 at 3:36 pm by David Farrar

’s books for the Government are forecast to have to borrow $20 billion over the next decade. A decade of deficits is going to push debt from under 20% of GDP to over 30%.

In that context, Labour’s pledge today to introduce universal student allowances within four years is reckless and unaffordable. Every cent of those allowances is going to be borrowed.

In 2005 I would have cheered for abolishing parental means testing. It would have been a far better policy than interest free student loans.

But to go ahead and announce this, after learning about the decade of deficits in reckless, and reinforces that this Government only knows how to spend money, and doesn’t know what to do when it runs out of money to spend – it just keeps spending.

This is not about some noble public policy goal – such as more operations, or not having eight year olds unable to read or write. It is purely an attempt to buy votes through a borrow and spend policy. Once fully implemented it will cost over $200 million a year – every cent of it borrowed.

It is becoming clear what Labour’s secret mini budget in December will be – massive tax increases. It is either that – or borrowing so much it will take a generation to repay.

There are many good things one can do when you have large surpluses. But when the economic is in recession, and you are spending more than you are receiving, you have to make choices. And those choices should be aimed at growing the economy, not just free cash for students.

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73 Responses to “Borrow and Spend”

  1. toms (301 comments) says:

    Pretty bitter diatribe there, Mr. Farrar. Wheels falling off the campaign?

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  2. Nefarious (533 comments) says:

    Hey toms,

    I’m a bit broke at the moment, my job security isn’t looking too flash and the house needs a fair bit of work.

    Do you reckon I should throw some cash the kids way and go out and HP a flash new car and get SkyHD installed?

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  3. NeillR (347 comments) says:

    Labour says this election is about trust. Therefore, if they are to be trusted they should release their “mini-budget” before the election so that voters know what they are going to do. Anything less smacks of a secret agenda – cancelled tax cuts and increased taxes and borrowing.

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  4. double d (225 comments) says:

    deja vu 2005
    shameless bribe to students
    financial crisis …. what crisis?

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  5. stephen (4,063 comments) says:

    What’s really quite strange about this policy is that the only people to benefit from it will be those who can’t even vote yet! Well, except for perhaps some far sighted 18 year olds who plan to do a PhD. So how is it buying votes?!

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  6. labrator (1,745 comments) says:

    So borrowing for National’s tax cuts is reckless but borrowing for student bribes is cool? If Labour get back in for a fourth term, the country will be bankrupted and be at the bottom of the OECD to boot.

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  7. Lee (627 comments) says:

    Tom’s,

    got an actual argument to make on the policy?

    got a brain to make an argument with?

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  8. What would Hayek say (51 comments) says:

    And from what friggin money tree will this come from!

    So me the money!!

    Where is it coming from.

    Journalists should fail uni if they aren’t asking this question of labour right now.

    Wheres the money coming from – what services will be reprioritised by labour to pay for this. How many bottles of herception would this buy? how much environmental clean up could be bought for this (reduce Kyoto liability) or innovation support could be provided.

    This way is the road to madness and serfdom

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  9. alex Masterley (1,490 comments) says:

    I saw the announcment and thought bribe. Why spend more when we are facing a potential international financial meltdown.
    Oh yes I remember now, say anything, do anything for power.

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  10. adamsmith1922 (888 comments) says:

    An appalling electoral bribe, yet more poor quality spending when the regime is claiming it is a sound economic manager and Cullen claims spending needs to be reined in.

    For anyone interested I have posted on the bribe at my blog

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  11. mike12 (183 comments) says:

    Bye bye tax cuts in December if these thieving bastards get back in…

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  12. stephen (4,063 comments) says:

    $210 million a year…would like to know how much the student allowance scheme is costing already – what it’ll mean is that it won’t be $210 million of extra spending, it’ll be 210 million minus the current figure, whatever that is. Yes, can’t see them cutting anything for this.

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  13. stephen (4,063 comments) says:

    How is it a bribe if 99.99% of current voters will never receive it – can’t imagine many voting for it.

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  14. Bevan (3,965 comments) says:

    In this financial climate? Are they barking fucking mad? Can someone please check labour’s manifesto and make sure there isnt the line: Send new Zealand stonking fucking broke.
    Please tell me the media is taking them to task on the mini budget post election nonsense too! If it was the nats, Mr garner would be salivating to high heaven!

    IMO, a damn good policy, BUT it should replace the Interest Free Student loans and not suplement it.

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  15. stephen (4,063 comments) says:

    It would be a damn good policy without the interest free loans – i’d rather have an easier life as a student than interest free loans, really.

    In this financial climate? Are they barking fucking mad? Can someone please check labour’s manifesto and make sure there isnt the line: Send new Zealand stonking fucking broke.

    To be fair/pedantic, it’s not in this financial climate, it’s in 2012′s financial climate.

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  16. Colonel Masters (420 comments) says:

    stephen,

    The students have parents (hence the means testing). In point of fact, it was the parents who were pleased with Labour’s last bribe in this policy area. They actually don’t like to see their kids indebted, you know.

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  17. Joely Doe (31 comments) says:

    F*ck. I’ve already bought and paid for my education – with interest, and without allowances, from day one.

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  18. What would Hayek say (51 comments) says:

    To be fair/pedantic – its is this friggin financial climate not 2012. What you promise in the future is actually a cost today (net present value being shifted in time).

    Otherwise why not just say in 2012 the world will be rosy, everyone will live in a gingerbread cottage, get to eat heaps of sweets, be healthy, sing and dance in the streets with roses tied up in there hair and we will all be happy, happy, happy

    So angry with this shite.

    We have a country that really needs financial management and not a lolly scramble that includes robbing penny to pay heather.

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  19. Grant Michael McKenna (1,156 comments) says:

    I was at the meeting- the policy was widely applauded, but the way it was presented left out all consideration of the fiscal implications.

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  20. presspassbob (14 comments) says:

    Labour are cleverer bastards that we give them credit for. Stephen, this is smart policy and will get undecided votes for several reasons:

    1. They can claim to be investing in the much vaunted (and yet to be delivered) knowledge economy.

    2. It appeals to a large group of probably swing voters, the intellegentsia and their offspring. Baby boomer parents who have kids approach tertiary age in the next few years will benefit. That’s a big group.

    3. They will crap on that the return for $200m will far out-weight the $1Bn cost of National scrapping tax credits on R&D (a major policy screw-up by National that they need to counter with a measure to encourage inward investment, otherwise they will lose the growth argument).

    The diehard trolls who were always going to vote Labour wont give a toss. The target market for this is very large. National need to counter by pointing out the obvious vote buying this really is. Idea’s on countering this?

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  21. democracymum (660 comments) says:

    Just updated from Salient – this is what some students are saying about Labour’s latest bribe

    …concerns have been raised by some students about the viability of this plan.

    An Auckland University student said: ” GODDAMN DON’T FUCK UP OUR COUNTRY YOU FUCKS. They’re not getting my vote anymore.

    “We can’t afford universal student allowances. People are just going to freeload like crazy. Our lectures will be filled with idiots.”

    Last month Victoria University’s Pat Walsh argued that the money from any possible universal student allowance could be better used to improve the universities themselves.

    This move to curry favour with students is a triennial favourite of Labour’s. Last election they announced the removal of interest off student loans for all people still living and working in NZ.

    Student protesters be worried. Soon there will be nothing left for you to protest about.

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  22. adamsmith1922 (888 comments) says:

    The money if it is there, which I doubt, should have gone to the universities not to the students.

    I cannot see how giving students an allowance improves the ‘knowledge of the country’ nor provides an assist to creating a knowledge led economy.

    This is all poor quality spend to get votes, does nothing for the economy, will waste tax dollars.

    After all this is the regime which blew hot air all over us with the Knowledge Wave, but did nothing.

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  23. presspassbob (14 comments) says:

    “I cannot see how giving students an allowance improves the ‘knowledge of the country’ nor provides an assist to creating a knowledge led economy.”

    It won’t. But don’t let the facts get in the way of a good line of spin! They will claim they are making 3rd level education more open to all, removing barriers, helping the poor down-trodden, blah blah…..

    Its actually a good thing to invest strategically in education, it was the cornerstone to Ireland’s economic success, though it took 20 years of investment in that country to reap the dividend.

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  24. somewhatthoughtful (451 comments) says:

    BUT remember guys, unis are going to start introducing more restrictions on entry, so that should improve the quality of education a bit and hopefully keep the cost under control. Hell i would still have to work even with this, only difference is my loan would be 22k lighter.

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  25. JC (906 comments) says:

    Last year a report came out that showed NZ has reduced it’s investment in universities by about $2000 per student. We were 19th out of 27 OECD countries for investment.
    The same report noted that student support was 50% higher than the OECD average and *four* times higher on student loans than the OECD average.

    So what we are doing is throwing more and more incentives to students to attend increasingly poorer universities.

    This is a classic example of the type of poor quality investment that Key was talking about. It’s also a classic of a govt still trucking along as if on magic mushrooms.

    JC

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  26. alex Masterley (1,490 comments) says:

    AdamS, I agree with your last.
    The institutions themselves need the funding not the students.
    I suspect however that many will see through this policy and call it the bribe that it is.

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  27. stephen (4,063 comments) says:

    A few perspectives that I hadn’t considered. However I think the INCREDIBLY dire news recently will temper the effect of this ‘smart’ policy a bit – hell, look at the quotes from democracymum. If Key doesn’t make hay with this for a while he’s thicker than thick!

    WWHS, yeah, it is guessing, and there WILL be deficits then too. I’d considered that, and yeah my comment was in hindsight pointless.

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  28. ISeeRed (244 comments) says:

    University funding has to be rebalanced in the country’s best interests. Fully subsidise medicine, dentistry, engineering etc. for those who show remarkable talent and potential, and make political studies, women studies and other rubbish 100% user-pays.

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  29. baxter (893 comments) says:

    NeilR has it right… A mini budget in December will be a program to either repeal tax cuts just implemented from the June Budget or to impose further taxes to pay for the Student allowances and other policies. A mini budget in December cannot be anything other than a secret agenda.

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  30. What would Hayek say (51 comments) says:

    Thanks Stephen,

    additional point – for anyone thining there is a saving in having students bowwor less, the answer is that zero interest loans take away any gains. Now you get an interest free loan and an allowance – Could be a good entry test for the economics and accounting departments. If i give you free money and then some more free money what will you do with it.

    Borrow lots, possibly pay some bills, invest the rest.

    Challenge the costs on this big time. This will cost a lot more than $210m. Shite I may even go back to uni again (whilst staying part time in work and possibly having an additional bite of the cherry).

    Remember if the government is going to hand money out you may as well take it, because otherwise someone else will and all you get is the bill and a nasty long term problem that isn’t fixed with the magic rash cream.

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  31. shady (251 comments) says:

    Will we see “Labour’s Bribe for Student Votes” on the front page of papers tomorrow? I think not – more than likely “National Slams Labour’s Universal Student Allowance”. Wonder what the spin will be?

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  32. Kimble (4,375 comments) says:

    “Its actually a good thing to invest strategically in education, it was the cornerstone to Ireland’s economic success, though it took 20 years of investment in that country to reap the dividend.”

    No, it wasnt. Joining the EU was.

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  33. first time caller (384 comments) says:

    You know, sometimes I wonder…is it Clark that’s smart, or is it msm that’s incredibly stupid?

    Where the hell’s the money for this???? Seems like a fairly simple question

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  34. Lindsay Addie (1,129 comments) says:

    How much more of the student vote can Labour pickup with this idiotic policy? Are they pissing in the wind on this one or have they picked up something in the focus groups that leads them to think they have a chance?

    It’s not a policy aimed at the hardcore beltway bloggers, it’s aimed at the person whose political knowledge starts and finishes with the 30 second sound bytes on the 6 o’clock news each night.

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  35. ianmac (26 comments) says:

    Mr Key and English keep talking about lifting Education but have not been specific about how. Apart from National Testing over the top of what every school does so already, I don’t know what else National is promising for Education. Anyone?

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  36. grumpyoldhori (2,410 comments) says:

    ISeeRed, you want some fields paid for by the NZ taxpayer so those graduates
    can then sod off overseas competing against graduates who had to pay the full cost of their education ?
    Why are so called white collar students owed taxpayer funds ?
    I take it you would be against ALL young people getting the same amount to do with what they want ?
    A couple of young relatives of mine have a good business going, but, no one handed them wads of cash to start it up.
    They borrowed the money at normal bank rates.
    Strange how so many of our young are bright enough for university, but, not bright enough to pay for it.

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  37. Kimble (4,375 comments) says:

    What better way to ride out a recession than slum it for a bit, go back to uni for a bit, suck on nanny-states teet for a bit?

    Once again we see Labour’s true colours.

    What to do when life in the real world starts getting a bit rough? Run away and hide in academia!

    How many teachers in cabinet again?

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  38. Kimble (4,375 comments) says:

    “I don’t know what else National is promising for Education. Anyone?”

    I still dont know what Labour is promising for education. I know what they are promising students, but that isnt the same thing.

    Throwing money at the problem has always been Labours answer to everything.

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  39. Strutta (67 comments) says:

    And how many of those fully funded additions to the “knowledge economy” are going to flee the country shortly after they graduate?

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  40. Blocker (12 comments) says:

    If joining the EU was good fopr Ireland they wouldnt be in trouble now would they?

    This is hardly a bribe, I’m a student and it isn’t going to get me to change my vote. I finish my teaching degree next year and will be left with a 40000 student loan debt. I paid taxes for 20 years but cannot get ANY type of allowance because my wife makes “too much money”. This policy changes nothing for me, BUT if it had been around two years ago I would definitely not have a debt as big as I have, and thats got to be a plus for our economy. The student loan scheme has crippled a generation with debt and the student allowance scheme has been broken since parental testing came in. I’d bet that a universal student allowance will go a long way towards reducing student debt in this country and allowing our best and brightest to save and buy property, rather than continue in a neverending spiral of debt, also it might be some incentive to stay in the country after studies, all of which can only be good for our economy and worth the money spent on it. Labour you dont have my vote but this is a step in the right direction for our country, lets help our students rather than penalising them.

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  41. Blocker (12 comments) says:

    Btw Kimble, $150 a week isnt slumming, its poverty

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  42. GPT1 (2,087 comments) says:

    Very good point about universal student allowances vs interest free loans. The former much better policy than the latter – although, of course, the bribe would not extend to ex students with loans then…

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  43. ISeeRed (244 comments) says:

    grumpyoldhori and Strutta, good points. Maybe graduates should be bonded in some way. Maybe those who agree to a 100% subsidy are not permitted passports. Maybe my initial idea is crap. Regardless, there is limited money for tertiary education, so NZ must focus on areas where we lack skills the most and will benefit the nation the most.

    Of course, as an ACT supporter, I also support policies I believe will make NZ a more attractive place to stay and work through higher take-home pay from tax cuts and a more buoyant economy that provides more opportunities and incentives. Just subsidising certain courses or bonding students in itself won’t address much. We can’t be afford more middle-class handouts and bribes like Labour is promising.

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  44. somewhatthoughtful (451 comments) says:

    also, what about the savings in bureaucracy made by not having employ as many people as studylink to perform all the background checks? has anyone run those numbers?

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  45. rolla_fxgt (311 comments) says:

    As a student myself I think the idea of a universal student allowance, or increasing the weekly borrowing limit, is a good idea. But for the foreseeable future, a universal student allowance is reckless.

    And why should we trust that Labour will in 4 years time, actually fulfil their promise? Most current students will in 4 years time be in the workforce, so this policy will be of little benefit for them. Do they realise that they’ll have to pay higher taxes to pay for this, say bye bye tax cuts, or maybe even hello IMF or other outside help if Cullen et al really snooker the economy.

    If the election is all about trust, then Labour can’t be trusted to keep this promise, and there other promises of tax cuts. Its that simple

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  46. NeillR (347 comments) says:

    So Labour’s plan is to make students of rich parents get a free education at the expense of lower income families? Hardly surprising when you consider the privileged background of Clark and Cullen. It’s all these bored rich kids who go on to become good little socialists – we can’t have them having to get real jobs, can we?

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  47. JC (906 comments) says:

    Look, at bottom this isn’t a big deal sum. More important, it’s a policy that should have been in place back in the early 90s and is at heart an unrepentent Tory policy whereby you don’t punish the kids for their parents earning the average wage.

    What we should be doing is accepting this as sensible and non discriminatory.. and immediately start charging students interest on their loans.. in line with the OECD average.

    JC

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  48. DamnedAngry (242 comments) says:

    I work at a Uni and week in, week out, all I see are scores of students getting pissed 3 nights a week, being nothing but disrespectful and total pigs when it comes to looking after their living quarters (I’d post photos of the trashed lounges but don’t wish to identify the Uni).

    If they banned alcohol from the campuses, we might start churning out some useful contributors into society, and with the savings the students would gain from not purchasing piss, there’d be less need for providing them with extra allowances. Also the cost to Uni’s for damage repairs would also drop dramatically.

    I do wonder how much of these student loans are actually applied to the real neccessities of student education, and how much is wasted on booze, luxuries, boy racer cars, holidays etc?

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  49. Rich Prick (1,538 comments) says:

    Well, I trust Labour to cancel this policy after they have the student vote. It not like Labour hasn’t cancelled something after winning an election before.

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  50. stephen (4,063 comments) says:

    somewhatthoughtful, the savings you refer to would be approximately bugger-all i’d say.

    DamnedAngry, the loan itself goes straight to the institution, it’s not up to the student what they spend it on. What you’re probably referring to is the ‘living costs’ segment of up to $150/week which goes on top of the loan. That’s where the ‘borrow to live’ slogan comes from.

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  51. DamnedAngry (242 comments) says:

    Whatever Stephen, I’m still DamnedAngry!

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  52. Jafa (37 comments) says:

    The trend here is ominous. Every election the same group of people i.e. students have to be bribed to vote Labour. What will they do in 2011? Maybe they will offer to buy all students a pet goat and a yard glass.
    Very rapidly this country will go down the gurgler if this is going to be the blueprint for allocation of scarce resources. The students biggest problem is that when they graduate, the salaries here are too low. In 9 years all Labour has done is raise the salaries of the public sector to unsustainable levels. We are kidding ourselves if we think we can borrow and spend our way out of this mess like Cullen and Clark want you to believe.

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  53. Kimble (4,375 comments) says:

    “If joining the EU was good fopr Ireland they wouldnt be in trouble now would they?”

    If spending a bucket load on education was good for Ireland they wouldnt be in trouble now would they?

    You are retarded, Blocker, and that single sentence proved it. But if there was any more doubt…

    “I’m a student and it isn’t going to get me to change my vote. I finish my teaching degree…”

    Enough said. You would think…

    “BUT if it had been around two years ago I would definitely not have a debt as big as I have…”

    Whooopeee! If money grew on trees I wouldnt have any debt either!

    “The student loan scheme has crippled a generation with debt…”

    No, a generation has crippled themselves with debt by borrowing without considering the consequences. They are only crippled by debt because they borrowed.

    “I’d bet that a universal student allowance will go a long way towards reducing student debt in this country…”

    Student debt has ballooned because the loans are interest free. Voluntary payments have crumbled away. We on this forum said at the time that that was exactly what would happen. And students like you came on here to argue against it. You may have even done it yourself, but even if you didnt you are in illustrious company.

    “… allowing our best and brightest to save and buy property…”

    BAHAHAHAHAHAHAHAHAHA!!! Poor poor students, not being able to speculate on property when everyone else was!

    “…rather than continue in a neverending spiral of debt…”

    You talk about a never ending spiral of debt (which a student loan isnt by the way) right after talking about poor students not being able to buy property! Do you want them to pay for it outright? Huh?! Because otherwise they will need a mortgage you moron!

    “Labour you dont have my vote but this is a step in the right direction for our country, lets help our students rather than penalising them.”

    Yeah, lets not penalise students by making them work to pay off their debt. Lets just make everything easy for the poor little dears. Protect them from the realities of life! They are too fragile to withstand having to pay back money they borrowed.

    Why is it that every time a teacher contributes, they end up sounding like a complete fucktard?

    “Btw Kimble, $150 a week isnt slumming, its poverty.”

    Boo great big fucking hoo. Then get a fucking job you lazy fucks! Thousands do it. Hundreds of thousands have done it. I am one of them. I WORKED my way through University. Why the fuck cant you?

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  54. OECD rank 22 kiwi (2,811 comments) says:

    Hels and Labour’s legacy when they are booted out of office on 8 November is that of a failed economy that will take years to correct. People are better off migrating to Australia or other superior first world countries.

    Let Labour voters starve.

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  55. the deity formerly known as nigel6888 (856 comments) says:

    so blocker, another teacher huh?

    your wife works, so the family had an income. You deliberately chose a qualification with poor earnings potential, and still you managed to borrow $40,000.

    very clever! well done! gold star that person! What a shame you will be able to influence the development of children.

    And if you are doing this because its your “vocation” stop whining and expecting me to subsidise your choices.

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  56. stephen (4,063 comments) says:

    How the hell does this work then:

    Recent advice issued by the Ministry of Education to Tertiary Education Minister Pete Hodgson has reported that the time taken for student loans to be repaid has been halved from eight to four years.

    According to the Ministry, the median repayment time for those who finished study in 2005 and had remained in New Zealand was four years, compared with eight years for those who had graduated in 1999.

    Hodgson said that this decrease was a vindication of the government’s decision to proceed with the interest-free student loan policy for students who chose to stay in New Zealand following graduation.

    I know what a median is, but is choosing the median rather than an average just a statistical trick or what?

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  57. Chthoniid (2,027 comments) says:

    Median might be more appropriate if there was a long tail at one end of the distribution. Ideally both should be reported to impart all the information about the distribution. Other relevant information would be whether there was a difference in the percentage of people staying in 1999 vs 2005.

    As an aside, what html code does Kiwiblog use to create indented quotes?

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  58. stephen (4,063 comments) says:

    er you put ‘blockquote’ in between the pointy things in between the ‘m’ and ‘?’ key on your keyboard.

    then ‘/blockquote’ in between them again at the end. Hopefully that’s a clue as to what the code is.

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  59. Chthoniid (2,027 comments) says:

    got it, thanks.

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  60. Kimble (4,375 comments) says:

    “I know what a median is, but is choosing the median rather than an average just a statistical trick or what?”

    It is a BS stat. First of all the explosion of worthless “courses” under Labour meant that there were many more people with small student loans. Easier to pay back and obviously paid back quicker. The quality of their education is not the same as the average student with a loan back in 1999.

    We will probably see the median drop even further. The number of people taking advantage of zero interest while studying and getting a student loan has increased by a tremendous amount.

    This is exactly what you would expect if students took out loans to pay for university, invested the money they would have spent on fees and books etc, then paid the loan back immediately after graduating to avoid paying interest if they head overseas. The more people doing this, the lower the average and median are both going to be.

    The student gets the interest. The taxpayer loses out on the interest.

    The final effect is a transfer of wealth from the taxpayer to the student.

    The way this policy should have been represented all along is that the loans arent interest free, the interest is just paid for by the public. Of course the amount of time it takes to pay off a student loan would fall if the rest of society is chipping in to pay the interest for you!

    Pete Hodgson should not be able to get away with spouting crap like this. Any intelligent journalist should be able to rip his argument apart. But there just arent that many, are there?

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  61. stephen (4,063 comments) says:

    Thanks Kimble,

    So it’s not so much the use of the median as the story of the past 9 years then?

    I think ‘bums on seats’ was initially a National initiative, but Labour took their sweet time fixing it.

    We will probably see the median drop even further. The number of people taking advantage of zero interest while studying and getting a student loan has increased by a tremendous amount.

    This is exactly what you would expect if students took out loans to pay for university, invested the money they would have spent on fees and books etc, then paid the loan back immediately after graduating to avoid paying interest if they head overseas. The more people doing this, the lower the average and median are both going to be.

    You can’t invest money for fees, unless you have the money already, and the vast majority of students certainly do not. The $150 a week in living costs on the other hand maybe. Then again most students would rather use that to live, or supplement what they get from working – investing is a benefit you get further down the road, at the cost of a relatively crummy lifestyle.

    I take issue with the above point, but I agree on everything else.

    Guyon Espiner said to Winston Peters, “If you want to ask questions and be a journalist you can go to polytech, learn short-hand and knock a zero off the end of your salary.” Why be a journo? I heard someone ask Robert Fisk about life as a journo and basically the answer was ‘it’s shit’.

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  62. Kimble (4,375 comments) says:

    “You can’t invest money for fees, unless you have the money already, and the vast majority of students certainly do not.”

    But those that do, should. And dont forget that parents used to help pay for many students fees etc, but now they have less reason to. In fact, interest free student loans makes it downright stupid to pay cash up front for tertiary education.

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  63. stephen (4,063 comments) says:

    “But those that do, should. ”

    Yup. Not so many that it’s a problem i’d venture.

    “[parents] now they have less reason to”

    I think parents give all the help they can to relieve the burden – they now don’t need to give as much, but still plenty of incentive to give as much as they consider possible.

    “In fact, interest free student loans makes it downright stupid to pay cash up front for tertiary education.”

    It does, but I don’t think many would – if you don’t have a degree you’re probably in a job that doesn’t need a degree i.e. a poorly paying one. Would take years to save $14,000 for a BA, so most would probably just hop in, get the degree and start earning even *with* interest. Making it compulsory to pay up front (regardless of degree) is of course off the table, so not sure it would ever be rational to pay up front in *any* situation..?

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  64. baxter (893 comments) says:

    Ianmac “Mr Key and English keep talking about lifting Education but have not been specific about how. Apart from National Testing over the top of what every school does so already, I don’t know what else National is promising for Education. Anyone?”

    Yep they have promised to ensure that all the litlies are taught to read and write and do the sums……That should help them whether they subsequently go on Varsity welfare or earn a living in the real world.

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  65. RRM (9,434 comments) says:

    Allowances for a few thousand students who could really use them = a reckless election bribe.

    Modest personal tax cuts for all = vital to the future success of the country. Not a bribe. Really, really not. And not reckless.

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  66. stephen (4,063 comments) says:

    “Not a bribe.”

    Their money in the first place.

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  67. Kimble (4,375 comments) says:

    Thanks for the billboard idea RRM,

    Promising modest personal tax cuts for ALL New Zealanders = morally right

    Promising hand outs to a FEW thousand students = morally left

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  68. wreck1080 (3,726 comments) says:

    It’s a good policy if it were included as part of a larger structural change.

    This is what I believe for what it’s worth.

    - Crap courses will be abolished. This includes fluffy courses such as media studies. And, it is quite obvious the difference between crap courses and good ones. Just ask me.
    - Enrolment incentives will be abolished, such as free laptops.
    - To gain entrance to university, you are required to pass some kind of University entrance test. This filters out the thickees.
    - University fees abolished and full allowances provided for those passing the entrance exams.
    - The reason for existence for universities will be academic excellence , not bums on seats as it is today. I imagine the financing criteria would need updating.
    - Students failing to achieve will lose allowances and pay course fees. Even better, each years allowance could be like a scholarship based on previous years academic performance. Nice.
    - Those who fail the Universtity entrance exams, can opt to pay full course fees (and receive no allowances) if they really wish to attend (gotta give ‘em credit if they’re willing to throw good money after their sorry asses).

    A few details need thrashing out, maybe one or two of the above is unrealistic but I like it.

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  69. stephen (4,063 comments) says:

    “- To gain entrance to university, you are required to pass some kind of University entrance test. This filters out the thickees.”

    Had one for ages. Yeah, it used to be called bursary/University Entrance. Now it’s NCEA level 3, I think. There are higher standards for courses like Medicine, and low achievers are often culled from subjects like Law each year.

    “- The reason for existence for universities will be academic excellence , not bums on seats as it is today. I imagine the financing criteria would need updating.”

    Labour did away with that this year or last (National started it, but yes Labour took their sweet time). They replaced it with funding based on the quality of research (determined by journal citings I think) by staff and possibly post-grad students. Is better than student results, as they don’t actually contribute anything (esp at undergrad level) to the world, as opposed to post grads and staff.

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  70. wreck1080 (3,726 comments) says:

    I’m not sure, how does NCEA level 3 compare to bursary? I get the impression that it is easy to get into university these days.

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  71. stephen (4,063 comments) says:

    The minimum standard for Bursary was three Cs (if you got a B average bursary, the government gave you $100, if an A, they gave you $200 :-D ) I didn’t do NCEA, but level 3 sounds comparable from what i’ve heard.

    “get the impression that it is easy to get into university these days.”

    Like I said, it depends what you want to do – its NEVER been easy to get into the ‘limited entry’ courses, and Auckland university announced this year that they would be increasing the number of courses that are ‘limited entry’ and increasing the number of post grad students – possibly (i could be wrong) in response to the government doing away with ‘bums on seats’ funding…

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  72. OECD rank 22 kiwi (2,811 comments) says:

    toms says on October 13th, 2008 at 3:41 pm:

    Pretty bitter diatribe there, Mr. Farrar. Wheels falling off the campaign?

    I think that should be “Pretty bitter diatribe there, Ms. Clark. Wheels falling off the campaign?” judging by Hels sour grapes comments regarding losing the TVNZ debate.

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  73. stephen (4,063 comments) says:

    So you came all the way back to the ‘borrow and spend’ thread to get that in?

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