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Cutting Allowances Short-sighted and Negative for NZ
Cutting Allowances Short-sighted and Negative for New Zealand
Cuts to allowances are short-sighted and is likely to have long-term negative implications for New Zealand’s society and economy, according to the New Zealand Union of Students’ Associations.
Tertiary Education Minister Steven Joyce announced today that student allowance eligibility will be cut back in the Budget, but without providing details.
NZUSA President Pete Hodkinson said that any cuts to allowances would reduce access, denying New Zealanders an opportunity to improve their lives and to contribute through their higher productivity to a more prosperous New Zealand, and would lead to greater debt.
“Students weigh up the cost of education, which is already extensive, when they decide to undertake study. That cost isn’t just fees and books, but is also the alternative uses for the time. These include having a low paid job, being a beneficiary. If potential students decide not to improve their potential through study because they don’t want to have to borrow to live then that’s a cost for all New Zealanders,” said Pete Hodkinson.
“At a time when we know that a significant number of students suffer severe financial strain already, and many are concerned about job prospects and whether or not they’ll be able to pay back their student loan debts, this will turn people off study. Since New Zealand already suffers from low productivity, this is short-sighted and likely to have long term negative consequences.”
This morning Mr Joyce claimed he was concerned about a “blow out” in the costs of student allowances, the cost of which had increased from $385 million in 2007/08 to $620 million in 2010/11. He said that was largely because of changes to the parental income threshold adjustments introduced under the Labour government.
NZUSA rejects the Minister’s claims. “A ‘blow out’ is when it’s not expected. The Labour-led government deliberately increased access to allowances because doing so enables people to get an education without having to borrow to live. This government needs to finance that entitlement too,” said Hodkinson.
“The costs have also increased because in a period of high unemployment and low wage growth more people are going to be eligible for means-tested allowances. So there’s no blow-out, it’s natural and predictable. Those weak economic conditions shouldn’t be used as an excuse to drive students into poverty or to deny people the opportunity of education. In fact, it’s the ideal
time to expand access and availability of tertiary education so that young people are getting skills and improving their potential productivity for when there are jobs for them.”
NZUSA is particularly worried that less access to allowances will simply mean more debt. “If a student doesn’t have access to allowances, and their parents can’t support them, then they’ll have to borrow. That costs too. We can’t reduce debt and force students to borrow to live at the same time. It’s completely illogical.”
“The National Government has got themselves into this situation because they gave tax-cuts to the richest New Zealanders. That is what has blown-out the budget. The implications of a generation of former students carrying debt because those who came before them, and had free education, want lower taxes is not fair. It is not sustainable, and will lead to intergenerational frustration and anger.”
NZUSA is the national representative body for tertiary students and has been advocating on student issues since 1929.
ENDS
NZUSA - New Zealand Union of Students' Associations
We stand for opportunity, for all.
NZUSA is the New Zealand Union of Students' Associations, the national body that represents New Zealand's students' associations and the interests of New Zealand's 400,000 students at universities, polytechnics and in trades training.
We conduct original research, advocate to Government and through the media, and support New Zealand's students' associations to be more effective on behalf of their members. We advocate alongside Te Mana Akonga – The National Māori Students' Association, and Tertiary Women New Zealand – The NZUSA Women's Caucus.
Since 1929, we've believed in a society rich in opportunity, where anyone from anywhere can become any thing. We support accessible, affordable quality public tertiary education.
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