Real Issues No. 344 - Referendum, Education, KiwiSaver

Maxim Institute - Real Issues - No. 344 25 June 2009 www.maxim.org.nz

Referendum angst KiwiSaver not creating saving Kiwis Giving Maori students a fair chance

IN THE NEWS Latin still a worthwhile investment Do private commitments impact public life?

REFERENDUM ANGST

The continuing debate over the referendum on child discipline took a turn for the surreal this week, with politicians from across the spectrum lining up to attack the referendum question as nonsensical, saying things like 'the law is working' and 'the question is weird.' The question we are supposed to answer does not seem hard. 'Should a smack as part of good parental correction be a criminal offence in New Zealand?' Committed to his brokered 'compromise' John Key can't afford to admit the law is not working. Phil Goff can't afford to offend elements in his own party, ideologically committed to the ban on physical discipline. And neither of them want to ignore the large majority of Kiwis who keep telling pollsters they support a good parent's right to make disciplinary decisions. So, they pretend contempt for the question, and count on a low turnout. This in itself is a damning indictment. The growing popularity of referenda and public distrust in politicians, are the products of people feeling that the government is distant, that they don't care what we think. Regardless of the merits of the question (whose limitations are unavoidable given that it must be a yes/no question) the gist of the referendum is clear to both the Yes and No campaigns, and the public should have their say on it. Contempt for the democratic process is far too general across the spectrum--from Parliament, when it abuses urgency, to leaders when they disregard the feedback they are receiving from constituents. Luckily for the country, our democracy does not belong to them alone--it is a precious right belonging to all of us. From the end of July, we should all do our duty and value the imperfect but vital process of democracy--especially when others are not.

Enrol to vote www.elections.org.nz

KIWISAVER NOT CREATING SAVING KIWIS The Retirement Commission's survey on financial literacy suggests that regular saving by adults has decreased in the last four years, despite the establishment of KiwiSaver. With many low income earners still lacking financial knowledge and not saving, it is time for the Government to look at how much money it is ploughing into a scheme which may not be achieving the goals it set out to reach. KiwiSaver is a government subsidised retirement savings scheme, set up in 2005 to 'encourage a national long-term savings habit and asset accumulation by individuals who are not currently saving enough...' The scheme incentivises people to save for their retirement while they are working, by matching the individual's contribution with an equivalent government contribution up to a certain limit, and by providing a $1000 kick-start contribution to every KiwiSaver member. Worryingly, the Commission's survey found that the number of New Zealanders with 'low financial knowledge' had not changed since the 2005 survey, and low income earners and women still make up the majority of that group. Other evidence produced by Dr John Gibson of Waikato University indicated that many of those using KiwiSaver already had 'advanced financial literacy' and were involved in saving, investing and planning for retirement. They recognised the succulent benefits of government contributions and shifted their savings onto the gravy train. Meanwhile only 19 percent of the 'low financially literate' group had enrolled in KiwiSaver. These are the kind of people who should be encouraged to save, so it is troubling that KiwiSaver doesn't appear to have had a huge effect on them. While the survey is not comprehensive enough to conclusively determine that KiwiSaver is ineffective, its findings do raise concerns. With $1 billion allocated to spending on KiwiSaver, we have to ask if it is a good use of taxpayers' money to subsidise those who can already afford to save for retirement as they build an even larger nest egg. It would be far better to cut government contributions to KiwiSaver--leaving it as a helpful state-run scheme to give people who would not ordinarily save for their retirement an option for starting. The money we would then save from KiwiSaver could be put toward cutting taxes in the future, providing everyone with more choice about how they spend and save. Clearly more work has to be done in educating those with low financial knowledge about saving for their retirement. But the government cash incentives for those who stay in the sponsored savings scheme have cost the taxpayer a lot, and have seemingly not reaped the benefits they were touted to provide.

Read '2009 Financial Knowledge Survey' http://www.financialliteracy.org.nz/sites/default/files/webfm/Research/FINAL%20REPORT.pdf

GIVING MAORI STUDENTS A FAIR CHANCE A recent Issues Paper from the Centre of Independent Studies in Australia suggests that the best way to increase Indigenous Australians' participation in tertiary education is through improving the quality of early education they receive. This coincides with discussions throughout New Zealand in the past week about how to encourage Maori participation at university. While arguments fly about the need to drop 'barriers' for entry, lowering the standard for people to get into courses simply does not work. A more committed, long-term approach is needed, beginning with early education. Over the last decade, mainstream Australia has seen 60 percent of Indigenous people enrol in tertiary education. However, this success is not mirrored by those in welfare-dependent and remote areas. According to researcher Joe Lane, the education system is partly to blame for the disparity as it has double-standards. More than 60 percent of Indigenous children who attend mainstream schools 'achieve similar results to non-Indigenous children in similar socio-economic circumstances.' However, many children from remote communities are deprived of quality education and only those 'who are the fortunate recipients of scholarships to mainstream boarding schools may expect to go on to university.' Lane makes the point that early and targeted initiatives, especially in the basic areas of numeracy and literacy are needed to give Indigenous children a fair chance in life. The Issues Paper is interesting as it coincides with a comment made last week by Pita Sharples that 'universities should provide open-entry to Maori' regardless of whether they have passed NCEA. Sharples has since clarified his statement and accepted the need for students to have achieved a certain standard, but his statements have sparked discussion about what is really needed to raise achievement among Maori. His concerns are not new. Maori participation in university education is low, and many Maori are not gaining enough credits to pass NCEA. However, these issues must be viewed as the corollary of a backlog of underachievement that begins well before students reach tertiary or secondary levels. Commitment to raising achievement among Maori needs to start early and continue rigorously throughout every level of education. Educational institutions cannot afford to pass the buck to one another. It is counter-productive for any school to insufficiently teach the basics such as literacy and numeracy, only to expect universities to later pick up the slack. When children are provided with quality education early on, they inevitably have more choices later in life. If we want to see Maori participation in universities improve, it seems that we need to have a long-term vision that begins with quality education from the time a child's schooling starts.

Read 'Indigenous Participation in University Education' http://www.cis.org.au/issue_analysis/IA110/IA110.pdf

IN THE NEWS LATIN STILL A WORTHWHILE INVESTMENT

There has been some discussion recently over whether Latin has out-lived its time in our school system. Latin has become the 'least popular subject' over the past few years, with student attendance declining rapidly. The NZQA has appropriately said that it was not considering removing it from the curriculum saying, 'there was no plan to ditch the unpopular subjects from NCEA based on low attendance alone.' It is crucial that our education system continues to uphold and respect the history of our English language, founded on Latin. Latin may not be fashionable but it is the foundation for scholarship in history, culture and language--to take this away would be taking invaluable depth out of our education system.

DO PRIVATE COMMITMENTS IMPACT PUBLIC LIFE?

Justice Colleridge of the UK hit the news recently after declaring that the break-down of family, and particularly marriage, has enormous social consequences. He suggested that the vast majority of 'social ills' stem from the collapse of families, and has called for the British Government to shape policies that will support rather than weaken family life.

Listen to Greg Fleming respond to this subject on Radio New Zealand http://www.maxim.org.nz/index.cfm/Media/article?id=1886

TALKING POINT

'The most common way people give up their power is by thinking they don't have any.' Alice Walker

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