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Fee maxima system the real threat to medical ed.

14 April 2004

Fee maxima system the real threat to medical education

The government's tuition fee maxima policy, not government under-funding, is the real threat to medical education in New Zealand, according to Education Forum policy advisor Norman LaRocque.

Mr LaRocque was commenting on the call for increased government funding for medical schools that has followed the announcement of a projected $5 million deficit for Otago University's Christchurch School of Medicine.

The fee maxima system, introduced this year by the government, limits the amount that all tertiary institutions, including medical schools, can charge students in tuition fees. In the case of medical schools, the limit in 2004 is $10,000.

"Before the fee maxima system was imposed, the Education Forum pointed out that it would adversely affect the ability of tertiary education institutions to attract and retain high-performing teaching staff. It is simple common sense - you cannot fix prices and then expect institutions to compete for staff whose salaries are being driven by wider economic factors, including domestic and international competition for medical professionals," said Mr LaRocque.

"These adverse effects are now being realised - and less than a year after the system was put in place."

The solution to the current problems at the Otago University's Christchurch School of Medicine is not to increase taxpayer funding for medical schools, as some have suggested.

Instead, the government should scrap the system of fee maxima entirely or allow medical schools to charge tuition fees above the maximum. This would recognise the folly of the existing system, which amounts to a ban on individuals investing further in their own human capital.

"Taxpayers are already providing a subsidy of more than $20,000 per equivalent full-time student in medical schools. They should not be asked for more, especially given the private benefits that accrue to students with medical training in the form of higher salaries," Mr LaRocque said.


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