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Treasury sends contradictory messages on tertiary education
Media release: 12 July 2013
Treasury sends contradictory
messages on tertiary education
Treasury’s latest four-yearly outlook on ways to constrain government spending without compromising prospects for better living standards in New Zealand over the next four decades – released this week – has left room to explore more positive scenarios for tertiary education, says the NZ Union of Students’ Associations (NZUSA).
“It is disappointing that the only future scenario put forward by Treasury for tertiary education is to increase tuition fees and student borrowing by a factor of 25% - on top of an obsession with raising the spectre of a return to interest payments within the student support scheme, despite the consensus position of political parties in opposition to that,” said Pete Hodkinson, NZUSA President.
“These aspects of Treasury’s thinking ignore the fact that vast numbers of current and former tertiary students are already over-laden with debt, itself a form of fiscal drag, and also serves to obscure the sinking lid already applied to access to student support in recent Budgets through decisions such as cutting postgraduate access to allowances.
“Interest demonstrably increases repayment times making it more difficult for the generations of students with loans to cope with the twin requirements of repaying and saving. This is compounded since, as Treasury notes itself, private returns to tertiary education have been shown to be small in New Zealand compared to many other OECD countries”.
“It’s important to return to the two reasons that Treasury cites for government investment in tertiary education: first, the imperative to increase equitable access for students who can’t individually afford to go to a university or polytechnic, and second, the wide ranging public benefits from higher aggregate levels of qualification and skills,” said Hodkinson.
“Spending on education is growth-supporting. If we fail to match the investment of other countries we can expect many skilled people to leave for higher-paying jobs overseas, and we will not have the level of resources that other countries have to address social needs”.
“Affording our future requires a growing economy – impossible without increased productivity, itself a product of increasing skills”.
Hodkinson acknowledged that the pressures of a projected gap between government revenue and spending are only going to increase with an ageing population, and that at the same time the proportional voting power of younger New Zealanders will continue to decrease as they become a smaller part of the population.
“For its part NZUSA is taking a leading role in facing up to these intergenerational issues and pushing for more engagement from government and institutions with our members.
“At the start of this year we ran a ‘Big Questions Tour’ around New Zealand campuses to raise awareness about medium-term policy thinking on how best to fund retirement income. Right now I’m working with Treasury officials to run a similar set of nationwide focus groups on long-term fiscal planning, due to start later this month”.
In confirming NZUSA’s plans for a second ‘Big Questions Tour’ Hodkinson said that Treasury’s newly released fiscal statement publication – Affording Our Future – will provide a base for discussion.
“We will pick up on challenges in the statement, and will explore more aspirational scenarios for affording our future”.
Hodkinson said Treasury’s fiscal statement contains many useful points around which to generate debate and challenge current thinking, including:
• celebrating the cost-effective “value for money” returns from a 67% increase from 2000 to 2012 in the numbers of people undertaking tertiary-level study and of those remaining in New Zealand.
• quantifying the amount of savings that could be made by reducing what Treasury refers to as “deadweight spending” in the tertiary sector e.g. institutional marketing spend on competing over domestic students, or compliance costs around the way that research outputs are measured.
• doing more to identify areas for active investment in smart long-term options for tertiary education (not just short-term reactions to cost pressures) since we know these have positive overall economic outcomes.
• doing more research into the importance of the role of the tertiary education system in addressing inequality (breaking the transmission of low incomes across generations), increasing participation and improving productivity.
• debating New Zealand’s poor international performance in educational mobility where too few children exceed their parents’ educational outcomes, as a way to break a cycle of lower socioeconomic status. (See www.treasury.govt.nz/abouttreasury/higherlivingstandards/hls-ag-equity-jan13.pdf)
• the need for a strategy that takes account of Treasury’s statements on the importance of life-long learning given frequent career changes will become the norm. Noting Treasury’s prediction that more older adults are likely to take-up some form of tertiary study in the long term – especially as people up skill and re-skill themselves in anticipation of longer careers, as different career opportunities emerge, and as some jobs become less relevant or obsolete. Note: This is at direct odds with (Treasury supported) moves to reduce access to student support for older students.
• reaffirming our need as a society to increase our level of skill not only to sustain our current living standards, but also to increase our living standards to support the New Zealand of tomorrow.
• canvassing students on the question of whether having to pay more for tertiary study would incentivise them to make “more optimal choices”, or turn them away from “courses of low value-add in terms of skill development” (unspecified in the Treasury paper).
• revisiting the broad types of skills that will be needed for the future workforce, given the high need confirmed by Treasury for people who are comfortable with ideas and abstractions, good at both analysis and synthesis, and critical thinking about central concepts (common to the Humanities and in contrast with the focus on STEM courses).
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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