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Deborah Coddington's Liberty Belle

Liberty Belle

Deborah Coddington's Liberty Belle

The race is on and the lolly scramble has begun. The two old parties have started a bidding war for votes using Other People's Money (OPM). It's very easy to spend OPM, especially when you get lots of lovely votes in return.

Buying votes from tertiary students is easy so long as you have the OPM chequebook. National would write a cheque for a minimum (they say) of $70 million a year, in the form of tax rebates on student loan interest. Tax rebates sound like tax cuts but they're not. One man's tax rebate is another woman's tax increase. You can't have tax cuts and tax rebates at the same time. However, obviously National has abandoned its promise to give tax cuts because Don Brash said he'd tell us what they'd be "a few days after the election date is announced". More than "a few days" have gone by and still no sign of National's tax cuts. I guess, like the little girl, we'll just have to wait.

Labour has dragged out a bigger fatter chequebook, however, and promises to write off interest on student loans for all students who remain in New Zealand. That's just about all students. Since student loans came into being, more than 550,000 New Zealanders have taken up a student loan. As of October 2004 less than five percent of those Kiwis were still overseas. Of all the graduates who travel overseas with student loans, more than two-thirds come home. So that brain drain is a myth. (I've always hated that expression anyway - by implication it means those of us who stay are thickos and as I look around me every day in New Zealand I see intelligent, smart, energetic great people. Just because you don't have a tertiary qualification doesn't mean you're stupid. Then again, I might be the exception to that little piece of wisdom.)

Labour says its policy will cost $300 million a year but Treasury papers released to me show that in 2000 Labour was warned that writing off interest on all student loans meant the government would have to find $4.5 billion dollars because of the extra take-up of those wanting to borrow. Interestingly, Treasury also showed how much money students could make if they didn't need a loan for fees, but took an interest-free loan anyway, and invested it. Heaps, man!

At the moment we spend nearly $12,000 per student on tertiary students. That's five times higher than per-student spending on early childhood education, yet the under-six years are the most crucial of a child's learning time. It's also 2.5 times higher than per- student spending on schools, including transport, special needs and other spending.

But hey, preschoolers, primary and most secondary students don't vote, so why should the OPM electioneering spenders care about them?

Yours in liberty,

Deborah Coddington (For the fastest way to pay off a student loan, go to


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