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No Justification for Universal Living Allowance

 4 July 2008

No Justification for Universal Living Allowance

There is no justification for New Zealand to introduce a universal living allowance for students in the tertiary education sector, according to Education Forum policy advisor Norman LaRocque.  Mr LaRocque was commenting on the call for the introduction of such an allowance by the Union of Students’ Associations. 

“There is no justification for providing such an allowance, especially given that the government already spends nearly $14,000 per student per year on tertiary education, the generosity of the student loan scheme and the fact that a significant proportion of the tertiary education budget already goes to student assistance.  The New Zealand policy of an income-contingent student loan scheme complemented by an income-targeted student allowance scheme is exactly in line with the recommendations of a recent OECD report on tertiary education”, said Mr LaRocque. 

Student union concerns about rising student debt are a bit rich, especially given that a significant proportion of recent increases is due to the introduction of the government’s ‘no-interest’ policy, which they actively supported.  This policy has been a recipe for higher debt – fuelled by increased numbers of borrowers, increased borrowings and a significant drop in voluntary repayments.    

Let’s hope that, in this election year, the major political parties place the longer-term interests of New Zealand tertiary education ahead of the short-term temptation of politically expedient policies such as a universal living allowance, said Mr LaRocque.

“If students believe their case for asking hard working Kiwis to pay even higher taxes to finance a universal living allowance is strong, they should front up and make the case to the truckies who are protesting in the major centres today.  It is time student unions got real”, concluded Mr LaRocque.    



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