20 June 2002 Media Statement

Alliance seeks to use NZ Superannuation funds to write off student debt

Associate Education (Tertiary Education) Minister Steve Maharey is criticising the Alliance for playing the politics of inter-generational envy with their proposal to use Government funding allocated to New Zealand Superannuation to write off student debt.

“If the money is coming from the Superannuation Fund the question is how does the Alliance intend to meet the income needs of older New Zealanders?

“To suggest that the incomes of older New Zealanders will be met by the growth dividend that will be generated from writing off student debt is to indulge in the kind of voodoo economics that went out with Ronald Reagan.

“And if the Alliance were to choose not to take money out of the pockets of older New Zealanders the only other way to fund their promises would be to increase the middle rate of income tax for working New Zealanders. Based on their own costings this suggests an increase in the middle rate from 21 to 25 cents in the dollar.

“Pre-funding New Zealand Superannuation is actually a policy that benefits today’s young people. If we don’t put some money aside now, when the current generation of tertiary students graduate they will face much higher tax rates to support baby boomer pensioners and there will be nothing set aside for them when they are ready to retire themselves.

“The Alliance’s objectives are laudable, but they are more heroic than realistic. Because they have little prospect of being represented in the next Parliament they can indulge themselves in sponsoring some kind of fiscal telethon. Others may want to play this game; Labour will stand on its record.

“Labour has delivered on all of its 1999 Manifesto policies in the area of tertiary education and training. Those policies were realistic, and they were affordable.

“Under the Labour-led Government total spending on tertiary education and training has increased from just under $1.38 billion in 1999/2000 to $1.85 billion in 2002/03 – that is an increase of 34% over this period.

“It is also remarkable that the Alliance policy says nothing about industry training, and workplace and life-long learning. This suggests to me that the Alliance is driven more by sectional interests than by the interests of the average New Zealand working family,” Steve Maharey said.

ENDS

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