NZUSA media release - 6 September 2012
Name change for Money Week?
The initiative of the Commission for Financial Literacy and Retirement Income in launching the first annual Money Week [which runs until this Saturday 8 September], has been welcomed by the New Zealand Union of Students’ Associations (NZUSA) with one small suggestion.
“Given the emphasis the Commission places on managing ‘voluntary’ loans, we wonder if the week might be better named Debt Week than Money Week?” said Pete Hodkinson, NZUSA President.
“The Commission and its publicly financed Sorted programme commendably shine a lot of light on the issue of shrinking what they call dumb debt. Our simple suggestion is that it would be more honest and accurate for the focus of this awareness raising week to turn to the issue of how the nation as a whole can remove debt where it causes the most fiscal drag.
“The mixed signal being given to young New Zealanders is that they need to magically exit their studies with minimal debt and a predictable plan for a wealth generating future. This conflicts with the reality of leaving tertiary studies with high levels of debt and an increasingly unpredictable future. The implication is that the less debt they have the more able ex-students will be to embark on planned events like buying a home, when again the reality shows that entering into a mortgage is often neither possible, nor necessarily desirable.
“In this depressed economic climate openly discussing new ideas and actions in areas such as managed debt relief shouldn’t be that difficult. This could start this year with a considered freeze on the relentless rise in tuition fees each year. When Money Week rolls around next year, the goal should be to shift the focus on to alternatives to debt – not a further endorsement of debt.
“At $20 billion and counting, the amount of regressive debt loaded onto the shoulders of students since 1992 through Government promoted and sanctioned loans, is making less and less sense. As covered in the editorial pages of the Otago Daily Times this week, it’s high time that questions about this endlessly growing debt bubble were taken seriously. We need to reframe the debate about sorting out viable alternatives, including progressive taxation, sooner rather than later.
“Meanwhile NZUSA supports financial literacy and the kind of initiatives we see the Financial Education and Research Centre – a joint venture between Westpac and Massey – is taking to perform a financial health check on students at campuses around the country,” said Hodkinson.
“Empowering young and vulnerable students with the financial knowledge needed for different life stages is vital. The importance of bringing a life stage point of view to the downstream effects of debt can’t be emphasised enough. However, as debated at Unitec’s Forum for the Future in July, it’s not all about skewing the focus towards the distant prospect of planning for retirement income. Looking at the life stage checklist of the Commission for Financial Literacy it’s a compelling fact that four out of 13 indicators are directed at the experience of our under 25 population: Going flatting, studying, relationships and starting work”.