Key: better for me if you don’t vote

32 comments on “Key: better for me if you don’t vote ”

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1. Herodotus 1

   14 March 2012 at 11:55 am

   Student interest free loans are an accounting scam devised by Labour (and exasperated by the crap policy of “Bums on seats” – quantity over quality) http://jmo.e-contentmanagement.com/archives/vol/12/issue/1/article/363/the-teac-(tertiary-education-advisory-commission) and continued by National.
   It allows for (currently $12b) of education funding to be classified as a Govt asset and appears to show any govts net debt in a stronger light. For me student laons should be got rid off and the money that we spend on this debt and servicing should be fed directly into the institutions and reflected in low to nil fees. It would necessitate in a $12b write off and a bad accounting year for the govt. even Winny/The Greens agree in sorts http://www.stuff.co.nz/dominion-post/news/politics/5367182/Peters-wants-to-write-off-student-loans
   Student debt is similar IMO as the age of entitlement for the pension – In its current state it is a noose around our countries neck that will strangle us and we are sacraficing other govt spending programs to cater for these ” Untouchables”
   http://www.interest.co.nz/personal-finance/57004/student-loans-and-allowances-grow-69-and-164-respectively-2010-while-debt-red.
   So at least JK was being semi honest isn his appraisal of it not being politically substainable
   • Lanthanide 1.1

     14 March 2012 at 12:38 pm

     Higher education is both a private and public good. The private part is reflected by the user-pays approach. The public part is reflected by the interest-free loan.
     • McFlock 1.1.1

       14 March 2012 at 1:22 pm

       But if I pay for the private good portion, doesn’t that reduce the net incentive for me to study? And increase the incentive for me to earn better wages in Australia after I finish studying (hence the brain drain)?
            
       I’ve never seen the point of the student loan scheme, other than the state cutting off its nose to spite its younger citizens. 
       • Matthew Whitehead 1.1.1.1

         14 March 2012 at 1:46 pm

         Yeah, I’d be happy to pay higher taxes to know that I could go back and complete additional tertiary education for a more reasonable price.
       • Lanthanide 1.1.1.2

         14 March 2012 at 4:13 pm

         “But if I pay for the private good portion, doesn’t that reduce the net incentive for me to study?”

         Yes. But in a resource-limited world, we have to apportion out the resources we do have appropriately. It would be nice if everyone could go to university and earn 4 degrees if they wanted to, but unfortunately that isn’t the world we live in.

         I would advocate for a UBI system before I advocated for free university, in our current economic climate.
         • McFlock 1.1.1.2.1

           14 March 2012 at 4:33 pm

           Well then, make admission or progression merit based. Or structure the funding mechanism around quality, rather than bums on seats. 
                
           But the big thing is that only a few people want 4 degrees all at once. And we might need them in our hip pocket one day – there’s a lot to be said for multidisciplinary approaches.
              
           I’m on my third significant qualification over about 20 years, gradually retraining for new roles each time. But in each new role I’ve taken something from the previous job into the new environment – it’s interesting how random things provide that little wedge to move forward on an issue, when people with more focused backgrounds are stumped (or doing the same thing in 3 times the work). But then their specialty knowledge is essential. So it’s all about diversity within the team.
   • Blighty 1.2

     14 March 2012 at 12:45 pm

     money that is owed to you is an asset.

     That was the case with the government’s student loan book before the loans were made interest free and it remains the case. The only difference being that the book value of that asset was slashed when the debt was made interest-free.

     Wiping student debt, while obviously good for those with it, would not free up money to fund education. It would cost the government hundreds of millions of dollars a year in loan repayments.
     • Herodotus 1.2.1

       14 March 2012 at 1:13 pm

       Currently student loans from a cash perspective costs approx $600m in debt servicing Interest rate 5%, (so it already does cost us “It would cost the government hundreds of millions of dollars a year in loan repayments”) the debt has been increasing gross by 5%p.a. (ie new student loans less repayments) that is about $1b every 18 months. So the last year we forked out approx $1.2b into this asset. !! The only time that this laond book will become benificail to a govt is when there is a net cash inflow derrived from it- And guesses as to when?
       Cover course fees and allow students to cover living costs above current allowance entitlements- So it would not cost us more- and for those skills we as a country value, cover additional costs and bond back students as we use to. Sometimes what we did was an improvemnt to what we are currently doing 😉
       There is another debate around this should the govt look after everyone in providing a full and compreshive education i.e. Pre/primary and secondary or share the spend and include tertiary?
       And as an aside according to Key we collect 53% of the debt
       http://www.stuff.co.nz/national/politics/3963867/11b-student-loan-debt-a-disaster-says-Key
     • McFlock 1.2.2

       14 March 2012 at 1:26 pm

       Of course, skilled citizens are an asset too. Whack universal education fees and allowances to students, bung in a government capex line item of “intellectual capital” and depreciate it over 40 years (career length). Same book offset, without the administration fees of the loans scheme.
2. vto 2

   14 March 2012 at 12:35 pm

   If Key doesn’t like interest-free loans to students then what does he think of the Federal Reserve, that privately owned money-printer, punching out billions and billions of near interest free loans to banks?

   And further, why doesn’t he reform our own money-printing system to provide that such interest free loans come at zero cost i.e. get the government to print its own money?

   After all, everyone is doing it. Actually, that’s not right, only privatly owned central banks are doing it. To the rest of the world’s cost.

   Somebody ask Key these questions. Please. I would love to see the response.
   • TT 2.1

     15 March 2012 at 7:50 am

     As a key shareholder of the Fed along with his Rothchild buddies, I’m sure he thinks it’s A-OK. So there’s no chance our privately owned central bank will continue to be anything more than a vehicle for the 1% to line their own pockets.
3. vidiot 3

   14 March 2012 at 1:44 pm

   Interest Free Student Loans / Working for Families – 2 fine examples of vote appealing to the masses and at the same time hindering the country. The sooner we figure that out, the better it will be.
   • McFlock 3.1

     14 March 2012 at 2:00 pm

     yeah. Get rid of the loan scheme completely, nuke WFF, and pay everything through a more cheaply administered more progressive tax system. 4 bands plus tax free under $20k.
     • vidiot 3.1.1

       14 March 2012 at 2:21 pm

       Allowing income splitting would also go some way to improving the balance of things.

       Why should a single income family pay more tax (circa 5K on 80K of FI) and get the same rebate as a dual income family earning the same level ‘family income’ ?
       • McFlock 3.1.1.1

         14 March 2012 at 2:38 pm

         Not hugely familiar with, or worried by, that issue. I tend to look at problems from the bottom up, rather than starting near the top. 
              
         I might be completely wrong, but it looks to be the self-obssesed angst of the want-to-be 1% but destined-to-be-20% class. I suggest referring it to Dunne or maybe ACT. 
         • Uturn 3.1.1.1.1

           14 March 2012 at 4:03 pm

           The “struggling middle classes”.
           • McFlock 3.1.1.1.1.1

             14 March 2012 at 4:09 pm

             nah, not even them. 

             edit: 80k job is beyond most nzers by far – that’s why POAL boosted the figures as much as possible
             • vidiot …

               14 March 2012 at 4:42 pm

               80K is not beyond most families by any means. 2 earners, 40K each = 80K
               • McFlock …

                 14 March 2012 at 5:00 pm

                 But they aren’t the ones “adversely affected” by lack of income splitting. Your issue is how to make things nicer for the few remaining people who can actually (most often comfortably) support a partner and small family in this day and age without additional sources of income.

                        
                      
                 And your example is the most extreme assumption that the lower income earner is on zero, rather than earning $10k or $20 in a part time job. And we are actually whether they are more hard done by than two income earners who are both scraping around $40k each doing every shit low wage casual job under the sun. 
                       
                 I still don’t see the pressing need of the hardship you identify. As opposed to, say, reestablishing an underclass by poorly resourcing high-dep schools and cutting social service assistance.
               • lprent …

                 14 March 2012 at 5:16 pm

                 Yep. But you really should look at who you want to support. $40k is well above median income. Two people earning that in a household makes that a pretty affluent household.

                 See table 2 in here ( or somewhere in PDF)

                 BTW: the difference between average and median is getting extreme. $703 per week average compared to $550 for the median.
                 • Herodotus …

                   14 March 2012 at 6:43 pm

                   lp your agruement in not supporting income splitting is contary to how WFF works. WFF is based on household incomes and the total income of the family- yet tax is based on the individual. 2 families have the same family gross income and the same WFF entitlements yet if there is a vast difference in how the incomes are derrived extreme case 2 on $40k and the other family on 65 + 15 both families have differing disposable income but the same WFF. This was more extreme on having a low threashold of the top tax bracket, before Lab commenced the dutch auction on delivering tax cuts.
                   • lprent …

                     15 March 2012 at 8:11 am

                     It was less of an argument and more of a contrarian. I was pointing out that the basis of most taxes and rebates was related to the targeting of the tax or rebate. I then said that it makes as much sense to move income tax to household basis as it did to move WFF to a individual basis – ie little to none.

                     The intent of WFF was to help working families raise kids, especially during the phase where one income earner was off work having or raising the kids and the household income dropped like a stone. In households where you have two earners earning low incomes, dropping one for months to have a kid s a powerful disincentive to do so.

                     So in your two scenarios in tha case you wind up with 15k, 40k, and 65k household incomes during late pregnancy and birth. Take the personal income tax out, add the WFF back in and you will find that the household incomes have moved closer together a bit. I’d do the maths, but not on an iPad sitting in bed. The effect to slightly reduce the disincentive to have kids because of income levels and helps reduce our ever diminishing home grown population stats in the future, which reduces issues with the tax base supporting the boomers on pensions.

                     And surprise surprise – that was the intent of the WFF. It is a longer term strategy to deal with the demographic issues we will get into over the next 50 years

                     And in this case I’d point out that the higher personal income tax threshold makes piss all difference. 5k at an extra 6% is what $300 per year or less than $6 per week. It is swamped by the WFF. Why did you bother bringing it up? Possily because you were only interested in above median income level obsessions that you have rather than looking at the country as a whole?

                     There is usually a reason why taxes and rebates are done the way they are. I find many people don’t bother looking. They just reference to themselves.
                   • Herodotus …

                     15 March 2012 at 11:17 am

                     From ther IRD tax tables 2011-12 income year
                     $80k income = $17,320 tax
                     $40k income = $6,020 tax so tax on 2 =12,040
                     $60k income = $11,020 & $20k = $2,520 tax = Total tax = 13,540
                     representing a gap of $5,280 on extreme case and $3,780 and $1,500 on the other 2 scenarios
                     Yet all 3 cases are eligible for the same WFF assistance- And this is the technical problem with having tax based on individuals and govt assistance on household incomes- there is no consideration taken into account of the results of different tax rates and the disposable after tax incomes.
                     It all goes back to some govt addressing the tax system with clear objectives and understanding – instead of the attacking the fringes as so often happens
       • lprent 3.1.1.2

         14 March 2012 at 2:46 pm

         Another alternative would be to do income tax based on households like rates are.

         In many ways this is actually a more equitable route. Tax rebates like WFF that are done on the basis that children are household based responsibility and that society depends on having kids for societies future survival.

         Of course it happens to ignore all of the children from separated households where both parents are contributing, but only one can claim a WFF. Or where a WFF is unable to be claimed because the parent raising the kid in a separated household isn’t working.

         You’d have the interesting problems with aggregating income on flats with multiple earners and the like. People living together with kids in the household who may or may not be parents.. etc etc.

         Quite simply every way you look at this you find inequities. The ones that particular people seem to feel are the important ones seem to relate directly to if they feel they themselves are affected.

         Based on your comment I can guess many things about your circumstances. I can also detect that you haven’t bothered thinking much past your own circumstances. Perhaps you should widen your mind a little.

         FYI: Neither Lyn or I have kids, are unlikely to have any, and both of us earn well. It is the signature of the most taxed group in the country – DINKies. Yet it isn’t hard to look at the reasons for WFF, student loans, and even the current tax techniques to see how hard it’d be to find better structures – at least not if you’re looking beyond your own circumstances and over the long term.

         I’d argue with levels and mixes (like the UBI systems or the levels of WFF and student support). But I’ve had real problems figuring out better systems.
         • vidiot 3.1.1.2.1

           14 March 2012 at 4:02 pm

           Rates aren’t worked out on the household (number of occupants, family income) income, they are based on the value of the property (land, capital improvements) and do not take in to account number of people residing there.

           – if we wanted to be fair, they (rates) would be levied equally against every person in that region. Perhaps 3 tiers – under 18 (25% of adult rate), 18-65 & 65+ (50% of adult rate). But then again, that’s a Poll tax, and Poll taxes are nasty.
           • lprent 3.1.1.2.1.1

             14 March 2012 at 6:05 pm

             Rates are worked out on the household property…But if you think about what I was talking about, it was on the household income.

             But both were levied using the household property as the basis rather than the individual. My point was that at present we have some things that are worked out using that peculiar structure of a family household (eg WFF), some as an individual (income tax, student loans), some as household property (rates), consumption (GST), etc. Generally they are done on the classic cost accounting allocation basis of trying to tie it to the thing that is most closely related.

             Simplistic individual based tax accounting like you’re advocating just offers uneven cost recoveries and distorts the intent of the taxes to be related to what they’re trying to recover costs from (or behaviours that are being encouraged).

             And incidentally, a poll tax is actually a daft basis to tax rates on. Property values are also a daft basis. Most of the substantial costs for rates are related to houses in an area. In particular roads, footpaths, garbage, parks, street lighting etc. If you don’t have sewerage and water in it (which Auckland does not), then far more of the substantial costs are related to street frontage and number of residences in an area than in numbers of people or property values.

             Quite simply a poll tax basis doesn’t recover costs adequately from low density housing.
4. KJT 4

   14 March 2012 at 6:00 pm

   Two minds about this one.
    
   For starters, Uni was not free. It was paid for by 65% taxes on those who did trades or other non University courses. Tax on people who could not afford university to help the children of the privileged infest the ski-fields.
   Student loans have made it easier for more people to go to University, but the business like focus on “competition” between tertiary providers has resulted in a drive for “bums on seats”, a multiplicity of tertiary courses of dubious value and university or polytech courses for subjects which should be apprenticeships/on the job training.
    
    
   We have more Lawyers per capita than anywhere else but the USA, while the average age in, the remaining,  trades, technicians and medical staff is in the 50’s.
    
   For subjects which give “a licence to kill” like law or accounting. Where strong Unions allow their pay gouging. The private good out-ways the public. 
    
   Others. Like nursing, there is a clear public good.
    
   I think some courses should be free, with a bonding scheme, others students should pay.
    
   Like others here, I would prioritise funding for, intervention to help kids at your 1 to 3 level,  a UBI and apprenticeships over free University study.
    
   The fact is, and the reason why Key will not touch it, is the majority of those who benefit from student loans are the offspring off wealthy tax avoiders.
   A major part of NACT’s constituency.
   As they are, by definition, greedy and self centred, cutting student loans would drive them to NACT lite.
   • rosy 4.1

     14 March 2012 at 7:33 pm

     “The fact is, and the reason why Key will not touch it, is the majority of those who benefit from student loans are the offspring off wealthy tax avoiders.”

     That’s not true. Trades courses that are not part of an apprenticeship scheme have course costs that are paid mostly out of student loans, given that these students are unlikely to have parents with trusts. The wealthy tax avoiders don’t need student loans for their kids – they can get student allowances, a whole other level of rort.
     • KJT 4.1.1

       15 March 2012 at 5:48 am

       They may not need them, but they are handy to buy shares with.
        
       Trades courses should be free. We need them!
5. jim 5

   14 March 2012 at 6:31 pm

   How sad it is that some people here are saying some education/courses should be free and others not. All education and health care should be free(funded by tax payers) it has many benefits to the whole community of humanity to have educated healthy people.
   But I guess that’s a part of Mr Keys and his followers grand plan to keep the general work population uneducated, addicted to cigarettes and alcohol, keeping them numb to what is really going on!
   • TT 5.1

     15 March 2012 at 7:52 am

     Some current tertiary courses should be shut down. Commerce departments across the country need to be eliminated and the so called degrees abolished. They are but a tool of the 1% to control the economy. Accountants and the like are a cancer on our society.
6. Vicky32 6

   15 March 2012 at 3:37 pm

   I would advocate for a UBI system before I advocated for free university, in our current economic climate.

   Lanth, you seem to have forgotten that once upon a time we had free university! (I  knew about it only for the last 2 years that it existed, which really upsets me) but the fact is, it once existed. In those days, they kept working class kids out by not telling them what they were entitled to – now they keep them out by pricing study above what they can afford.

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