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Under-invest now, reap what you sow later

Written By: - Date published: 11:31 am, April 19th, 2010 - 22 comments
Categories: education - Tags:

The most over-rated man in New Zealand politics, Steven Joyce, has come up with a bright idea: let’s increase the fees for getting high skill degrees in areas where there are big skill shortages.

Honestly, what is this clown thinking? Increasing the cost of studying for medical degrees, which are already horrendously expensive, by raising the fee caps is madness.

This is typical short-term National thinking: save pennies now, and pay the big bucks later (once Joyce is safely out of politics) when heavily indebted and highly skilled graduates are forced to go overseas to pay off their debt in a reasonable time frame.

22 comments on “Under-invest now, reap what you sow later”

  1. tc 1

    Let’s hope it remains an idea. You guarantee a skills migration if they come out with a huge debt and bigger bucks offshore.

    I’m a fan of having a notional debt forgiveness scheme where if they stay and work in NZ then say 10% of gross income is forgiven off the debt each year….by the time they’ve done about 3 years relationships normally keep them in NZ.

  2. Sam 2

    The “career student” is the new welfare mother. All this fear and vitriol, yet nothing substantive. I’m sorry, but on what planet do you make a living and a career out of getting numerous undergraduate degrees? The majority of students have to borrow to live as well as borrowing to learn, yet this is considered a career? If that’s National’s definition of a career then god help us all.

    They want to save a couple of tens of millions of dollars by placing yet more testing and bureaucracy into an already stringently tested, bloated bureaucratic nightmare, while claiming efficiency, cost cutting, and incentive. This makes no sense. The people who cannot complete an undergraduate degree in 7 years are the people who need the most help, they need the support of the government to get past whatever is preventing them from finishing and getting out there. It’s already demoralising and frustrating without being made into a societal boogie man and having your funding, and therefore any hope of actually making something of yourself, cut.

    Not to mention the stinking hypocrisy of the man who took 21 years to properly complete his degree placing time limits…

    Gotta love the cunning rhetoric too – people who go to university are no longer working to make ours a highly-skilled economy, a vibrant, educated and engaging society – no no, they are leeches exploiting cheap debt. I can’t wait to see who gets to decide which degrees are “worthwhile” and which aren’t, and the wonderful effects of turning our tertiary system into even more of a degree factory.

  3. Nick C 3

    The incentive to go overseas to earn higher income exists regardless of whether you have large debt. It is only increased by jacking up taxes in order to pay for higher subsidies.

    All this achieves is a massive welfare payment to the rich: Those who get high skill degrees earn more in the workforce and now you want society to pay the cost of their degree

    • Sam 3.1

      That may be the case, but the incentive is definitely much more persuasive if you’ve got a whole boat load of debt to pay off. Australian dollars and British pounds surely come in much larger numbers and work out to be quite a lot more when you get back here after all. I do not buy into the idea that taxes increase migration outflow at all – it’s wages.

      • Nick C 3.1.1

        “I do not buy into the idea that taxes increase migration outflow at all it’s wages.”

        Errr, surely wages only effect migration to the extent that they affect net disposable income? And since taxation also effect disposable income, both would have effects on migration? To say that one factor affecting income affects migration but another doesnt when you make no distinction between the two is absurd.

        “That may be the case, but the incentive is definitely much more persuasive if you’ve got a whole boat load of debt to pay off.”

        Once again the amount of debt you have to pay affects your disposable income. Since you either want more income as a tradeoff for going overseas or you dont, i dont see how debt particularly affects this desision. E.g. if I can earn $100,000 more by going overseas surely whether or not im paying off a loan wont make a difference, im earning $100,000 more either way.

  4. DeeDub 4

    Did anyone else notice that Key used the example of a poor cleaner working for eight hours a day to pay tax so rich boys and girls could go to Uni. on TV this morning. What a vile, disgusting and insincere prick…. he really cares about the workers you know?!

    • Zaphod Beeblebrox 4.1

      The same cleaner pays Key’s salary and for him to fly around the world business class. He also would have had a mortgage which will help the bank make a profit that would have helped his Merill Lynch salary. Whats wrong with taxation paying for training teachers, doctors and nurses?

    • Olwyn 4.2

      Not to mention, it is within his capacity to ease the burden on the poor cleaner by permitting a tax free income level at the bottom instead of giving tax cuts to his mates at the top.

  5. Irascible 5

    the generation who laid their lives on the line for the present NZ citizens thought that investing in the possibilities of the future generations through taxation was a wise and unselfish decision.
    Key and his NACT philosophies of selfishness and individual cut-throat economics and non investment in communities are an unfortunate manifestation of the group who took without recognising the wisdom and selflessness of those who went before.
    Key’s arguments are as substantive as the Auckland University ACT U-tube genius and should be greeted with the same loud laughter each time he appears in public.

  6. Rex Widerstrom 6

    increase the fees for getting high skill degrees in areas where there are big skill shortages

    Suffice it to say I had to re-read that twice and even then I assumed you’d got muddled up, Marty.

    Geezus. This man’s run a successful business. If he had a skills shortage would he disincentivise the people he needed from applying by making the position less attractive?!

    So why, when people get into government, does all common sense desert them in the search for a short-term political hit? They truly are power junkies.

    • Draco T Bastard 6.1

      You’re talking National here. They really are that stupid.

      • Jim Nald 6.1.1

        What is detrimental to NZ is
        NZ bears the costs & consequences of their
        sinisterly stupid and stupidly sinister policies

    • Nick C 6.2

      Heh thats exactly the point Rex; the market creates its own incentives for people to fill labour shortages. Theres no need to incentivise it.

      • Craig Glen Eden 6.2.1

        What Rubbish NICK C the market has not once resulted in Nurses being paid what they are worth or many other health professionals, you can add Teachers/Educators to that as well .

        Your logic or lack of logic re tax and income is also screwed. Tax only becomes the issue when you are counting your pennies as English was reminded recently on TV.

        Tax rates in Aussie are very similar to NZ at the end of the day and New Zealanders are continuing to move there. Why because wages and life style not because they will pay less tax.

        • Nick C

          What on earth do you mean tax only becomes the issue when you are ‘counting your pennies’? Surely by that logic wages are only the issue when you are ‘counting your pennies’ as well? Money is money whether its added to your disposable income by tax cuts or wage increases. Thats not right wing propaganda, its called simple logic.

          As for the market paying appropriate wages; Its funny how you know exactly what nurses are ‘worth’. How much exactly is a nurse worth, and how did you come to this conclusion?

          • r0b

            How much exactly is a nurse worth, and how did you come to this conclusion?

            I would probably conclude that a nurse is worth more than you Nick C. And I would come to that conclusion using the methodology of the report described here:

            The research examined the contributions these jobs make to society, and found that it was the lower paid jobs which involved more valuable work. For example, for for every £1 bankers make, they destroy £7 of social value. Whereas for every £1 childcare workers are paid, they generate between and £9.50 worth of benefits to society. For every £1 a hospital cleaner is paid they generate over £10 in social value, but an advertising executive destroys £11 for every £1 in value they generate.

  7. Descendant Of Smith 7

    I remember employing a lawyer once who had a $40,000 student loan. They along with their fellow students realised in the last couple of years of their law degree that their would be jobs for less than a third of them in New Zealand and that most would not be getting jobs as lawyers.

    You can infer correctly that I wasn’t employing them as a lawyer.

    What about even some rationale based on demand forecasting to restrict numbers to manageable levels, what about some forecasting of skill shortages as baby boomers retire – what jobs are they going to retire from and when, what about some consideration of these aspects in light of global demand in OECD countries.

    What about removing those courses run by PTE’s such as aromatherapy which result in no serious employment what-so-ever, or some of the computer skills courses in which any cost benefit analysis would show the cost clearly outweighs the benefit due to their poor quality and focus on making profit to the detriment of quality education.

    There seems to me to be much more intelligent ways to rationlise education spending than this type of blunt instrument.

    It’s that disconnect with any sort of clear vision for the future that continues to worry me about this government. So much is driven by ideology and rhetoric rather than a way forward with a plan that can be understood.

    Even Muldoon could articulate what he wanted for the country much more clearly than the current government.

  8. luva 8

    “when heavily indebted and highly skilled graduates are forced to go overseas to pay off their debt in a reasonable time frame.”

    I do not buy this myth and have never seen any evidence to back it up.

    I am one of those highly indebted graduates who now lives and works in London. I have many reasons for being and staying here and repaying a student loan is one but down the priority list. There are thousands of Kiwi’s living here and the vast majority want to return to NZ at some point. However it is diificult giving up a lifestyle where there are more professional opportunities and salaries are two to three times higher. Plus (when this ash clears) the wonders of Europe, the Middle east and Norther Africa are only a short and cheap flight away. I do not have published research to back this but from living and mixing in the London New Zealand community this is why I believe Kiwi’s flock to this end of the world.

    The National opposition argued we were fleeing Ms Clarks punitive tax system. Going by this post I predict the Labour opposition will argue we are here due to our student loans. Both lines of attack were and are bulshit.

    Student loans are largely irrelevent. You could make education completely free. Kiwis are still going to leave and in some cases never come back. Until you can fly from Auckland to a Spanish beach in under 2 hours for 40 dollars and we begin paying salries in Sterling, don’t expect NZ graduates to loyally stay at home.

    [doesn’t look like you’ll be flying to Spain from the UK any time soon either. 😉 Oh, and it’s Miss Clark. Marty]

    • luva 8.1

      Too right Marty, might be stranded here for a while if this volcano doesn’t give up.

      And having read my comment again I realise that a large student loan does not equate with an ability to spell.

    • gingercrush 8.2

      No its Ms. Clark. Miss Clark infers she isn’t married.

      • Pascal's bookie 8.2.1

        implies. not infers.

        You might infer that someone who prefers ‘Miss’ is not married, and you may have some justification, but it aint necessarily so…

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