February 1, 2016 7:04am by David Farrar

Labour goes even further left

Labour’s announcement of three years “free” tertiary education is a remarkable lunge to the left. They’ve adopted what was a fringe Alliance Party policy.

Its what you get from a party whose leader, finance spokesperson and education spokesperson are all former student presidents. They’re spent so many years chanting “free” education on protest marches, they’re never outgrown it.

This is a very very bad policy. Not a moderately bad policy, but a really really bad policy. This is for numerous reasons.

Cost

Labour say once fully implemented it will cost $1.2 billion a year. It will in fact cost far more than this. Labour never ever properly take into account growth in demand if you make something “free”. If you make houses free, everyone will buy a house. Make alcohol free almost everyone will buy alcohol. Make tertiary education “free”, and of course you will get a huge explosion in people enrolling. They may not complete a course, but they will enrol.

Quality

Labour’s policy will be great for tertiary providers. All they have to do is get you to sign a piece of paper and the Government will give them $15,000 or so. Even under the current funding system we’ve seen a reasonable number of rorts where providers hire people to go around hamburger bars and sign people up for a low quality (but zero fee) course, so they get the funding for it.

Providers respond to incentives. They will spend a huge amount of money on signing people up, and people will sign up with little regard for quality or usefulness – as they are not paying anything themselves. When someone offers you something for free you care far less about the quality than if you have to partially pay for it yourself.

Helps the most wealthy

People who get a degree will on average over their life-time earn at least $500,000 more income. This policy will see people who don’t go to university paying higher taxes to fund those who do go to university. Truck drivers will pay more in tax so that lawyers get $15,000 free money from the Government.

It is not unreasonable that in exchange for extra income of $500,000+, students contribute towards the cost of tertiary courses they undertake.

Not targeted

If there is an issue with wanting more people to do tertiary student, who are put off by having to get a loan, then you could target assistance based on income. This doesn’t. This is just a huge bribe.

Opportunity Cost

Almost every study in education shows that the most critical period is early childhood. If you went to 100 experts in education and said we have $1.5 billion a year to spend – where should we spend it to make the most difference to educational outcomes, no one would say spend it all on tertiary – let alone on a policy that will lower quality of education, not improve it.

So in summary it will: