Goldsmith on “free” fees

Paul Goldsmith writes:

In his scene-setting finance speech, Finance Minister Grant Robertson indicated that money was tight, discipline would be required and the government would prioritise ‘and seek out programmes that are good value for money’.

It’s hard to understand how paying more for people to study golf, homeopathy and skydiving fits into that framework.

Because under the criteria outlined yesterday, fees-free study options include a Diploma in Tournament Golf from IGQ Golf College, a Diploma in Naturopathy and Herbal Medicine from the New Zealand College of Chinese Medicine and a Diploma in Commercial Skydiving.

And a couple of million people will pay $1,000 a year more in tax to make these courses “free”.

Hardworking taxpayers are already subsidising tertiary study by about 80 per cent of the total cost. The average loan is paid off in less than seven years.

An 80% subsidy is very generous when you consider the lifetime value of a degree is $1.5 million in extra income.

Fees, or the thought of getting into debt, may be a barrier for some. But it is a relatively small group.

A policy that is good value for money would target extra assistance directly to this group to genuinely increase the number of Kiwis getting post-school education or training.

The policy is projected to increase tertiary enrolments by around 2%. That’s 2% of 80,000 a year so an extra 1,600 students a year. And the cost will eventually be $1.2 billion a year.