In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Civilian Party leader Ben Uffindell (uff- as in the sound cute dogs make without the w, -in- as in buckminsterfullerene or absentmindedness, and -dell as in the largest global manufacturer of computers that stop working after 14 months) today announced his party's cornerstone policy - to ban all satire, in all of its forms, from all media. Standing on the steps of the Christchurch Museum, Uffindell declared that "enough was enough" and that "this charade has gone on for too long."
"Back when I started The Civilian newspaper, the satire environment was barren. There was only the occasional cactus and prairie dog, but now there is a lush rainforest, full of the greenest trees and loudest animals imaginable. The sheep no longer have wool over their eyes, the wolves have cried boy for the last time, and it is a crime that milk is so expensive in a country with so many cows. When will somebody think of the children?"
A large crowd of three people and one german shepherd cheered/barked as Uffindell delivered his passionate missive through a megaphone, even though the megaphone was not working as "someone forgot the batteries". Sporting the bowler hat and plastic pipe that New Zealand Herald New Zealander of the Year 2013 Finalist Uffindell is known for, he decried satirists such as Steve Braunias, Scott Yorke, and Patrick Gower for "destroying all that is good in the world in the name of satire." Uffindell stated "the public image of many important people has been marred by satire, making them appear uncoordinated and incompetent when clearly no help is needed to achieve that effect." Police eventually arrived to shut down the event, as multiple noise complaints were made over the 2am policy announcement.
There is more controversy surrounding the policy today, as Colin Craig has accused the Civilian Party of stealing a "core Conservative policy that we hadn't announced yet, but we'd written it down in our brainstorm already, I swear." Prime Minister John Key has rubbished the policy, saying "I don't get it," while the Taxpayers' Union said he was "furious" and that the policy was "outrageous". The Labour Party could not agree on a response at the time of publication.
Uffindell was also accused of being a National Party plant, with leaked emails in Nicky Hager's recently released book (Dirty Laundry: Five easy steps to get your whites whiter and your brights brighter) showing that Uffindell was contracted to distract New Zealanders from the election to help National maintain the status quo. In response, Uffindell stated that he had never undergone photosynthesis, that his chlorophyll levels were definitely at the human average, that he had never reproduced by disseminating pollen, and that he had the doctor's certificate to prove it, which upon closer examination appeared to be a temporary learner's drivers license.
When later asked to comment on whether this policy would mean that all New Zealand politics, as satire of how good government should work, would be banned, Uffindell said "the real victim of satire is Hamilton."
Friday 29 August 2014
Thursday 28 August 2014
A Policy A Day: Food in Schools
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's post is written by Maanya Tandon.
I’ve been asked to analyse and present to you the policy of free meals in schools, proposed by the Internet-Mana Party. Initially pushed heavily by the Mana Movement a couple of years ago, it remains on the agenda of the now Internet-Mana party, with a broad degree of support from Labour, Greens, and New Zealand First.[1]
I’ll start with my verdict: Yes. Absolutely, and 100% yes. Support this policy. There is no valid reason not to, in light of the gross levels of child poverty in Aotearoa.
Firstly – what does the policy involve?
· Establishing Government-funded breakfast and lunch-programmes in all decile 1 and decile 2 schools
· This would provide breakfast and lunch for all children every day at all schools, kohanga, and early childhood education centres – starting with schools in low income communities.[2]
· The policy is reflected in the Education (Breakfast and Lunch Programmes in Schools) Amendment Bill. This Bill had its First Reading on 28 May this year.
Education and health matter
Poverty is the single largest contributor to educational under-achievement. A recent report by the Child Poverty Action Group (CPAG) iterates that there is unequivocal research indicating that the major predictor of educational success is socio-economic circumstances at birth.[8]
According to the CPAG report, “the Government's key schooling indicators show New Zealand's current school system is failing to help students overcome the effects of poverty and socio-economic disadvantage. On average children at lower decile schools do not achieve as well as children who are better off, at every level.”[9]
As the Treasury itself reports, educational mobility is low:
“The link between parents’ socioeconomic status and a child’s educational outcome is very high in New Zealand compared internationally, suggesting that New Zealand’s education system does not lean against socioeconomic background as much as the education systems of other countries.”[10]
Children who lack adequate food have difficulty concentrating, have lower academic achievement and poorer performance, especially in numeracy and literacy, and are more frequently absent or late to school than their peers.[11]
Are we doing enough?
In its first hearing, those in opposition to this Bill stated that
“We are ensuring that every child gets a great education. It is one of the most important things that we can do as a Government, and what we do in this regard raises the standard of living and creates a more productive economy, where every child has the opportunity as they go through our educational system to participate in it, achieve in it, and succeed in life.”[12]
Further, it was stated that the “intent of what this bill is about is being enacted already in our schools and in our communities.”[13] But the facts just don’t seem to support this. Even with existing programs in place, 80,000 children still do not get fed before school every day. It seems disingenuous to point to existing programs such as Fruit in School and KidsCan, and state that they are adequately addressing the problem despite overwhelming evidence to the contrary.
But whose responsibility is it?
I know a lot of opposition to measures such as this rest on the conflation of social and welfare spending as establishing a ‘nanny state’ in New Zealand. I’ll leave aside for today my feminist qualms about why the idea of government services being conceptually analogous to something like maternal care is such a terrible thing.
Today's post is written by Maanya Tandon.
I’ve been asked to analyse and present to you the policy of free meals in schools, proposed by the Internet-Mana Party. Initially pushed heavily by the Mana Movement a couple of years ago, it remains on the agenda of the now Internet-Mana party, with a broad degree of support from Labour, Greens, and New Zealand First.[1]
I’ll start with my verdict: Yes. Absolutely, and 100% yes. Support this policy. There is no valid reason not to, in light of the gross levels of child poverty in Aotearoa.
Firstly – what does the policy involve?
· Establishing Government-funded breakfast and lunch-programmes in all decile 1 and decile 2 schools
· This would provide breakfast and lunch for all children every day at all schools, kohanga, and early childhood education centres – starting with schools in low income communities.[2]
· The policy is reflected in the Education (Breakfast and Lunch Programmes in Schools) Amendment Bill. This Bill had its First Reading on 28 May this year.
· If the text on Mana party’s website is correct, Internet-Mana would support an amendment at the Select Committee stage of this Bill to include all decile 3 and 4 schools, as recommended by a recent report by the Child Poverty Action Group (CPAG) and Children’s Commissioner.
The problem
There is an absolutely inexcusable level of poverty in Aotearoa (though I’m not sure any level of poverty actually qualifies as ‘excusable’). Those hit the hardest, and among the most vulnerable are children, particularly those in Maori and Pacific communities.[3] The Children’s Commissioner identifies that “disproportionate number of these children are exposed to multiple risk factors that contribute to poorer outcomes.”[4]
The problem
There is an absolutely inexcusable level of poverty in Aotearoa (though I’m not sure any level of poverty actually qualifies as ‘excusable’). Those hit the hardest, and among the most vulnerable are children, particularly those in Maori and Pacific communities.[3] The Children’s Commissioner identifies that “disproportionate number of these children are exposed to multiple risk factors that contribute to poorer outcomes.”[4]
There are currently 285,000 children living in poverty in NZ, 100,000 of which go to school hungry every day. This affects their development, ability to learn, grow, and ultimately their right to not be burdened by hunger or poor nutrition. It’s not a small minority of ‘extreme poverty’ that we’re talking about here. Research by the Ministry of Health shows roughly 20 percent of New Zealand households with children run out of money for food.[5] Children in low-income households are also more likely to have higher cholesterol intake and eat fewer healthy foods than their peers in higher income households.[6]
Further, “there is a clear and consistent relationship between nutrition and academic outcomes in the long term. Children who eat regular meals and have an adequate nutrient intake do better at school than those who skip meals and have inadequate nutrition intakes.”[7]
In the face of stats like this, it’s hard to disagree with a policy aimed at promoting children’s wellbeing and addressing child poverty in Aotearoa. No one, regardless of where they stand on the political spectrum, disagrees with the aims of this policy. What does become the subject of debate (at least, going by the first reading of this Bill in Parliament) is mainly
Further, “there is a clear and consistent relationship between nutrition and academic outcomes in the long term. Children who eat regular meals and have an adequate nutrient intake do better at school than those who skip meals and have inadequate nutrition intakes.”[7]
In the face of stats like this, it’s hard to disagree with a policy aimed at promoting children’s wellbeing and addressing child poverty in Aotearoa. No one, regardless of where they stand on the political spectrum, disagrees with the aims of this policy. What does become the subject of debate (at least, going by the first reading of this Bill in Parliament) is mainly
i) whether we are currently doing enough to address the ‘food in schools’ issue and
ii) where the responsibility for this ultimately falls
I know that it’s always been (and remains) politically popular to talk about poverty, disadvantage, and inequality in New Zealand as if it’s the by-product of poor decision making rather than a consequence of the systemic and structural biases of the neo-liberal economic logic we live by. We talk about these things as if they are the products of decisions of individuals – unaffected by colonialism, race, gender, disability, class, among a host of other factors. While we’re outraged by child abuse and neglect when we read about it or see it on the news, we seem to be really ok with overlooking the health and wellbeing of children when it occurs in less sensationalist or ‘headline-worthy’ forms. That’s where policies such as this come in.
I know that it’s always been (and remains) politically popular to talk about poverty, disadvantage, and inequality in New Zealand as if it’s the by-product of poor decision making rather than a consequence of the systemic and structural biases of the neo-liberal economic logic we live by. We talk about these things as if they are the products of decisions of individuals – unaffected by colonialism, race, gender, disability, class, among a host of other factors. While we’re outraged by child abuse and neglect when we read about it or see it on the news, we seem to be really ok with overlooking the health and wellbeing of children when it occurs in less sensationalist or ‘headline-worthy’ forms. That’s where policies such as this come in.
Education and health matter
Poverty is the single largest contributor to educational under-achievement. A recent report by the Child Poverty Action Group (CPAG) iterates that there is unequivocal research indicating that the major predictor of educational success is socio-economic circumstances at birth.[8]
According to the CPAG report, “the Government's key schooling indicators show New Zealand's current school system is failing to help students overcome the effects of poverty and socio-economic disadvantage. On average children at lower decile schools do not achieve as well as children who are better off, at every level.”[9]
As the Treasury itself reports, educational mobility is low:
“The link between parents’ socioeconomic status and a child’s educational outcome is very high in New Zealand compared internationally, suggesting that New Zealand’s education system does not lean against socioeconomic background as much as the education systems of other countries.”[10]
Children who lack adequate food have difficulty concentrating, have lower academic achievement and poorer performance, especially in numeracy and literacy, and are more frequently absent or late to school than their peers.[11]
Are we doing enough?
In its first hearing, those in opposition to this Bill stated that
“We are ensuring that every child gets a great education. It is one of the most important things that we can do as a Government, and what we do in this regard raises the standard of living and creates a more productive economy, where every child has the opportunity as they go through our educational system to participate in it, achieve in it, and succeed in life.”[12]
Further, it was stated that the “intent of what this bill is about is being enacted already in our schools and in our communities.”[13] But the facts just don’t seem to support this. Even with existing programs in place, 80,000 children still do not get fed before school every day. It seems disingenuous to point to existing programs such as Fruit in School and KidsCan, and state that they are adequately addressing the problem despite overwhelming evidence to the contrary.
But whose responsibility is it?
I know a lot of opposition to measures such as this rest on the conflation of social and welfare spending as establishing a ‘nanny state’ in New Zealand. I’ll leave aside for today my feminist qualms about why the idea of government services being conceptually analogous to something like maternal care is such a terrible thing.
But I will say that views such as the following, stated by Conservative Party leader Colin Craig, are terrible, short-sighted, and ridden with privileged conceptions of what poverty is and how to address it. Craig has said children sent to school without lunch should go without. Instead, their parents should be charged the "cost of rectifying their bad behaviour".[13]
Read that again. Thinking that parents who aren’t able to financially make ends meet are going to be able to pay for measures ‘rectifing their bad behaviour’ is actually ridiculous. Indebting them for something like this also inhibits their ability to provide for their children, exacerbating the very problem that this policy is trying to address. It’s also a terrible idea to punish or criminalise behaviours like this, as they tend to end up doing a lot more harm than (any) good.
Regarding how much individual responsibility each of you want to attribute to parents, keep two things in mind:
· “There is little hard evidence that poor people, as a group, are much worse than rich people in their capacity to manage their finances. The primary problem is that some parents simply don’t have enough income to provide adequately for their children.”[14]
· Secondly, even assuming that individual parents are blameworthy – allowing these children to ‘go without’ only punishes children at the end of the day, for the mistakes or reprehensible actions of their parents. And that should strike a chord with even the most libertarian of voters (I hope).
Who else supports this?
A host of people and organisations throughout New Zealand, including doctors and child poverty experts have expressed support for this policy. They include the following:
The Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty Report recommend the development and implementation of a government-funded food in schools programme for decile 1 to 4 schools.
Mana has written to all 500 decile 1 and 2 schools throughout the country regarding the “Feed the Kids” bill. None have opposed the initiative.
Child Poverty Action Group (CPAG) released their Compulsory Schooling and Child Poverty report today which includes 10 recommendations for school policy development, including providing free breakfast and lunch in all decile 1-4 schools. They have stated that "…we believe that central government has a responsibility to provide leadership and resources to assist schools through a national strategy for food in ECEs and schools in low-decile neighbourhoods.”
Other organisations include:
· Plunket
· Save the Children
· Unicef NZ
· Royal New Zealand College of General Practitioners
· Salvation Army
· Women’s Refuge NZ
· Choose Kids
· New Zealand Post Primary Teachers' Association
The cost
This policy would cost approximately $100 million per annum (including food, staffing, administration, monitoring, and evaluation costs). I’m not going to go through and crunch budget numbers. I know this seems like a lot to some people (including our current Prime Minister). Whether you consider the cost of this justified I guess depends a lot on what you consider to be the purpose, and role of government. It’s harder to justify the cost of this policy if you fall within the ‘tax-low, spend little’ umbrella, as opposition to this Bill largely does.
Read that again. Thinking that parents who aren’t able to financially make ends meet are going to be able to pay for measures ‘rectifing their bad behaviour’ is actually ridiculous. Indebting them for something like this also inhibits their ability to provide for their children, exacerbating the very problem that this policy is trying to address. It’s also a terrible idea to punish or criminalise behaviours like this, as they tend to end up doing a lot more harm than (any) good.
Regarding how much individual responsibility each of you want to attribute to parents, keep two things in mind:
· “There is little hard evidence that poor people, as a group, are much worse than rich people in their capacity to manage their finances. The primary problem is that some parents simply don’t have enough income to provide adequately for their children.”[14]
· Secondly, even assuming that individual parents are blameworthy – allowing these children to ‘go without’ only punishes children at the end of the day, for the mistakes or reprehensible actions of their parents. And that should strike a chord with even the most libertarian of voters (I hope).
Who else supports this?
A host of people and organisations throughout New Zealand, including doctors and child poverty experts have expressed support for this policy. They include the following:
The Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty Report recommend the development and implementation of a government-funded food in schools programme for decile 1 to 4 schools.
Mana has written to all 500 decile 1 and 2 schools throughout the country regarding the “Feed the Kids” bill. None have opposed the initiative.
Child Poverty Action Group (CPAG) released their Compulsory Schooling and Child Poverty report today which includes 10 recommendations for school policy development, including providing free breakfast and lunch in all decile 1-4 schools. They have stated that "…we believe that central government has a responsibility to provide leadership and resources to assist schools through a national strategy for food in ECEs and schools in low-decile neighbourhoods.”
Other organisations include:
· Plunket
· Save the Children
· Unicef NZ
· Royal New Zealand College of General Practitioners
· Salvation Army
· Women’s Refuge NZ
· Choose Kids
· New Zealand Post Primary Teachers' Association
The cost
This policy would cost approximately $100 million per annum (including food, staffing, administration, monitoring, and evaluation costs). I’m not going to go through and crunch budget numbers. I know this seems like a lot to some people (including our current Prime Minister). Whether you consider the cost of this justified I guess depends a lot on what you consider to be the purpose, and role of government. It’s harder to justify the cost of this policy if you fall within the ‘tax-low, spend little’ umbrella, as opposition to this Bill largely does.
However, this really is a small price to pay for going a little way to ensuring basic health and educational needs of children in New Zealand, in line with our international requirements under the UN Convention on the Rights of the Child. As social benefits and support measures have been peeled back in recent years, measures like this probably go some way to remedy that. You could also conceptualise this as a preventative health measures – money spent on programs such as this means less spent later for worse health outcomes. Investing in reducing child poverty early also ends up saving later expenditure in the health, education, social services and justice sectors.
Maanya Tandon is currently finishing a BA/LLB (Hons) at the University of Auckland. In her spare time she enjoys William Burroughs, wine, Mexican food, and raging against the machine.
[1] ‘Mana News’ Issue #2, June 2014.
[2] Ibid.
[3] Children’s Commissioner Expert Advisory Group on Solutions to Child Poverty, “Solutions to Child Poverty in New Zealand: Evidence for Action”, at 15.
[4] Children’s Commissioner, Working Paper “A Framework for Food in Schools Programmes in New Zealand”, May 2013, 2.
[5] 3 News “No free lunches for hungry kids says Colin Craig”, 24 October 2012
[6] Smith & Brown, 2010 [cited in CPAG, 60]).
[7] Children’s Commissioner, Working Paper “A Framework for Food in Schools Programmes in New Zealand”, May 2013,3.
[8] Snook, I. & O’Neill, J. (2010). Social class and educational achievement: Beyond ideology. New Zealand Journal of Educational Studies, 45(2), 3-18.
[9] Child Poverty Action Group, Compulsory Schooling Policy, 3 July 2014.
[10] Child Poverty Action Group, “Our children, our choice: priorities for policy series. Part 3: Compulsory schooling and child poverty” July 2014.
[11] Ibid, 16.
[12] Education (Breakfast and Lunch Programmes in Schools) Amendment Bill — First Reading, 28 May 2014, per Jonathan Young (National – New Plymouth).
[13] 3 News “No free lunches for hungry kids says Colin Craig”, 24 October 2012
[14] Children’s Commissioner Expert Advisory Group on Solutions to Child Poverty, “Solutions to Child Poverty in New Zealand: Evidence for Action”, 18.
Maanya Tandon is currently finishing a BA/LLB (Hons) at the University of Auckland. In her spare time she enjoys William Burroughs, wine, Mexican food, and raging against the machine.
[1] ‘Mana News’ Issue #2, June 2014.
[2] Ibid.
[3] Children’s Commissioner Expert Advisory Group on Solutions to Child Poverty, “Solutions to Child Poverty in New Zealand: Evidence for Action”, at 15.
[4] Children’s Commissioner, Working Paper “A Framework for Food in Schools Programmes in New Zealand”, May 2013, 2.
[5] 3 News “No free lunches for hungry kids says Colin Craig”, 24 October 2012
[6] Smith & Brown, 2010 [cited in CPAG, 60]).
[7] Children’s Commissioner, Working Paper “A Framework for Food in Schools Programmes in New Zealand”, May 2013,3.
[8] Snook, I. & O’Neill, J. (2010). Social class and educational achievement: Beyond ideology. New Zealand Journal of Educational Studies, 45(2), 3-18.
[9] Child Poverty Action Group, Compulsory Schooling Policy, 3 July 2014.
[10] Child Poverty Action Group, “Our children, our choice: priorities for policy series. Part 3: Compulsory schooling and child poverty” July 2014.
[11] Ibid, 16.
[12] Education (Breakfast and Lunch Programmes in Schools) Amendment Bill — First Reading, 28 May 2014, per Jonathan Young (National – New Plymouth).
[13] 3 News “No free lunches for hungry kids says Colin Craig”, 24 October 2012
[14] Children’s Commissioner Expert Advisory Group on Solutions to Child Poverty, “Solutions to Child Poverty in New Zealand: Evidence for Action”, 18.
Wednesday 27 August 2014
A Policy A Day: Compulsory Te Reo Māori
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's post is written by Charlotte Austin.
Today's policy comes from the Māori Party. The idea is to have Te Reo Māori as compulsorily available in schools by 2015. The Māori language is a taonga guaranteed to Māori under the Treaty of Waitangi. Unfortunately, despite this, the significance of Te Reo in New Zealand hasn’t always been widely appreciated, and the past 200 years have seen the prevalence of the usage of Te Reo both amongst Māori and non-Māori vary widely.
1. The majority of Māori will be able to speak Māori to some extent and proficiency levels in speaking, listening to, reading and writing Māori will increase.
Analysis of the Policy
For those interested in the overall strategy for saving Te Reo Māori, please have a look at Joshua Fishman's model for reviving threatened or dead languages (including Hebrew and Welsh) which is suggested as a potential model for New Zealand. Step 5 of 8 is compulsory language use in schools.
Charlotte Austin is a second year student at Victoria University where she studies Law, Japanese, and International Relations. She is left leaning but is not a member of any political organisation. Charlotte has an interest in language learning and social policy. A special thank you to @ellipsister for reviewing this post and contributing valuable feedback.
Today's post is written by Charlotte Austin.
Today's policy comes from the Māori Party. The idea is to have Te Reo Māori as compulsorily available in schools by 2015. The Māori language is a taonga guaranteed to Māori under the Treaty of Waitangi. Unfortunately, despite this, the significance of Te Reo in New Zealand hasn’t always been widely appreciated, and the past 200 years have seen the prevalence of the usage of Te Reo both amongst Māori and non-Māori vary widely.
Brief History of the past 200 years of Te Reo Māori in
New Zealand
In the early 1800s, Māori
and Pākehā alike spoke
Te Reo Māori. Children of early European settlers often grew up bilingual and
missionaries learned Māori to better communicate their message. In the 1850s
the Pākehā population surpassed the Māori and Te Reo became a minority language. The Native Schools Act 1867 enforced English as the only language
to be used in educating Māori children. However, despite this, and the fact
that at school children could even be punished for using Te Reo, Te Reo Māori was still widely used and understood up until World War II.
The urbanisation of Māori
following the Second World War contributed to a significant decline in the percentage of the population who were able to
speak Te Reo Māori. Prior to World War II, Te Reo was the first language of the majority of the Māori population. By the 1980s, this had dwindled to less than 20%
of the Māori population.
In the 1970s, there was
growing concern about the status of Te Reo, and around this time significant
language preservation efforts began. In 1972 a petition with 30,000 signatures was presented to Parliament, calling for Māori
language to be offered in schools. Māori Language Day was established, (extended to Māori Language Week in 1975), and in 1987 Te Reo Māori
was made an official language of New Zealand. The first Kōhanga Reo and Kura
Kaupapa Māori (Māori-language immersion schools) were also established
in the 1980s.
Since then, the prevalence
of Te Reo Māori has stabilised somewhat. The 2013 census found
21.3% of Māori were able to hold an everyday conversation in Te Reo (a decrease
of 3.7% since 1996, which Statistics New Zealand categorises as a neutral
change). Between 2001 and 2006, the percentage increased, however following that, the only sector of the Māori population able
to speak in Te Reo to increase between 2006 and 2013 was those aged 65 and
older; all other age groups experienced a decline.
The current place of Te Reo Māori within the New
Zealand curriculum
At present, Te Reo Māori fits within the ‘Learning Languages’ section of the New Zealand curriculum. That means that it sits alongside other languages such as French or Japanese, as opposed to being an ‘essential learning area’ like English or maths. Somewhat surprisingly, it wasn’t until 2003 that work began on a Te Reo Māori curriculum. The draft was published in 2007; prior to this there had been no curriculum guidelines for the subject for teachers to use.
Māori Language Strategy
Also in 2003, the
Government released the Māori Language Strategy which sets out five goals to be achieved by 2028.
This strategy is still in place (although the Māori Language (Te Reo Māori) Bill proposed by Hon Dr Pita Sharples is currently before Select Committee). The goals are:
1. The majority of Māori will be able to speak Māori to some extent and proficiency levels in speaking, listening to, reading and writing Māori will increase.
2.
Māori language use will be increased at marae, within Māori households, and
other targeted domains.
3.
All Māori and other New Zealanders will have enhanced access to high-quality Māori
language education.
4.
Iwi, hapū and local communities will be
the leading parties in ensuring local-level language revitalisation. Iwi
dialects of the Māori language will be supported.
5.
The Māori language will be valued by all New Zealanders and there will be a
common awareness of the need to protect the language.
Analysis of the Policy
On the topic of
compulsorily available Te Reo Māori in schools, Dr Pita Sharples said that “People
will always say this is racist and stuff like this, which is ridiculous, but
there will always be that opposition, so I think we just plough ahead now we've
had a lot of time", and I’m inclined to agree with his sentiment.
Te Reo Māori is an important part of New Zealand’s past
and present and should remain so in our future. Even with the progress that has
been made in Māori language preservation, the prevalence of Māori language
comprehension and usage is worrying. The good news is that public attitudes towards Te Reo Māori among both Māori
and non-Māori are increasingly positive; the progress in this area has been hard won, and it
would be a shame to let it lapse.
Although making it
compulsory for schools to offer Te Reo Māori is a logical step, the main issue
I see with this policy is the issue of whether New Zealand has the capacity in
terms of sufficiently trained teachers for this to be a possibility. At
present, we just don’t have capacity to make learning Te Reo compulsory in all schools (as proposed by Mana); demand for teachers of Te Reo Māori is already unmet.
Making it compulsory for schools to offer
Te Reo would be a slightly easier threshold for us to reach because not all
students would choose to learn Te Reo, meaning a lesser burden would be placed
on the Māori language teachers. It’s crucial, that before any policy is put in
to action, that we do have enough sufficiently trained teachers to make the
implementation a success. Poor teaching of Te Reo could well be detrimental in
that we could just end up putting a whole generation off Te Reo as a language
due to a bad experience at school. Since the advent of kura there has been a resurgence of young Māori speakers.
Te Reo Māori needs to be
more than just understood. It needs to be a vibrant language, with speakers who
want to use it, beyond just in the
classroom - also in their everyday lives. There is an important link between using the language and preservation of the entire Māori culture. Maori Party leader Te Ururoa Flavell says "Without our language we will lose our culture and the very essence of who we are as indigenous peoples".
A lot more consultation has been done in recent times surrounding the Maori Language Strategy, spearheaded by Dr Sharples (which has lead to the new Bill). A lot of groundwork has been put in place to ensure that compulsory Te Reo Māori in schools can be feasible in the future. For example, in Budget 2013, about 265 TeachNZ scholarships were made available, targeted at Te Reo Māori teachers. Sharples says "We’ve heard the cries and advice of our people to keep our language alive and so approximately $60 million has been committed to Te Reo Māori and Māori education". But this has to take effect first before we can move to full compulsory Te Reo Māori in schools.
A lot more consultation has been done in recent times surrounding the Maori Language Strategy, spearheaded by Dr Sharples (which has lead to the new Bill). A lot of groundwork has been put in place to ensure that compulsory Te Reo Māori in schools can be feasible in the future. For example, in Budget 2013, about 265 TeachNZ scholarships were made available, targeted at Te Reo Māori teachers. Sharples says "We’ve heard the cries and advice of our people to keep our language alive and so approximately $60 million has been committed to Te Reo Māori and Māori education". But this has to take effect first before we can move to full compulsory Te Reo Māori in schools.
I think that
learning some Te Reo Māori should be an important part of every New Zealander’s
education, just as important as learning about the Treaty or any other “basic”
part of a Kiwi education. Getting too caught up about whether or not people
“want” to learn Te Reo is actually not the point. Not every student is going to
love learning algebra or reading Shakespeare, but, well, at the risk of
sounding like my parents, that’s just life. Te Reo Māori is an important, and I
think too often undervalued, part of New Zealand’s culture.
Verdict: Compulsory Te Reo Māori is a good aspirational target, and the
benefits of having Māori language teaching more widely available, both for
Māori and non-Māori would definitely be a positive thing for New Zealand. I
think a strong case for compulsory Te Reo Māori learning can be made,
given the important place Māori language should occupy in New Zealand. At
present, however, we simply do not have the capacity for this to be a reality, and so the Māori Party’s policy of Te Reo Māori becoming compulsorily available in schools is a more realistic and achievable policy that will still be of benefit. Perhaps what we really need is compulsory Te Reo Māori training for all teachers - although that’s for another post!
For those interested in the overall strategy for saving Te Reo Māori, please have a look at Joshua Fishman's model for reviving threatened or dead languages (including Hebrew and Welsh) which is suggested as a potential model for New Zealand. Step 5 of 8 is compulsory language use in schools.
Charlotte Austin is a second year student at Victoria University where she studies Law, Japanese, and International Relations. She is left leaning but is not a member of any political organisation. Charlotte has an interest in language learning and social policy. A special thank you to @ellipsister for reviewing this post and contributing valuable feedback.
Tuesday 26 August 2014
A Policy A Day: Disestablish the IPCA
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's post is written by Gayathiri Ganeshan.
Background
Lack of Independence
Selective Investigations
The fact that the IPCA refers most of its investigable complaints to the Police also allows the government to maintain an illusion of separation between the IPCA and NZ Police. Some might argue that investigators should have ties to the Police in order to be able to carry out meaningful investigations: but how fair can an investigation be when a fact-finder is from the same notoriously fraternal institution? (This is also a point that The Civilian has made with punchy effect.)
Narrow Range of Powers
Verdict: The Māori Party clearly feels that the reforms of 2007/2008 were insufficient to address systemic defects in the operation of the IPCA. It recommends the investigation of complaints against the Police as part of a wider Anti-Corruption Commission: this would presumably be more independent from the Police, and not face similar resource constraints. Crucially, it would also mean that Māori complaints about the Police are not investigated either by that same body, or an institution with close police ties.
Today's post is written by Gayathiri Ganeshan.
Background
The Independent Police Conduct Authority (IPCA) is a self-described “independent body that considers
complaints against New Zealand Police and oversees their conduct.” The IPCA, by
way of the Independent Police Conduct Authority Amendment Act 2007, replaced the former Police Complaints Authority in November 2007.
The main differences between the PCA and IPCA involved the appointment of
independent investigators and enhancement of investigatory powers.
The Māori Party proposed in 2011 that the IPCA be disestablished, with its
functions transferred to a new Anti-Corruption Commission. The Kāwanatanga policy document is still on their website and the Māori Party has recently repeated its position on the IPCA, so I assume this policy still stands this election:
It is important that the public has
trust and confidence in New Zealand Police. The Independent Police Conduct
Authority will be disestablished. Its functions will be transferred to the
Anti-Corruption Commission.
The MANA Movement also mentions the IPCA as
part of its wider Responses to Wrongdoing policy, but would restructure (rather than disestablishing) it:
Restructure the Independent Police
Complaints Authority as a truly independent body whose decisions can be
appealed, and with an autonomous Māori investigative branch to review Māori
complaints against, and Māori relationships with, the Police.
While their policies are different, both
the Māori Party and MANA Movement seem to be
primarily concerned with the independence of the IPCA and its handling of
complaints by Māori.
The Policing of Māori; or “Not All Cops”
This post is written from the perspective
of an outsider in regard to NZ Police/IPCA procedures—I’m only using
information from academia and whatever has been reported. What I do know, however, is that the Police
and Māori have a long history of fraught relations
in New Zealand. This traces back to colonial-era New Zealand: today’s police
are descendants of the institutions responsible for 19th-century military actions against and
social control of Māori. It was only after New Zealand was considered “tamed” that the
police were hived off from the military and de-armed.
In recent decades, major police actions have targeted Māori activism. The breaking up of protests at and occupation of Bastion Point (with military assistance); terror raids in the Uruweras; the haka party incident at the University of Auckland; even the pre-emptive deployment of police in riot gear at Waitangi every February 6th—there is a proven pattern of responding to Māori protest and activism with antagonistic policing tactics. Moana Jackson, in his 1988 report Māori and the Criminal Justice System: A New Perspective, He Whaipaanga Hou, argued that our criminal justice institutions reflect dominant Western culture; he attributes Māori offending to the failure of these institutions, together with colonisation and the attendant breakdown of Māori culture.
In recent decades, major police actions have targeted Māori activism. The breaking up of protests at and occupation of Bastion Point (with military assistance); terror raids in the Uruweras; the haka party incident at the University of Auckland; even the pre-emptive deployment of police in riot gear at Waitangi every February 6th—there is a proven pattern of responding to Māori protest and activism with antagonistic policing tactics. Moana Jackson, in his 1988 report Māori and the Criminal Justice System: A New Perspective, He Whaipaanga Hou, argued that our criminal justice institutions reflect dominant Western culture; he attributes Māori offending to the failure of these institutions, together with colonisation and the attendant breakdown of Māori culture.
However, dominant justice ideology in New
Zealand has instead led to the construction of Māori as a criminal and problem population. In 1998, two studies were
conducted to analyse police perceptions of Māori and Māori perceptions of police (NZ Police’s summary of the two reports can be read here). A third of police
officers said that they were more likely to suspect Māori of an offence; two thirds reported having heard their colleagues
use racist language about suspects/offenders. On the whole, a quarter of police
respondents held negative attitudes towards Māori. On the part of Māori, an
overwhelming majority of respondents said that they felt police were, as an
institution, hostile to Māori because
they viewed them as criminal. These institutional perceptions of Māori are also evident within criminal justice discourse and academia:
Greg Newbold, a professor at the University of Canterbury who is
widely-regarded as a leading criminologist in the country, refuses to entertain the possibility of systemic police bias and discrimination and instead sees Māori offending as a “fact of life”.
What Does Police Oversight Look Like?
Encounters with the Police can lead to
apprehension: in 2012 and 2013, Māori accounted for 42 – 45% of all Police apprehensions. This over-representation
is also visible in prison at the other end of the conviction process—which represents
the harshest sentence our courts can impose. In 2012, Māori prisoners were 58% and 51% of women and men in prison respectively. Figures
from 2011 also reveal that apprehended Māori youth face a higher likelihood of being prosecuted for an offence.
We know that encounters between Māori and the Police can be fraught, largely due to historical events
and systemic bias evident in state institutions and processes. We also know
that the image of the Māori offender
has become normalised in our criminal justice system. Add to this the fact that
police powers allow for (at times) unfounded and potentially violent
intrusion into the lives of civilians. We need to ensure that the state agency
that commonly signifies (and in most cases determines)
entrance into the criminal justice system does not breach civilians’ rights or
abuse its powers. We need oversight; and this needs to be civilian,
well-resourced and independent.
Since Judge Sir David Carruthers took over
the IPCA, a number of promising changes have been made. All reports are publically released, and investigators
without ties to the NZ Police have been added to the investigatory team. But
putting the word “Independent” into the Authority’s name (as was done in 2007) and
hiring investigators from outside the Police family doesn’t necessarily make it
so. In 2012/2013, 1997 complaints were received: of these only 62 were investigated
(with nine reports released); around 270 were referred to the police for
investigation; about 1600 were disregarded. The IPCA clearly lacks the
resources to investigate even the “meritorious” complaints it receives.
This also means the IPCA only investigates major
complaints, generally when death or serious injury is involved. By these
criteria, events such as the recent police entry onto a marae in Stratford—in
which children as young as four years old were woken in the middle of the night
and lined up outside so that police could inspect their hands—are unlikely to be
investigated, even though the circumstances imply targeting of Māori. These events may be
regarded as less serious in terms of immediate impact, but need to be
understood within their political and historical context and could be evidence
of more insidious harm.
The fact that the IPCA refers most of its investigable complaints to the Police also allows the government to maintain an illusion of separation between the IPCA and NZ Police. Some might argue that investigators should have ties to the Police in order to be able to carry out meaningful investigations: but how fair can an investigation be when a fact-finder is from the same notoriously fraternal institution? (This is also a point that The Civilian has made with punchy effect.)
Time Delays
The under-resourcing of the IPCA manifests
in lengthy investigations. On 15 June, the NZ Herald reported on one such protracted
investigation, which did not involve a court case (ongoing proceedings are
commonly-cited as a reason for dragged-out investigations):
A police officer digs a thumb into
Jai Bentley-Payne’s windpipe and tries to lift him off the ground by his jaw.
Another officer yanks him by his legs. The University of Auckland student says
when police pulled him out of the crowd, they bound his hands behind his back
and carried him to a police van so that his feet couldn’t touch the ground. He
was left in the van for an hour, his wrists bruised.
Bentley-Payne, 38, was among 43
people arrested on 1 June 2012, during a “peaceful” protest against Government
cuts to student budgets. They were kept in a police holding cell for six hours
and not allowed to call family and friends.
(…)
Two years later, he is still waiting
for a decision from the Independent Police Conduct Authority (IPCA) as about
whether excessive force was used to quell the demonstration.
Ignorance of Structural Problems
It took more than five years for the IPCA
to release its report on the Operation 8 raids. This report criticised
police for unlawfully searching and detaining people during the raids, and also
critiqued other operational elements of the raids. However, it failed to
address serious concerns that racial discrimination played a part in the raids,
in which hundreds of police officers descended upon sleepy townships, imposed
roadblocks and questioned civilians. It is hard to imagine that the Police
could employ similar tactics in a majority non-Māori town; it is also troubling that the raids were cast as necessary to protect the public
from supposedly-seditious Māori activism.
Narrow Range of Powers
Although the Police Commissioner accepted
criticisms in the Operation 8 report and recently issued an apology, he did not feel they
warranted disciplinary action against the officers in question. This is another
key criticism of the IPCA: its findings only have the weight of
recommendations. It has been suggested that the IPCA be able to make binding statements,
lay criminal charges against police officers, and open its
own investigations (rather than waiting for a complaint). I’m not certain
whether these would improve the situation (due to a lack of information
necessary to make such a call), or whether a solution lies elsewhere—but the
Police being able to ignore the IPCA clearly devalues it as an oversight body.
Verdict: The Māori Party clearly feels that the reforms of 2007/2008 were insufficient to address systemic defects in the operation of the IPCA. It recommends the investigation of complaints against the Police as part of a wider Anti-Corruption Commission: this would presumably be more independent from the Police, and not face similar resource constraints. Crucially, it would also mean that Māori complaints about the Police are not investigated either by that same body, or an institution with close police ties.
The IPCA is at best benignly toothless; at
worst, it is a wing of the NZ Police. Either way, we have not had meaningful
and effective police oversight in New Zealand. The Māori Party and MANA Movement have highlighted real concerns that need
to be addressed, regardless of which parties are in government after the
election.
Gayathiri
Ganeshan is a student union advocate and Criminology graduate student at the
University of Auckland. She believes in being critical of institutions of
power. She likes cats and chai.
Monday 25 August 2014
A Policy A Day: Variable Superannuation
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's post is written by Jason Armishaw.
The policy for today is from the United Future Party. Flexi Super was announced by leader Peter Dunne around this time last year. This policy would allow those qualifying for superannuation in New Zealand to choose at what age they would start their superannuation payments, between the ages of 60-70. Superannuitants starting their payments earlier would receive reduced rate for their lifetime. Conversely, those starting later would receive an increased rate.
What’s wrong with the status quo?
Superannuation is the single largest part of the welfare state, making up nearly half of all Social Welfare payments in New Zealand. In turn, Social Welfare makes up roughly 25% of the government budget. The costs of superannuation are not static and are projected to massively increase over the coming years. This is caused mainly by the demographic change occurring in New Zealand, with the baby boomers reaching retirement, and life expectancy increasing. These pressures mean that Superannuation costs are going to increase. In addition, decreasing fertility rates means that the proportion of tax paying workers is decreasing in comparison to the amount of superannuitants. The combination of the two will mean that Superannuation will end up taking a larger segment of government expenditure, leaving less to spend in other areas. This creates problems with intergenerational equity, where there are large transfers of wealth from the current generation to the previous one. Additionally, Superannuation is currently universal for all of those above the age of 65, regardless of if they are still working, or their general level of affluence. While this may be good or bad, depending on your perceptions of the role of state welfare, the universality of Superannuation creates significant costs to government.
Analysis of Flexi-Super
One of the arguments put forward by United Future in favour of their policy is greater choice for the elderly, because individuals will be able to take control over when they retire, understanding that the decision has financial implications. While this is ostensibly true, the argument operates under the assumption that everyone is in a roughly similar position, and can all make rational choices. In reality this assumption does not hold. Generally speaking, those in more labour intensive work (who will be unable to work after 65), or lower socio economic individuals are more likely to take state support sooner. Conversely those who are wealthier with larger savings will have the option to take Superannuation later in their life. This is effectively the state increasing inequality amongst the elderly. While it may seem on the face of it that the policy offers greater flexibility, this is only true for those wealthy enough to hold off on receiving payments until later. Additionally, people are generally unable to make rational decisions because they do not have perfect information because they can't accurately predict the future; when you are age 60, it is difficult for you to say with certainty what your situation will be in 5 or 10 years time, so you cannot make a well-informed, rational decision on whether you should retire now or later.
While I have not been able to find figures for how much United Future would give at each age level, I have done some rough calculations of my own to figure out the degree of difference between taking the payment at a lower level and deferring the payment. I used a discount rate of 6% and discounted back the current superannuation payments. I then projected the 6% rate forward, and worked out that the someone opting into the scheme at 60 would receive roughly 75% of the current payment, while those taking it at 70, would receive 134% of the current payment. A single individual living alone would ordinarily receive $421.76 a week at 65, however if taken at 60 that individual would receive $315.16 a week, while if taken at 70, $564.41 would be received. I understand that this analysis is shaky, but with no figures to go on it illustrates the point that the scheme may generate inequality between those who are forced to take the payment earlier with those who are fortunate enough to defer the payment. (A spreadsheet with the calculations used for this post is available here.)
The second main argument in favour of the policy is that those with lower life expectancies have the ability to take the payment earlier. The line of reasoning is that it is unfair that those who die earlier don’t receive as much state support. With a Flexi Superannuation scheme, individuals will be able to increase their overall superannuation in their lifetime in comparison to the status quo by taking superannuation earlier if they know that their life expectancy is lower than the average. However, individuals aren’t able to effectively guess their life expectancy; in addition the level of financial literacy in New Zealand is not particularly high. It does not seem reasonable for individuals to be able to guess their life expectancy and plan financially for it.
As mentioned above, there has been no costing provided by United Future in their policy documents about how the scheme would look. Just that it would be done in a way that is “fiscally neutral”. Assuming that this is true, this policy would not change New Zealand’s short term financial position. However this policy does not do anything to affect the underlying demographic changes occurring in New Zealand. As touched upon earlier, the biggest drivers in the growth of superannuation payments is increasing life expectancy, meaning people spend longer on state support, and baby boomers reaching retirement age. The problem of the increasing costs of superannuation is not going away. This policy does nothing to address the fact that life expectancy of a Pakeha Male when the Universal Superannuation scheme was implemented by Muldoon in 1977 was 69 years, and would be on Superannuation for 9 years. In 2012, average life expectancy for a male was 80.2 years, and would be on Superannuation for 15 years. Flexi Super does not in anyway fix the underlying issues with the long term affordability of Superannuation. To say that this policy is kicking the can down the road would be too grandiose.
A more minor issue is the increased complexity that arises from introducing variability into these sorts of schemes. The current universal scheme is fairly straightforward to administer; just find everyone over the age of 65, work out their living situation (living alone, married, etc), and pay them their respective rate. Introducing variable Superannuation would increase the amount of administrative work that would need to be done significantly. Additionally, a married couple's superannuation is currently calculated together; how would this policy work where both spouses did not start taking their superannuation at the same time? The figures decided on would need to be constantly checked to make sure that there is no potential for welfare arbitrage (such as going on the Unemployment Benefit and deferring Superannuation). Finally, how does the scheme reconcile with those receiving pensions to/from overseas? This system is complicated already and having to adjust all of these figures depending on the year that the superannuation was taken would significantly increase it.
Verdict: While the policy seems like a sensible idea initially, it does not hold up to a reasonable degree of scrutiny. It does provide greater flexibility to the elderly, but this may not be worth the increased administrative costs and the potential increase in inequality among the elderly and infirm. The policy does not address the long term cost pressures of superannuation. I think that this policy is not a particularly good one, but more discussion needs to be had about how the state can continue to afford rapid growth to Superannuation.
Jason Armishaw is a third year Law and Commerce Student majoring in Economics at the University of Auckland. He was a writer of the Youth Long Term Fiscal Statement which was developed out of the Treasury sponsored Affording Our Future conference. He has a strong interest in public policy and fiscal management.
Today's post is written by Jason Armishaw.
The policy for today is from the United Future Party. Flexi Super was announced by leader Peter Dunne around this time last year. This policy would allow those qualifying for superannuation in New Zealand to choose at what age they would start their superannuation payments, between the ages of 60-70. Superannuitants starting their payments earlier would receive reduced rate for their lifetime. Conversely, those starting later would receive an increased rate.
What’s wrong with the status quo?
Superannuation is the single largest part of the welfare state, making up nearly half of all Social Welfare payments in New Zealand. In turn, Social Welfare makes up roughly 25% of the government budget. The costs of superannuation are not static and are projected to massively increase over the coming years. This is caused mainly by the demographic change occurring in New Zealand, with the baby boomers reaching retirement, and life expectancy increasing. These pressures mean that Superannuation costs are going to increase. In addition, decreasing fertility rates means that the proportion of tax paying workers is decreasing in comparison to the amount of superannuitants. The combination of the two will mean that Superannuation will end up taking a larger segment of government expenditure, leaving less to spend in other areas. This creates problems with intergenerational equity, where there are large transfers of wealth from the current generation to the previous one. Additionally, Superannuation is currently universal for all of those above the age of 65, regardless of if they are still working, or their general level of affluence. While this may be good or bad, depending on your perceptions of the role of state welfare, the universality of Superannuation creates significant costs to government.
Analysis of Flexi-Super
One of the arguments put forward by United Future in favour of their policy is greater choice for the elderly, because individuals will be able to take control over when they retire, understanding that the decision has financial implications. While this is ostensibly true, the argument operates under the assumption that everyone is in a roughly similar position, and can all make rational choices. In reality this assumption does not hold. Generally speaking, those in more labour intensive work (who will be unable to work after 65), or lower socio economic individuals are more likely to take state support sooner. Conversely those who are wealthier with larger savings will have the option to take Superannuation later in their life. This is effectively the state increasing inequality amongst the elderly. While it may seem on the face of it that the policy offers greater flexibility, this is only true for those wealthy enough to hold off on receiving payments until later. Additionally, people are generally unable to make rational decisions because they do not have perfect information because they can't accurately predict the future; when you are age 60, it is difficult for you to say with certainty what your situation will be in 5 or 10 years time, so you cannot make a well-informed, rational decision on whether you should retire now or later.
While I have not been able to find figures for how much United Future would give at each age level, I have done some rough calculations of my own to figure out the degree of difference between taking the payment at a lower level and deferring the payment. I used a discount rate of 6% and discounted back the current superannuation payments. I then projected the 6% rate forward, and worked out that the someone opting into the scheme at 60 would receive roughly 75% of the current payment, while those taking it at 70, would receive 134% of the current payment. A single individual living alone would ordinarily receive $421.76 a week at 65, however if taken at 60 that individual would receive $315.16 a week, while if taken at 70, $564.41 would be received. I understand that this analysis is shaky, but with no figures to go on it illustrates the point that the scheme may generate inequality between those who are forced to take the payment earlier with those who are fortunate enough to defer the payment. (A spreadsheet with the calculations used for this post is available here.)
The second main argument in favour of the policy is that those with lower life expectancies have the ability to take the payment earlier. The line of reasoning is that it is unfair that those who die earlier don’t receive as much state support. With a Flexi Superannuation scheme, individuals will be able to increase their overall superannuation in their lifetime in comparison to the status quo by taking superannuation earlier if they know that their life expectancy is lower than the average. However, individuals aren’t able to effectively guess their life expectancy; in addition the level of financial literacy in New Zealand is not particularly high. It does not seem reasonable for individuals to be able to guess their life expectancy and plan financially for it.
As mentioned above, there has been no costing provided by United Future in their policy documents about how the scheme would look. Just that it would be done in a way that is “fiscally neutral”. Assuming that this is true, this policy would not change New Zealand’s short term financial position. However this policy does not do anything to affect the underlying demographic changes occurring in New Zealand. As touched upon earlier, the biggest drivers in the growth of superannuation payments is increasing life expectancy, meaning people spend longer on state support, and baby boomers reaching retirement age. The problem of the increasing costs of superannuation is not going away. This policy does nothing to address the fact that life expectancy of a Pakeha Male when the Universal Superannuation scheme was implemented by Muldoon in 1977 was 69 years, and would be on Superannuation for 9 years. In 2012, average life expectancy for a male was 80.2 years, and would be on Superannuation for 15 years. Flexi Super does not in anyway fix the underlying issues with the long term affordability of Superannuation. To say that this policy is kicking the can down the road would be too grandiose.
A more minor issue is the increased complexity that arises from introducing variability into these sorts of schemes. The current universal scheme is fairly straightforward to administer; just find everyone over the age of 65, work out their living situation (living alone, married, etc), and pay them their respective rate. Introducing variable Superannuation would increase the amount of administrative work that would need to be done significantly. Additionally, a married couple's superannuation is currently calculated together; how would this policy work where both spouses did not start taking their superannuation at the same time? The figures decided on would need to be constantly checked to make sure that there is no potential for welfare arbitrage (such as going on the Unemployment Benefit and deferring Superannuation). Finally, how does the scheme reconcile with those receiving pensions to/from overseas? This system is complicated already and having to adjust all of these figures depending on the year that the superannuation was taken would significantly increase it.
Verdict: While the policy seems like a sensible idea initially, it does not hold up to a reasonable degree of scrutiny. It does provide greater flexibility to the elderly, but this may not be worth the increased administrative costs and the potential increase in inequality among the elderly and infirm. The policy does not address the long term cost pressures of superannuation. I think that this policy is not a particularly good one, but more discussion needs to be had about how the state can continue to afford rapid growth to Superannuation.
Jason Armishaw is a third year Law and Commerce Student majoring in Economics at the University of Auckland. He was a writer of the Youth Long Term Fiscal Statement which was developed out of the Treasury sponsored Affording Our Future conference. He has a strong interest in public policy and fiscal management.
Friday 22 August 2014
A Policy A Day: Microfinance Loan Scheme
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's policy comes from the National Party. Paula Bennett announced on 16 May 2014 that the government is looking to assist community-based organisations in the provision of low or no-interest loans to people with unsustainably high debt or who cannot access affordable credit. The policy can be summarised as:
- Microfinance Loan Scheme for underprivileged and low-income individuals
Background
In 2012, the Children's Commissioner created a group of experts to look at poverty in New Zealand. Unsurprisingly, they found that debt was one of the biggest drivers of poverty, yet we as a country are not doing enough to address the problem. The Expert Advisory Group on Solutions to Child Poverty returned with many recommendations, one of which was introducing low-interest loans to undercut "loan sharks". From the report:
"Many New Zealand families have some form of debt, such as a mortgage or credit card debit. Fewer families experience problem debt, where debt repayment becomes unmanageable and leads to financial strain. Children living in families with problem debt have less money to meet their essential needs, including food, clothing, heating, transport and school-related expenses."
From the NZ Herald article at the time:
"Expert group co-chairman Dr Jonathan Boston said the idea was inspired by an Australian scheme run by a charity, Good Shepherd Microfinance, using capital from the National Australia Bank (NAB) to lend to low-income families to buy essential household items at no interest, or cars and other items at low interest."
Today's policy comes from the National Party. Paula Bennett announced on 16 May 2014 that the government is looking to assist community-based organisations in the provision of low or no-interest loans to people with unsustainably high debt or who cannot access affordable credit. The policy can be summarised as:
- Microfinance Loan Scheme for underprivileged and low-income individuals
Background
In 2012, the Children's Commissioner created a group of experts to look at poverty in New Zealand. Unsurprisingly, they found that debt was one of the biggest drivers of poverty, yet we as a country are not doing enough to address the problem. The Expert Advisory Group on Solutions to Child Poverty returned with many recommendations, one of which was introducing low-interest loans to undercut "loan sharks". From the report:
"Many New Zealand families have some form of debt, such as a mortgage or credit card debit. Fewer families experience problem debt, where debt repayment becomes unmanageable and leads to financial strain. Children living in families with problem debt have less money to meet their essential needs, including food, clothing, heating, transport and school-related expenses."
From the NZ Herald article at the time:
"Expert group co-chairman Dr Jonathan Boston said the idea was inspired by an Australian scheme run by a charity, Good Shepherd Microfinance, using capital from the National Australia Bank (NAB) to lend to low-income families to buy essential household items at no interest, or cars and other items at low interest."
There are a few schemes already in existence in New Zealand, such as the Nga Tangata Microfinance Trust funded by Kiwibank. However, loan sharks still operate in many places, taking advantage of individuals who need money quickly and can't get it from friends/family or banks. People may have bad credit scores due to unpaid bills, or might be unable to provide collateral/security. Loan sharks often rely on low levels of education so that people don't read the fine print, and may not fully understand what they're getting themselves into. The price of getting money in this way is typically extortionately high interest rates, reportedly as high as 500% (per annum). Anecdotal evidence includes a man who bought a car for $9,000, expecting his total repayments including interest to be $11,000, but ultimately faced a total bill of $21,000. There are many other stories of shocking exploitation like this across the country.
Analysis of the Policy
The idea behind the policy is for the government to either create a programme itself or work with community-based organisation to provide loans to individuals when they are in financial hardship. The government is able to borrow money at a lower rate than most individuals, but regardless they would be able to provide the loans at an interest rate far lower than the loan sharks. In a perfect free market economy, this should price the loan sharks out of the market, as individuals should always choose the cheaper service. In many microfinance schemes, applicants have to go through an interview process to assess whether they need the money and to discuss their ability to pay the money back. Importantly, because these schemes are generally attached to social community organisations, the applicant and their family is likely to receive more knowledgeable support from social workers and volunteers. The government has a strong role in providing social welfare support, and microfinance schemes are a relatively low-risk method of helping people help themselves with a loan rather than a handout.
However, the policy feels like a solution that takes a "well if [bad thing] is going to happen anyway, at least it should be safe and controlled" approach. For some difficult social problems that approach is better than doing nothing, but it is like a panadol; it doesn't address the root issues that cause the bad thing to happen. Loan sharks exist because a profitable environment exists for them to operate in. Changing that environment is critical to resolving the true causes of the problem.
Even if the government is able to introduce a new entrant to the market that is able to take some customers away from the loan sharks, the loan sharks will continue to exist. Imperfect information and inequitable access to information will keep the loan sharks in the market, and the government should do more to stop their actions. The government has the power to regulate and restrict the types of exploitative and predatory practices used by loan sharks. For example, ridiculously high interest rates as high as 500% a year and unreasonable administration fees as high as $400 can be legislated against with caps (such as interest rate caps) if the government is willing to crack down on these operators. The Credit Contracts and Financial Services Law Reform Bill was passed in May, which included provisions that "put the onus on lenders to disclose full details of interest or fees and ensure borrowers can meet their repayment requirements," but this does not go far enough to protect vulnerable members of our society from exploitation.
However, such regulation goes against the interests of the many high-value donors to political parties who prefer the status quo, and the political will to enact harsh restrictions that puts people out of business is low. There are arguments that banning loan sharks outright would inadvertently ban or affect other types of more legitimate financial activity, and limits the ability of the "free market" to operate smoothly. In theory, individuals should be given choices, and if they choose to go to a loan shark then the free market should reward or punish them as a consequence of that choice. However, loan sharks give the entire financial industry a bad reputation, and ostensibly it would be a good idea for the legitimate and big players to back such regulation so that they can be seen to be more trustworthy. Unfortunately, it appears that profits are more attractive than morals.
Verdict: A policy with good intentions that will likely help some people, but doesn't address the root causes that allow loan sharks to operate. More significant and effective action could be taken to achieve a stronger outcome. The policy is still a good incremental step though.
Analysis of the Policy
The idea behind the policy is for the government to either create a programme itself or work with community-based organisation to provide loans to individuals when they are in financial hardship. The government is able to borrow money at a lower rate than most individuals, but regardless they would be able to provide the loans at an interest rate far lower than the loan sharks. In a perfect free market economy, this should price the loan sharks out of the market, as individuals should always choose the cheaper service. In many microfinance schemes, applicants have to go through an interview process to assess whether they need the money and to discuss their ability to pay the money back. Importantly, because these schemes are generally attached to social community organisations, the applicant and their family is likely to receive more knowledgeable support from social workers and volunteers. The government has a strong role in providing social welfare support, and microfinance schemes are a relatively low-risk method of helping people help themselves with a loan rather than a handout.
However, the policy feels like a solution that takes a "well if [bad thing] is going to happen anyway, at least it should be safe and controlled" approach. For some difficult social problems that approach is better than doing nothing, but it is like a panadol; it doesn't address the root issues that cause the bad thing to happen. Loan sharks exist because a profitable environment exists for them to operate in. Changing that environment is critical to resolving the true causes of the problem.
Even if the government is able to introduce a new entrant to the market that is able to take some customers away from the loan sharks, the loan sharks will continue to exist. Imperfect information and inequitable access to information will keep the loan sharks in the market, and the government should do more to stop their actions. The government has the power to regulate and restrict the types of exploitative and predatory practices used by loan sharks. For example, ridiculously high interest rates as high as 500% a year and unreasonable administration fees as high as $400 can be legislated against with caps (such as interest rate caps) if the government is willing to crack down on these operators. The Credit Contracts and Financial Services Law Reform Bill was passed in May, which included provisions that "put the onus on lenders to disclose full details of interest or fees and ensure borrowers can meet their repayment requirements," but this does not go far enough to protect vulnerable members of our society from exploitation.
However, such regulation goes against the interests of the many high-value donors to political parties who prefer the status quo, and the political will to enact harsh restrictions that puts people out of business is low. There are arguments that banning loan sharks outright would inadvertently ban or affect other types of more legitimate financial activity, and limits the ability of the "free market" to operate smoothly. In theory, individuals should be given choices, and if they choose to go to a loan shark then the free market should reward or punish them as a consequence of that choice. However, loan sharks give the entire financial industry a bad reputation, and ostensibly it would be a good idea for the legitimate and big players to back such regulation so that they can be seen to be more trustworthy. Unfortunately, it appears that profits are more attractive than morals.
Thursday 21 August 2014
A Policy A Day: Internet Rights and Freedoms
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's policy comes from the Green Party. Gareth Hughes has developed this crowdsourced policy with the internet, through reddit, twitter, and other social media services. The bill is not finalised yet, but the crowdsourcing model allows for an unprecedented level of democratic participation before the bill even reaches a first reading, and provides an alternative to the sometimes inconvenient select committee system. There are four main outcomes of the bill/policy:
- Ten Internet Rights and Freedoms including the right to access, the right to encryption, the right to privacy, the right to be forgotten, and net neutrality.
- Establishment of an Internet Rights Commissioner to allow NZers to seek effective remedies for human rights violations online.
- A Chief Technology Officer (similar to the Chief Science Advisor) to champion the Internet economy.
- Support for a global Internet Rights Treaty
Background
Digital rights are increasingly being recognised by a number of countries around the world, particularly in Europe. The absence of clearly defined human rights has been described as the "missing link" between the technology oriented and value oriented approaches to the internet. A lack of understanding of how real world human rights that are established and acknowledged translate to the digital world mean that there is a lot more room for exploitation and abuses of power.
Through a combination of common law and legislation, access to the internet is guaranteed as a right in Spain, Finland, and Costa Rica. A number of surveys and polls around the world have found that individuals believe that "the internet does more to help society than it does to hurt it" and "access to the internet should be a basic human right" (both 83% agree in the Global Internet User Survey 2012, which had a huge sample size of 10000 but may be biased since it was conducted on online). It seems that around the world, the trend is moving towards recognising these rights and ensuring that the right protections are in place.
Analysis of the Policy
Perhaps the best way to analyse the overall policy is to look at each of the four main outcomes in turn.
The ten Internet Rights and Freedoms are generally a good idea. We as a society already accept most of them, which is evidence by the fact that a number of them such as freedom of expression and freedom of association are already protected by law under other human rights legislation. This is both a good and a bad thing - it's good to reaffirm them and ensure that everyone understand that they apply in a digital context as well, but it's a bad to reaffirm them for the sake of reaffirming them. While there is some room for debate on whether or not these ten rights are the only rights we should be protecting or if it's worth duplicating the law, overall it is difficult to see why these rights as a whole should not be upheld. It is a little difficult to argue for these rights when bad things haven't necessarily happened in New Zealand yet, which makes this policy a bit proactive rather than reactive.
The establishment of an Internet Rights Commissioner is an interesting proposal in that it allows for a new individual with specific expertise to help promote and protect digital rights in NZ. Given that it is an area that we have mostly been silent on in the past, it makes sense that someone needs to be appointed to help raise awareness and also to enforce the rights enshrined in the previous policy. However, there are some legitimate concerns over the addition to bureaucracy, and while the policy proposes that the position be created within the existing Human Rights Commission, it is perhaps not strictly necessary when that power and work can be distributed amongst existing agencies such as the HRC and the Privacy Commission. If the internet is as ubiquitous as this policy suggests, then chances are all human rights agencies are going to need to be up-to-date and familiar with the digital space anyway.
A Chief Technology Officer sounds a lot more exciting if you imagine it to be someone who's going to be responsible for the government's technical systems and fix Novopay, but that's unfortunately not what the policy suggests. Having someone who can advocate for technology in the same way that the Chief Science Advisor does would be beneficial though; perhaps the best argument for this is the recognition that our politicians are, by and large, incompetent when it comes to understanding and using technology. Providing politically neutral advice would help inform politicians and help them make better decisions, and also help with educational initiatives to improve the general public's understanding of technology's role in society. Given the overlap with the Chief Science Advisor, I imagine that there would be a lot of collaboration to help make Science and Technology more of a focus for a forward-looking New Zealand.
Lastly, a global Internet Rights Treaty is a continuing work in progress that is in its relatively infantile stages. For our human rights to be truly protected online, a global solution that crosses national boundaries has to be adopted. A draft Charter on human rights and principles for the internet was produced by the UN Internet Governance Forum, and there is perhaps an opportunity for New Zealand to lead the way in pushing for that Charter to be further developed and ratified. There is less certainty in this part of the policy, mainly because when other countries start to get involved everything becomes a lot more fluid. We would have to be careful not to allow certain countries to hijack the Charter and dilute or destroy the good intentions behind the process and replace it with corporate or oppressive interests. It is a step in the right direction though, and it may just be up to the global bureaucracy to sculpt such a treaty into something that can last.
Verdict: A good policy that is long overdue. The internet is not a fad, and protections need to be put in place before we start seeing the types of exploitation happening overseas happening in New Zealand. The policy as a whole is something that we should support and continue to develop.
Today's policy comes from the Green Party. Gareth Hughes has developed this crowdsourced policy with the internet, through reddit, twitter, and other social media services. The bill is not finalised yet, but the crowdsourcing model allows for an unprecedented level of democratic participation before the bill even reaches a first reading, and provides an alternative to the sometimes inconvenient select committee system. There are four main outcomes of the bill/policy:
- Ten Internet Rights and Freedoms including the right to access, the right to encryption, the right to privacy, the right to be forgotten, and net neutrality.
- Establishment of an Internet Rights Commissioner to allow NZers to seek effective remedies for human rights violations online.
- A Chief Technology Officer (similar to the Chief Science Advisor) to champion the Internet economy.
- Support for a global Internet Rights Treaty
Background
Digital rights are increasingly being recognised by a number of countries around the world, particularly in Europe. The absence of clearly defined human rights has been described as the "missing link" between the technology oriented and value oriented approaches to the internet. A lack of understanding of how real world human rights that are established and acknowledged translate to the digital world mean that there is a lot more room for exploitation and abuses of power.
Through a combination of common law and legislation, access to the internet is guaranteed as a right in Spain, Finland, and Costa Rica. A number of surveys and polls around the world have found that individuals believe that "the internet does more to help society than it does to hurt it" and "access to the internet should be a basic human right" (both 83% agree in the Global Internet User Survey 2012, which had a huge sample size of 10000 but may be biased since it was conducted on online). It seems that around the world, the trend is moving towards recognising these rights and ensuring that the right protections are in place.
Analysis of the Policy
Perhaps the best way to analyse the overall policy is to look at each of the four main outcomes in turn.
The ten Internet Rights and Freedoms are generally a good idea. We as a society already accept most of them, which is evidence by the fact that a number of them such as freedom of expression and freedom of association are already protected by law under other human rights legislation. This is both a good and a bad thing - it's good to reaffirm them and ensure that everyone understand that they apply in a digital context as well, but it's a bad to reaffirm them for the sake of reaffirming them. While there is some room for debate on whether or not these ten rights are the only rights we should be protecting or if it's worth duplicating the law, overall it is difficult to see why these rights as a whole should not be upheld. It is a little difficult to argue for these rights when bad things haven't necessarily happened in New Zealand yet, which makes this policy a bit proactive rather than reactive.
The establishment of an Internet Rights Commissioner is an interesting proposal in that it allows for a new individual with specific expertise to help promote and protect digital rights in NZ. Given that it is an area that we have mostly been silent on in the past, it makes sense that someone needs to be appointed to help raise awareness and also to enforce the rights enshrined in the previous policy. However, there are some legitimate concerns over the addition to bureaucracy, and while the policy proposes that the position be created within the existing Human Rights Commission, it is perhaps not strictly necessary when that power and work can be distributed amongst existing agencies such as the HRC and the Privacy Commission. If the internet is as ubiquitous as this policy suggests, then chances are all human rights agencies are going to need to be up-to-date and familiar with the digital space anyway.
A Chief Technology Officer sounds a lot more exciting if you imagine it to be someone who's going to be responsible for the government's technical systems and fix Novopay, but that's unfortunately not what the policy suggests. Having someone who can advocate for technology in the same way that the Chief Science Advisor does would be beneficial though; perhaps the best argument for this is the recognition that our politicians are, by and large, incompetent when it comes to understanding and using technology. Providing politically neutral advice would help inform politicians and help them make better decisions, and also help with educational initiatives to improve the general public's understanding of technology's role in society. Given the overlap with the Chief Science Advisor, I imagine that there would be a lot of collaboration to help make Science and Technology more of a focus for a forward-looking New Zealand.
Lastly, a global Internet Rights Treaty is a continuing work in progress that is in its relatively infantile stages. For our human rights to be truly protected online, a global solution that crosses national boundaries has to be adopted. A draft Charter on human rights and principles for the internet was produced by the UN Internet Governance Forum, and there is perhaps an opportunity for New Zealand to lead the way in pushing for that Charter to be further developed and ratified. There is less certainty in this part of the policy, mainly because when other countries start to get involved everything becomes a lot more fluid. We would have to be careful not to allow certain countries to hijack the Charter and dilute or destroy the good intentions behind the process and replace it with corporate or oppressive interests. It is a step in the right direction though, and it may just be up to the global bureaucracy to sculpt such a treaty into something that can last.
Verdict: A good policy that is long overdue. The internet is not a fad, and protections need to be put in place before we start seeing the types of exploitation happening overseas happening in New Zealand. The policy as a whole is something that we should support and continue to develop.
Wednesday 20 August 2014
A Policy A Day: Binding Referenda
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's policy comes from the Conservative Party. Binding citizens initiated referenda is an interesting policy, because at face value it sounds a lot more democratic, and we all like democracy right? The issue is so important to the Conservatives, that they have stated that it is a bottom line issue for them and they will not enter a coalition with the National Party unless they agree to introduce binding referenda. The specifics of the policy are not on the issues page of their website, but here's the policy from their previous press releases:
- Citizens Initiated Referenda that achieve a two thirds (66.67%) majority will be binding on the government
Background
There are two types of referendum in New Zealand - government-led and citizens-initiated. Their names imply the source of those referenda - this analysis focuses on Citizens Initiated Referenda (CIRs). To trigger a CIR, an individual has to lodge a petition with the Clerk of the House. From this point, they have 12 months to collect signatures from 10% of all registered electors. At the 2011 election, there were 3,070,847 people on the electoral roll, so in practice petitioners need to gather around 340,000 signatures to account for duplicate signatures, signatures that can't be verified, and other errors. This is not a trivial task, and equates to getting almost 1,000 signatures a day.
As it turns out, the majority of petitions lodged do not go ahead, and lapse after 12 months because not enough signatures could be obtained. Topics including battery hens, voluntary euthenasia, banning tobacco, prostitution, and even binding citizens initiated referenda have been proposed over the last 12 years.
Since the introduction of the Citizens Initiated Referenda Act 1993, five CIRs have been held:
- In 1995, on whether the number of professional full-time firefighters should be reduced (88% NO, 27% turnout)
- In 1999, two referenda; one on reducing the size of Parliament from 120 seats to 99 (81.47% YES), and one on justice reform to impose "minimum sentences and hard labour" for serious violent offences (91.78% YES, 84.8% turnout as referenda held in conjunction with the general election)
- In 2009, on whether corporal punishment "as a part of good parental correction" should be a crime (87.4% NO, 56.1% turnout)
- In 2013, on whether the asset sales should be supported (67.3% NO, 45.07% turnout)
As it stands, Citizens Initiated Referenda are not binding on the government, meaning that if the CIR passes, the government can choose whether they do what it tells them to do, or ignore it. In all five cases of CIRs so far, the government has chosen to ignore the result each time.
Analysis of Policy
The fundamental question that we ask when governments ignore Citizens Initiated Referenda (CIRs) is whether the government truly believes that they know better than the electorate. On the one hand, when we elect a government we entrust them with the power to make the decisions that run our country for three years. A CIR is rarely going to reaffirm something the government is already doing; rather the CIRs in recent times have sharply criticised decisions and tried to apply pressure to reverse those decisions. However, successive governments have chosen to ignore these CIRs, presumably because they have more information than available to the electorate or because they know better than us.
As it turns out, in some cases this is true. For example, the anti-smacking referendum came after rigorous debate fuelled by media misinformation and a fundamental misunderstanding of what the law change actually did. Sue Bradford proposed a change that attracted a rare show of cross-party bipartisan support, because ultimately it was a good idea. The law change only removed the criminal defence of "oh I was just disciplining my child" that had been abused far too many times, with some absolutely shocking cases. It was never intended to criminalise the light smacking or other disciplining techniques used by the majority of parents. In this case I would argue that yes, the government did know better than the electorate, and it was better for them to keep the law change and protect at least some children from domestic violence and child abuse.
In other cases it is more questionable. It would be difficult to argue with certainty that the state asset sales over the last term were definitively the right thing to do. It is often held up by proponents of binding CIR as an example of the government clearly ignoring the will of the majority, because 67.3% did not agree with the government selling up to 49% of its holdings in those assets. Except there is one fundamental issue with this "will of the majority" claim - only 45.07% of the electorate responded to that CIR, meaning that actually only 30.33% of the entire electorate did not agree; not a majority. This is a common trend over CIRs, which have had far lower voting rates than general elections. It begs the question - if we're going to have binding referenda, then surely we would need to introduce a minimum quorum as well, something like requiring at least 75% of the electorate to vote before the CIR can be considered by the government (2/3rds of 75% is 50%). Otherwise, the 2/3rds majority for the CIR to be binding isn't necessarily a simple majority of all eligible voters.
This policy also should require changes to how CIRs are set up. First of all, rather than only having the binary YES or NO options (which is currently required by law), a No Vote as an option should be added (at least to influence quorum, if not the final outcome). We also need to make sure that the questions really are yes/no questions, so that "it depends" or "I sit somewhere on a scale between yes and no" are not plausible responses. The questions would also have to be more action oriented; rather than the confusing questions that ask for a general opinion on the issue, the question would have to be more like a Proposition in the US, where a specific policy or piece of legislation is passed into law or repealed directly by the electorate. With the questions we have now, they don't require or force the government to do anything in particular, they're essentially large-scale opinion polls. We also need to look carefully at the biases created by poorly worded questions; for example, there is a strong case that the anti-smacking referendum biased respondents to vote yes because the question implied that smacking was good parenting, and no one wants to call themselves a bad parent. Before we can put our trust in CIRs to provide binding action on our government, we need to ensure that they are adequately doing the job they were intended for.
In some respects, the government tends to be a little more liberal and forward thinking than the rest of the country. The Marriage Equality Bill passed by a much larger margin in Parliament than opinion polling of the electorate suggested. Allowing the population to reverse such decisions by CIR could hamper New Zealand's generally positive record of social progress. The Internet Party has an interesting proposal of "conditional binding referenda" where CIR in certain areas (such as human rights, national security, and international treaties) would not be binding in order to protect minority interests of marginalised groups (interestingly they also think that binding CIRs should have a 75% majority and a 50% quorom). Beyond that, it would also make it harder in general for the government to pursue new issues if they have to deal with more CIRs, and we would continue to rehash the same debates over and over again. There are also legitimate concerns of the electorate using CIRs to simultaneously demand that the government give them more benefits, while demanding tax cuts, creating fiscal chaos as the government is forced to spend more money than it has; California is an oft-used example.
Lastly we need to consider the costs of CIRs, and whether this policy would change the status quo. The most recent referendum (on asset sales) was reported to cost $9 million, and activists (and opposition parties) were criticised for wasting a lot of money on a referendum that was never going to change the government's decision. The Electoral Commission conducts the referenda by mail, which costs less than running election booths across the country, but may cost more than an online system (although implementing such a system would be very costly, and some mail systems would still be required for many voters, duplicating effort and functionality). Would introducing binding referenda make them more common? Perhaps - citizens have more incentive to propose and pursue a CIR if they know that the result will achieve actual change. However, the cost of pursuing a CIR is not cheap for activists and organisers either. At 2011 electoral roll levels, an average of 842 signatures have to be collected every day for a year to reach the 307,085 signatures required to trigger a CIR (it is noted that to account for errors, duplicates, etc. the asset sales referendum collected and presented 393,000 signatures). The 10% threshold is designed to prevent spurious or vexatious petitions, but it is a very high threshold that incurs a significant cost just in getting it off the ground. The threshold should also be reconsidered as part of any binding referenda policy.
Verdict: With the intention of keeping the policy "simple", the Conservative Party has left many details unanswered. For the CIRs to become binding there need to be significant changes to how they are run. There is sufficient doubt in my mind over the balance of power between the government and the electorate, and binding CIRs could create more harm than good. Overall, I am not convinced of the efficacy of this policy.
Today's policy comes from the Conservative Party. Binding citizens initiated referenda is an interesting policy, because at face value it sounds a lot more democratic, and we all like democracy right? The issue is so important to the Conservatives, that they have stated that it is a bottom line issue for them and they will not enter a coalition with the National Party unless they agree to introduce binding referenda. The specifics of the policy are not on the issues page of their website, but here's the policy from their previous press releases:
- Citizens Initiated Referenda that achieve a two thirds (66.67%) majority will be binding on the government
Background
There are two types of referendum in New Zealand - government-led and citizens-initiated. Their names imply the source of those referenda - this analysis focuses on Citizens Initiated Referenda (CIRs). To trigger a CIR, an individual has to lodge a petition with the Clerk of the House. From this point, they have 12 months to collect signatures from 10% of all registered electors. At the 2011 election, there were 3,070,847 people on the electoral roll, so in practice petitioners need to gather around 340,000 signatures to account for duplicate signatures, signatures that can't be verified, and other errors. This is not a trivial task, and equates to getting almost 1,000 signatures a day.
As it turns out, the majority of petitions lodged do not go ahead, and lapse after 12 months because not enough signatures could be obtained. Topics including battery hens, voluntary euthenasia, banning tobacco, prostitution, and even binding citizens initiated referenda have been proposed over the last 12 years.
- In 1995, on whether the number of professional full-time firefighters should be reduced (88% NO, 27% turnout)
- In 1999, two referenda; one on reducing the size of Parliament from 120 seats to 99 (81.47% YES), and one on justice reform to impose "minimum sentences and hard labour" for serious violent offences (91.78% YES, 84.8% turnout as referenda held in conjunction with the general election)
- In 2009, on whether corporal punishment "as a part of good parental correction" should be a crime (87.4% NO, 56.1% turnout)
- In 2013, on whether the asset sales should be supported (67.3% NO, 45.07% turnout)
As it stands, Citizens Initiated Referenda are not binding on the government, meaning that if the CIR passes, the government can choose whether they do what it tells them to do, or ignore it. In all five cases of CIRs so far, the government has chosen to ignore the result each time.
Analysis of Policy
The fundamental question that we ask when governments ignore Citizens Initiated Referenda (CIRs) is whether the government truly believes that they know better than the electorate. On the one hand, when we elect a government we entrust them with the power to make the decisions that run our country for three years. A CIR is rarely going to reaffirm something the government is already doing; rather the CIRs in recent times have sharply criticised decisions and tried to apply pressure to reverse those decisions. However, successive governments have chosen to ignore these CIRs, presumably because they have more information than available to the electorate or because they know better than us.
As it turns out, in some cases this is true. For example, the anti-smacking referendum came after rigorous debate fuelled by media misinformation and a fundamental misunderstanding of what the law change actually did. Sue Bradford proposed a change that attracted a rare show of cross-party bipartisan support, because ultimately it was a good idea. The law change only removed the criminal defence of "oh I was just disciplining my child" that had been abused far too many times, with some absolutely shocking cases. It was never intended to criminalise the light smacking or other disciplining techniques used by the majority of parents. In this case I would argue that yes, the government did know better than the electorate, and it was better for them to keep the law change and protect at least some children from domestic violence and child abuse.
In other cases it is more questionable. It would be difficult to argue with certainty that the state asset sales over the last term were definitively the right thing to do. It is often held up by proponents of binding CIR as an example of the government clearly ignoring the will of the majority, because 67.3% did not agree with the government selling up to 49% of its holdings in those assets. Except there is one fundamental issue with this "will of the majority" claim - only 45.07% of the electorate responded to that CIR, meaning that actually only 30.33% of the entire electorate did not agree; not a majority. This is a common trend over CIRs, which have had far lower voting rates than general elections. It begs the question - if we're going to have binding referenda, then surely we would need to introduce a minimum quorum as well, something like requiring at least 75% of the electorate to vote before the CIR can be considered by the government (2/3rds of 75% is 50%). Otherwise, the 2/3rds majority for the CIR to be binding isn't necessarily a simple majority of all eligible voters.
This policy also should require changes to how CIRs are set up. First of all, rather than only having the binary YES or NO options (which is currently required by law), a No Vote as an option should be added (at least to influence quorum, if not the final outcome). We also need to make sure that the questions really are yes/no questions, so that "it depends" or "I sit somewhere on a scale between yes and no" are not plausible responses. The questions would also have to be more action oriented; rather than the confusing questions that ask for a general opinion on the issue, the question would have to be more like a Proposition in the US, where a specific policy or piece of legislation is passed into law or repealed directly by the electorate. With the questions we have now, they don't require or force the government to do anything in particular, they're essentially large-scale opinion polls. We also need to look carefully at the biases created by poorly worded questions; for example, there is a strong case that the anti-smacking referendum biased respondents to vote yes because the question implied that smacking was good parenting, and no one wants to call themselves a bad parent. Before we can put our trust in CIRs to provide binding action on our government, we need to ensure that they are adequately doing the job they were intended for.
In some respects, the government tends to be a little more liberal and forward thinking than the rest of the country. The Marriage Equality Bill passed by a much larger margin in Parliament than opinion polling of the electorate suggested. Allowing the population to reverse such decisions by CIR could hamper New Zealand's generally positive record of social progress. The Internet Party has an interesting proposal of "conditional binding referenda" where CIR in certain areas (such as human rights, national security, and international treaties) would not be binding in order to protect minority interests of marginalised groups (interestingly they also think that binding CIRs should have a 75% majority and a 50% quorom). Beyond that, it would also make it harder in general for the government to pursue new issues if they have to deal with more CIRs, and we would continue to rehash the same debates over and over again. There are also legitimate concerns of the electorate using CIRs to simultaneously demand that the government give them more benefits, while demanding tax cuts, creating fiscal chaos as the government is forced to spend more money than it has; California is an oft-used example.
Lastly we need to consider the costs of CIRs, and whether this policy would change the status quo. The most recent referendum (on asset sales) was reported to cost $9 million, and activists (and opposition parties) were criticised for wasting a lot of money on a referendum that was never going to change the government's decision. The Electoral Commission conducts the referenda by mail, which costs less than running election booths across the country, but may cost more than an online system (although implementing such a system would be very costly, and some mail systems would still be required for many voters, duplicating effort and functionality). Would introducing binding referenda make them more common? Perhaps - citizens have more incentive to propose and pursue a CIR if they know that the result will achieve actual change. However, the cost of pursuing a CIR is not cheap for activists and organisers either. At 2011 electoral roll levels, an average of 842 signatures have to be collected every day for a year to reach the 307,085 signatures required to trigger a CIR (it is noted that to account for errors, duplicates, etc. the asset sales referendum collected and presented 393,000 signatures). The 10% threshold is designed to prevent spurious or vexatious petitions, but it is a very high threshold that incurs a significant cost just in getting it off the ground. The threshold should also be reconsidered as part of any binding referenda policy.
Verdict: With the intention of keeping the policy "simple", the Conservative Party has left many details unanswered. For the CIRs to become binding there need to be significant changes to how they are run. There is sufficient doubt in my mind over the balance of power between the government and the electorate, and binding CIRs could create more harm than good. Overall, I am not convinced of the efficacy of this policy.
Tuesday 19 August 2014
A Policy A Day: Free Tertiary Education
In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available here. Enjoy!
Today's policy comes from the Internet Party. While the policy is yet to be fully fleshed out on their website, it has been touted as a flagship policy for a few months now as part of their "socially just and inclusive" policy package. A few other parties such as the Green Party and the Mana Party have expressed similar sentiments, although usually stopping short of moving to a completely government-paid model of:
- Free tertiary education and student loans
More recently, the policy has been repeated again and again at the Internet MANA roadshow throughout the country. The Internet Party's Palmerston North candidate (who actually teaches at AUT in Auckland), Dr Pani Farvid, says:
"This means that all New Zealanders who want to better their education can do so for free, as we all know knowledge is power ... We are doing a massive disservice to our young people who have the desire and the urge to better themselves by learning more, by slapping them with a massive debt as they turn 18, 19, 20. They're starting their lives on the back foot as soon as they want to study."
Background
A student loan is now an expectation of tertiary education in New Zealand. By the time I graduate, I will have accrued roughly $40,000 of debt in course fees alone (I've never taken living costs). As is often stated, this was not always the case. Tertiary education used to be free! Journalist Sarah Robson wrote quite a good piece in Salient back in 2009, drawing on anecdotal evidence of her mum who "is always right", and explaining how Phil Goff (yes, that's right, Phil Goff), the Education Minister in 1989, introduced the user-pays system for tertiary education to reduce the government's fiscal obligations, and introduced the student loan scheme to help ease the pain for young people.
Tertiary education is often conflated with university education, but it is important to note that there are a significant number of polytechnics, institutes of technology, colleges of education, and wānanga that are also included in this group. Funding is currently through a combination of student fees and government subsidies. The government funds tertiary institutions based on the number of enrolled students and the study time of each course to calculate an equivalent full-time student (EFTS) number. However, this funding has not been increasing at the rate of inflation, and tertiary institutions are struggling to meet their costs, forcing them to pass those costs onto students. The rate at which tertiary institutions can increase student tuition fees is capped at 4% per year, except that institutions can apply to the Tertiary Education Commission to exceed that cap if necessary.
Students eventually have to pay student loans back to the government, although this has been interest-free since 2005. After they graduate, the IRD starts to take 12% off all pay over a threshold. Students can also claim a student allowance to help pay for their living expenses as well (around $170 a week, which will not rise with CPI inflation until at least 2017 as part of a govt cost saving measure), which they do not have to pay back. However, the student allowance is means-tested, and most commonly students may not be able to claim a student allowance if their parents' income is too high. There is also a limit on how long you can claim a student allowance for (roughly four years), which can be limiting for some students (such as those studying conjoint degrees that take five or more years).
Analysis of the Policy
In general, it has become harder and less affordable for individuals to be students in New Zealand. While enrolments at most tertiary institutions have been rising, and competition for limited entry programmes such as law and medicine is increasing, more and more individuals are being priced out of tertiary education, and forced to seek employment that may not be in their long-term interests. The Ministry of Social Development reports that individuals with a Bachelor's degree have hourly earnings 64% higher than those with no qualifications, and 29% higher for those with other tertiary qualifications.
For current and future students, this policy would be a godsend in making their tertiary education much more financially viable and feasible. It becomes far easier for students to take on the risk of education, investing multiple years of their life for a potential future income pay-off. That risk is not a certain risk; we all know of stories of students who have dropped out of university or students who have studied one thing and ended up in a completely different industry. Students are also forgoing several years of potential income that they could be earning if they were working. Lowering the barrier to entry for students opens up more opportunities for young people to upskill and not only improve their own long-term benefit, but also their ability to contribute to the economy and society as a whole. University may not be for everyone, but if we remember the many other types of tertiary education available then chances are there is a programme somewhere in New Zealand that suits any given school leaver. Tertiary education is in general a good thing - that's something that most people accept.
However, the biggest stumbling block for the policy is the cost of such a policy to the government. The Internet Party is yet to provide an estimate. To figure the cost out, we should first look at the existing budget for tertiary education. Vote Tertiary includes funding research, some rebuild of the University of Canterbury, and a few other projects, but the main cost is the "Student Achievement Component" which is budgeted for $2.06 billion in 2014/15. This is the funding given to tertiary institutions to provide teaching and learning services for enrolled students. In 2014, this is expected to be roughly 230,000 EFTS. But this is only part of the cost - sitting in Vote Social Development is the real kicker - $531 million for student allowances and $1.68 billion for student loans budgeted in 2014/2015. This cost totals to $4.27 billion - about $200 million less than in 2010.
This report from the Institute of Governance and Policy Studies at the Victoria University of Wellington paints an interesting picture about the existing perceptions of the public-private split of tertiary education costs. It reports that student loans are not so much loans as they are subsidies for students - in fact, the Ministry of Education says that 44.7% of the value of student loans was written down in 2011; about 20% is due to the interest-free nature of the loans (cost of lending), while graduates who leave the country also account (low collectability) for a sizable chunk of the write-down. In 2013, the total value of student loans held was $13.56 billion. The Ministry of Education estimates that government funding accounts for 70% of the cost of tertiary education, with the other 30% borne by students and their families. If we look at the University of Auckland as an example, the split between "government grants" and "tuition fees" in their income is roughly 62% and 37%, although this includes international students.
So from this information, we should be able to figure out what the cost of the policy is, which is not the total public and private cost of tertiary education in New Zealand, but the difference between that total and the status quo. Firstly, if tertiary education is entirely paid for by the government, then there is no need for a student loan scheme; while the government bears the full cost of "tuition fees" (presumably for domestic students), there are some potential cost savings from reduced administrative costs (no need for StudyLink!) (the management of student loans costs $15 million a year), as well as less interest being paid by the government to maintain that level of debt. The number that we are thus really interested in is the total price paid to tertiary institutions for their education services; we should remove student allowances from the equation too, as they are provided to (means-tested) students but not part of the costs for tertiary institutions and would thus be the same even with the policy (if not lower). Additionally, when we look at the "costs" of the student loan programme, we should only look at the write-down, i.e. the part of the money that the government doesn't get back in repayments, around $756 million. If we work from this point, we can determine that without the policy, the total cost of government funding and student loans is around $2.82 billion a year. With the policy, assuming that existing government funding account for (conservatively) roughly 65% of the tuition-related income of tertiary institutions, the total cost of government funding all tertiary education is $3.16 billion a year.
Current government funding + government costs of student loans = $2.82 billion
If the government fully funded tertiary education (covering the tuition fees, abolishing the student loan scheme) = $3.16 billion
So it costs roughly $340 million a year more for the government to pay entirely for tertiary education (assuming that the government continues to fund the same number of positions). This is not an insignificant amount, but it's also not extortionate, and probably a lot less than people expect. It works out to be about 0.37% of total government expenditure (which is $92.7 billion). I should put lots of disclaimers here that the number is very roughly calculated and with incomplete information, but it should be in the right ballpark (or at least playing the right sport). There are definitely other gains (such as cutting the $15 million on management of student loans) and losses that are not accounted for, and I would expect a proper analysis to be done before this policy is funded. But then the question becomes where we get the $340 million from - whether we pay for it with some new tax (or other revenue source), or we cut funding from elsewhere. That perhaps is beyond the scope of this analysis. Farvid says that it is "doable if we reshuffle govt spending", while the Auckland Central candidate Miriam Pierard suggested to me that it might come from a fairer tax regime, but it's always easy for an outside political party to propose an expensive policy without having to justify where the money comes from.
In terms of getting the costs of the existing student loan scheme down, the main issue with the status quo is that the write-down of student loans is simply costing too much - introducing a 2% interest rate to student loans (as suggested by Treasury) or more aggressively chasing down expat graduates would alleviate a lot of that burden, and thus reduce the annual cost of the student loan scheme. In fact, it turns out that the write-down on student loans in 2005 was only 11%, and has risen due to the increase in individuals making low or no repayments. In response to this the National government increased the repayment rate from 10% to 12% and limited eligibility for part-time and older students in 2011, but it doesn't seem to be enough.
Verdict: Is $340 million dollars a year worth making the lives of students significantly easier and providing tangible benefits to the economy in the long term? I don't know - I think there are probably very important things we could spend the $340 million on. But if a government can find the funding, then this is a reasonably worthwhile policy. It would produce wins for students, wins for tertiary institutions, wins for the economy, wins for the government, and wins for society as a whole. It just depends on whether we are willing to invest the money.
Today's policy comes from the Internet Party. While the policy is yet to be fully fleshed out on their website, it has been touted as a flagship policy for a few months now as part of their "socially just and inclusive" policy package. A few other parties such as the Green Party and the Mana Party have expressed similar sentiments, although usually stopping short of moving to a completely government-paid model of:
- Free tertiary education and student loans
More recently, the policy has been repeated again and again at the Internet MANA roadshow throughout the country. The Internet Party's Palmerston North candidate (who actually teaches at AUT in Auckland), Dr Pani Farvid, says:
"This means that all New Zealanders who want to better their education can do so for free, as we all know knowledge is power ... We are doing a massive disservice to our young people who have the desire and the urge to better themselves by learning more, by slapping them with a massive debt as they turn 18, 19, 20. They're starting their lives on the back foot as soon as they want to study."
Background
A student loan is now an expectation of tertiary education in New Zealand. By the time I graduate, I will have accrued roughly $40,000 of debt in course fees alone (I've never taken living costs). As is often stated, this was not always the case. Tertiary education used to be free! Journalist Sarah Robson wrote quite a good piece in Salient back in 2009, drawing on anecdotal evidence of her mum who "is always right", and explaining how Phil Goff (yes, that's right, Phil Goff), the Education Minister in 1989, introduced the user-pays system for tertiary education to reduce the government's fiscal obligations, and introduced the student loan scheme to help ease the pain for young people.
Tertiary education is often conflated with university education, but it is important to note that there are a significant number of polytechnics, institutes of technology, colleges of education, and wānanga that are also included in this group. Funding is currently through a combination of student fees and government subsidies. The government funds tertiary institutions based on the number of enrolled students and the study time of each course to calculate an equivalent full-time student (EFTS) number. However, this funding has not been increasing at the rate of inflation, and tertiary institutions are struggling to meet their costs, forcing them to pass those costs onto students. The rate at which tertiary institutions can increase student tuition fees is capped at 4% per year, except that institutions can apply to the Tertiary Education Commission to exceed that cap if necessary.
Students eventually have to pay student loans back to the government, although this has been interest-free since 2005. After they graduate, the IRD starts to take 12% off all pay over a threshold. Students can also claim a student allowance to help pay for their living expenses as well (around $170 a week, which will not rise with CPI inflation until at least 2017 as part of a govt cost saving measure), which they do not have to pay back. However, the student allowance is means-tested, and most commonly students may not be able to claim a student allowance if their parents' income is too high. There is also a limit on how long you can claim a student allowance for (roughly four years), which can be limiting for some students (such as those studying conjoint degrees that take five or more years).
Analysis of the Policy
In general, it has become harder and less affordable for individuals to be students in New Zealand. While enrolments at most tertiary institutions have been rising, and competition for limited entry programmes such as law and medicine is increasing, more and more individuals are being priced out of tertiary education, and forced to seek employment that may not be in their long-term interests. The Ministry of Social Development reports that individuals with a Bachelor's degree have hourly earnings 64% higher than those with no qualifications, and 29% higher for those with other tertiary qualifications.
For current and future students, this policy would be a godsend in making their tertiary education much more financially viable and feasible. It becomes far easier for students to take on the risk of education, investing multiple years of their life for a potential future income pay-off. That risk is not a certain risk; we all know of stories of students who have dropped out of university or students who have studied one thing and ended up in a completely different industry. Students are also forgoing several years of potential income that they could be earning if they were working. Lowering the barrier to entry for students opens up more opportunities for young people to upskill and not only improve their own long-term benefit, but also their ability to contribute to the economy and society as a whole. University may not be for everyone, but if we remember the many other types of tertiary education available then chances are there is a programme somewhere in New Zealand that suits any given school leaver. Tertiary education is in general a good thing - that's something that most people accept.
However, the biggest stumbling block for the policy is the cost of such a policy to the government. The Internet Party is yet to provide an estimate. To figure the cost out, we should first look at the existing budget for tertiary education. Vote Tertiary includes funding research, some rebuild of the University of Canterbury, and a few other projects, but the main cost is the "Student Achievement Component" which is budgeted for $2.06 billion in 2014/15. This is the funding given to tertiary institutions to provide teaching and learning services for enrolled students. In 2014, this is expected to be roughly 230,000 EFTS. But this is only part of the cost - sitting in Vote Social Development is the real kicker - $531 million for student allowances and $1.68 billion for student loans budgeted in 2014/2015. This cost totals to $4.27 billion - about $200 million less than in 2010.
This report from the Institute of Governance and Policy Studies at the Victoria University of Wellington paints an interesting picture about the existing perceptions of the public-private split of tertiary education costs. It reports that student loans are not so much loans as they are subsidies for students - in fact, the Ministry of Education says that 44.7% of the value of student loans was written down in 2011; about 20% is due to the interest-free nature of the loans (cost of lending), while graduates who leave the country also account (low collectability) for a sizable chunk of the write-down. In 2013, the total value of student loans held was $13.56 billion. The Ministry of Education estimates that government funding accounts for 70% of the cost of tertiary education, with the other 30% borne by students and their families. If we look at the University of Auckland as an example, the split between "government grants" and "tuition fees" in their income is roughly 62% and 37%, although this includes international students.
So from this information, we should be able to figure out what the cost of the policy is, which is not the total public and private cost of tertiary education in New Zealand, but the difference between that total and the status quo. Firstly, if tertiary education is entirely paid for by the government, then there is no need for a student loan scheme; while the government bears the full cost of "tuition fees" (presumably for domestic students), there are some potential cost savings from reduced administrative costs (no need for StudyLink!) (the management of student loans costs $15 million a year), as well as less interest being paid by the government to maintain that level of debt. The number that we are thus really interested in is the total price paid to tertiary institutions for their education services; we should remove student allowances from the equation too, as they are provided to (means-tested) students but not part of the costs for tertiary institutions and would thus be the same even with the policy (if not lower). Additionally, when we look at the "costs" of the student loan programme, we should only look at the write-down, i.e. the part of the money that the government doesn't get back in repayments, around $756 million. If we work from this point, we can determine that without the policy, the total cost of government funding and student loans is around $2.82 billion a year. With the policy, assuming that existing government funding account for (conservatively) roughly 65% of the tuition-related income of tertiary institutions, the total cost of government funding all tertiary education is $3.16 billion a year.
Current government funding + government costs of student loans = $2.82 billion
If the government fully funded tertiary education (covering the tuition fees, abolishing the student loan scheme) = $3.16 billion
So it costs roughly $340 million a year more for the government to pay entirely for tertiary education (assuming that the government continues to fund the same number of positions). This is not an insignificant amount, but it's also not extortionate, and probably a lot less than people expect. It works out to be about 0.37% of total government expenditure (which is $92.7 billion). I should put lots of disclaimers here that the number is very roughly calculated and with incomplete information, but it should be in the right ballpark (or at least playing the right sport). There are definitely other gains (such as cutting the $15 million on management of student loans) and losses that are not accounted for, and I would expect a proper analysis to be done before this policy is funded. But then the question becomes where we get the $340 million from - whether we pay for it with some new tax (or other revenue source), or we cut funding from elsewhere. That perhaps is beyond the scope of this analysis. Farvid says that it is "doable if we reshuffle govt spending", while the Auckland Central candidate Miriam Pierard suggested to me that it might come from a fairer tax regime, but it's always easy for an outside political party to propose an expensive policy without having to justify where the money comes from.
In terms of getting the costs of the existing student loan scheme down, the main issue with the status quo is that the write-down of student loans is simply costing too much - introducing a 2% interest rate to student loans (as suggested by Treasury) or more aggressively chasing down expat graduates would alleviate a lot of that burden, and thus reduce the annual cost of the student loan scheme. In fact, it turns out that the write-down on student loans in 2005 was only 11%, and has risen due to the increase in individuals making low or no repayments. In response to this the National government increased the repayment rate from 10% to 12% and limited eligibility for part-time and older students in 2011, but it doesn't seem to be enough.
Verdict: Is $340 million dollars a year worth making the lives of students significantly easier and providing tangible benefits to the economy in the long term? I don't know - I think there are probably very important things we could spend the $340 million on. But if a government can find the funding, then this is a reasonably worthwhile policy. It would produce wins for students, wins for tertiary institutions, wins for the economy, wins for the government, and wins for society as a whole. It just depends on whether we are willing to invest the money.
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