TOP dubs Labour’s tertiary policy as middle class welfare

Labour has committed to free tertiary education – including 3 years of free post-school education over a person’s lifetime. As an added sweetener they have boosted student allowances and loans by $50 per week in a package that will cost $2b over 4 years. The first year of this package will be available to new students as early as 2018.

Here at TOP, we have no issue with the idea of investing in education. There are considerable benefits derived from upskilling the workforce, and the desire to invest in the future and give more kiwis the opportunity to study is admirable. However, knowing that the pot of money for education is limited, we have to make sure we are getting the best bang for our buck, both in terms of education outcomes and fairness. Labour’s policy fails on both counts.

Early Childhood Education is the better investment

During the lead up to the election, TOP campaigned for investment to be directed at early childhood learning. From a purely economic perspective, the return on investment here is simply much higher, relative to tertiary. Contrary to popular belief, the skills needed for the modern world are actually learned in early childhood; skills like collaboration, creativity, communication and critical thinking. It may look like fun and games in the sandpit, but any skilled early childhood educator will show you there is a lot more going on than that.

Early childhood education also has the greatest potential to close the gap between rich and poor. Currently, some kids in poverty are heading to school two years behind their wealthier peers, a gap that they never make up throughout their school career. This clearly has a significant impact on future outcomes for these kids, and explains one of the reasons why those in poverty go on to be over represented in many of our negative social statistics.

Tertiary Education benefits the already well off

Clearly the growing inequality in our education system is an area that needs to be addressed, unfortunately, the evidence suggests that investing in free tertiary education is not the best way to do this. We know through current attendance levels that those from poor backgrounds are considerably less likely to attend university, or other forms of tertiary education, compared to those who are well off. Of those in the bottom 20% of incomes, half won’t attend any post school training. Someone from the poorest households is 65% more likely to not do any tertiary study at all than someone from a rich household. And of course the numbers get worse the ‘higher’ you go in the education system – people from the poorest 20% of households are four times less likely to attend University compared to those in the top 20%.

In other words, Labour’s policy to offer free fees and boosted allowances will benefit the rich far more than the poor. This problem becomes even more pronounced when you consider that rich people tend to do more expensive courses. The current fees for building and carpentry apprenticeships for instance are around $2,000-$4,000 and diplomas and certificates around $12000-$19000, while University fees cost around $22000-$32000 for a bachelor's degree. Some subjects such as medicine, veterinary science, and postgraduate study are even higher - totalling around $46,000 for three years. Bear in mind that the government is already covering 75% of the cost of these degrees, so this policy change is simply giving even more money to people that already get a considerable amount of support from government. Meanwhile we have 90,000 young people not in any education, employment or training. What support do they get?

But surely cutting fees will help more people from poor backgrounds go on to tertiary study? Actually, no. The evidence shows that investing in early childhood education is actually a much better way to get poor people to improve their education outcomes in the long term. In the meantime, the best way to increase University participation would be to fund the First in Family proposal put forward by NZUSA. At a cost of $54m it would help anyone who is the first in their family go to University. This program is based off overseas research which indicates that the understanding of benefits and support plays a greater role in improving attendance in cases where higher level tertiary education is not normalised through previous experience (i.e. those where no family member has attended univeristy).

Middle class welfare

In summary, Labour’s policy will give more money to people from wealthier backgrounds, who already get considerable support, and who are likely to earn more over their lives. This is simply middle class welfare.

Should we be surprised? Under the last Labour Government inequality didn’t fall, it only plateaued, because despite their rhetoric Labour aren’t really interested in helping the poorest members of our society. At the end of the day, they are competing with National for the middle ground, which means delivering the same old, same old.

Many will say that at least Labour are doing something, but that is not good enough. If we really cared about the poor, we would put this $2b into early childhood education. Funding tertiary is too late, because by the time many kids are ready to leave school , the system has already failed them. Targeting early childhood education allows us to build prosperity on a foundation of fairness, rather than just throwing money toward a group of society that the evidence shows is already better off.

Bearing all this in mind, this leaves the question of why Labour has pushed so hard for this tertiary policy? The answer may lie in the voting statistics. While barely half of those aged 18-24 voted this election, this was actually a marked improvement from the last election, up around 6%. It’s difficult to tease out the reasons for the increase, but one could make an argument that Labour’s tertiary education offering (similar to 2005) had something to do with it. In short, their election bribe seems to have worked.

By Geoff Simmons & Andrew Courtney


Showing 17 reactions

  • Barbara Hay
    followed this page 2017-12-02 00:19:06 +1300
  • Matt Walkington
    commented 2017-11-29 19:20:34 +1300
    bob You say " it is quite possible to undertake tertiary study, doing your very best and ending up with a qualification that almost prevents you getting a well paying job."

    Firstly, if by some miracle we manage to keep modern civilization intact and restored to a track of improved living for its citizens, life may be less about work for pay and more about pursuing fulfillment in one of its many guises. Then tertiary study is going to be even more critical to full life than it is now where a paid career track can double in that role.

    Mainly, though, don’t you think what we have is not so much as a failure of the education but a failure of the economy? That’s how I view it.

    Actually, my present thinking is that NZ (along with many other countries) has been held hostage by the dual evils of first British colonialism and second US imperialism (through the tools of bodies like the IMF, the WTO and the World Bank). US imperialism might equally now be characterised as imperialism by US-based multinational corporations. I think we have allowed ourselves to be sold the ideology of all-out free trade and have not allowed ourselves a more balanced approach, where we might have developed and retained a more diverse economy. You can see how it works: the once big strong diverse economies, though they decay over time, retain a lot of the strength and diversity that they gained through the most ultra protectionist policies. US propaganda talks incessantly about free markets and free trade but the reality is the US economy employed some of the most protectionist policies to grow and strengthen. Although the US national economy is hardly in the shape is was, the command economies of its multinational corporations are in very good shape indeed. On the other hand, small open economies like NZ find it difficult to strengthen internally and to develop diversity outside of few areas where they have a comparative advantage.

    I just don’t see that following the ideology of free trade is the complete answer but we are so stuck with it we can hardly have a rational conversation about it. A bad case of sunk cost fallacy. The coming clean technology revolution may be a way out of some of this bind, if we are able to be particularly clever about our approach.
  • bob Atkinson
    commented 2017-11-29 19:12:21 +1300
    Matt: true the UBI was an interesting idea. And it would solve this problem which boils down to who decides what is valuable education worthy of taxpayer subsidy. I know my son will have little choice but to spend time in the classroom next year but he really hates school learning and really enjoys seeing and doing.
    Note from the article "" The current fees for building and carpentry apprenticeships for instance are around $2,000-$4,000 and diplomas and certificates around $12000-$19000, while University fees cost around $22,000-$32,000 for a bachelor’s degree. "" and ""Bear in mind that the government is already covering 75% of the cost of these degrees"". Since on average graduates earn more this is unfair. The UBI just about solves it.

    There is evidence that pre-school expenditure is the best financial investment. I read about it in the two Freakonomic books; also contains some interesting remarks about small schools being more effective than large ones. I assume there is a more authoritative and recent evidence supporting Andrew Courtney’s assertion about pre-school education otherwise the entire justification for the policy falls to pieces.
  • Matt Walkington
    commented 2017-11-29 18:19:25 +1300
    bob You say “My son the apprentice builder is busy realising his full potential – so why isn’t he being paid by the taxpayer? Or do you only think potential is abstract academic study?”

    Essentially, I think all kinds of tertiary study should be considered worthy and supported accordingly. Certainly, apprentice builders. I wouldn’t set myself up as some kind of arbiter of what is valuable learning and what is not. Individuals need to make those calls for themselves (with proper info and help). If I recall correctly, TOP policy agrees with “Youth to Adult UBI”, if you want to interpret it that way in this context.

    Is it true that NZ Business is particularly poor at funding training and R&D? If so, there’s probably a case for an additional tax on business revenue or profit or both to contribute to tertiary training across the board, from apprenticeships to PhDs and everything else.
  • bob Atkinson
    commented 2017-11-29 17:53:19 +1300
    Matt: well I studied history and philosophy of science. In those days I didn’t feel guilty that the then 95% non-graduates were paying for my tuition and a big chunk of my student allowance. Now I find it is and was unfair. OK I have been well paid so my taxes did eventually repay what the government paid me.
    With 6 children of varying abilities and attitudes to education I chose to help those who decided to enter tertiary education. However because of personality one not ability one has ended up with a substantial loan and two of the others managed to pay theirs off by delivering pizzas and living very quietly while they were students.
    My son the apprentice builder is busy realising his full potential – so why isn’t he being paid by the taxpayer? Or do you only think potential is abstract academic study?
    One point I think we do agree on is it is quite possible to undertake tertiary study, doing your very best and ending up with a qualification that almost prevents you getting a well paying job. So we have graduates working in fast food outlets and they will never manage to recoup the money they spent and owe to get their tertiary education. This is sad but it is doubly sad when they are pushed into courses that they don’t even enjoy. Meanwhile I’m retired and still reading books on the history & philosophy of science (ref “The Better Angels of Our Nature: Why Violence Has Declined” by Steven Pinker – highly recommended).
  • Matt Walkington
    commented 2017-11-29 17:49:01 +1300
    “Contrary to popular belief, the skills needed for the modern world are actually learned in early childhood; skills like collaboration, creativity, communication and critical thinking. It may look like fun and games in the sandpit, but any skilled early childhood educator will show you there is a lot more going on than that.”

    Is this statement more than a circular self fulfilling proposition? i.e is it more than just saying the skills that are learned in early childhood ARE the skills learned in early childhood? OR where’s the evidence that “collaboration, creativity, communication and critical thinking” are more important to the “moden world” than other skills AND the evidence that these are learned SOLELY or MAINLY in early childhood?

    It seems more plausible to me that these skills continue to be honed over a lift time of learning and experience. even assuming early childhood is formative.
  • Matt Walkington
    commented 2017-11-29 17:37:59 +1300
    bob atkinson: If the ONLY measure of value in a tertiary education was the manufacture of things with a high use or exchange value then the comment below might have more of a point. Happily tertiary education is about a whole lot more. In fact, I would say it’s primarily about realising your full potential as a contributing citizen. Thinking about it only as training to make money is both sad and limited.

    Also, if you do some calculations about the repaying of realistic estimates of student debt you might change your tune a bit on that issue. Student debt has been a fundamental plank of the neoliberal assault on the many by the few over the past several decades.
  • Philip Gates
    commented 2017-11-28 21:40:35 +1300
    I can but agree.

    I have a large extended family, and the repeat of poor educational outcomes through the generations is plain to see. Not to say people are poor parents, but, to put it crudely, “the apple doesn’t fall far from the tree”. And that is true for all of us. (And is actually a recognized employment strategy in Germany.)

    More logic, less smiles and selfies please, Mr and Mrs Government.
  • Carol Smith
    commented 2017-11-28 21:29:00 +1300
    “Sensible, coherent and logical” – well said, Graham.
    Robert Walker – I’m not sure how you equate TOPs policy here with keeping poor people poor. Currently, those that are interested in tertiary study, from whatever sector of society, get a student loan to pay for it, and just do it. The thing is, as TOP rightfully are saying, those at the bottom are often not interested because they have been behind the eight ball since year dot, creating an intergenerational setup that self-perpetuates. Any ECE teacher would likely agree – if you can get the kids to love education when they are little, hopefully, it will continue lifelong. Reminds me of that old Jesuit saying “give me the child till he is seven, I’ll show you the man”.
    And don’t forget, this policy is one of many that would sort out the other problems you talk about too.
    Carol Smith NZCS, BN, current post-grad student
  • Olive Hill
    commented 2017-11-28 21:12:10 +1300
    TOP raises valid points. A lot of children will fail from the very beginning if they do not have the advantage of educated and/or time rich parents. (Parents who are there before and after school to help their child.) A child who needs extra help at our school is currently unable to receive it as our school does not have enough funding. That seems terrible to me. The child definitely needs extra help as he is probably Autistic or suffers from ADD, the main teacher is not able to help more as the class is OPEN learning and requires ALL the teacher’s attention to make it work. So that child is already falling behind and he is only 6 years old. He has 4 siblings and very young parents who are struggling. So under the current system I doubt he will even finish school, let alone make it to tertiary education. So YES, TOP does make some valid points. A leveling of the playing field at the start seems logical to me. Those who are intelligent will always succeed, others can too, with a little support.
  • Trevor Jones
    commented 2017-11-28 19:26:54 +1300
    Poor kids who’re interested and engaged in their education by starting earlier may be the (missing) link to bring change.
    If the kids themselves were pro-active enough to ask mum for a couple of pieces of bread and really keen to go to school we might have the start of something.
  • bob Atkinson
    commented 2017-11-28 19:19:07 +1300
    To quote Graham Peat: “Sensible, coherent and logical”.

    My son is an apprentice builder and unlike college he is loving it. Any system that encourages a young man to study say sociology at uni for 3 years rather than actually working and creating useful things (currently he is building a primary school) is a bad waste of taxpayers money.
    To answer the other comments: a 22 year old will now get increased student allowances and although he will build up a student debt if he chooses a useful subject and graduates well then he will easily obtain the better paid jobs that allow him to repay the debt briskly.
    Robert Walker’s child should find an IT job at Auckland council – the degree will be a real benefit and when he is earning the average $100,000 salary repaying his loan will be easy. If his/her partner does the same starting a family will not be difficult. The moral situation is the numerous young people who because they lacked intellectual stimulation before they were five have never had a chance to compete with his graduate children.
  • Angelica Perduta ♀Xy
    commented 2017-11-28 17:09:36 +1300
    I have a 22 year old son who would love to do tertiary education if only we can somehow find the means to support him. I don’t agree with focusing on primary education…

    <b>this is real life, right here, right now…</b>

    The future of younger generations will benefit from the contributions my son’s generation can afford to make.
  • Robert Walker
    commented 2017-11-28 16:43:05 +1300
    Male bovine excrement! What about those who graduate with a degree and a 40,000 Studylink debt and who want to buy a house and start having children. Mum and Dad then need to go out to work, pay for child care or, even NOT buy their own home because of the loan restrictions and the Studylink debt degree. Those that come from the poorest families are, by your analysis, barred from university and getting better, higher paying jobs, paying more in taxes and who are aiming at social and economic class escapes into better earnings and lifestyle. Your policy actually reinforces the poorer families’ economic and social class status and possible ongoing dependence on welfare by not being able or allowed to rise out of their circumstances! No wonder, if what you say is correct about poorer families not taking up tertiary studies, that they cannot and will not ‘cos TOP wrongly hypothesises that they can’t and won’t. Robert W. Walker B.A. (Syd.) Grad Dip Science (Cant.)
  • Martin Tancock
    commented 2017-11-28 16:36:24 +1300
    If under 5s could vote it would be a different story
  • Graham Peat
    commented 2017-11-28 16:30:21 +1300
    Sensible, coherent and logical. The absolute antithesis of the strait-jacketed and intransigent mainstream parties. All the best.
  • Oliver Krollmann
    followed this page 2017-11-28 16:05:36 +1300