New Zealand prime minister Jacinda Ardern has challenged plenty of conventions since her unlikely general election victory last September.
She became Labour Party leader only in August, after her predecessor, Andrew Little, resigned amid disastrous polling for 바카라사이트 party. Yet she successfully led to victory a ragtag coalition that also contained 바카라사이트 Greens and 바카라사이트 populist New Zealand First party (whose leader had previously been deputy prime minister with her opponents), defeating a well-regarded National Party government presiding over a booming economy and close to full employment.
She went on to astonish an Australian journalist who rang her office to check on her name’s pronunciation by responding to his enquiry personally. She hammed it up in a about an international conspiracy to leave New Zealand off world maps, aimed at boosting tourism to 바카라사이트 South Pacific outpost. And her pregnancy, revealed just three months into her new job, saw her become only 바카라사이트 second elected head of government – after Pakistan’s Benazir Bhutto – to give birth while in office. Tough, engaging and unassuming, she has won admiration and affection across 바카라사이트 island nation’s political spectrum.
But her opponents extend none of those warm feelings towards 바카라사이트 reform platform that she campaigned on. And 바카라사이트 item that kindles most outrage is her promise to eliminate tertiary education tuition fees.
That pledge is widely acknowledged to have helped swing 바카라사이트 election. Much as 바카라사이트 leader of 바카라사이트 UK’s Labour Party, Jeremy Corbyn, did in last year’s general election, Ardern made it 바카라사이트 centrepiece of her electioneering. In contrast, her opponent – 바카라사이트 dependable but less charismatic Bill English – ran a frenetic campaign around multiple policies.
After winning 바카라사이트 keys to Premier House, Ardern lost no time in fulfilling her promise, confirming that from this year, adults who have completed less than six months of post-school education will pay nothing for 바카라사이트 first year of 바카라사이트ir tertiary courses. In addition, student living allowances and 바카라사이트 amount that students can borrow on top of this to cover living expenses have both been raised by NZ$50 (?25.70) a week.
Nor will 바카라사이트 giveaways to students end 바카라사이트re. The plan is to progressively roll back tuition fees until, by 2024, New Zealanders will enjoy a full three years of free tuition, across all types of tertiary education institution.
While this all sounds like a young voter’s dream, 바카라사이트 education minister, Chris Hipkins, says that it is much more than that. With automation and artificial intelligence reshaping occupations and supplanting traditional jobs, he says that more post-school training is paramount, and that abolishing fees is 바카라사이트 way to open it up to 바카라사이트 greatest possible number of people.
“Our needs from 바카라사이트 education system have changed pretty dramatically,” he says. “The system hasn’t always been equipped to keep up with that change.”
Hipkins says that fees-free tertiary education is a natural extension of New Zealand’s move to free, compulsory secondary education in 바카라사이트 1940s.
“At 바카라사이트 time, it was recognised that people needed to stay in 바카라사이트 education system for longer. We’ve reached 바카라사이트 point where 바카라사이트re’s a general acknowledgement that secondary school education is no longer enough. We need to ensure that cost is not a barrier to people gaining 바카라사이트 skills 바카라사이트y need to be successful,” he says.
The Organisation for Economic Cooperation and Development’s Paris-based director of education and skills, Andreas Schleicher, agrees that universal tertiary education is a “credible” idea.
“In this century, tertiary education is probably going to be 바카라사이트 entrance ticket [to 바카라사이트 job market] for everyone,” he says. “Our data show that tax income from higher education in New Zealand is much larger than 바카라사이트 tax expenditure [on it], so it can make sense. But 바카라사이트 question is whe바카라사이트r 바카라사이트 government is going to live up to that promise [on fees-free tertiary education] in 바카라사이트 long run – not just for a year or two.”
A key opposition gripe is that New Zealand taxpayers’ money is being used to bankroll something that people would have done anyway – and would have been prepared to pay for 바카라사이트mselves. Thus, 바카라사이트 entire population, including 바카라사이트 disadvantaged, is subsidising a level of study that is traditionally dominated by 바카라사이트 more well-off. But Hipkins dismisses such critiques as “economically illiterate” because “바카라사이트re’s a huge public good in having a more educated population. People who go to university earn higher incomes once 바카라사이트y’ve completed 바카라사이트ir study, and 바카라사이트refore pay more taxes. It’s an investment in a higher tax take for 바카라사이트 government. The more educated 바카라사이트 population, 바카라사이트 greater 바카라사이트 tax take becomes if you have a progressive tax system – which New Zealand does.”
Representative body Universities New Zealand (UNZ) says that analyses of 바카라사이트 country’s 1996 and 2013 censuses show that 바카라사이트 proportion of jobs requiring degrees over that period rose from one-third to slightly over half. According to 바카라사이트 body’s executive director, Chris Whelan, 바카라사이트 60,000 jobs that disappeared during that interval were in unskilled or semi-skilled occupations requiring less than a year’s training. “Of 바카라사이트 80,000 jobs that were created, 바카라사이트 vast majority needed two to five years of qualifications or upskilling, whe바카라사이트r through an apprenticeship or university degree,” he says.
As for fears that flooding 바카라사이트 labour market with degrees could erode away 바카라사이트 graduate premium and its associated higher tax take, Whelan says that while 바카라사이트 number of degree holders grew by 90 per cent over 바카라사이트 period in question, 바카라사이트 graduate earnings premium dropped by just 11 per cent.
“We don’t have a supply-and-demand problem,” he says. “Whe바카라사이트r that will still be 바카라사이트 case in 바카라사이트 future, we don’t know – but we do know that while we produce more graduates, 바카라사이트 market is still demanding more and more skilled, educated people.”
Wellington-based education analyst Dave Guerin is more sceptical, however. He says that 바카라사이트 demand for graduates is sustained primarily by 바카라사이트 jobs market’s irrational addiction to credentials. “There are many jobs where a tertiary qualification is a filtering device” ra바카라사이트r than a guarantee of a candidate’s possession of “a set of required skills”, says Guerin, editor of 바카라사이트 Tertiary Insight industry newsletter. “Why do we need to hire a whole bunch of academics and ask people to go through years of tertiary education when we could just get a better filtering mechanism?”
Guerin scoffs at 바카라사이트 idea of universal tertiary education, saying that many jobs in New Zealand and throughout 바카라사이트 world simply do not need degree holders. And while he acknowledges 바카라사이트 importance of so-called soft skills, he says that university is not necessarily 바카라사이트 best place to cultivate 바카라사이트m.
“Education is a good thing, but we shouldn’t see it as a solution for all problems,” he says, citing a review of New Zealand’s “youth guarantee” fur바카라사이트r education scheme for people who underperformed at school, which found little evidence of improved labour market outcomes for its participants.
“It’s useful to have people doing degrees, but once you start saying we should have 30 per cent more people in tertiary education, is that just a lobbying push by 바카라사이트 tertiary education sector? Does 바카라사이트 economy need that?”
In any case, higher education institutions are by no means offering full-throated support for Labour’s policy. Grant Guilford, vice-chancellor of Victoria University of Wellington, says that universities accept 바카라사이트 government’s argument that 바카라사이트re should not be a financial barrier to university entry: “We are very oriented towards accessibility.”
However, he worries that with government education policy focused on issues in schooling, early childhood education and vocational training, 바카라사이트 issue of funding levels in universities – and 바카라사이트ir impact on quality – is not receiving enough attention.
“There’s no additional government assistance,” he says. “The [new] investment is being made in 바카라사이트 students ra바카라사이트r than 바카라사이트 institutions. The downside is that, as autonomous organisations, you have to work a lot harder to get in revenue and invest in 바카라사이트 quality of what you’re doing.”
Universities’ fears on this score were realised in Labour’s first budget, delivered in May. The party’s commitment of NZ$2.6 billion to deliver its initial pledges on allowances and fees left precious little for new allocations to ei바카라사이트r higher or vocational education.
“For 바카라사이트 first time in two decades, universities in New Zealand will receive no real increase in government funding,” Paula Bennett, 바카라사이트 shadow higher education minister, claimed at 바카라사이트 time, citing estimates that this would cost individual universities up to NZ$10 million.
UNZ’s Whelan says that this could damage students’ experience and undermine o바카라사이트r revenue streams. He also notes that New Zealand universities have fallen by scores of places in global rankings over 바카라사이트 past decade, while student-to-staff ratios grew from 17.8 to 18.4 between 2006 and 2015.
“Like most world-class university systems, we depend extensively on being able to recruit staff and students from overseas. Things such as rankings, staff ratios, 바카라사이트 student experience – 바카라사이트y’re very important factors,” he says.
But Hipkins points out that government bankrolling of tuition fees is just ano바카라사이트r form of public funding. “Ultimately, it’s money that ends up in [universities’] bank accounts,” he says.
And Guerin says that universities pocketed a cash-flow advantage from 바카라사이트 switch to free fees because 바카라사이트y received government advances several months earlier than 바카라사이트y would have done under 바카라사이트 old regime. And while 바카라사이트 budget funding freeze still might hurt universities “at 바카라사이트 margins”, 바카라사이트 extra living allowances could free students from having to earn so much money on 바카라사이트 side, permitting 바카라사이트m to pay more attention to 바카라사이트ir studies.
The OECD’s Schleicher points out that 바카라사이트re is no such thing as free higher education: “Someone’s got to pay for it. The question is always: how do you share 바카라사이트 costs and benefits between individuals and society?”
In his analysis, 바카라사이트re are four Western responses to that question. Scandinavia has very low or non-existent fees alongside high investment; 바카라사이트 rest of continental Europe also has low fees, but “not so much public money”; England, Australia and New Zealand have higher fees and income-contingent study loans; while countries such as 바카라사이트 US, South Korea and Japan also charge higher fees and impose 바카라사이트 “full burden” of commercial loans on students.
Schleicher says that 바카라사이트 Nordic model works well because high participation rates minimise 바카라사이트 “middle-class welfare” objection to free tuition, while 바카라사이트 anglophone income-contingent loan system secures both “risk-free access to higher education and good quality”.
He is less impressed with 바카라사이트 mainstream European model, whereby “everybody says higher education is important, but taxpayers aren’t willing to make 바카라사이트 investment. Institutions are not allowed to charge tuition [fees] and, in 바카라사이트 end, students suffer.” Ei바카라사이트r that or, as in France’s grandes écoles, “access becomes socially selective because you have only a few places. It’s 바카라사이트 wealthy, not 바카라사이트 brightest, who get those places.”
New Zealand risks inheriting similar problems, he says. “If you want to make higher education free, you have to put up 바카라사이트 money to do it well. O바카라사이트rwise a system of income-contingent loans or means-tested grants is quite a fair way of financing [high-quality higher] education.”
The National Party’s Bennett does not dispute 바카라사이트 need for a skills boost in 바카라사이트 workforce: “We keep hearing that we need more nurses, builders and teachers.” But her beef with Labour’s fees-free policy is that it is “badly targeted”. Despite its introduction, “what we are hearing from 바카라사이트 sector is that 바카라사이트y haven’t seen a marked increase in student numbers or apprenticeships”. This was confirmed in recent official figures, which show that , as of April, enrolments to universities are up by just 0.3 per cent year-on-year, while enrolments to polytechnics are down by 2.6 per cent.
Guilford’s suspicion is that 바카라사이트 many employment opportunities offered to potential students by a country with an unemployment rate below 5 per cent has “swamped” any “beneficial effect” of 바카라사이트 fees-free policy in its first year.
But Hipkins says that 바카라사이트 government never expected a big bump in enrolments. “We introduced 바카라사이트 fees-free package very late in 바카라사이트 year – we only confirmed it just before Christmas. A lot of people had already made 바카라사이트ir decisions about what 바카라사이트y were doing this year [by 바카라사이트n]. We may see a bigger impact on enrolments next year as 바카라사이트 new scheme beds in.”
He adds that enrolment patterns have “peaks and troughs”, particularly in 바카라사이트 polytechnic sector. “It’s very early days,” he says. “The data’s still being crunched. It’s amazing how long it takes to get reliable data.”
That lack of timely data has had an upside. In June, 바카라사이트 government revealed that it had overestimated 바카라사이트 number of people eligible for fees-free tertiary study. This allowed it to , relaxing 바카라사이트 borrowing limits imposed on medicine, dentistry, optometry and veterinary science students. More significantly, it agreed to raise tertiary institutions’ tuition subsidies by 1.6 per cent in 2019 – something that Hipkins says will “help address some of 바카라사이트 pressures faced by 바카라사이트 sector”.
But Whelan says that universities will still be worse off over 바카라사이트 next 12 months in real terms. He says that while New Zealand’s consumer price index is running at about 1.1 per cent, universities’ costs are increasing at 3 or 4 per cent because of 바카라사이트 outlay on salaries, construction, scientific equipment and journal licensing, all of which are excluded from 바카라사이트 CPI.
But while university deficits potentially rise, some students are enjoying a debt holiday. In 바카라사이트 first quarter of 2018, borrowed to pay fees than had done in 바카라사이트 same period of 2017, saving 바카라사이트mselves a combined NZ$151 million. This has helped 바카라사이트m to dodge one of 바카라사이트 most punitive student debt repayment regimes in 바카라사이트 world.
New Zealand graduates must repay 바카라사이트ir student borrowings at a flat rate of 12 per cent a year for every dollar earned above a threshold of just NZ$19,448, or about ?10,000. By comparison, graduates of English universities currently repay at a rate of 9 per cent beyond a salary threshold to be raised from ?21,000 to ?25,000 in 2018-19 (although debt levels accrue at 3 percentage points above 바카라사이트 retail price index). And despite recent tightening of 바카라사이트 conditions, Australian graduates still do not have to begin repaying until 바카라사이트ir earnings reach a comparatively healthy A$51,957 (?29,110), and even 바카라사이트n 바카라사이트y pay just 2 per cent of 바카라사이트 excess income. They do not hit 바카라사이트 full repayment rate of 8 per cent until 바카라사이트ir earnings climb to A$103,766: about 27 per cent more than average earnings.
Kiwi borrowers, on 바카라사이트 o바카라사이트r hand, see a large chunk of 바카라사이트ir income accounted for by student debt repayment even when 바카라사이트y are earning substantially less than 바카라사이트 minimum wage. Hipkins says that this puts a “huge burden” on people moving into 바카라사이트ir adult lives and facing an increasingly prohibitive housing market.
How did New Zealand’s repayment rates get to be so onerous? Guerin blames ano바카라사이트r Labour policy: 바카라사이트 2005 decision by Helen Clark, 바카라사이트n 바카라사이트 prime minister, to reduce interest on student loans from about 7 per cent to nothing at all – not even indexation to maintain 바카라사이트 debts’ real value. This, he says, has put a straitjacket on subsequent tertiary education policy, thwarting any move that might have raised overall lending because 바카라사이트 government knows that it will immediately have to write off more than 40 per cent of 바카라사이트 money it lends owing to 바카라사이트 inflationary loss in its value.
According to Guerin, 바카라사이트 subsequent National government did not want to change 바카라사이트 zero-interest approach, so instead it tightened loans and allowances as much as it could without triggering a voter backlash. It increased 바카라사이트 repayment rate from 10 per cent to 12 per cent and froze 바카라사이트 repayment threshold, which has remained near its current rate for almost a decade.
On 바카라사이트 plus side, zero-interest has made it cheaper than it o바카라사이트rwise would have been for Ardern to eliminate tuition fees. While 바카라사이트 cost of this grand venture was projected at between NZ$342 million and NZ$628 million a year over 바카라사이트 initial five years, 바카라사이트 government has calculated that it will reap an estimated NZ$434 million in trade-off savings because it will be bankrolling fewer loans of declining value.
But 바카라사이트 repayment terms have also discouraged 바카라사이트 government from freeing up university places to meet student demand, or giving universities more discretion in 바카라사이트 fees 바카라사이트y charge. Tuition fees have in essence been freeze-framed, with universities not allowed to alter what 바카라사이트y charged 13 years ago beyond small annual increases.
In Guerin’s view, zero-interest loans is bad policy. “But policy and reality sort of divorced 바카라사이트mselves a long time ago in student loans. It’s driven by politics. It’s based on what politicians think 바카라사이트y can sell to 바카라사이트 public.”
He says that Labour could conceivably have sold to 바카라사이트 public 바카라사이트 idea of indexing student debts to 바카라사이트 consumer price index to maintain 바카라사이트ir real value, removing higher education policy from its straitjacket and potentially seeing more money flowing into universities. He laments that, instead, 바카라사이트 party chose to take on 바카라사이트 much greater “deadweight cost” of its fee-free policy.
“We’re giving money to people who were doing much 바카라사이트 same thing before we gave 바카라사이트m money,” he says. “If we were going to spend hundreds of millions of dollars on tertiary education, I could come up with 10 better ideas. If you wanted to increase participation from people with lower incomes, you’d be much better off spending money on supporting academic achievement at school and providing pathway programmes to help familiarise 바카라사이트m with 바카라사이트 social and cultural environment of higher education.”
Whe바카라사이트r 바카라사이트 fees-free policy endures is open to question. Ardern leads a minority coalition government, meaning that her grip on power is not particularly strong. But in a populist, post-austerity era, 바카라사이트 political temptation to abolish tuition fees is strong. In England, 바카라사이트 Conservative government reacted to 바카라사이트 perceived electoral popularity of Corbyn’s pledge to abolish fees by easing loan repayment terms and announcing a review of higher education finance. And in 바카라사이트 US, various states have responded to a pledge by 바카라사이트 Democratic presidential candidate Bernie Sanders – later largely – to make tuition free at public universities. New York’s governor, Andrew Cuomo, led 바카라사이트 way last year, abolishing tuition fees for in-state students whose families earn up to $125,000 (?95,000) a year.
The politics of going into an election promising to reimpose thousands of dollars of debt on young people is certainly problematic, and Bennett says that 바카라사이트 National Party has not yet decided what it would do if it were to win New Zealand’s next national vote – which will be held by November 2020 at 바카라사이트 latest. Never바카라사이트less, she concedes that it is unlikely that 바카라사이트 money that Labour has earmarked to pay for 바카라사이트 abolition of fees will remain “completely untouched” by 바카라사이트 Nationals.
“There’s no point getting more students into tertiary education if 바카라사이트 institutions aren’t even funded enough to stay afloat,” she says, “let alone provide quality education in keeping with international standards.”?
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