Free fees a failed election bribe?

When the figures came out from the Tertiary Education Commission last week on the uptake of first-year fees-free tertiary education, it was found overall student numbers had actually fallen.

Reactions were predictable. Labour said the figures showed the policy was tracking well and National called it untargeted middle-class welfare and a failed election bribe.

As with KiwiBuild, free fees could be a weak point the Opposition targets at the next election.

Free fees could reduce student debts and allow more people to undertake tertiary education. If money is plentiful, it is a reasonable policy. Many countries have such provisions, and university education once was free in New Zealand.

But is free fees the best policy, the best use of public money?

It was promulgated by Labour before the last election, and it follows Helen Clark and Labour's earlier interest-free student loans pre-election "bribe'' in 2005. Labour leader Jacinda Ardern spent time at university campuses, including Otago, in the weeks before polling day, and Labour was keen to mobilise young students who often do not vote.

The policy resonated with students, and no doubt many parents. It is an expensive policy that won votes, and in that sense was an election bribe.

The free-fees policy offers new students one free year of full-time tertiary study or training, and it is expected to cost $350million in its first year. That is to be extended to three years' free fees. Costs could rise to $1.5billion a year when fully implemented, a lot of money in anyone's currency.

Labour has always stressed the free fees apply to polytechnics, other tertiary training institutes and industry training, not just universities. One issue, however, is that most university courses for first-year students will be far more expensive than many polytechnic and trade courses. These could well be part-time and limited (short courses costing, say, $500 compared to, say, $6000 for a full first-year university course). Therefore, the bulk of benefits go to university students, the vast majorityfrom better-off and educated backgrounds. Most of the savings in fees go to the middle-classes and wealthy - certainly not to the poor.

The Southland Institute of Technology already had a zero-fees policy, and courses for many students at wananga were already free, again skewing the benefits.

The figures last week were embarrassing for the Government because they showed higher proportions of "European'' students than others taking up free-fees at universities and polytechnics. For industry training, the preponderance of "European'' take-up is even more marked.

Numbers on free-fees are well down on what was budgeted. Education Minister Chris Hipkins is correct when he attributes much of this to the abundance of jobs. Training and education are not as attractive when work is readily available.

We have always argued that students need skin in the game, even if their fees represent only, perhaps, 20% of course costs. Students are more likely to give consideration to the value of their courses to them, and they are less likely to put up with second-rate teaching or programmes.

It is true, too, that free fees should reduce the size of interest-free student loans, which are themselves heavily subsidised by the Government. There is a saving here.

Substantial support for fees is practical and beneficial. Universities, polytechnics and industry training need to be accessible. But, and this is reinforced by the numbers taking advantage of the policy, it would seem free fees are being picked up by students taking part in tertiary education anyway. This is what was predicted.

Surely, with so many deep-seated and widespread needs in our society, there are higher priorities. Surely, $1.5billion could be spend in a more worthwhile way. This is a transfer of taxes to help, largely, the relatively well off.


Many poorer students go to University from bridging courses and found they weren't eligible for the free fees this year.

Today in NZ the average student in NZ is 30 years old before they have got their head above water and have their loan paid off. Then they need an start saving average of over $80,000 deposit to buy a first home.

It's no wonder many are in their late 30s or 40s before they can afford a first home, if they get there at all. Paying rent and starting a family often destroys any chance of buying a home. No wonder home ownership is plummeting in younger generations.

Spending just 2% of our education budget to give a free first year of fees is just a small starting step to help our young people start out in the real world. It's very easy for us baby boomers to sit in our homes as they continually increase in value, and criticise anybody else getting a hand up .

No wonder our school leavers, looking forward, can only see 20 years of student debt and slaving for a house deposit, leading to high levels of depression and one of the worst suicide rates in the world (and the highest of any age group in NZ).

In assessing the 2% of education spend used on one year of free fees, the ODT should consider the wider picture - mental health, and not killing the dream of home ownership.

Great peoples government I must say


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