Monday, May 16, 2011

Do you want to be educated? Educate yourselves first

Before the election National pledged to increase education spending every year, above what was already committed. At the same time it criticised Labour's pledge card.

Now, the Government may effectively cut education spending. It also wants to ensure that people borrowing for studies were likely to find work that would give them enough income to repay their loans.

To do that the Government has to ensure two things: that work is there to be found and that it pays enough.

Instead, what it is doing is to limit the numbers of students who take out a loan so that fewer of those who earn crap incomes don’t have to spend it on student loans to pay back living costs. It is also cutting eligibility for students over 55 as they are not likely to get jobs as a result of their study that will repay those student loans. This move may contravene the Bill of Rights but the Government has shown it is quite happy to pass laws that are in contravention to the Bill of Rights.

Even if some do get jobs, the Government is telling people to do more with less and praising those who do so by lying about the amount they do have.

Just recently the Government used the Napier Kindergarten Association as an example of being able to “do more with less”. by quoting budget figures before funding cuts were implemented. Meaning they are only doing “more with less” by increasing fees.

Fees, in some cases, that are paid by students who have to put their kids in childcare so they can study.

The amount saved every year by restricting access to student loans will be up to $60m a year.

I think the Government would like more couples to go on the student allowance, particularly if they have an earning partner. Most couples -say, with two preschool children - on the student allowance earning $406.00 a week actually get more than they would if they earned $700.00 - due to the sharp abatement rates. Meaning many of those earning over $407.00 a week are paying more tax( some on secondary tax) but getting less net income - but feel they are getting more net income as they are working more.

With the over 55’s, 70 per cent of money borrowed is not paid back – so that means much of the living costs loaned to over 55’s is treated as a student allowance and as less is to be loaned to these students money will be saved.

How much will be saved by reversing the tax cuts? I`ll give you a clue, if we just reversed tax cuts for those over $70k we’d save $1.625 bn. We could ensure the retention of the $20 tax subsidy for all KiwiSaver members, increase access to education, make ECE free, and still have money left over.

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