Posts by Paul Williams
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Um, yes... but anyone who thinks the Cullen Fund wasn't a "political plaything" from it's inception is being a wee bit naive.
That's rubbish Craig. NZ savings are low by international comparison and something needed doing. Since Muldoon scuppered Kirk's scheme, we've been stuck in political no-man's land. Winston's attempt to develop some scheme was doomed but Cullen's is hardly distinguishable from the Australia scheme which, despite recent losses, will provide a respectable retirement income for most.
With an aging population, forecast declines in workforce participation and slowing MFP growth, the ratio of workers to dependents is on the rise and unless you're going to put your hand up to pay more taxes, savings is essential.
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But that would be a very major change to the purpose of the fund: which is to fund a future liability as a large number of New Zealanders reach retirement. To this end it has been placed in the control of independent managers tasked with achieving the best possible return for New Zealanders, which will not necessarily lie in New Zealand.
This confusion of purpose is worrying.
I understand the need to both encourage infrastructure development and boost savings. I am aware that NZIER have reservations about whether the Cullen fund is stimulating new savings, but simply tapping it 'cause it's there puts at risk it's orginal purpose. I don't imagine there's a corresponding gaurantee to increase state super proportionate to any losses? Moreover, the last twenty years of public sector reform has been about reducing the risk of Ministerial meddling. I know first hand that officials were worried that Anderton was too close to the allocation of MED funding for instance.
Also, if this modified arrangement defers new/additional saving, won't we be back where we were?
Is Key doing to Cullen what Muldoon did to Kirk/Rowling?
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From working in one of the "ivory towers", someone should find a way to cut the useless fat that Universities still have, after a couple of decades of bitching about being poor and then passing those costs onto students. Some parts of the system really are struggling, other parts spend thousands of dollars near the end of the year on stuff that they don't need that much, just so they get the same budget come next year.
Throwing $200 million at the universities wouldn't lead to better quality etc anyway, that sort of amount of money would have to lead to a reduction in fees.
I've worked in a few too, plus in the national quality body. Universities are under-funded by international comparisons and comparatively low wages may be a problem, however it's not absolutely clear. Lecturers I know tell me work/life balance is a major advantage in NZ compared with offshore.
I think Craig raising an interesting point, but I don't think there's any less dead weight in higher wages than there is student allowances. Student funding for higher education, not just unis, increased massively over the last two decades, but so too did public funding... lets say we now talk about corporate investment?
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Wouldn't there be more "social good" (as Russell puts it) if $250 million a year was being put into tertiary institutions to provide high quality courses, and recruit and retain quality staff?
It's a fair point. Good knows the AUS would appreciate your support (though they might be surprised). Staff salaries in NZ universities are comparatively low, importantly compared with Australia, however if you're looking for alternative investments, I'd suggest first looking outside the tertiary sector.
All that said, I still think Labour's got the far better overall education policy and track-record compared with National. National's policy has been a catch-up, me-too tapestry and has lacked any meaningful or consistent narrative since English was moved on - pity as I understand he was developing genuine policy alternatives.
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Over the last nine years, we've had a Labour Government who have tried not to make it too much worse, rather than trying to actually solve it.
Actually, I think that's a little unfair. The fee maxima had a dramatic impact on debt levels and there was an interest/repayment change that was significant too. I think Labour's tried hard to make National's dog-of-a-scheme work...HECS is nowhere near as bad as what National introduced!
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The insertion of the "public/private benefit for tertiary education" juxtaposition in the public dialogue will be one of the most significant lasting impacts of the 1990 - 1999 National government. It shows no signs of going away.
Kyle, I know the point you're making but how do you ration public investment? The educational benefits of early childhood education are huge and yet its not fully/universally funded.
Personally, I can only make sense of this debate in context. The current arrangements mix public- and private funding for education services differently therefore every additional investment is going to be measured against the alternatives. You could assess the value of universal allowances by comparing it with additional investment in ECE, special ed or industry training (you might not want to measure it in terms the impact on enrolments however).
I opposed user-pays in higher education for years and years and years. I still think that National's reforms were a disaster and not just 'cause the sequencing and pacing were appalling. Shock and awe stuff. However, how do you avoid the moral hazard? How do you ensure that scare public resources are allocated fairly. What about the fact that poorer kids start missing out at Year 9? ACT says vouchers but then they've got no evidence for this, just blind faith.
Personally, I still support universal allowances but not as my number 1 priority.
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The threshold isn't the measure of private benefit but, it's just a point where government determined repayments commence. I'm not familiar with it being presented as the point at which your private benefit kicks in.
There's plenty of studies that have attempted to estimate the value of the benefits of various education and training pathways. IRD/Treasury were doing one a while back using IRD income data compared with debt etc. I don't have a link however.
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Currently, the government thinks the "private benefit" of tertiary education kicks in at less than the minimum wage.
I/S, could you elaborate? I've seen studies that put this figure all over the show... but mostly more than the minimum wage.
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The current operation of the loan scheme means that this kind of policy has been an option for a while but is still a significant change. The cost to the crown P&L might be the same but the balance sheet changes significantly obviously.
Interestingly, it's not going to be at the expense of other, in my opinion better quality, investment in education and training i.e. industry training. Labour's consistently invested more and more money in industry training which has a real and immediate impact on workforce participation and productivity. I note that they've announced a goal of having ten per cent of the workforce in industry training by 2011. That's a big deal too.
Labour's plans for improving productivity, to my mind, are a lot more meaningful that National's (PPPs for roading and modest tax cuts).
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Wow. Student Allowances for all. Wow. In 1995/6, I'd've been over-the-moon if this had been policy. Now I'm not so sure.