National has launched its bid for the student vote by promising to make the interest on student loans tax-deductible. This is welcome, for a couple of obvious reasons: it brings a bit of consistency to the tax system, by putting borrowing to build knowledge on the same basis as borrowing for other forms of capital (such as tools); and it will do something, no matter how small, to reduce the student debt burden. At the same time, let's be clear: this is a drop in the bucket. Total student debt is now almost $8 billion and rising. National's promise is expected to cost $70 million a year - less than 1% of this. It also does absolutely nothing to deal with the causes of student debt: high fees and limited access to allowances. If National was serious about addressing the student debt problem, then it needs to look at those areas, and not just tinker around the edges.
All that aside, the real reason this is welcome is because it will put pressure on the government to improve on National's offer. They have reasons for doing so in any case; writing last week, Chris Trotter argued that Labour needs some new policies to inspire people, and which address the wants of the middle-class voters it is currently losing to National. Those voters are concerned about their children, and concerned that debt and lack of access to allowances will burden them (and more selfishly, mean they are a burden to their parents) for the rest of their lives. Significant moves to ease student debt, both by reducing the need to borrow and reducing the balance owed, would be a good way of addressing those concerns.