When Labour introduced its interest-free student loan policy during the election, the right derided the idea, saying that it would lead to higher borrowing and cost a fortune. Their reason for this was ideological: they see people as rational utility maximisers who would leap at the chance of free money, and indulge in all sorts of complicated financial schemes (chiefly revolving around arbitrage) to benefit from it. The reality turns out to be rather different. In today's budget speech, Michael Cullen noted that student loan uptake had been less than forecast, and this had allowed them to revise their estimate of loan costs downwards, to the tune of $600 million.
So, National's ideological approach to loans has now been empirically disproven - not once, but twice. If they had a shred of intellectual honesty, they'd be revising those theories or allowing them to die in their place. But this being National, we'll probably instead see a press release deriding students for their "stupidity" in failing to conform to National's ideology...
[Hat tip: Just Left]
Didn't Labour claim $300 million in the first year, so it's double.
ReplyDeleteAlso nothing like using budget figures to argue your point.
It's not like Labour didn't actual try and supress costings done earlier.
Why not wait until the actual figures are released.
After all Labour claimed that National wanted to burn a half a billion dollar cheque by not ratifying Kyoto.
Well, that costs the country close to a billion dollars and rising.
Or the prision debacle....over budget by another half billion.