Tuesday, January 13, 2004

Dunne on loans

There's been a lot of angst over the last few days about doctors fleeing New Zealand for higher wages in Australia. National blames the "socialist Labour Government" (which is about the limit of their imagination), the government says it's not a problem (despite the fact that fewer doctors graduate than leave each year), but Peter Dunne lays most of the blame at the feet of the student loan scheme - and goes further in saying that the wider problem of student debt needs to be addressed:

"This country cannot continue to sit on its hands and watch the debt burden on our young people grow billion by billion," Mr Dunne said.

"As it does so, it crushes dreams and aspirations, from home-buying to when they can afford to start to raise the families that New Zealand needs for its future."

This is normally the sort of stuff you expect from NZUSA, not from a former Rogernome like Dunne. But in this he seems to be acting as the weathervane of Middle New Zealand, who seem to finally have woken up to the consequences of their intergenerational selfishness. And he's very big on the idea of New Zealand being a "property-owning democracy" - an idea which is deeply threatened by the long-term indebtedness engendered by the loan scheme.

As for his solutions, one is good, and one could be bad. If tertiary fees are sticking around, then parental savings schemes are necessary; government promotion (and contribution) is a way of getting them started, and of easing the burden in future. It does nothing however for the present generation of students, who will be faced with the prospect of having to save for their children's education while struggling to pay off their own. Employment bonding is more dubious, and needs to be handled very carefully indeed. Formal travel restrictions will undermine that other great kiwi tradition - the OE - and smacks of hamstringing the local blacksmith. Formal bonding to a specific employer or field of employment runs the risk of contributing to the problem, by using a captive pool of workers to keep salaries artificially low. And if done as part of the loan contract itself, rather than as a parallel voluntary incentive scheme, it runs dangerously close to debt slavery.

Still, it is good to see Dunne recognising the problem. Now, if only the government would too...