Tuesday, May 04, 2004
Missed the point, or just a different focus?
Michael at No Right Turn believes that I have missed the point. I may have taken a different angle on his 'if you can't feed'em - don't have'em' post - but I don't believe that blaming the student loan system (of which I am currently a significant contributor to) is enough.
My point is, the student loan fund is made up of Government borrowing from overseas, the $7 billion can not just be written off. So where to from here? I paid for my education to the tune of $38,000 and am now paying it back. I would accept that, if every other area of my life was not being overwhelmed by taxes.
The incentive to earn more, more particularly, to stay in NZ and earn more is dramatically reduced when only half of the increased earnings find their way into the bank account - this is true. But is the student loan 10% the crux of the issue? Take the SST article and eliminate the student loan from the equation - that same scenario improves by circa $100 per week, still not a lot of slack when the Government is grabbing a little more here and even more there.
I will post some of today's Q & (no) A from Parliament later to highlight this argument. In the meantime I would espouse that the fairest change to the student loan scheme would be to freeze any increase to the total loan balance once a person is paying back 10% of their wages, but not paying back enough to cover the interest charges themselves. To be paying back what you are obliged to when working full time as a graduate (as is the intention of the scheme) and watching the total loan balance climb steadily is indeed soul destroying.
