Today I want to talk about debt. Not many people know that before I became a stay-at-home parent I was a debt collector. Not a smash-your-door-down take -your-TV type of debt collector – I worked for a law firm in the central city and used to work with everyday clients to come up with payment plans to get them out of debt.
I loved that job. People find that strange, but I really did. You have no idea how much silent stress debt puts on people. Often people ignore debt and see it as too big to get out from under, but of course debt tends to feed off itself via interest charges and penalties. I gained immense satisfaction sitting down with clients and watching them literally sit up straighter, and hold their head higher as they saw that, with a plan, they could get out of debt.
So this was one of the drivers behind my working for the last six months with economists and researchers on New Zealand First’s Up Front Investment Tertiary Education policy. I presented the policy a few weeks ago at our AGM/conference in Dunedin and have been travelling the country with my PowerPoint at every opportunity when Parliament has not been sitting. With student debt standing at over $15 billion, the current system is just not sustainable. We cannot burden future generations with such debt. The rise in depression and anxiety among our student body is just one indicator that we are burdening them with more than just money. So New Zealand First intends, should we be in a place of influence, to shift from a financial debt for our students, to a skill debt to our country.
Is it affordable, I hear you say? In the last financial year, the National-led Government spent $4.183 billion, or 1.67 per cent of GDP, on Tertiary Education and students themselves borrowed another $1.5 billion on top of that. New Zealand First’s Up Front Investment Policy, which includes a universal student allowance that is not parental income tested, will cost $4.638 billion, or 1.86 per cent of GDP. If one takes into account that in 2009/10 the Government was spending 2.9 per cent of GDP, then the 2 per cent cap that we set for ourselves with this policy is well inside that margin. As Parliament winds down for the year, I hope to hold information evenings around Rodney to give you all an opportunity to quiz my numbers or ask questions. Our reality is we can’t afford not to do this for our future generations.
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