Budget 2013: Student debt, politicians, and “social contracts”

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The problem of student debt – now at over $13 bllion – continues to be a thorn in the side of successive governments. Labour tinkered with it by cancelling interest whilst student were studying; National has taken a ‘stick’ to the problem  by threating to arrest so-called “loan defaulters” if they dare return to New Zealand.

If National’s aim was to force New Zealanders to stay overseas and never return, it’s a fantastically clever plan. No one in their right mind would come back to New Zealand if they faced a risk of arrest.

Even conservative media have jumped into the fray with this anonymously written editorial in today’s (20 May) Dominion Post,

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Acknowledgment: Dominion Post – Editorial – Loan defaulters break ‘social contract’

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Part of the unattributed (are editorial writers so frightened of public back-lash?) editorial stated,

“After all, if the people concerned had a low income and found it genuinely hard to repay, they were free to argue the point and try to make a deal with the tax-gatherer. Others could easily repay their loans but simply ignored the Government’s inquiries.

Those who have refused to do anything now face the threat of the bailiffs and, if they persist, of arrest. It’s hard to know what else the Government could do. Those who refuse to respond are breaking the social contract.

Students, after all, do not pay the full cost of their tertiary education. Even with the loans, they are being subsidised by the taxpayer. In return for that aid, however, they must make a contribution themselves.”

Acknowledgment: IBID

This demanded a response to the anonymous author of that piece;

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from:     Frank M <fmacskasy@gmail.com>
to:     Dominion Post <letters@dompost.co.nz>
date:     Mon, May 20, 2013 at 12:03 PM
subject:     Letter to the editor

 

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The Editor
DOMINION POST

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In your editorial, “Loan defaulters break ‘social contract”you state, “Those who have refused to do anything now face the threat of the bailiffs and, if they persist, of arrest… Those who refuse to respond are breaking the social contract.” (20 May)

There is no such “social contract”.

The original social contract was for taxpayers to fund education; allow students to graduate without massive debt; get into good careers;  earn good salaries, and then pay it forward for the next generation to gain a free education.

That was the social contract.

And considering the numbers of politicians who got a free education in the 1970s and 1980s (John Key, Steven Joyce, Peter Dunne, Judith Collins, Bill English, Nick Smith, et al), it worked very nicely for them.

How much have they paid paid of their tertiary education?

Not one bean, I’ll wager.

Perhaps Key and English should set an example and make a “contribution” (plus interest for delayed payment) for the free tertiary education that was paid by taxpayers at the time.

It’s called leading by example.

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-Frank Macskasy

(address & phone number supplied)

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Previous Related Blogposts

Budget 2013: How NOT to deal with Student loan defaulters

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