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What I want for Christmas…

29 December 2017 Leave a comment

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Now is the time of the year when we send in  requests to that mysterious red-garbed being at the north pole for ‘goodies’ of one sort or another.

This is my belated wish-list of gifts. But not gifts for myself. These are gifts for the whole of New Zealand…

Housing for all

As the Coalition’s Associate Finance Minister, David Parker recently stated;

“I have a pretty simple view of this. I don’t think that it should be an international market for houses. I think local homes are to live in.

They shouldn’t be commodities that we trade internationally. I think just about everyone who’s a foreign person buying into New Zealand – they’re a very, very wealthy one-percenter if you like. And I think that’s one of the excesses of global capital when you allow those sorts of interests to influence your local housing market.”

The majority of New Zealanders would agree with him.

Even our former pony-tail-pulling Dear Leader, John Key, was moved to lament seven years ago;

“Now, that’s a challenging issue given the state of the current law and quite clearly it’s evidentially possible and has been achieved that individual farms can be sold. Looking four, five, ten years into the future I’d hate to see New Zealanders as tenants in their own country and that is a risk I think if we sell out our entire productive base, so that’s something the Government will have to consider.”

Granted that he was referring to selling farms to foreign investors, but the same holds equally true for residential property. We literally could become “tenants in our own country” if housing is allowed to be a commodity traded by investor-speculators. Especially without hindrances such as Stamp Duty or Capital Gains Tax. In effect, our housing becomes the plaything of the wealthy, with our children becoming increasingly locked out of ever owning their own home.

Even domestic investor-speculators are having a deleterious effect on home ownership. As recently as March this year (2017) the Property Investors Club revealed that “Auckland investors account for a 43% share of all sales [and] first home buyers have dropped back to a low of 19%“.

When I open up the Christmas gift labelled “Housing”, I find;

  • A capital gains tax, excluding the family home, set at the corporate tax rate of 28%. Rentals are a business; we should tax them as such.
  • An increase of State Housing of at least ten thousand units.
  • Labour’s “Kiwibuild” policy taking off  like a rocket and providing affordable homes for all first-home buyers.
  • Entrenching Housing NZ  in legislation as a public service rather than an SOE; banning dividends or any other transfers from HNZ to central government; reinvest any gst paid by HNZ back into HNZ; banning sales of existing housing; guaranteeing tenancy for all families where children and/or young adults under 21 reside in the home.

Free education for all

One of the greatest scams sold to New Zealanders is that education is a “private benefit” and therefore should be paid for (at least in part) by young people.

This was never the case for Tories such as John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al. Their university tuition was mostly free, courtesy of the State.

An educated population presented solely as a “private benefit” ignores the counter-factual; an un-educated population would be severely handicapped economically, socially, technologically and marked with deprivation on every level.

As a mind-experiment, imagine if every doctor, nurse,  and dentist remained in New Zealand after graduation, and in doing so, their debt was wiped. Who would benefit? Answer:

(a) doctors, nurses, and dentists,who would have no massive debts hanging over them

(b) the public, who would  enjoy their services

(c) central government, which would receive  doctors, nurses, and dentists’ taxation.

Now imagine if those same doctors, nurses, and dentists, all emigrated. Imagine if we were left with not one doctor, nurse,  and dentist in the country. Who would benefit? Who would lose out? Answer:

(a)  Losing out: the public, which would be deprived of their services

(b)  Losing out: central government, deprived of their taxation

(c)  Losing out: the entire country, as the economy, life-expectancies, child mortality, etc, all took a giant leap backwards

(d) Doctors, nurses, and dentists, who would still have massive debts hanging over them.

It’s abundantly clear that an educated population is not primarily a private benefit. It is a collective benefit that allows an entire society and nation to progress.

We used to have (near-)free tertiary education for those who wanted it – with a student allowance thrown in.

Then we had Rogernomics; seven tax cuts; and ended up with over $15 billion in student debt. High student debt has forced many graduates to go overseas. The previous National regime even implemented a policy arresting so-called “loan defaulters” at the border;

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This is the craziness  we have arrived at: making criminals of young people for not paying for a service that John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al, enjoyed for free.

And like a frog in a steadily heating pan of water, this craziness has grown incrementally until New Zealanders have have accepted this state of craziness as “the norm”.

It is not normal. It is as far removed from normal as one can get without permanent residency in the local psych unit.

I open the second Christmas gift. This one is labelled “Education”. In it, I find;

  • Fully funded Early Childhood Education; Primary Schools, and Secondary Schools. All school “donations” are dropped.
  • Increases to Vote Education funding is tagged to inflation/cost-of-living increases.
  • The mandate for  salary increases for teachers is handed to the Remuneration Authority, and is automatically double that of MP salary increases.
  • All university and polytech education is free-to-user.
  • All current student debt is wiped.
  • All criminal convictions for loan defaulters are wiped and their legal fees reimbursed.
  • All student debt amounts paid by graduates become a tax credit. Eg; a graduate having paid $30,000  in debt (including interest) will have a tax credit of the same amount. (An exception being those graduates who voted National and/or ACT. Their debt will be doubled. After all, they support user-pays. Let’s not disappoint them.)

Free breakfasts and lunches in schools

Europe does it. Sweden, Finland, Estonia, UK, Scotland,  and even India does it. They provide varying levels of free meals  for children at school.

The benefits are obvious; healthy meals are provide to all children regardless of social status or class origins. There is no stigmatisation as “coming from a poor family” when everyone is provided with the same service.

Child Poverty Action Group (CPAG) wrote in their 2011 report, “Hunger for Learning“;

Yet despite the ubiquity of food insecurity among students at Auckland’s decile 1 and 2 schools, children’s hunger is often portrayed as one of individual moral failure and stigmatised accordingly. (p17)

In all cases breakfasts were provided on a universal basis to all children who wanted one. Principals were very conscious of the stigma attached to targeted provision of meals, even in younger children. For schools working to build trust between themselves and the community principals felt that universal provision sent a message that children and parents would not be judged. (p24)

Anscombe (2009) notes that in the New Zealand context some schools  do not want to be seen as needing to feed children because of the stigma attached to low-decile schools. (p28)

The key argument against free provision is that it takes away parents’ responsibility to provide basics for children. Yet, as this report makes clear,  many families cannot afford to provide adequate nutrition for their children, and also, targeting risks stigmatisation, and it is clear from the interviews conducted for this report that this becomes evident in children well before they leave primary school. Stigmatisation risks missing children that need help (Sheridan, 2001). (p29)

In its estimate of the cost of food in schools in Scotland, the Scottish parliament made a number of observations pertinent to New Zealand. Among them were that a deregulated system led to poorer quality food, something the Scottish legislation sought to address; a universal system removes the stigma attached to targeted provision, improves take up and is cheaper to administer; universal provision helps build a healthy nation, and this was viewed as contributing to the economic, social and healthy wellbeing of Scotland as a whole; and nutritious school meals were recognised as lowering Scotland’s high rates of coronary heart disease, some cancers, and diabetes, and were seen as being of key importance for development and growth in childhood and adolescence (Sheridan, 2001, pp. 2-3). Other, more direct, savings included teacher time (teachers spend time teaching rather than trying to deal with disruptive behaviour) and savings associated with improved attendance. (p36)

One fact we are all fully cognisant of is that the moralising Right are only too willing and quick to jump on a soapbox and judge poor families for not feeding their children. The constantly parroted rhetoric is “can’t afford to feed them, don’t have them” – a subtle code  advocating class eugenics, and attempting to deflect from the real social problems we face.

Make school meals – like superannuation and hospitals – universally free, and that stigma vanishes because everyone’s children is treated equally.

After all, if it was good enough for former Social Welfare Minister, Paula Bennett,  to refuse to  measure poverty

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…then it should be good enough not to measure which children should or should not qualify for free breakfasts and lunches in our Primary and Secondary schools.

I open my third gift, and it contains;

  • Free healthy, nutritious breakfast and lunch for every child in New Zealand.

Orphan medicines for all who need them

In the last few years I have reported on a small number of New Zealanders who have been denied life-saving medication because PHARMAC has insifficient funding to pay for these expensive drugs. Medication for diseases such as Acid Maltase deficiency, or Pompe Disease, are not funded and sufferers either have to pay huge sums – or slowly perish.

NZORD, the New Zealand Organisation for Rare Disorders, has repeatedly called for PHARMAC to fully-funded orphan drugs for rare conditions.

In August 2013, this blogger reported;

At a seminar in Wellington, Labour’s Health spokesperson, Annette King, announced her Party’s new policy to create a new fund for purchasing so-called “orphan drugs” – medicines – for rare diseases.

Labour’s new policy marks a turning point in the critical problem of “orphan drugs” which are not funded by PHARMAC, but which are a matter of life and death for people suffering rare diseases.

Ms King announced Labour Party policy on the issue of orphan drugs and the problem of lack of funding;

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Annette King orphan drugs NZORD seminar

Health Spokesperson, Annette King, Wellington, 1 August 2013 – NZORD seminar

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“So one of the things that would need to happen soon after an election would be the establishment of on implementation working group, which could be made up of clinicians; of patients; of community representations, and others,  to put in place the details and work on the criteria for access. I do believe that in separating the funding and operation of the orphan drugs policy from PHARMAC. It will let them get on with doing what they do really well, and I think in some ways it will free them to get the best they can for the most of us who don’t need special medicines. But it will mean that for those who have rare disorders, that there will be a fund around that.”

Ms King was advocating a separately-funded body that would over-see orphan drugs for rare diseases.

However, it has become apparent that budgetary constraints and fiscal time-bombs left by the previous, incompetant National government have put Labour’s policy in doubt.

Instead, the new Coalition government is faced with unfunded budget-blow-outs such as new frigates for the NZ Navy;

The cost of upgrading two of the navy’s frigates has blown out again – this time by $148 million. The project – originally estimated to cost $374-million – will now cost $639 million.

This, on top of an eye-watering, jaw-dropping $20 billion “investment plan”  for New Zealand’s military. The Fairfax article appeared to parrot the previous government’s spin with these opening paragraphs;

The Government for the first time has confirmed New Zealand is capable of launching its own cyber attacks as a deterrent to cyber terrorism.

It’s unveiled a $20 billion investment plan in defence force capability, which will see the military establish a new cyber support capability, bolster intelligence units and digitise the army on the battlefield, giving it network enabled navigation and communications systems.

Only further down the story was it revealed that the $20 billion would be spent on new warships, aircraft, and other military paraphernalia.

Meanwhile, health budgets are stretched with PHARMAC unable to afford life-saving medicines.

The next gift to be opened;

  • “orphan drugs” funded for all who desperately need them

There are many other gifts to be opened, but one particular one caught my eye. This one had no cost to it. It was totally, utterly free-of-charge…

Kiwi fairness

Wrapped up in plain brown paper,  and put away in a dusty attic somewhere for the past thirty years, is a little box. It appears unassuming and unremarkable.

Except…

It contains the most precious gift of all; our notion of Kiwi fairness; our identity of caring for others. We had it once, in abundance. We even used to march for it in our streets, for fairness, justice, and peace in far away countries.

In South Africa;

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In South East Asia;

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Even in our own backyard;

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Wouldn’t it be refreshing if those 1,152,075 New Zealanders who voted for National in September this year, thought more of homelessness; child poverty; polluted rivers and lakes; under-funded hospitals, medicines, and mental health services; mounting student debt on our children, etc  – than for their bloated property values?

Wouldn’t it be better for us as a society if our distorted sense of hyper-Individualism – that bratty spoiled ‘child’ of  neo-liberalism and globalisation,  was pared back, and the needs of our communities put first and foremost?

The last gift I open;

  • The Kiwi identity of a fair go for all.

Without it, nothing else can be achieved. Perhaps that one is the most important of all.

A very Merry Christmas, festive season, happy new year, and family time for all,

irrespective of how you may choose to celebrate it.

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References

NBR: Foreign Buyer Ban – it’s the enforcement, stupid

NZ Herald:  PM warns against Kiwis becoming ‘tenants’

Property Investors Club:  First buyers still missing out in Auckland’s most affordable properties

Labour Party:  Our plan to start fixing the housing crisis

NZ Herald:  Student loan debt – 728,000 people owe nearly $15 billion

Fairfax media:  Kiwi lawyer comes home from UK to find $16,000 student loan grown to $85,000

NZ Herald:  Woman arrested at airport over student loan debt

NZ Herald:  Third person arrested at the border over student loan debt, as Govt ramps up crackdown on borrowers

NZ Herald:  Student loan debtor arrested at border, more warrants sought

Radio NZ: Two dozen prosecuted for defaulting on student loans

Child Poverty Action Group: Hunger for Learning

NZ Herald:  Bennett slammed over child poverty claim

National Party:  29 fiscal time-bombs waiting to blow

Radio NZ:  Navy budget blowout – ‘Our sailors aren’t safe’ – Ron Mark (audio)

Fairfax media:  Defence White Paper – Government unveils $20b defence plan for new planes, boats and cyber security

Electoral Commission:  2017 General Election – Official Result

Additional

Bay of Plenty Times:  Inside Story – The student loan effect

Previous related blogposts

Terminal disease sufferer appeals to John Key (12 Nov 2012)

Terminal disease sufferer appeals to John Key – Update & more questions (28 Nov 2012)

Health Minister circumvents law to fulfill 2008 election bribe? (18 Dec 2012)

Johnny’s Report Card – National Standards Assessment – Compassion (9 Jan 2013)

“There’s always an issue of money but we can find money for the right projects” – John Key (20 Jan 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part tahi (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part rua (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part toru (4 March 2013)

Opposition parties work together on “orphan drugs” (part wha) (10 Aug 2013)

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homeless families living in a car cartoon

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This blogpost was first published on The Daily Blog on 24 December 2017.

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Observations on the 2017 Election campaign thus far… (tahi)

6 September 2017 Leave a comment

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So many little occurrences and huge events have transpired over the last couple of months, to brand this as one of the most intriguing (and tumultuous) of election campaigns in my life. Only the 1984  and the 2014 General Elections rank as memorable. In all three, there were two threads weaving through the campaigns;

  1. Events which have successfully engaged even the most disinterested, cynical Citizen;
  2. A  subtle – but palpable – shift in the political concensus.

Over-laying those two threads are the desperate scramblings of a decaying third term government; the rise of a new, popular leader (this time on the Left); and an unreconstructed, vindictive side of New Zealand society.

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It’s just a… jump to the Left!

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The onset demise of neo-liberalism/globalisation has been an on-going topic of discussion since the “Brexit” referendum and the ascendancy of Donald Trump and (to a lesser degree) Emmanuel Macron.

Some have suggested that with our MMP system – which has a diluting-effect on political revolutions whether Left, Right, or Populist – that New Zealand will dodge the rising groundswell of international public resentment against the neo-liberal concensus.

Well, that won’t be happening. Regardless of electoral systems, New Zealand is not immune to the winds of international political change.

Just as neo-liberalism swept over this country in the 198os – imported from Reagan’s USA and Thatcher’s Great Britain – the counter-counter-revolution will happen here, and it has been televised since the courageous Metiria Turei put her hand up and showed us why things were so broken for those left behind by Roger Douglas’ so-called “reforms”.

One of the litmus-tests for ideological positioning on the Left-Right spectrum is the concept of user-pays. Since the late 1980s, user-pays has been gradually implemented by way of “mission-creep”.

Done gradually so as not to alienate the public, National learned a bruising lesson in public resentment after it attempted to implement a $50-per-day public-hospital charge in 1991. The public defied the charges and simply refused to comply with  invoices demanding payment. The policy was dropped prior to the 1993 general election.

User pays for medication has been gradually increased from fifty cents to three dollars (in 2007, by Labour), to five dollars (in 2013 by National).

The other big-ticket item targeted for user-pays was tertiary education. Student fees were raised and student loans implemented by National in 1992 (the same year ‘Shortland Street’ began broadcasting).

Until then, tertiary education was near-free, with student allowances paid to students to meet basic living costs.

Former Prime Minister, John KeyMinister Steven Joyce, and previous Finance Minister, Ruth Richardson (who implemented the policy) were amongst those National Party politicians who benefitted from near-free tertiary education. Like Paula Bennett, who gained a free tertiary education as a young woman whilst on the DPB, using the Training Incentive Allowance – and which she then scrapped in 2009 – Richardson, Joyce, and Key made sure no other young New Zealander would gain from a free (or near-free) tertiary education.

The user-pays regime has remained in place ever since, and student debt had spiralled out of control to a staggering $15.3 billion owed by 731,800 students.

Resentment by students, and refusal to repay this monstrous debt, was such that in 2013 Minister Joyce employed draconian Soviet/Nazi-style policies to arrest and prosecute rebellious loan defaulters;

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Just because people have left New Zealand it doesn’t mean they can leave behind their debt.  The New Zealand taxpayer helped to fund their education and they have an obligation to repay it so the scheme can continue to support future generations of students. “

Said the man who had a near-free, tax-payer funded tertiary education – Steven Joyce.

The result of National’s crack-down? Predictable, as Fairfax’s Adele  Redmond reported in May this year;

Five years of arrests and court proceedings have recovered less than $230,000 in overdue student loan debt.

Arrest warrants and Australian court cases pursued by Inland Revenue in the last five years have recovered a fraction of student debt, figures released under the Official Information Act show.

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Three completed court cases recovered $79,610 from two borrowers – the third person’s debt was wiped due to hardship – and $150,221 was repaid following eight arrest warrants to prevent debtors leaving New Zealand.

Twelve more cases covering $621,955 of debt were still under way, an Inland Revenue spokesman said.

The $229,831 recovered so far represented 0.02 per cent of all overdue debt.

The amount of loan debt owed worldwide topped $1.07 billion last year.

User-pays in tertiary education has failed. Like our antiquated marijuana laws, it criminalises those who refuse (or cannot) repay their debt. Others are left with a debt hanging over them as they try to save to buy a house; raise a family; or set up business. The mill-stone of a student debt handicaps young New Zealanders before they have set foot outside of learning institutions and into the workforce.

The innate unfairness and fiscal failure of user-pays is apparent. What is not so apparent is that the majority of political parties have policies that are counter to the user-pays concensus that has existed up till now;

Greens

Loan Repayment

  • Support keeping the current zero interest scheme
  • Ensure that repayment rates reflect borrowers’ ability to repay by adjusting the repayment thresholds to start at a higher income level, and introduce a progressive repayment scheme

Student Support

  • Review levels of student support to ensure they are at an equitable and liveable level
  • Work towards a universal student allowance by progressively reducing the age at which students cease to be means tested on their parents’ income and continue to raise the parental income threshold
  • Reinstate access to the Student Allowance for those studying postgraduate courses

Fees

  • Work towards a public ‘fee-free’ tertiary education system by capping and then progressively reducing student fees
  • Review funding mechanisms to explore alternatives to EFTS funding
  • Ensure Tertiary Institutions are adequately funded

Labour

  • Increasing living costs support with both a $50 a week boost to student allowances and a $50 a week lift to the maximum that can be borrowed for living costs
  • Restoring post-graduate students’ eligibility for student allowances
  • Restoring the eligibility of students in long courses, such as medicine, to access student allowances or loans beyond seven years FTE study
  • Accelerating the three years’ free policy, starting with one year fees free full-time equivalent for everyone starting tertiary education or training for the first time from 1 January 2018, and extending this to three years’ free by 2024.

Mana Movement (not currently in Parliament)

  • Improve access to free tertiary education for all students
  • Abolish all tertiary fees and cancel interest on student loans
  • Provide students with jobs to help them pay off debt
  • Develop a plan to write off student debt
  • Provide students with a living allowance while studying

Maori Party

  • Increase the accommodation supplement by half for all tertiary students.
  • Introduce a universal student allowance with cost of living adjustment to guarantee a livable income during study, for all tertiary students, including post-graduate students.
  • Write off the living cost component of all student loans and explore the viability of writing off the total student loan for those who work in a job equivalent to their qualification in Aotearoa for a period of five years
  • Provide free public transport to primary and secondary school children as well as tertiary students
  • Develop a four year zero fee scholarship to target the ‘First in Whānau’ to engage in a Bachelor level qualification programme.
  • Retain interest-free loans.
  • Reduce the repayment levels on a student loan starting at 4% ($40,000), 6% ($50,000) and 8% (for $60,000 and over)

NZ First

  • Introduce a universal living allowance which is not subject to parent means testing as a priority for all full-time students.
  • Immediately introduce a dollar-for-dollar debt write-off scheme so that graduates in identified areas of workforce demand may trade a year’s worth of debt for each year of paid full-time work in New Zealand in that area
  • Work with NZUSA and the sector to establish an expert reference group with a view to implement two thousand ‘First in Family’ scholarships per year. These will create a step-change in educational aspiration by promoting fee-free education with wrap-around support from secondary, through transition and to completion for those who would be the first in their immediate family to achieve a degree. ($68m over first 3 years 2015 to 2017).

United Future (now defunct)

Fees

[United Future will] Remove tuition fees for tertiary education in New Zealand, accompanied by a push to increase the quality of tertiary education and protect the value of New Zealand degrees. The zero fees policy would mean that students would only borrow living costs, rather than the crippling loans which are currently being incurred to cover fees as well. A zero fees policy also addresses one of the illusions of the current policy, where it is assumed that tuition fees cover all or most of the costs of study, when in fact the taxpayer already covers the majority of tuition costs.

Student Allowance

Abolish the Student Allowance, as a way to help fund the zero fees policy. The student allowance system has become patently unfair, relying on means testing of parental income until a student turns 24, and enabling the wealthy to receive allowances where their parents are able to reduce their taxable income.

National and ACT appear to be the only two parties that stubbornly adhere to the notion of user-pays in tertiary education.

The times, they are-a-changin’, as user-pays in tertiary education becomes less and less popular. We may expect in the coming years to see that deeply unpopular policy slowly wound back and a gradual, inexorable return to free, state-funded tertiary education.

Like the billboard sez;

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Though perhaps the slogan should have read “Return to free education“. If only to remind New Zealanders what we once had – and then lost – in the mania that was neo-liberalism.

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ACT’s Billboard – Blissful Obliviousness to Ironic Hypocrisy

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Seen throughout the country is  David Seymour’s grinning face on ACT’s canary-yellow billboard;

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Note the campaign slogan ACT has adopted; “Own your future“.

Deeply ironic considering that ACT is the party that has at it’s core policy to sell off all state assets to the highest bidders, whether local or off-shore corporates.

Own your  future“? Yeah, nah. Only if you can afford to bid for it.

 

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References

Te Ara Encyclopaedia of New Zealand:  Hospital funding and patient entitlement – Funding public hospitals

Fairfax media:  Prescription price rise hits vulnerable

Wikipedia:  Timeline of New Zealand history – 1990s

Ruth Richardson NZ Ltd: Ruth Richardson CV

Sunday Star Times: Politics – John Key – A snapshot

NBR: Bennett cutting a benefit that helped her – Labour

Fairfax media:  Student loan debt ‘balloons’ by 37 per cent, with average student owing $21,000

Fairfax media:  Joyce defends student loan crackdown

Fairfax media:  Five years of legal action by Inland Revenue recovers fraction of student loan debt

Green Party:  Tertiary Education Policy

Labour Party: Tertiary Education

Mana Movement: Education

Maori Party: Education Policy

NZ First: Education

United Future: Tertiary Education

Additional

Radio NZ:  As it happened – Jacinda Ardern takes charge as Labour leader

Horizon Poll:  New Zealand First voters equally split over coalition options

Radio NZ:  Labour sweeps into lead in latest poll

Previous related blogposts

Steven Joyce – Hypocrite of the Week

Cutting taxes toward more user-pays – the Great Kiwi Con

 

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Note: Replace US references to  Social Security with Superannuation and Medicare with State-funded healthcare for local relevance.

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This blogpost was first published on The Daily Blog on 1 September 2017.

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Andrew Little’s “dangerous” speech – a cunning plan for the Middle and the Left

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Labour Party - Andrew Little - pre-budget speech (24)

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Wellington, NZ, 22 May – Speaking to a fully packed downtown conference centre in Wellington, on a cold, gloomy rainy afternoon, Labour-leader, Andrew Little launched into a fiery attack on the current National Government focusing  on it’s inarguably lack-lustre track record for the past eight years.

With a heavy media presence, Rimutaka MP, and Labour spokesperson for Education, Chris Hipkins, was tasked with making the introduction;

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Frank Macskasy Frankly Speaking blog fmacskasy.wordpress.com Labour Party - Andrew Little - pre-budget speech

 

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Hipkins said;

“Certainly there is a mood for change around the country now and that mood for change is increasing.  But the question that everybody has been asking us, is is Labour ready? And that’s a fair question to ask.”

“They say that being the leader of the Opposition is the toughest job in politics. Well I can tell to tell you that Andrew has taken to that tough job in politics like a duck to water.”

“In all of that time that he has been doing that job, and all the hours he has put in, he has never forgotten why is there; for people. And that is why the Labour Party is here.”

The short  introduction over, the audience of committed Labour members clapped enthusiastically as Little mounted the podium;

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Frank Macskasy Frankly Speaking blog fmacskasy.wordpress.com Labour Party - Andrew Little - pre-budget speech

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To say that Little had plenty of material to work with would be an understatement as the growing crisis for both affordable housing; skyrocketing rentals; and shortage of state houses have been well publicised in the media and by bloggers.

From just one day in Wellington’s Dominion Post Monday 23 May edition;

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dominion post - housing crisis

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Jane Bowron’s piece especially – Marae shows up Government with haere mai to homeless  – is a must-read, head-on assault on the warped ‘values’ which currently afflict our government and some peoples’ thinking.   Yet, the Dominion Post is hardly known as a bastion for marxist agitation.

Little wasted no time as  he launched into a recitation of National’s failures after eight years in government;

“It’s becoming harder for many people to get ahead.  Harder to find a good job or get a pay rise. Harder to find a home, put some savings aside, or get the health care you need. Parents are paying more for their childrens’ education, but our schools aren’t performing as well.

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Look at the headlines from the last couple of weeks: Children sleeping in cars or forced to lives in houses that make them sick; plummeting home ownership; rising unemployment, [and] stalled wages for many people.

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And while the few at the very top got to enjoy special rules that meant they didn’t have to pay their fair share – everyone else is paying the cost.

We’ve seen increases in unemployment. There are now 144,000 people out of work in New Zealand, 40,000 more than when National took office.”

Little is correct on those stats. According to the convenient graphs and data from US website, Trading Economics, the increase in unemployment in New Zealand has remained stubbornly high;

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unemployed persons 2008 - 2016

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Little explained that the unemployment problem was worse than just sheer numbers;

“And it’s not just that more people are out of work – it’s that many more are out of work for longer.  Under this government the number of people unemployed for more than a year has tripled – up over 11,000 since they took office.

The situation is especially tough for our young people. Under this government the number of young people who aren’t in work, education or training has risen by more than 26,000.

The truth is those are the young people this government has given up on – the ones they label as ‘pretty damn hopeless’.”

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Bill English describes some Kiwis looking for work as 'pretty damned hopeless'

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Little pointed out the numbers who had not gotten any wage increase in the last year, and more importantly that workers were missing out on the benefits of economic growth;

For those in work, getting a pay rise has become harder. 43% of New Zealanders saw no increase in their incomes at all in the last 12 months.

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Under the last Labour government, the share of economic growth going to wage and salary earners was over 50%.

Today, it’s 37%.

The slice of the economy going to workers has fallen each year under National.

This year, that lost income works out to be fifty bucks a week for the average family.

His comments will most likely resonate with those workers who feel they are working harder and longer hours – and yet do not seem to be progressing. The back-stories of mega-rich tax-evaders hoarding their wealth in tax havens will fuel feelings of resentment by those who work and pay their  taxes so we can have roads, hospitals, schools, etc;

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Panama Papers investigation 'NZ absolutely, conclusively is a tax haven'

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Little then hit the big story of the last few weeks – growing homelessness in New Zealand. Coupled with a fall in home ownership rates since 1991 (from 74% in 1991 to 64% in 2015), and we get a clear picture how “free” market economics has impacted on our society.

National’s response was to deny that a problem existed in New Zealand at all. According to Social Housing Minister Paula Bennett;

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"I certainly wouldn't call it a crisis. I think that we've always had people in need."

“I certainly wouldn’t call it a crisis. I think that we’ve always had people in need.” – Paula Bennett, 20 May 2016

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Andrew Little’s response was less dismissive of the challenges facing 21st century New Zealand families;

“When kids are sleeping in cars. That’s a crisis.

When families are crowded into garages. That’s a crisis.

When an entire generation is locked out of ever owning their own home, that is a crisis.”

He firmly sheeted home blame for our current predicament, in no uncertain terms;

“Instead of owning up to that and fixing it, the government is siding with property speculators and land bankers, while everyone else misses out.

Every initiative our bumbling housing minister Nick Smith has tried on housing has failed. Rather than go after the causes of the problems, he’s flailed around with gimmicks.

Remember special housing areas? Fewer than 1000 homes actually built.

Remember his gimmick from the last Budget? Releasing crown land? It turned out to include substations, cemeteries and even the back yard of Government House.

While the government’s been tinkering, the problem’s gotten so much worse.

In March, the average house price in Auckland rose by over $2,200 a day.”

For maximum effect, Little repeated that startling factoid to the audience and media;

“Let me say that figure again. Over twenty two hundred dollars a day.”

On Radio NZ’s political panel on Monday, 23 May, former Labour Party President, Mike Williams complimented Andrew Little’s speech, referring to it as “dangerous”;

“Middle New Zealand is concerned about health, education, housing, and the economy. And I think, as far as John Key is concerned, this is the most dangerous speech a Labour leader has given since Helen Clark resigned.”

Williams also made an interesting observation regarding how Middle New Zealand felt about their rising house values;

“I think there’s a bit of schizophrenia going on in Middle New Zealand which is showing up in the UMR numbers. If you own a house you are feeling pretty good because the value of your asset has been going through the roof. However, if you’ve got kids, you’re worried about their schooling; you’re worried about will they get a house; and  you’re worried about will they get a job that pays enough  to pay for a house. So I think, that, yes,  home-owning New Zealanders [are]  feeling ok, but parents are not.”

Little then addressed the growing under-funding of  public healthcare;

According to Infometrics, we’ve had $1.7 billion dollars cut in real terms from our health budget over 6 years.

That’s meant that 160,000 people in the last 5 years have been unable to get the appointment they need with a specialist.”

Which seems to be a replay of National’s cuts to the Health budget in the late 1990s;

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acute-heart-surgery-list-nearly-400-otago-daily-times-5-february-1998

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In response, Little promised;

“Under Labour, Kiwis will know that if they get sick, the public healthcare system will be there for them.  That’s why we are committed to meeting the cost pressures that are depriving people of the care they need…

…Budgets are about priorities, and under Labour, health will be a priority again. We shouldn’t be spending money on $3 billion of unaffordable tax cuts when we could be fixing our health system instead.”

Which, if the previous Clark-led Labour government’s actions are anything to go by, can be counted as a solid committment;

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1-5b-injection-for-health-9-dec-2001

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Little was also scathing at National’s taxpayer subsidies being thrown at Charter Schools;

“At the same time as National has poured millions of dollars of taxpayers’ money into privately run charter schools, our public education system is struggling.

In the last year alone, National has cut funding for pupils by $150 each.

And so schools load more costs on to parents in order to fill the gaps.

Ask any parent and they’ll tell you the cost of uniforms, class activities, camps and of course ‘voluntary donations’ just keep on rising.”

For all of National’s much-vaunted “reforms” in our education system, the results are less than impressive. Little rattled off a list of stats that should raise concern with all New Zealanders;

But here’s the thing: while costs are rising, standards are falling.

In 2006, we were ranked 5th in the world for reading.

Now we’re 13th.

We were 7th in science.

Today? 18th.

And in maths? We’ve fallen from 11th to 23rd.

So much for National Standards. And so much for the neo-liberal ideology that has not only not delivered on promises of excellence in our education system – but has seemingly damaged it. Our fall in international rankings are stark evidence that National’s policies in education have failed spectacularly.

Little then offered what can only be  described as Labour’s manifesto for the 2017 General Election;

  • We’ll crack down on the offshore speculators who are driving up house prices and locking families out of the market.
  • Labour will launch a mass home building programme to deliver new, affordable homes in Auckland and around the country.
  • That’s why we are committed to three years’ free post-school education so that Kiwis can train and retrain across their working lives, without having to take on huge debt. That’s how we support our people and its how we tackle the challenge of the future of work.
  • We’ll introduce a dole for apprenticeships scheme to give young people the opportunity to get into paid work.
  • We’ll raise the number of hours people can work without having their benefit cut.
  • We will feed hungry kids in schools…

In six, short, sentences, Andrew Little has put the boot into neo-liberal so-called “reforms”. If elected, and if Labour does not water-down it’s promises, we will be witnessing the dismantling of thirtythree years of the neo-liberal paradigm in New Zealand.

No wonder right-wing commentator, Matthew Hooton, seemed perturbed by Little’s speech during his regular ‘slot’ on Radio NZ’s Nine to Noon programme on 23 May.

Perhaps the most revolutionary aspect to Little’s promises is that of  “three years’ free post-school education“. This is, in effect, partially undoing user-pays in our tertiary institutions.

But the most clever aspect to Little’s speech is that it is “talking” to two different parts of New Zealand.

His reference to “that lost income works out to be fifty bucks a week for the average family” is a direct pitch to Middle New Zealand that feels it is not progressing whilst the mega-rich rort the tax system.

But his reference to abandoning part of user-pays in tertiary education is directed at the Left who are demanding that the Labour Party make a public commitment to renouncing it’s Rogernomics past.

The trick for Labour’s hierarchy and strategists is to achieve both – appealing to Middle New Zealand and the Left – but without spooking the former, or further alienating the latter.

In effect, Labour has taken a firm step-to-the-left – and the public have not noticed.

Mike Williams was right: this was a “dangerous” speech from Andrew Little.

And a damned clever one.

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Addendum

Full text of Andrew Little’s speech here.

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Labour victory

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References

Fairfax: Jane Bowron – Marae shows up Government with haere mai to homeless

Trading economics: New Zealand Unemployed Persons 

Fairfax media: Bill English describes some Kiwis looking for work as ‘pretty damned hopeless’

TV1 News: Panama Papers investigation – ‘NZ absolutely, conclusively is a tax haven’

Interest.co.nz: Collapse in home-ownership rates among families formed since 1991 is an unfolding disaster for NZ’s economy

Radio NZ: No housing crisis in NZ – Paula Bennett

Radio NZ: Nine to Noon – Political commentators Mike Williams and Matthew Hooton

Scoop media: Andrew Little: Pre-Budget Speech 2016

Related

Pundit: Have We a Housing Policy?

Other bloggers

Chris Trotter: Left Unsaid: What Andrew Little Didn’t Say In His Pre-Budget Speech

Kiwipolitico: Not Quite But Getting There

No Right Turn: National should give us our $13,000 back

The Standard: Little’s $50 a week message getting through

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

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capitalism taking from those who work

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This blogpost was first published on The Daily Blog on 25 May 2016.

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= fs =

Letter to the editor – Who are the Real Greedies?

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Frank Macskasy - letters to the editor - Frankly Speaking

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It is amazing how many blame the victims of neo-liberal ideology, rather than looking at the causes of why things happen.  Are some people really so simple-minded that they can’t see beyond their immediate prejudices…?

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letter to the editor - dominion post - sylvia moore

 

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So yet again, I point out some ‘home truths’ to people like Ms Moore, who seems to have selective amnesia when it comes to recent history…

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Sat, May 21, 2016
subject: Letter to the editor

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The editor
Dominion Post

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In attacking so-called “loan defaulters”, Sylvia Moore has targetted the wrong group. (letters, 20 May)

She is indeed correct that increased student fees and student loans were introduced in 1992. Before that, tertiary education was near-free.

Beneficiaries of free tertiary education were people like John Key, Bill English, Steven Joyce, et al. Even Paula Bennett was recipient of free tertiary education, through the Training Incentive Allowance – which she scrapped in 2009 after becoming Minister for Social Welfare.

When Moore states that “perhaps if they [student loan defaulters] repaid their loans, the government, might be able to allocate a grant to parents in need of help” misses the point that since 1986 there have been seven tax cuts. The last two in 2009 and 2010 cost over $2 billion per annum

That is why schools and hospitals are being under-funded and children are in need in equipment such as lap-tops, as Ms Moore pointed out.

It is a double standard that we now saddle our youth with massive student debts and threats of prosecution.

Perhaps she should cast her ire at National Ministers who have gained personal benefit from free education and are now abusing their power to force others to pay for what they got for free.

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-Frank Macskasy

[address and phone number supplied]

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References

NBR: Bennett cutting a benefit that helped her – Labour

Infonews: Government’s 2010 tax cuts costing $2 billion and counting

Previous related blogposts

“It’s one of those things we’d love to do if we had the cash”

Roads, grandma, and John Key

John Key’s track record on raising wages – 4. Rest Home Workers

Aged Care: The Price of Compassion

Tax cuts & school children

Nick Hanauer – a devastating demolition of the Neo-liberal dogma of tax cuts!

Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

Letter to the Editor – tax cuts bribes? Are we smarter than that?

The consequences of tax-cuts – worker exploitation?

The Mendacities of Mr Key #3: tax cuts

A Message to Radio NZ – English continues fiscal irresponsibility with tax-cut hints

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student-loan-debt

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This blogpost was first published on The Daily Blog on 22 May 2016.

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= fs =

Letter to the editor: Setting it straight on user-pays in tertiary education

19 February 2016 4 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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Labour’s promise of a return to (limited) free tertiary education appears to be unsettling some, for whom the last thirty years has been dominated by the implementation and bedding-in of  user-pays (often gradually, so as not to spook the punters) ; reduced-tax; and minimalist-government ideology;

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letter to editor - the wellingtonian - sue usher - student debt

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I replied to Ms Usher’s public expression of “guilt twinges”…

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from: Frank Macskasy <fmacskasy@gmail.com>
to: The Wellingtonian <editor@thewellingtonian.co.nz>
date: Sat, Feb 13, 2016
subject: Letter to the editor

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The editor
The Wellingtonian

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Sue Usher defends user-pays in Universities, asserting, “anyone who takes out a loan on anything surely knows that there’s no such thing as a free lunch; you are not given money, you are lent it”. (letters, 11 Feb)

Prior to 1992, there were no student loans/debt. Tertiary education was paid from taxes, with the expectation that graduates would, in turn, pay for following generations.

That was the social contract.

That contract dissolved when successive governments introduced user-pays, with seven tax cuts in 1986, 1988, 1996, 1998, 2008, 2009, and 2010. The burden of higher education shifted from society, onto individuals. By 2014, student debt reached $14.8 billion.

Ms Usher admits this unfairness, “I acknowledge that repaying a loan and trying to buy a first home is a mighty challenge and feel slightly guilty that my generation did not have any such system”.

John Key and Tertiary Education minister, Steven Joyce, should also feel a twinge of guilt. Both obtained their University degrees free, paying almost nothing.

Those who parrot the cliche that education is a “private good” should consider if our doctors, scientists, engineers, teachers, et-al, all decided to pack up and move overseas.

Or if none of us could read and write.

Education benefits us all, which user-pays fails to recognise.

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-Frank Macskasy

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[address and phone number supplied]

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Additional

Salient: A short history of tertiary education funding in New Zealand

Ministry of Education: Student Loan Scheme Annual Report 2014

IRD: Student Loan Scheme Amendment Act 2014 – Arrest at border

Fairfax media: Joyce defends student loan crackdown

Fairfax media: Student loan arrest could prompt others to address debt

NZ Herald: ‘I don’t think I’m a criminal’

Teara.govt.nz: National Party – The ‘mother of all budgets’

Sunday Star Times: Politics – John Key – A snapshot

Wikipedia: Steven Joyce

National Party: Steven Joyce

Related blogposts

Letter to the Editor: Steven Joyce – Hypocrite of the Year

The Mendacities of Mr Key # 16: No one deserves a free tertiary education (except my mates and me)

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This blogpost was first published on The Daily Blog on 14 February 2016.

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= fs =

The Mendacities of Mr Key # 16: No one deserves a free tertiary education (except my mates and me)

11 February 2016 9 comments

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student-loans-debt

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Prologue

As reported in a previous blogpost last year (Steven Joyce – Hypocrite of the Week);

Fun Fact #1: Student loan stood at $14.235 billion, as at 30 June 2014 – up from 9.573 billion in 2008.

*Up-date* – Student loan stood at  $14.837 billion as at 30 June 2015 – up from $14.235 billion in 2014.

Fun Fact #2: As at 30 June 2013, 721,437 people had an outstanding student loan, registered with Inland Revenue. That’s roughly 16% of the population.

Fun Fact #3: Approximately 1.2 million people – roughly a quarter of the population –  have taken out  student loans.

Fun Fact #4: Students have borrowed $20.119 billion of which  $9.157 billion has been collected in loan repayments.  More than 415,000 loans have been fully repaid.

Fun Fact #5: $1.031.7 billion in loan repayments were received, $22.2 million less than last year. The total number of students completing formal qualifications reached 144,000 in 2013 – a decrease of 0.6% from 2012. The number of people enrolled in tertiary education has dropped, from  504,000 in 2005 to  about 420,000 (in 2014).

Fun Fact #6: The student fees/debt system began in 1992. Prior to that, students  had access to Bursaries and Student Allowances and tuition fees were minimal.

Fun Fact #7: “The median borrowing increased – from $7,441 in 2013 to $7,708 in 2014. The median loan balance also increased – from $13,882 in 2013 to $14,421 in 2014. Both were driven by higher fee borrowing: fees are rising and students are more likely to take more expensive courses. In the 2014 academic year, 72.4% of eligible students took out a loan, down from 73.8% in 2013… The number of borrowers in default has declined slightly on 2013/14, but the amount in default has increased.”

Fun Fact #8: On 17 May 2013, National announced new legislation would give the IRD powers to arrest loan defaulters at “the border” (ie, airports) if they are “about to leave or attempt to leave New Zealand after returning from overseas”.

Fun Fact #9: On 18 January this year, the first person arrested at the border for non-payment of a student debt was a 40-year-old with  an  outstanding debt that, with interest,  had ballooned from $40,000 to $130,000.

Fun Fact #10: The Prime Minister, John Key, and Tertiary Education Minister, Steven Joyce, both received near-free tertiary education, paid nearly entirely by the New Zealand taxpayer.

Sources: Ministry of Education, Beehive, NBR, and The Wireless

Some Recent History: 1972 – 1992

Prior to 1992, tertiary education at Universities was mostly free, with minimal course fees. On top of which, a student allowance plus part-time paid employment, was usually sufficient for students to graduate with minimal debt hanging over them.

This allowed graduates to start their adult lives, careers, and families with only as much debt as they chose to take on. This was usually in the form of a mortgage and business start-up costs (if they elected to be self-employed).

Those that earned more in a professional capacity, paid a higher rate of tax. This ensured that those who stood to gain the most, financially, from a near-free tertiary system, paid more in taxation. This – in part – assisted funding for future generations to move through the tertiary education system.

Those that did not achieve high income-brackets could contribute in other ways.

When National’s Ruth Richardson became Finance Minister in 1990, the social contract between generations “paying it forward” was broken. University fees were increased; student loans were made available to cover payment for increasing user-pays;

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Prime Minister Jim Bolger and Finance Minister Ruth Richardson make their way to the House of Representatives for the presentation of the 1991 budget. Richardson was from the radical wing of the National Party, which promoted individual liberty and small government. This was reflected in the budget, which severely cut government spending, including on welfare. Richardson proudly proclaimed her plan as the 'mother of all budgets', but such was its unpopularity among voters that it – along with high levels of unemployment – nearly cost National the next election.

Prime Minister Jim Bolger and Finance Minister Ruth Richardson make their way to the House of Representatives for the presentation of the 1991 budget. Richardson was from the radical wing of the National Party, which promoted individual liberty and small government. This was reflected in the budget, which severely cut government spending, including on welfare. Richardson proudly proclaimed her plan as the ‘mother of all budgets’, but such was its unpopularity among voters that it – along with high levels of unemployment – nearly cost National the next election.

Acknowledgement of image: NZ Herald

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Ironically, Ruth Richardson herself was a beneficiary of New Zealand’s then near-free tertiary education system. In 1972, she graduated from the University of Canterbury with a Bachelor of Law  (Honours).  She immediately went to work – debt-free – for the NZ Department  of  Justice  (NZ).

She has made herself a Limited Liability Company, ostensibly to minimise her tax “liabilities”.  According to her website, her husband is General Manager of “Ruth Richardson Ltd”.

Some Recent History: 1986 – 2010

Though the tertiary education system was far from perfect – for example polytechnics could charge higher student fees – it offered near-free higher education and taxpayers were ultimately beneficiaries of a system that produced doctors, engineers, scientists, and other skilled professionals to take New Zealand into the 21st Century.

Even those who went overseas in pursuit of lucrative work gained valuable experience which benefited the country as a whole, upon their return.

Unfortunately, the social contract between generations was broken as the Lange-Douglas Labour Government implemented neo-liberal policies that included user-pays as a new concept upon which to base State/individual transactions.

Labour did not implement user-pays in tertiary education – but it laid the fertile ground for the following Bolger-Richardson National government to radically change University funding for course fees.

For the right-wing Labour (of the 1980s) and National, smaller government meant tax-cuts, and from 1986 there were no less than seven cuts to taxation;

1 October 1986 – Labour

1 October 1988 – Labour

1 July 1996 – National

1 July 1998 – National

1 October 2008 – Labour

1 April 2009 – National

1 October 2010 – National

Each cut to taxation has meant less revenue for the government and resulted in either reductions to social services, and/or increases in user-pays.

The ballooning of “voluntary” school fees to over a billion dollars since 2000 is the clearest example yet of  tax-cuts making way for the covert rise in user-pays for what is supposedly “free” schooling in this country.

The under-funding of schools and desperate need for parents’ “donations” has become such a pressing problem that Patrick Walsh, of the Principals Association of New Zealand,  has openly suggested that the ideal of  free education should be abandoned;

“I think the basic principle is you undertake a study … of what it costs to actually run a school, all the operational costs including staffing, and you either fund it to the level it actually costs, or you say the pie isn’t big enough to support that and we will now allow schools to charge parents for some of the services.”

Perhaps Walsh has a point. It would at least acknowledge the current semi-user-pays system as a reality, rather than fooling ourselves with dishonest and quaint notions of “school donations”.  Only then might New Zealanders clearly comprehend how we have arrived at a toxic mix of tax-cut bribes and implementation-by-stealth of user-pays in education, and other state services.

Education is not the only state service suffering from lack of adequate funding, as recent media reports from Canterbury and Waikato DHBs indicate. The increasing waiting times for public operations, and painful suffering of people with debilitating medical conditions,  is a telling indicator that our health care system is ailing through lack of funding.

A September 2012 Treasury paper,  “Average Marginal Income Tax Rates for New Zealand, 1907-2009“, revealed;

In 1900 tax revenues were approximately 8% of GDP. They rose to 28% of GDP during WWII and to a high of 37% in 2006. Currently tax revenues make up around 29% of GDP.

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government-tax-revenue-by-source-1903-2011

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Source

Taxation has fallen – as have once-free services which New Zealanders took for granted. At the same time, population growth has put pressure on (reduced) government revenue and spending.

In 1984 the population stood at 3,175,737 (as at 1981 Census).

By 2013: our population had swelled by over a million to 4,242,048 (as at 2013 Census).

We are spending less, for more people, to meet expectations that are simply unrealistic after seven tax cuts.

Rather unsurprisingly, the consequences of successive tax-cuts have been predictable, and well-reported in the media;

According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

New Zealand’s wealthiest individual, Graeme Hart, is ranked number 200 on the Forbes list of the world’s billionaires, with US$7 billion. That makes his net worth more than the bottom 30 per cent of New Zealanders, or 1.3 million people. 

The Progressive Response

January 31st marked a giant step Kiwi-kind that – if endorsed by voters – could prove to be the the first nail-in-the-coffin for user-pays.

Labour leader, Andrew Little, announced a policy that, while seemingly radical in the 21st century, was common-place policy in this country pre-1980s.

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Labour's announcement welcomed and slammed

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Little proposed;

“… that the next Labour government will invest in three years of free training and education after high school throughout a person’s life.

[…]

Three years of free skills training, of apprenticeships or higher education right across your working life.”

He then pointedly explained not just where the money would come from – but that bribes in the form of  successive tax-cuts had under-mined our once-proud cultural expectations of state-provided services;

“The money is there – the Government just has it earmarked for tax cuts. We will use that money instead to invest in New Zealand’s future.”

In effect, this would be a massive admission of failure in user-pays, and the beginning of rolling back thirty years of New Right doctrine.

The Neo-Libs Strike Back

The response of the National Party and it’s front-organisation, the so-called “Taxpayers’ Union“, has been utterly predictable.

From Tertiary Education minister, Steven Joyce, came these two ‘clangers’ via Twitter;

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Steven joyce - tertiary education - hypocrite

Source

Source

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Judging by the angry responses on Joyce’s Twitter account, his comments were more provocative and self-defeating, than achieving any ‘hits’ on Labour’s policy-announcement.

John Key fared little better after his jaw-dropping gaffe on this issue;

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John Key draws flak after questioning why waitresses' taxes should fund students

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Aside from the usual tactic of playing on low-paid workers’ dire plight to criticise free education (or free anything provided by the State), links were quickly drawn to Key’s on-going assault on waitress Amanda Bailey, in Auckland’s Rosie Cafe;

Prime Minister John Key has drawn a barrage of criticism after questioning if Labour’s fee free study policy was fair on waitresses who would be paying tax to subsidise students.

His comments also drew a quick response from some critics on social media who drew the link with Key’s repeated pulling of Auckland cafe waitress Amanda Bailey’s ponytail.

Key’s rhetorical question attempted to paint free tertiary education as unfair on low-paid workers;

“How much should the waitress.. how much of her taxes should go to a student who will absolutely earn a lot more?”

The question could equally be put;

“How much should the waitress.. how much of her taxes should go to…”;

  • National Ministers  gifting themselves 34 new BMWs. The last batch – bought in 2011 – are to be replaced only after about three years’ use. Cost? Unknown. According to National, the price is “commercially sensitive”. (Code for *politically embarrassing*.)
  • Subsidies and special tax concessions to Warner Bros for ‘The Hobbit‘, and to other movie companies? Cost – ongoing.

But the main question should be;

“How much should the waitress.. how much of her taxes should go to paying for tax-cuts for the top 1% of  New Zealanders.”

When National cut taxes for high-income earners in 2010, and raised GST from 12.5% to 15%, this was essentially a transfer of wealth from low-income earners to the uber-wealthy. Low income earners pay disproportionately more in GST than the wealthy.

People like Ruth Richardson can structure their tax-affairs by registering as a limited liability company (or using Trusts and other accounting trickery) – which allows her to claim back on GST – this puts the rest of us at a distinct disadvantage.

Other companies such as Facebook and Apple have made big profits in New Zealand, but paid minimal tax. Facebook paid $23,034 in 2013/14 (out of alleged revenue of just $846,391), whilst Apple paid $5.5 million in 2012/13 (out of $571 million revenue).

As for criticisms from the so-called “Taxpayers Union” – this is a front-organisation for National. It’s organisers are party apparatchiks from National and ACT;

Jordan Williams is closely connected to the likes of David Farrar, Cameron Slater, and Simon Lusk – all of whom are hard-Right National/ACT supporters and apparatchiks.

Right-wing blogger, David Farrar, is one of the  Board members of the Taxpayers Union. He has been a member of the National Party since 1986, as his candid Disclosure Statement on Kiwiblog reveals.

John Bishop; businessman; columnist for the right-leaning NBR; and authored a “puff piece” on National’s Deputy Leader, Bill English; Constituency Services Manager,  ACT Parliamentary Office, April 2000 – August 2002, “developing relationships with key target groups and organising events”.

Gabrielle O’Brien; businesswoman; National Party office holder, 2000-2009.

Jordan McCluskey; University student; member of the Young Nationals.

Jono (Jonathan) Brown; Administrator/Accounts Clerk at the Apostolic Equippers [Church] Wellington, which, amongst other conservative policies,  opposed the marriage equality Bill.

See: A Query to the Taxpayers Union – ***UP DATE ***

Publishing criticisms from the “Taxpayers Union” is simply another PR statement from National, masquerading as independent analysis.

People’s Exhibit #1 – The Case for Key’s and Joyce’s Hypocrisy

Undeniably the worst aspect of National’s condemnation of  free tertiary education rests with our esteemed Dear Leader, John  Key, and Tertiary Education minister, Steven Joyce.

Both men were recipients of free, tax-payer-funded, University education.

In Key’s case, his  was obtained at Canterbury University, from 1979 to 1981;

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POLITICS - John Key - A snapshot - tertiary university education - free education

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Has Key re-paid any of his University education? One suspects the answer is a firm “no”.

And with seven tax cuts, neither did he pay for it with taxation, as high-income earners paid less and less since 1986 – five years before graduating.

In Joyce’s case, as first reported on 6 August 2015, in a previous blogpost;

  1. Steven Joyce, born: 1963.

  2. After completing a zoology degree at Massey University, Steven started his first radio station, Energy FM, in his home town of New Plymouth, at age 21 (1984).

  3. Student Loan system is started: 1992.

Joyce completed his University studies and gained his degree eight years before the Bolger-led National government introduced student fees/debt in 1992.

One wonders how Joyce reconciles his free tertiary education – as well as benefiting from seven tax-cuts, along with John Key – with justifying National’s  issuing warrants-to-arrest for loans defaulters;

Just because people have left New Zealand it doesn’t mean they can leave behind their debt.  The New Zealand taxpayer helped to fund their education and they have an obligation to repay it so the scheme can continue to support future generations of students.

Key and Joyce never paid for their free University tuition.

Yet they expect other New Zealanders who followed in their foot-steps to pay for theirs.

Or face arrest.

What does it say about us as a nation, when we elect hypocrites as our elected representatives, who bludge of the tax-payer?

If this does not fly in the face of New Zealanders’ values of fairness and giving everyone a fair go – then we are not the same people we once were.

Postscript

Tweet from Steven Joyce, condemning Labour’s policy for free tertiary education;

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Steven joyce - tertiary education - hypocrite - achieving nothing

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Can we take it from the Tertiary Education Minister that his own university education “achieved absolutely nothing”?

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References

National Business Review: Budget 2015 – student loans – does the government dare to act?

Ministry of Education: Student Loan Scheme Annual Report 2014

Beehive.govt.nz: Celebrating student support under Labour

Ministry of Education: Student Loan Scheme Annual Report 2015

The Wireless: Getting by on a student budget

IRD: Student Loan Scheme Amendment Act 2014 – Arrest at border

Fairfax media: Joyce defends student loan crackdown

Fairfax media: Student loan arrest could prompt others to address debt

NZ Herald: ‘I don’t think I’m a criminal’

Teara.govt.nz: National Party – The ‘mother of all budgets’

Statistics NZ: Annual unemployment rate has increased from 1987

Ruth Richardson NZ Ltd: Ruth Richardson CV

Ruth Richardson NZ Ltd: Home page

Fairfax media: ‘Free’ education cost set to mount to more than $1 billion

Fairfax media: ‘Human scandal’ as Christchurch elderly refused access to surgeries

Fairfax media: ‘Painful wait’ for surgery

NZ Treasury:  Average Marginal Income Tax Rates for New Zealand, 1907-2009

NZ 1984 Yearbook: 3A – General Summary – Increase of population

Statistics NZ: 2013 Census Usually Resident Population Counts

Oxfam NZ: Richest 10% of Kiwis control more wealth than remaining 90%

Radio NZ: Labour’s announcement welcomed and slammed

Andrew Little: State of the Nation speech

Twitter: Steven Joyce

Twitter: Steven Joyce

Fairfax media: John Key draws flak after questioning why waitresses’ taxes should fund students

NZ Herald: Govt backtracks on limo statements

NZ Herald: Complaints laid against Murray McCully over Saudi farm deal

Radio NZ: Saudi abattoir deal will proceed – PM

Fairfax media: NZ government shells out $11m on New York apartment for UN representative

Fairfax media: NZ diplomat involved in decision to buy $6.2m luxury Hawaiian mansion

Otago Daily Times: Smelter gets Meridian, Govt lifeline

Rio Tinto.com: Rio Tinto announces a 10 per cent increase in underlying earnings to $10.2 billion and 15 per cent increase in full year dividend

NZ Herald: GST rise will hurt poor the most

Fairfax media: Time to pay some tax, Facebook?

NZ Herald: Apple’s NZ unit coughs up 0.4pc tax

Kiwiblog: Disclosure Statement

Sunday Star Times: Politics – John Key – A snapshot

Wikipedia: Steven Joyce

National Party: Steven Joyce

Fairfax media: IRD monitoring 20 for possible arrest in student loan repayment crackdown

Additional

Salient: A short history of tertiary education funding in New Zealand

NZ Herald: Minister to students – ‘keep your heads down’

Other bloggers

The Daily Blog: John Key said WHAT about waitresses’???

The Daily Blog: Why does Steven Joyce hate education so much?

Previous related blogposts

A Query to the Taxpayers Union

A Query to the Taxpayers Union – ***UP DATE ***

Know your Tory fellow travellers and ideologues: John Bishop, Taxpayers Union, and the NZ Herald

Greed is good?

It’s official: Political Dissent Discouraged in NZ!

Shafting our own children’s future? Hell yeah, why not!

Hon. Paula Bennett, Minister of Hypocrisy

Budget 2013: How NOT to deal with Student loan defaulters

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

Steven Joyce – Hypocrite of the Week

Anne Tolley’s psycopathy – public for all to see

Letter to the Editor: Steven Joyce – Hypocrite of the Year

The Mendacities of Mr Key # 15: John Key lies to NZ on consultation and ratification of TPPA

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*Note: For New Zealand audiences, simply replace "Social Security" with Superannuation, and "Medicare" with public health system.

*Note: For New Zealand audiences, simply replace “Social Security” with Superannuation, and “Medicare” with public health system.

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This blogpost was first published on The Daily Blog on 7 February 2016.

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Steven Joyce – Hypocrite of the Week

6 August 2015 8 comments

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Fun Fact #1: Student loan stood at $14.235 billion, as at 30 June 2014 – up from 9.573 billion in 2008.

Fun Fact #2: As at 30 June 2013, 721,437 people had an outstanding student loan, registered with Inland Revenue. That’s roughly 16% of the population.

Fun Fact #3: Approximately 1.2 million people – roughly a quarter of the population –  have taken out  student loans.

Fun Fact #4: Students have borrowed $20.119 billion of which  $9.157 billion has been collected in loan repayments.  More than 415,000 loans have been fully repaid.

Fun Fact #5: $1.031.7 billion in loan repayments were received, $22.2 million less than last year. The total number of students completing formal qualifications reached 144,000 in 2013 – a decrease of 0.6% from 2012. The number of people enrolled in tertiary education has dropped, from  504,000 in 2005 to  about 420,000 (in 2014).

Fun Fact #6: The student fees/debt system began in 1992. Prior to that, students had access to Bursaries and Student Allowances and tuition fees were minimal.

Sources: Ministry of Education, Beehive, NBR, and The Wireless

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During Bill English’s Budget speech on 16 May 2013, the Finance Minister made perhaps the most  extraordinary announcement that I have ever heard from a New Zealand politician;

Introducing the ability to arrest non-compliant borrowers who are about to leave New Zealand

Making it a criminal offence to knowingly default on an overseas-based repayment obligation will allow Inland Revenue to request an arrest warrant to prevent the most non-compliant borrowers from leaving New Zealand. Similar provisions already exist under the Child Support Act. This will be included in a bill later this year.

It was extraordinary on at least two levels.

The first is because a loan defaulter does not normally fall under the Crimes Act. It is what is known as a Civil matter.

If, for example, you, the reader, default on your mortgage, rent, or hire purchase, the Lender does not involve the Police (unless deliberate fraud is involved). Instead, they apply to the Courts for a remedy.

The Tenancy Tribunal and Small Claims Court are examples where litigants can take their cases before a Court, and make their claims. Police are not involved. In the Tenancy Tribunal, there are not even any lawyers (generally).

For National to intend issuing arrest warrants, for student loan defaulters, takes the matter of a civil contract into the realm of the Crimes Act.

Secondly, this law – if enacted – would not stop people leaving New Zealand. It would prevent people returning to New Zealand.

The law targets ex-students with loans  who had moved overseas; who had defaulted on their loan repayments whilst overseas; and who then returned to New Zealand (perhaps for a funeral, holiday, or visit family). Only then were were they to be  arrested at an airport as they attempted to board a plane to fly out of the country again.

Shades of former USSR and it’s Eastern Europe satellite-states!

Under such circumstances; what loan-defaulting New Zealander in their right mind would ever consider coming back to this country?

The law was enacted, and as Alex Fensome reported for Fairfax Media last year;

However, others believe the increase [in former students declaring bankruptcy whilst overseas] is down to the Government’s more aggressive pursuit of recalcitrant debtors, and an attempt by some of the borrowers to wipe their New Zealand slate clean.

Student-loan defaulters can be arrested if they try to enter or leave New Zealand, under legislation passed last year.

A few days ago, it was reported;

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IRD monitoring 20 for possible arrest in student loan repayment crackdown - student debt - steven joyce.

To complete National’s Soviet-style crack-down on loan defaulters, the story also reported;

Ministers have also considered refusing to renew passports for those who do not engage with Inland Revenue.

As Finance Minister Bill English desperately tries to balance the government’s books and return to a Budget Surplus, it appears that National Ministers are prepared to go to any extraordinary lengths to claw back cash from New Zealanders. Whether those New Zealanders are low-paid paper-delivery boys and girls or the sick needing medication or ex-pat New Zealanders living overseas – this government is reaching deep into peoples’ pockets.

Tertiary Education Minister Steven Joyce said this about issuing warrants-to-arrest for loans defaulters;

Just because people have left New Zealand it doesn’t mean they can leave behind their debt.  The New Zealand taxpayer helped to fund their education and they have an obligation to repay it so the scheme can continue to support future generations of students.

Which, when one looks into Joyce’s background, finds something curious.

Steven Joyce,  benefitted from a free, tax-payer funded, University education, with no debt incurred from his  tuition.

The facts are simple;

  1. Steven Joyce, born: 1963.
  2. After completing a zoology degree at Massey University, Steven started his first radio station, Energy FM, in his home town of New Plymouth, at age 21 (1984).
  3. Student Loan system is started: 1992.

Joyce completed his University studies and gained his degree eight years before the Bolger-led National government introduced student fees/debt in 1992.

Joyce’s university education was mostly free, except for minimal course fees. He was most likely  also eligible for a bursary and/or student allowance, as well, to assist his living costs.

As Joyce was reported in the Fairfax story;  “The New Zealand taxpayer helped to fund their education and they have an obligation to repay it so the scheme can continue to support future generations of students.

Will Joyce repay the cost of his University studies?

Or will he simply be one of those who benefitted from a near-free University education – paid by other hard-working taxpayers at the time  – and now insisting that others pay for their own tuition, racking up huge debts in the process?

Another case of a Baby Boomer telling Gen X to “do as I say, not as I do”?

Neither Joyce, nor Revenue Minister Todd McClay, have any moral authority to demand payment for tertiary education from any New Zealander.

Both men are hypocrites.

No one should take them seriously.

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References

National Business Review: Budget 2015 – student loans – does the government dare to act?

Ministry of Education: Student Loan Scheme Annual Report 2014

Beehive.govt.nz: Celebrating student support under Labour

IRD: Budget 2013 announcements

Fairfax  media: Wipe your student loan – go bankrupt

Fairfax media: IRD monitoring 20 for possible arrest in student loan repayment crackdown

NZ Herald: Budget 2012 – ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: Prescription cost to rise to help pay for Budget

Wikipedia: Steven Joyce

National Party: Steven Joyce

Additional

Salient: A short history of tertiary education funding in New Zealand

NZ Herald: Minister to students – ‘keep your heads down’

Previous related blogposts

Greed is good?

It’s official: Political Dissent Discouraged in NZ!

Shafting our own children’s future? Hell yeah, why not!

Budget 2013: How NOT to deal with Student loan defaulters

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

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This blogpost was first published on The Daily Blog on 1 August 2015.

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Letter to the Editor: Message to students with loans – don’t come home!

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old-paper-with-quill-pen-vector_34-14879

 

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In the media today; it seems that National has followed through on it’s promise, last year, to enact a new law to criminalise New Zealanders;

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Student loan defaulters targeted

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To which I replied accordingly;

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FROM:     "f.macskasy" 
SUBJECT: Letters to the editor
DATE:    Fri, 07 Mar 2014 13:45:08 +1300
TO:     "The Dominion" <letters@dompost.co.nz> 

 

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The Editor
Dominion Post

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So National has passed a law decreeing that student loan
defaulters returning to New Zealand will be arrested at our
borders (ie; airport)?

What will this achieve, aside from sending a clear message
to Kiwi expats - don't come home?

The sad irony of this ridiculous law is that most of it's
National Party architects had the benefit of a free tertiary
education in their youth. In the case of Paula Bennett, her
university education was paid by the taxpayer via a Training
Incentive Allowance which she scrapped in 2009. 

In John Key's case, his university tuition - again free -
gave him the opportunity to amass a multi-million dollar
fortune, before returning home.

After two unaffordable tax cuts, National is so desperate to
scrape together revenue to balance it's books that it is
willing to criminalise an entire sector of our fellow New
Zealanders.

What an absolutely apalling state of affairs we have arrived
at when greed, in the form of lower and lower taxation,  
has resulted in permanently exiling so many of our children.

The message is clear: don't come home unless you have money.

-Frank Macskasy
(address & phone number supplied)

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References

Radio NZ:  Student loan defaulters targeted

Previous related blogposts

Budget 2013: How NOT to deal with Student loan defaulters

 

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Paula Bennet

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

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budget 2013 - education - tertiary education - student debt

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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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Dominion Post Editorial Loan defaulters break 'social contract'

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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Budget 2013: How NOT to deal with Student loan defaulters

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barbed_wire_fence_by_archaeopteryx_stocks1

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1. Prelude

In my parent’s home nation in Eastern Europe, during the era of the Soviet Bloc, the citizens of Poland, East Germany, Hungary, Czechoslovalia, Bulgaria, Yugoslavia, Romania, and Albania were denied the right to travel freely to the West. (Mainly because 90% would not have returned.)

Travel outside of the Eastern bloc was severely curtailed. Those trying to cross borders to the West, without appropriate documentation, if caught, faced lengthy prison sentences.

Such was life under authoritarian regimes that used extreme measures to control their citizens.

In 1989, those regimes fell, and freedom returned to Eastern Europe. People were permitted to travel freely without fear of hindrance or arrest.

2. Welcome to the People’s Republic of New Zealand, Inc.

In 2013, New Zealand’s National government announced plans to adopt similar extreme measures. Powers of hindrance and arrest are to be issued to our Border security. Travel will be curtailed for a few.

During Bill English’s Budget speech today (16 May), the Finance Minister made one of the most extraordinary revelations that I have ever heard from a New Zealand politician;

Introducing the ability to arrest non-compliant borrowers who are about to leave New Zealand

Making it a criminal offence to knowingly default on an overseas-based repayment obligation will allow Inland Revenue to request an arrest warrant to prevent the most non-compliant borrowers from leaving New Zealand. Similar provisions already exist under the Child Support Act. This will be included in a bill later this year.

Acknowledgment:  IRD – Budget 2013 announcements

It is extraordinary because a loan defaulter is not a matter under the Crimes Act. It is what is known as a Civil matter.

If, for example, you, the reader, default on your mortgage, rent, or hire purchase, the Lender does not involve the Police. Instead, they apply to the Courts for a remedy.

The Tenancy Tribunal and Small Claims Court are examples where litigants can take their cases before a Court, and make their claims. Police are not involved. In the Tenancy Tribunal, there aren’t even any lawyers (generally).

For National to intend issuing arrest warrants, for student loan defaulters, takes the matter of a civil contract into the realm of the Crimes Act.

One wonder if  banks, finance companies,  and landlords will eventually apply for similar powers?

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"Open up please, Mrs Jones. Your rent is two weeks in arrears!"

“Open up please, Mrs Jones. Your rent is two weeks in arrears!”

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The worst aspect – indeed, the dumbest aspect – of this new measure is that it appears no one in  National has thought through the consequences of such a harsh,  autocratic policy.

This law – if enacted – will not stop people leaving New Zealand. It will stop people returning to New Zealand.

Because the law involves ex-students with loans  who have moved overseas; who have defaulted on their loan repayments whilst overseas; return to New Zealand (perhaps for a funeral, holiday, or visit family) – and only then are arrested at an airport as they try to board a plane to fly out of the country again.

Under such circumstances; what loan-defaulting New Zealander will bother coming back to this country? Ever?

Well done, National. You have just provided a further reason (if any was really required) for expat Kiwis to remain – expat. In terms of economic policy, this wasn’t an exercise in rationality – it was an exile in perpetuity.

The message that Key and English have sent to every New Zealander, who owes money to the State, is: don’t come home. The police will  be waiting.

So not only have we lost any chance that ex-pat loan defaulters might one day return and pay back their debt – but we’ve lost their expertise and any fortune they might bring back with them.

The sheer lunacy of such an ill-conconceived policy beggars belief.

But then again, maybe not. This was the government that was so cash-strapped last year, that they raided the meagre earnings of paper boys and girls;

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'Paper boy tax' on small earnings stuns Labour

Acknowledgment: NZ Herald – Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour

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This is a mean, desperate government we have, folks.

Make no mistake, they will do whatever it takes to get back into some form of  surplus by new year’s election. Because if they don’t – they are dog tucker  for sure.

Which is why I’m not holding my breath for Bill English’s “Big Announcement” in two weeks regarding the problem of hungry kids, and initiating a food-in-schools programme. Expect a massive disappointment on this matter.

Meanwhile, our Border Security will no longer be focused on searching for contraband, dangerous goods, or potential weapons being carried onboard airport. They will now be Border Guards tasked with keeping New Zealanders from travelling. Or escaping any other way…

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Our New Border Guards in New Zealand

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One wonders who will  next  be barred from travelling to and from New Zealand?

Consider also,  when we take this insane proposal and place it alongside  other laws, and proposed law-changes,

  •  the so-called Terrorism Suppression Act,
  • the Search and Surveillance Act,
  • the Crown Minerals Amendment Act which suppresses protest at sea and threatens protesters with large fines and terms of imprisonment,
  • the IRD sharing sensitive information with other government departments,
  • illegal spying by the GCSB – with no legal consequences for those in authority,
  • and instead,  extension of the surveillance powers of that same GCSB,

– we can see that our country has taken a path that we hoped, and feared, would never happen to us.

Well, it has happened and it is happening.

We are slowly but surely drifting ever closer to a police state.

3. An Open Letter to Labour, The Greens, Mana, and New Zealand First

As a citizen of this country, it is my deepest, sincerest hope that an incoming Labour-Green-Mana(-New Zealand First?)
coalition government will, upon taking office, make an urgent review of the spying powers of our “intelligence community”.

I submit that we have drifted from an open, free society, to one that is highly surveilled; copious data files kept on us;  and where police and  intelligence groups are straying far beyond their lawful mandates.

I also submit the following,

  1. We do not need the so-called “Terrorism Suppression Act” or “Search and Surveillance Act”.  The Police, with their normal powers, are quite adequate to deal with crimes.   They serve no useful purpose and instead give powers to the State which serve only as a prelude to even more Orwellian laws. It is time to take  several, big, steps back. These laws should be repealed forthwith.
  2. The Crown Minerals Amendment Act must be repealed forthwith. It is draconian legislation which serves the interests of corporations and threatens the right of New Zealand citizens to protest activity that is counter to the welfare of our nation and environment. This is a brazen attack of democracy and would be perfectly at home in a Third World dictatorship.
  3. Do not permit the IRD to share information with other government departments. There is no need to create a vast monolithic State apparatus that collects information on us and in the process, invades our privacy.  Allowing the IRD to share information with, say, the Police, will simply serve to drive certain activities further underground.
  4. Any extension of the GCSB’s surveillance powers should be undone and returned to it’s original purpose. (Or even get rid of it altogether. Precisely why are we spying for the Americans anyway?)
  5. We desperately need a more effective, well-resourced, oversight mechanism for the SIS, GCSB, and Police. Our Australian neighbours are more serious in the way they over-see their spy agencies and we need to look to them for guidance. If there is one thing that the current Prime Minister has illustrated with crystal clarity – we can no longer trust one person to hold the responsibility for these agencies. At some time in the future, we could have a worse Prime Minister, with even more incompetant or nefarious intent. We must prepare for that day.

Some might say, “if you have nothing to fear, you won’t mind being watched by the State”. If true, my fellow New Zealanders, we might as well put cameras into every home and workplace in the country. After all, if we have nothing to fear…

I would turn it around and say, “if the State has no cause to believe we are about to rob a bank or sell heroin to schoolkids, then it won’t mind keeping out of our private lives”.

Previous governments (including this current one) have gradually extended the power and surveillance capabilities of the State.

It is time to wind back that Orwellian clock and re-set the values which we used to hold for personal privacy, and allow State intrusion only for real (not imagined) criminal activities.

We don’t need to be monitored. We don’t need files kept on us all.

We are not a nation of 4.4 million criminals.

You don’t need to fear us.

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No more anarchy

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“It’s fundamentally a fairness issue”- Peter Dunne

16 January 2013 15 comments

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student debt

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In a recent blogpost (see: Children’s Health: not a high priority for Health Minister Tony Ryall) the nadir of National’s cost-cutting to funding of our public services was revealed in a succession of NZ Herald stories,

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Govt eyes cuts to elective surgery

Full story

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In a repeat of  (then-Health Minister) Bill English’s cost cutting of the public health sector  in the late 1990s, National is once again targetting social services that will impact most harshly on our youngest and most vulnerable – our children. It defies understanding  and flies in the face of our supposed reputation for being “a great place to bring up children”.

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Govt's proposed health cuts could affect children - Labour

Full story

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As one respondent stated on a previous blogpost,

“One of the major reasons in combatting glue ear is improving a child’s academic performance.

Ensuring academic success with today’s children offers the best prospect of growing tomorrow’s economy, reducing unemployment, increasing the living standard, generally reducing the country’s/ world’s problems, etc.

Is this not a smart investment? How National fails to understand this is bewildering.” –  ‘Procrastinator’, 12 January 2012

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Doubt over savings from restricting ear treatment

Full story

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“Bewildering”, indeed.

Until one starts to “connect-the-dots” and a slightly new – though all-to-familiar – picture emerges.

To complete the picture, some more “dots”,

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Parents face burden of preschool squeeze

Full story

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Budget 2012 - 'Paper boy tax' on small earnings stuns Labour

Full story

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Student loan repayments hiked, allowances restricted

Full story

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Meds price hike - 'Children will die'

Full story

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Petrol price rises to balance books

Full story

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And the latest,

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Student-loan dodgers face tough crackdown

Full story

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Revenue Minister Peter Dunne sez,

It’s fundamentally a fairness issue.”

I call “bollocks” on that.

This has as much to do with “fairness” as the US invasion of Iraq had to do with locating Saddam Hussein’s mythical  “weapons of mass destruction”.

Let’s be upfront and honest here, Mr Dunne. This has squat to do with “fairness”.  After all,  if  National ministers and their coalition “partners” truly wanted to make this an issue of  ” fundamental fairness “, then perhaps Mr Dunne and his colleagues should look in the mirror first.

Starting with Peter Dunne himself…

Peter Dunne ” graduated from the University of Canterbury in 1977 with a Master of Arts Degree with Honours in Political Science, and has also studied business administration at Massey University ” (see: Beehive.govt.nz: Peter Dunne ).

With student loans for tertiary education fees  not kicking in until 1992 (see: Timeline of New Zealand history), Peter Dunne’s own University education was  free.

He paid nothing for his Master of Arts Degree with Honours in Political Science, nor for his  business administration studies at Massey University which were most likely carried out prior to 1988, when he was an Associate Fellow of the New Zealand Institute of Management (see: Beehive.govt.nz: Peter Dunne ). I can find no record indicating whether or not Dunne graduated from his business course at Massey.

On top of his free education, Dunne probably also qualified for a student allowance – again courtesy of the New Zealand taxpayer and non-repayable.

The Prime Minister, John Key, and Social Welfare Minister, Paula Bennett, also gained their respective University education free of charge – courtesy of the taxpayer. In Bennett’s case, she used the WINZ Training Incentive Allowance to pay for her tertiary education – which she later cut back so it is now no longer available for other solo-parents (see: Bennett cutting a benefit that helped her).

Peter Dunne was partially correct in one respect, though,

There’s a certain sense of annoyance amongst people who stayed in New Zealand and diligently worked to pay off their loans that these freeloaders overseas are, in some cases, getting away with it.”

See: Student-loan dodgers face tough crackdown

The free-loaders though, are not the students who’ve escaped the double-standards; hypocrisy; and sheer plain selfishness of our country. The real free-loaders are every single Tory politician and bludging right-winger who gained a free taxpayer funded tertiary education – and then proceeded to force subsequent generations of young New Zealanders to pay for their University education.

The real free loaders are hypocrites such as Peter Dunne who paid nothing for his years at  University – whilst now expecting others for pay. And on top of that, using the full force of the State to enforce payment.

No wonder that so many New Zealanders, like Matthew Fraher, who  left for Australia in 2000, are justifiably angry. As he pointed out about politicians, they,

“… didn’t pay a dime and they’re having a go at us.”

See: Student loan debtor: I’m better off in Australia

And the system is actually encouraging graduates to leave the country. As Mr Fraher correctly stated,

I was paying about $10,000 a year just doing the minimum amount for the last three and a half years.

When I go to Australia I’ll be paying back $3000 a year.

They’re actually making an incentive to leave the country. “If anyone thinks that’s sensible or good policy, their head’s not right.”

See: IBID

None of the student fees/loans/debt makes any sense. Not socially, not economically, and certainly not for our country’s future as we continue to bleed people to Australia and further afield.

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evansknowlegewave

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Only  certain politicians and the low-information voters who voted for this mess could possibly think any of this was a good idea.

The sad thing is that New Zealand was warned of this eventuality in the 1990s by social commentators, left-wing activists,  and political parties such as The Alliance.

The real motive for National’s under-funding and cutting social services; taxing newspaper-delivery boys and girls;  and their latest witch-hunt to grab back every cent they can manage to ring from ex-students, is quite simple: National is desperate for cash.

After two unaffordable tax-cuts in 2009 and 2010, which cost this country in billions of dollars in lost revenue (see; Govt’s 2010 tax cuts costing $2 billion and counting, Deficit halved, but still higher than forecast), National is scrambling to cut services to save money and to raise revenue from every possible source.

All for promises of two tax cuts we couldn’t afford in 2008 – and still can’t afford now, five years later.

Alex Tarrant, from Interest.co.nz,  summed matters up succinctly when he wrote last year,

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Treasury lowers govt's forecast for 2014 2015 surplus to NZ$66 mln

Full story

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Mr Tarrant left out one vital factor: the tax cuts. He refers to “government receiving almost NZ$8 billion less in tax revenue over the next four years” – which is precisely the figure that The Green Party uncovered after some judicious political detective work,

The Green Party has today revealed that the National Government has so far had to borrow an additional $2 billion dollars to fund their 2010 tax cut package for upper income earners.

New information prepared for the Green Party by the Parliamentary Library show that the estimated lost tax revenues from National’s 2010 tax cut package are between $1.6–$2.2 billion. The lost revenue calculation includes company and personal income tax revenues offset by increases in GST.

“The National Government said that their signature 2010 income tax cut package would be ‘fiscally neutral’ — paid for increased revenues from raising GST. That hasn’t happened. The net cost for tax cuts has been about $2 billion,” Green Party Co-leader Dr Russel Norman said today.

“Borrowing $2 billion in 18 months to fund upper-income tax cuts is fiscally irresponsible.

“National’s poor economic decisions have led to record levels of government debt and borrowing.

“They have also broken a promise to the electorate when they said their tax cut package was going to be fiscally neutral.”

See: Govt’s 2010 tax cuts costing $2 billion and counting

Dr Norman is correct – National did indeed promise that tax cuts would be “fiscally neutral”.  But more than that, in 2008, National also pledged,

National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.

See: National/Economy/Tax Policy

That has to be the biggest,  bare-faced lie from National since John Key took over leadership of that Party in November 2006.

It is also worth noting that  National’s expected surplus for 2014/15 is a mere $66 million. That is a fraction of the $72.9 to $74.9 billion in Core Crown expenses for the 2014/15 period (see:  Fiscal Outlook). It’s the cost of a damaged bridge-repair  or other unforeseen circumstance requiring government expenditure.

Little wonder that Ministers are directing their departments to scrimp and scrape to save every dollar they can get away with.

The reason this is so vital to National?

Because every other economic and social indicator is either stagnating, or getting worse. With their free market “hands off” policy, National is unable to intervene directly in the economy  in any meaningful way (except provide subsidies to certain industries like multi-billion dollar movie conglomerates).

National finds itself unable to engage in job creation programmes – that is the role of business, said Dear Leader,

Nothing creates jobs and boosts incomes better than business growth. ” – John Key,  24 August 2012

See: Key Notes: Honouring our fallen soldiers

National can’t even bring itself to help Cantabrians with housing – that is the role of private enterprise, said Roly Poly Leader, Gerry Brownlee. (see:  Christchurch rent crisis ‘best left to market’)

With much of the economy “off limits” on ideological grounds and National unwilling to address critical social problems (I refuse to call them “issues”) – there is only one area where Key and his Party can show the voting public that they are an effective Party in power and “on top of things”: government spending.

In a bizarre form of political roulette, Key and English are gambling their political reputations on one throw of the dice; returning to Budget surplus in 2014/15.

That’s all they have. Most other economic and social indicators are worsening on an almost weekly or monthly basis and National’s Party strategists know that come the  2014 general election, they are in for a real nasty hiding if they cannot demonstrate to the public that they can return to surplus. After all, if the Nats can’t achieve even that, then voters would be scratching their heads and wondering what on Earth Key has been doing for six years.

That’s when Labour, NZ First, et al, will be showing clips of John Key dancing at radio stations, Gangnam-style. Or gormless-style.

Peter Dunne was being dishonest when he said, “It’s fundamentally a fairness issue“.

Rubbish. It has nothing to do with “fairness”.

What Dunne was really saying was, “It’s fundamentally a fiscal  issue”.

If Dunne was really interested in fairness, then I suggest that he, John Key, Paula Bennet, Stephen Joyce, et al, all pay back the full amount of student fees and living allowances that were paid to them when they were at University. Plus interest.

It might not dent the debt that National has accumulated since 2009 – but at least they’d be setting an example to the country, and not engaging in rank hypocrisy.

What about it, Mr Dunne – will you be paying for your University degree?

Addendum 1

Date: Wed, 16 Jan 2013 at 0:06
From: Frank Macskasy <fmacskasy@yahoo.com>
Subject: Student debt
To: “peter.dunne@parliament.govt.nz” <peter.dunne@parliament.govt.nz>

Kia ora Mr Dunne,

You have been recently reported in the media as pursuing student loan holders who have left the country and who are not re-paying their student loan debt.

In the NZ Herald you are quoted as saying,

“There’s a certain sense of annoyance amongst people who stayed in New Zealand and diligently worked to pay off their loans that these freeloaders overseas are, in some cases, getting away with it.”

It is common knowledge that you yourself (along with John Key, Paula Bennett, Stephen Joyce, et al) are all beneficiaries of a free, tax-payer funded tertiary education.

The record states that you graduated from the University of Canterbury in 1977 with a Master of Arts Degree with Honours in Political Science, and has also studied business administration at Massey University.

You may even have been in receipt of a taxpayer funded and non-repayable student allowance.

To show true leadership on this issue and to set an example to student loan holders, can we assume that you will be paying the cost of your tertiary education, along with repayment of any allowances received; plus interest?

To many people it seems curiously hypocritical that you are demanding payment for education from other people whilst not paying your own fair share.

As you said in the NZ Herald on 10 January,

“It’s fundamentally a fairness issue.”

Let’s put it to the test, shall we? It’s fundamentally a fairness issue that you pay for something that others have to pay for as well.

Regards,
-Frank Macskasy
Blogger

Addendum 2

National’s (tax payer funded) media spin doctors have been using a particular ‘line’ when it comes to cost-cutting our social services; instead of reducing government debt, they say that “savings will be reinvested” in other areas of state services.

Here are a few examples from above,

The money would be used for smarter investment in other parts of the health system.”

See: Govt eyes cuts to elective surgery

Joyce says the changes will slice $250m off the loan book and create $60m to $70m per annum savings for the Government, which would be re-invested in the tertiary sector.”

See: Student loan repayments hiked, allowances restricted

The Government has announced it will make the first increase in prescription cost in 20 years at next week’s budget to fund reinvestment in the health sector in lean economic times.”

See: Meds price hike: ‘Children will die

It’s such a subtle piece of BS spin that it’s hardly noticeable. But it all a lie, of course. The cost-cutting – which they refer to as “savings” – will be used to reduce borrowing. And the borrowing is necessary because of the unwise, progligate taxcuts of 2009 and 2010.

Eventually, of course, most New Zealanders become weary of constant cuts to essential services and vote for a return to a Labour-led government. The re-building of our social services then begins in earnest,

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$1.5b injection for health - 9 December 2001

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Been there. Done that. Lost the t-shirt off my back.

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Previous related blogposts

Children’s Health: not a high priority for Health Minister Tony Ryall

The Great New Zealand Scam

An Expensive Lesson?

It’s official: Political Dissent Discouraged in NZ!

Greed is good?

References

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

NZ Herald: Outlook slashes tax-take by $8b

Fairfax media: Budget 2012: The main points

Scoop.co.nz: Govt’s 2010 tax cuts costing $2 billion and counting

Fairfax media: Student loan repayments hiked, allowances restricted

Dominion Post: Ten students owe $2.9 million in loans

NZ Herald: Student-loan dodgers face tough crackdown

NZ Herald: Student loan debtor: I’m better off in Australia

Beehive.govt.nz: Peter Dunne

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= fs =

The Great New Zealand Scam

19 November 2011 1 comment

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Never mind Nigerian scammers – we have something much closer to home, and is the biggest rort ever. What do retirement policies and asset sales have in common? Plenty!

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Full Story

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One commentator to the story above posted this message on Stuff’s messageboard,

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cm   #47   11:48 pm Nov 18 2011

All this shows is who votes, and in numbers.

the boomers stand to loose the most from a retirement age increase. The boomers stand to gain the most from asset sales.

come on gen y, x, z what ever the demographs call you. get out and vote before the baby boomers (your own parents/grandparents) sell you and your future out. its pretty damn simple, if you over 20 you arnt a child anymore, your an adult. so act like you give a damn about your futures and stop believing the bullshit that your parents will look after you, put that on a tui bill board.

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CM has pretty well identified how Baby Boomers are going to “internalise a complicated situation” by voting National even though, on the surface, they have an alleged dislike of asset sales.

It is a perfect analysis of what is about to happen on 26 November: the Baby Boomer generation is about to ‘steal’ property from the next generation, for their own gain.

Instead of our generation paying it’s way through taxation, we’ve voted tax cuts for ourselves (2009, 2010) and big borrowings from overseas to sustain those tax cuts, and maintain social services. Then, to start paying it back, instead of doing it through taxation, we’ll sell off state assets. End result; we get the benefits, and Gen X, Y, etc, are left with $13 billion in student debt and not much more to show for it.

By the way, John Key and many others in his position had the benefit of a free tertiary education – fully tax-payer funded. With a student allowance on top, to make it all as easy as possible.

Then, through two tax cuts, he voted himself an extra $1000 a week.

Meanwhile, our young folk are accumulating more and more student debt. By last year, the student debt mountain has grown to an unfeasible $13.9 billion.

What a racket! This is ‘better’ than a Ponzi Scheme! It’s better than a Nigerian scam – because it’s all totally legal.

This is why our best and brightest young people are heading overseas.  They’re leaving before they get saddled with the bill for looking after us in our retirement.

Unfortunately, Labour’s policy to make sure disengaged youth are heard may be too little, too late. Our children are already disconnected from us and our society because we made damn sure it happened that way. Saddling our young folk with a debt we (Baby Boomers) never had to face is pretty well telling them, “Kid, you’re on your own!”.

All I’ll say to Gen Xers and Yers is: Run! (Though Baby Boomers – through the government – won’t let you get away quite so easily.)

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Additional reading

Student loans – the debt mountain

Govt may use student loan debt collectors abroad

Greed is Good?

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It’s official: Political Dissent Discouraged in NZ!

28 September 2011 12 comments

Government Minister to political dissenters: “Pull your Head in!”

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Steven Joyce

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The government has ordered Auckland University to cease political protest action. Government minister, Steven Joyce yesterday decreed that “my  general advice to NZUSA (NZ Union of Students’ Associations) on the cost of living for students is to keep your heads down”.

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Full Story

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As usual, the full force of the State was brought in to “control” the situation,

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PROTEST: Police on standby at Auckland University after students took over the business building.

Full Story

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Joyce further added, “I think most New Zealanders think students are reasonably well looked after at this point in time”.

“Mr Joyce said university students had 75 per cent of the tuition subsidised on average and benefited from interest-free student loans.Source

This is true:  university students currently have much of their tuition fees subsidised by the State. And their student loans are interest free.

However, the Minister for Tertiary Education forgot to reveal to the NZ Herald that he recieved a free tertiary education. No student fees. No student debt. It was all paid for by the tax-payer.

So, it seems rather curious that Mr Joyce, who benefitted from a free, tax-payer funded, tertiary education, with no debt incurred from his tuition – can order fee-paying students to cease all political dissent.

Another case of a Baby Boomer telling Gen X to “do as I say, not as I do”?

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Source for information

  1. Steven Joyce, born: 1963.
  2. After completing a zoology degree at Massey University, Steven started his first radio station, Energy FM, in his home town of New Plymouth, at age 21 (1984).
  3. Student Loan system is started: 1992.

Additional reading

“Greed is Good?”

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Greed is good?

28 August 2011 54 comments

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As we look back on the last 25 years of neo-liberal “reforms”, including User Pays; the canning of “Labour’s” superannuation savings plan in 1975 (by Muldoon – after being elected into office with his infamous “Dancing Cossacks”  TV ad); and National’s continuing high popularity in the polls, despite their avowed proposal to sell-down 49% of several State assets,  – it seems abundantly clear who has been  pulling the “strings”.

No, it’s not Washington. Nor the Bilderbergers. Nor the UN/New World Order/Illuminati.

The answer is mind-numbingly far more prosaic:  it’s us – the Baby Boomer generation. The 1960s and 1970s rebellious youth  weren’t just an “aberration” – they were a clear signal that the Baby Boomers had arrived; could be inclined to  incredible selfishness (hence the term the “Me Generation”); and we voted individually for personal gain – on a collective basis.

Yep. We have seen the “enemy” – and it’s us; graying; self-centered; resentful of the young (who we’ve well and truly shafted);  and looking back at ourselves in the mirror, wondering where it all went wrong.

The case of  Surgeons Ian Penny and Gary Hooper, who tried to rort the tax system using Trusts  and companies – even though they had graduated BEFORE student loans and fees were implemented in 1992 – is the clearest example ever of our collective unbridled selfishness.

To re-cap;

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A court battle is over for two surgeons who challenged Inland Revenue over claims they tried to avoid tax bills worth tens of thousands of dollars.

The Supreme Court has ruled unanimously against Ian Penny and Gary Hooper, saying they underpaid themselves from their own businesses to avoid the top personal tax rate.

The issue arose after the previous Labour-led Government raised the top personal tax rate to 39%, compared to the company rate which was then 33%.

The orthopaedic surgeons openly paid themselves a lower salary than the market rate, arguing that they had a choice about how they operated their business.

They tried to challenge a Court of Appeal decision that found in favour of Inland Revenue, which said the surgeons had paid themselves salaries too small to be commercially realistic.

It said they were therefore able to avoid paying the top tax rate, while the balance of their businesses’ profits went as dividends to family trusts.

The trusts funded items such as a loan for one surgeon, and a holiday home for the other.

Inland Revenue said using those business structures to create artificially low salaries amounted to tax avoidance, saving each man between $20,000 and $30,000 a year for three years, beginning in 2002.

Supreme Court Justice Blanchard on Wednesday delivered a judgement supporting that argument, ordering Mr Penny and Mr Hooper to pay Inland Revenue $25,000 in court costs.

Mr Hooper told [Radio New Zealand ]Checkpoint the court has created a salary benchmark that is higher than the one countless private practitioners have been using.

He says they have been following Inland Revenue advice and calculating their salaries based on public hospital rates.

An Inland Revenue deputy commissioner welcomed the ruling, telling Checkpoint it clearly states and reaffirms what the department’s commissioner felt was the case all along. Carolyn Tremain says IRD has yet to fully absorb the implications and consequences of the ruling.

PricewaterhouseCoopers John Shewan, who appeared as a witness for the surgeons, said the case is important for individuals and firms. He said tens of millions of dollars may now be claimed by Inland Revenue from cases it still has open on this matter.

Source:  Radio New Zealand

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Specifically,

Surgeons Ian Penny and Gary Hooper set up companies, owned indirectly through trusts, to buy their surgical services and paid themselves artificially low salaries.

After 2000, Hooper’s personal income fell from $650,000 to $120,000 a year. Penny’s dropped from $302,000 to $125,000, and then to $100,000, while the income of their companies grew.

Source:  Dominion Post

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What makes this case of case of tax avoidance stand out is that none of it was ever necessary in the first place.

Dr Ian Penny received his Bachelor of Medicine Bachelor (MB ChB) of Surgery from Otago University in 1981.  He became a Fellow of the Royal Australasian College of Surgeons in 1990.

Dr Gary Hooper received his Bachelor of Medicine Bachelor (MB ChB) of Surgery  from Otago University in 1978 and became a Fellow of the Royal Australasian College of Surgeons in 1985.

In simple terms, they graduated as doctors in the late ’70s and early ’80s. Tertiary education then was still nominally free. Plus,  student allowances were available to most students,

“Up until 1992, nearly every student (86.4 percent) studying at a public tertiary education institution in New Zealand received a living allowance or grant while they studied.

 Prior to the mid 1970s, student support was based on a system of bursaries and scholarships. In 1976, a new system of government-funded tertiary bursaries was introduced. This included a study or living costs grant that was available to most students.”

Source: NZUSA

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Student fees and student loans came into effect in 1992, during the Bolger-led National Government, when Ruth Richardson was Minister of Finance (and coincidentally the same year that Shortland Street came on air).

In simpler terms, Dr Penny and Dr Hooper enjoyed the benefit of near-free tertiary education before fees were raised in 1992. They had no student loans to repay, as  medical students currently do, and may well have benefitted from receiving a Student Allowance.

Contrast their free tuition with that of medical students, in the 21st Century:  “on average medical students will graduate with around $80,000 of debt and nearly 90% will have a student loan“, according to the  New Zealand Medical Students’ Association in April, last year.

So with a free education; in receipt of student allowances; and no student loan; Dr’s Penny and Hooper were, as Revenue Minister Peter Dunne stated;

… the important thing about this decision is to bear in mind the scale of what was happening. This wasn’t people minimising their income because they were reinvesting in their business. This was people minimising their income because they were actually minimising their tax liability but still enjoying the full benefits of the income they were in reality earning.

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So not only did these gentlemen benefit from a free education – but they were now minimising their income because they were actually minimising their tax liability [whilst] still enjoying the full benefits of the income they were in reality earning.”

God, you’ve no idea how sick this incident has  made me.  Let me explain why.

Prior to the introduction of “Rogernomics” in 1984 (and National’s addition from 1990 onward),  education in this country had been free (or as close as possible to free) to nearly all New Zealanders. Education whether at Primary School or University was funded by the previous generation; our Mums & Dads; Grandmothers & Grand dads. The idea was terribly simple; education was a right, and not to be determined by ability to pay.

In turn, as we graduated from schools and Universities, we – my generation, the “Baby Boomers” – were to fund our children through their education, through our taxes.

Except, it did not quite happen that way.

In 1984 we unknowingly elected a Labour Government that had been taken over by a secret cabal of neo-liberals, conservatives, and proponants of the Free Market. A raft of  radical changes were implemented throughout the economy and impacting directly on society.

Despite public objection; mass protests; and even vocal opposition from within the Government by some Labour MPs such as Jim Anderton, Labour was re-elected in 1987.  Curiously, they had increased their majority from 55 to 57.

During Labour’s two terms (1984 to 1990), they cut taxes twice, and implemented a new tax in 1986, called GST.

National followed, implementing User Pays in tertiary education whilst  cutting taxes in 1996 and 1998.

In 2008, despite evidence that the world was plunging into a global recession, John Key promised that National would again cut taxes. As New Zealand went into deep recession; unemployment rose; businesses closed down – National cut taxes in April 2009 and October last year.

Most of the public, it seems, will swallow User Pays if they stand to reap a benefit from tax cuts.

The social contract therefore, was well and truly broken between our (the Baby Boomers) generation, and our parents/grandparents.

We had taken their gift – that of free education which they had paid for – but we decided not to pass it on to our children. Instead, we accepted one tax cut after another. And social services were either cut or User Pays applied, to pay for those tax cuts.

To my generation of fellow Baby Boomers, I say this; we’ve well and truly  shafted our own children. We denied them the very same opportunities of a free education that our parents had bequeathed to us. Instead, we voted ourselves seven  hefty tax-cuts; instigated User Pays; and left our children saddled with $13.9 billion in student debt.

Is it any wonder that our children our leaving New Zealand in greater and greater numbers? They’re not just emigrating to seek better paying jobs – they’re sticking it to us for our unmitigated greed. Whether consciously or sub-consciously, our children realise what our generation has wrought, and by god, they are not happy.

No doubt there are some folk who will cheer on Drs Penny and  Hooper. These people  feel that paying taxes is “unfair” and that it is unreasonable for the State to take the money that they have worked hard for.

Perhaps I should take a moment to remind these people what their taxes were, and in many cases  are still, used for…

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Inter-island Ferry, Aramoana

Dams and other power generation projects

Our first television broadcast system

Roading and highways

Hospitals

University education

Dental care for our Children

Our Police and justice system

Railways and other public transport

Schools

State Housing

Infrastructure such as power transmission lines

Social welfare and superannuation

Bridges

Postal and telecommunications systems

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Many of these assets no longer reside in public ownership – but they were originally built and maintained by previous generations of taxpayers; our parents, grandparents, et al.

As the Baby Boomer generation, what have we built and left our children?

$13.9 billion in student debt?

No wonder they are departing our shores…

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But I leave the last word to this expat Kiwi, now living in Australia,

A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.

The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.

“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.

“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.”

Source: Dominion Post

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Further Reading

Greed of boomers led us to a total bust

New Zealand’s wealth gap widens

Over-55s own most of NZ’s wealth

 

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