Big boost for education, tertiary study as Labour unveils spending plan
Labour has made it's biggest pitch of the campaign so far with a promise to deliver the first year of three years free post-secondary education a year earlier in 2018 and boost student allowances and loans by $50 per week as part of a big jump in education spending.
Leader Jacinda Ardern released the policy on Tuesday as finance spokesman Grant Robertson updated the party's fiscal plan that included the extra spending.
The move sees extra education spending jump from $417m this year under Labour's original plan to $781m and from $1.5b to $2b by 2022 as the fee free promise is fast-tracked.
That policy, unveiled by former leader Andrew Little in his "state of the nation" speech in early 2016, promised three years free education for tertiary students and other "post-school" education.
Ardern unveiled the plan at Western Springs College in Auckland to applause from the students, saying it would mean "more young people can go on to study after school and gain qualifications with less debt".
"Students have told us that the priority needs to be living costs. Just getting by week-to-week has become a significant barrier to many people continuing to study," she said.
"Labour will therefore boost living cost assistance for students by $50 a week from the start of 2018.
This applied to both the means tested student allowance and universal student loan living costs allowance, bringing each up to around $230 a week. Following the boost they would remain tied to CPI.
"For anyone out there who challenges that, who says that this is a cynical move or a policy that we shouldn't be announcing, my response to them is this: it is unreasonable for us to expect that those who are furthering themselves for all of our benefit, should have to live on $170 a week."
"I'm keen to remove tertiary fees as quickly as possible, so I have brought forward by one year our three years' free policy. From the beginning of 2018, everyone starting tertiary education for the first time will get one year full-time study fees free."
"That will be extended to two years free in 2021 and three years free in 2024. If conditions allow, we will accelerate this policy further."
Ardern said she wished she could deliver all three years immediately - so the students in front of her could get through university without paying right away, but that wasn't possible at this point.
"I wish I could stand here and say that we had done the big kahuna all at once, but we are going to be phasing the rest of that programme in."
The tertiary policy would prepare students for an uncertain future economy.
"Our job isn't too gaze into a crystal ball to predict the type of work you will do, which is going to be amazing. Our job is simply to help you prepare for it."
"When you are trained and educated that benefits all of us, and the New Zealand economy as a whole."
Labour had costed it at $265 million in the first year rising to $1.2 billion at full implementation.
But that would not have been until 2025. It will now be fully implemented in 2024.
Robertson said the fiscal plan, updated after last week's pre-election opening of the Government's books, showed Labour would deliver a significant investment in public services "while responsibly managing the country's finances".
"Labour will invest in better education, affordable housing, greater access to health services and lifting children out of poverty, and we'll do so without increasing income tax," he said.
The plan sees Labour spending an additional $8 billion on health, $6b into education and $5b on families over the forecast period.
"We can afford to do this because we have rejected National's tax cuts. Now is not the time for tax cuts that would give $400 million to the top 10 per cent of income earners," Robertson said..
"Labour's spending commitments have all been fully costed and can be delivered in line with our Budget Responsibility Rules."
That would include running sustainable surpluses, reducing net core crown debt to 20 per cent of GDP within five years and prioritising long term investments, such as re-starting contributions to the Super Fund - which would start with a $500m injection immediately.
"As with Labour's original Fiscal Plan released in July, this plan has been analysed and vetted by independent economic agency, BERL."
BERL in its report said the plan showed surpluses through to 2022, debt reducing to 20 per cent of GDP by 2022 and expenses "comfortably" under 30 per cent of GDP through to 2022.
National's track would see debt fall to 16.7 per cent of GDP by 2022.
National campaign chair Steven Joyce said Labour was planning $13.7b in additional spending and $11b more debt over four years.
"This nearly doubles the additional expenditure of $17b over four years already allowed for in the pre-election fiscal update."
He said Labour was proposing to add more than $30b in new operating spending over the next four years. "And then there's additional capital spending as well.."
"This is not the stage of the economic cycle to be increasing debt. We should be reducing debt and putting money aside for the next rainy day.," he said.
But Robertson said Labour's plan gave voters a clear choice between a "tired" National and a "energised" Labour.
The move echoes Labour's key 2005 campaign when it promised to make student loans interest free - a policy that was credited with securing a third term for Helen Clark.
That policy appealed not only to students and those planning to study at a tertiary level but also their parents and grandparents who worried that the burden of debt was delaying thier kids buying their first home, starting a family and even driving some overseas.
Free education has been a repeated theme in Ardern's speeches, sparking speculation she would fast-track the party's "three free years fee free" tertiary promise.
17-year-old student Oscar Furness-Wills, in his last year of high school, was a fan of the policy, which he said was a realistic way to tackle the financial fears prospective students face upon ending high school.
"I think the financial debt that we always associate with university is a big scare and a a big threat for everyone. I think they have provided a realistic attempt to fix that," Furness-Wills said.
"Going to university has a certain aspect of privilege, because of that financial barrier, I think it's good that they are slowly breaking that down."
He noted that there were still issues around eligibility to the student allowance system, but was pleased Labour
The 2016 pledge would have applied only to undergraduate study and would be phased in starting in 2019 with one year, two years from 2022 and three years from 2025. It would not apply to those who have already undertaken post-school study.