Investing in Our Future

I was one of the lucky ones. In my day, universities, like primary and secondary schools, charged no fees. With the aid of a scholarship, working in dairy factories during the holidays, and my parents chipping in, I completed my education debt-free.

But, the sceptics will argue, things have changed since then. The numbers going on to university in those days were so small that the cost could easily be borne by the taxpayer. The cost has risen so far today, it is said, that it would be unfair and impracticable to saddle the taxpayer with it.

Paradoxically, however, the case for a free tertiary education has over recent decades actually got stronger, rather than weaker. Whereas in the old days, tertiary education could be easily distinguished from the primary and secondary schools in the compulsory sector by the fact that only a small and privileged minority stayed on the education conveyor belt and went on to university, that distinction is now much harder to maintain.

The fact is that virtually all Kiwis will, at some point in their lives, have some experience of tertiary education. The conveyor belt will still operate for school leavers but it will take them not only to university but to polytechnics, wananga, private academies, apprenticeships and other forms of vocational training.

For those Kiwis who may not go straight on to post-secondary school education, tertiary education will become an option at different and later stages of their lives; nor will their progression through the education world follow a standard pattern. Someone with a Ph.D. may return to education later in life to do a certificate or diploma course in something quite different.

Tertiary education, in other words, is no longer so different from the compulsory sector. It is to all intents and purposes now universal and comprehensive. It is no longer the preserve of the privileged. The case for sparing the taxpayer the cost of tertiary education by applying a “user pays” principle looks pretty shaky when the user and the taxpayer are the same people.

The widely accepted argument that primary and secondary education bring such benefits to the whole of society that they should be publicly funded must, in other words, now be extended to tertiary education as well. Our hesitation about doing so is the product of less than clear thinking.

When I returned to New Zealand in 1994, a body called the Todd Working Party had been set up to decide how the cost of tertiary education should be divided between the public and private purse. The Working Party members spent many no doubt innocently enjoyable hours debating what proportion of the benefits of tertiary education could be attributed to the public good and how much to personal gain.

Some said the proportions were about 50-50. Others favoured one side of the equation rather than another. All persisted in the nonsense that it was a zero-sum game which implied the ridiculous proposition that, the higher the perceived personal benefit, the lower must be the public good.

The truth is that the undeniable public gain from investing in tertiary education can only be achieved through raising the educational levels of individuals, just as it is with compulsory education – the two are necessarily complementary rather than competing. A higher general level of education means better educated individuals but also a better-functioning and more successful society – one able to take a wider and longer-term view and achieve a deeper understanding.

As most people instinctively realise, the great economic and social benefits of education can be achieved only if we are prepared to invest in our future. When that investment is made, the benefits are felt by everyone in society. For an investment that is so important, and whose benefits are so widely shared, what could be more sensible than to fund it through the public purse?

The debate about whether tertiary education should be free (that is, taxpayer-funded) or not resolves itself into two main issues. First, is the ramshackle and problematic student loan scheme the best, fairest and administratively most straightforward way of funding tertiary education? The scheme is administratively complex and requires a substantial bureaucracy to allocate and track over decades the loans undertaken by tens of thousands of students.

It also has a deterrent effect on potential students; and since the debts incurred by virtue of the scheme continue to weigh heavily on individual budgets and to deter expensively educated young Kiwis in particular from returning to New Zealand, so that we are denied the benefits of the education we have funded, the answer to that question would seem to be conclusively in the negative.

The second question is not, as so often suggested, can we afford it, but what priority should we give it? The cost to taxpayers might require us to forego other purposes of public spending (though it would be more than offset by savings to thousands of students and their families). The real question is, can we afford not to ensure that our future generations are educated to the level that enables us – as a society – to compete in an increasingly global environment?

Bryan Gould

2 February 2016