Monday, January 30, 2012

Student allowances hide rate of benefit dependence

The most recent student allowance data available is Jan-June 2011. In that period 82,267 student allowances were paid. In 2007, during the same period, the number was 52,231.
That's an increase of 57.5 percent.

To my mind a student allowance is a form of benefit. But it is not paid out of the Ministry of Social Development budget. It comes out of the Education budget, specifically Tertiary Funding.

One consequence of this is  MSD benefit numbers are held down. People who might otherwise have been on unemployment or domestic purposes benefit are on a student allowance and out of the Social Development Ministry's hair.

But it must put incredible strain on the Education budget as more people opt to stay in tertiary education because their job prospects are poor.

I wonder too if student allowances don't have a negative influence in accustoming people to living at a certain income level, thereby creating a tolerance for benefit-living post tertiary education. In the same way that student loans accustom young people to living in debt.

From the state's viewpoint it is better to have young people in education  and out of the NEET group (which seems to be the overarching focus currently) but there is nevertheless an element of 'sweeping problems under the carpet' in play.


Anonymous said...

To my mind a student allowance is a form of benefit.

There's no question that student allowances, student loans, and above all the massive government funding of education at all levels of NZ - from the cradle to the grace aren't just "forms of benefits" --- they a hugely massive contribution of NZ's vast money-flushing exercise on benefits.

So not only are they benefits, they're also mostly useless, money flushed down the crapper, because either people don't "learn" anything in NZ, and those few that do lean useful skills --- work overseas.

And yes, because these education benefits (like healthcare) don't have any of the opprobrium rightly unleashed on WINZ bludgers --- hell the electorate crys out for more and more "free students places" or "free student loans" or "brand new classrooms" or "smaller class sizes" all of which are nothing more than economic deadweights on the back of the vanishingly small productive sector in NZ.

Education in NZ needs the same reforms as welfare and as health:

stop the spending.

Students will then make rational economic decisions on how much education they can afford. Once NZ's subsidies are removed, comparing cost and quality - Australian tertiary provides will make much more sense than staying in NZ - which is just what you'd expect based on the sizes and economies of the two countries.

Anonymous said...

In Spain, 25-year olds count themselves luck to get an illegal job paying 3-euros an hour!

How many "students" would take a job paying $3-per hour? None!

The destruction of NZ's economy is writ there for all to read!