Learn now pay later —report

Press, 27 September 1988, Page 1

Learn now pay later —report

By

GLEN PERKINSON

in Wellington

A form of graduate tax is one measure advocated in a series of radical reforms for New Zealand’s postcompulsory education system in a report commissioned by the Government

By 1990, tertiary students might be expected to contribute 20 per cent of the cost of their education to be paid through tax after graduation. The report was written by Professor Gary Hawke, chairman of the Planning Council , and Victoria University’s Institute of Policy Studies. It includes a wealth of other, reforms including the abolition of six educational advisory and statutory bodies, decentralised decision making, a new Ministry of Education and Training, streamlined funding for research, a single upper-school qualification and greater access to tertiary education for disadvantaged groups. Existing educational institutes would be encouraged to earn income by selling services to groups and individuals. The report also recommended industries benefiting from employees’ education should contribute toward the cost of those skills and qualifications. Nevertheless, the Government would remain the principal source of funding for post-com-pulsory education. About 80 per cent of the money needed would still come from the taxpayer. The Hawke report also said institutions other than universities should be able to confer degrees. The present Access training schemes would come under the jurisdiction of the new Ministry of Education and Training, and away from the Labour Department. Employers should also spend more time and money on job training and retraining, the

report said. There should be more Maori input into secondary education, as well as provision for women’s and Pacific Island issues. But the major reform outlined in the report is the charge on students for their post-compul-sory education. At present the Government pays about 99 per cent of the cost. From the next decade students would have to meet 20 per cent of costs. I A loan allowing students to pay fees would be granted to each student in tertiary education. Those loans could be up to $5500, in today’s terms, for a three-year course at a university or polytechnic. Once the student graduated he or she would be taxed from between 1 and 3 per cent of the loan each year in repayment.

A low-interest charge would be made, but some groups would be exempt from the interest charge. It was only fair that people who would earn higher incomes "should contribute to the cost” of acquiring the skills that allowed them greater earning power, Professor Hawke said yesterday. The bulk funding from Government to education would be decided against other commitments, such as health, social welfare and defence. Once that had been established the new Ministry would work out funding for each component of the system — early childhood, primary, secondary, tertiary, Access and non-formal education. Each institution would have to draw up a charter; indicating intentions and needs for funding.

The charter would be a contract the institution would adhere to so as to maintain Government funding. Each institution could deploy funding to individual courses as it saw fit — at present the Government decided that. Certain courses cost more than others, and students undertaking more expensive courses, such as medicine, would be expected to meet cost differences. If a student could meet the cost of education, then he or she would get a fee discount, believed to be about 15 per cent. Students would be expected to start paying back the loan only when their income reached a certain level. That was expected to be less than $22,000 a year. The repayments would be deferred until the income threshold was reached, but interest would continue to accrue on the loan until repayments began. People on Access and postgraduate courses would not be expected to pay interest. Nor would students with dependants. The report recommended teachers’ colleges should remain as separate institutions. The Picot report had advocated these should be attached to universities. Research work by tertiary institutions should be paid for by those benefiting. Research “in the public good” would be funded by the Government. Further reports, reaction, page 14