Closing the Gap With Australia – How about with Loans and Allowances?
The National Government was elected in 2008 promising to close the gap with Australia. Four years in, there’s instead
been a widening disparity. As the final touches are put to the 2012 Budget, student leaders are pointing to loans and
allowances as an obvious place to start. This comes amidst reports that some of New Zealand’s best students are already
taking advantage of Australia’s better resourced institutions and student conditions to study, perhaps never to return.
“There are two obvious differences with the loans and allowance schemes between Australia and New Zealand,” says Pete
Hodkinson, President of the New Zealand Union of Students’ Associations. “The first is that Australians get more money,
and though also means-tested they continue to get money with higher levels of parental income. The second is that their
income contingent loans scheme doesn’t require payments until there’s an actual proof of higher income.”
“The irony is that our colleagues in Australia argue that their scheme is unfair and that students can’t afford to live
on it, a view supported by the recent Bradley Review into Student Support. If that’s true at their higher levels how
much more true it must be here.”
A big difference between the level of Australian student support and New Zealand’s is that is that Australia takes
account of the actual costs of living. In Australia, students can get up to $120 per week to support their rent costs.
New Zealand students can only get $40 per week.
“The other difference is that the allowance, while also means-tested on parents income, has greater understanding of the
ability of families to support their children. New Zealand’s scheme denies any support if both parents are earning even
the average wage, while we know most parents in their mid-to-late forties will be earning more than that. Australia’s
scheme is simply more sensible.”
While New Zealand graduates with student loans have to start paying back their loans at a rate of 10 cents in every
dollar earned over $19,084, Australian graduates pay back on a graduated scale that starts at 4% of their total earnings
once they earn over $48,000.
“The New Zealand rate kicks in at a level barely above poverty, where graduates are certainly not demonstrating any
private benefit from their study, and at precisely the time when they are going to be faced significant other costs of
setting up their homes, their families, or potentially their businesses. At $30,000 a year, that $40 a fortnight is a
big deal. The Australian repayment level is fairer and makes more sense in terms of the nation’s economics.”
NZUSA is the national representative body for tertiary students and has been advocating on student issues since 1929.
ENDS