There we were again, all over the leaders’ debate on TV3 last night. The lost generation, the brain drain, the flying New Zealander: simultaneously cultural bogeyman and utterly bribe-worthy. Peter Dunne was out of the gate first, offering to “fix the brain drain” by reducing student loan principal by ten percent for each year you work in New Zealand after graduating. The Greens saw that and raised it, wiping one year off your debt for each year you stay in New Zealand. And Jim Anderton galloped past everyone else in a flurry of hooves, offering to fully refund the loans and interest of anyone who sticks around for three full years after graduation.
Money can’t buy you love, but clearly all parties have figured out that there are plenty of interested parties who are open to negotiation: students and the families who are subsidizing them, and they’re all voting age.
Don Brash pointed out, quite reassuringly that only 6% of outstanding student loans are located, in the economic jargon, “offshore,” with the other 94% based firmly in New Zealand. (This just in, from Kyle at Otago: the relevant figures are here.) Don was, on the other hand, rather worried about the six hundred people per week allegedly fleeing to Australia, loans or not.
Rodney Hide went straight for the “it’s the economy, stupid,” solution, arguing that a better economy would “hold our people here.” He also conjured up the poignant, Saatchi-worthy image of families in towns and cities up and down New Zealand bereft of their young people, who are off overseas perhaps never to return. I swear I heard the Last Post playing in the background somewhere. Or perhaps it was the Pied Piper? He’s right, though: pretty much everyone knows someone who’s currently overseas, which is what makes it such a hot topic.
Helen Clark framed the question in terms of helping young graduates get a “stake in society” as expeditiously as possible, arguing that the interest write-off would allow people to think about home-ownership and starting families earlier than they might otherwise. (Or, you know, AT ALL.) She didn't apologize for the naked bribe value of the interest write-off, and even managed to work the phrase “brain exchange” into the debate a little later on, arguing matter-of-factly that “kiwis fly, and they do well.” Well yes, cheers, Helen. That’s why your interest write-off might need a rethink.
So, the wires ran hot with replies to my last post, the most succinct of which was from Danielle:
Well, if you're studying full time overseas, you're getting your interest written off anyway. Or you should be. Mine was.
Now this is very useful information, and it nicely addresses my original kaupapa, which was to argue for an amnesty for the academic diaspora.
This just in from Ry in Switzerland:
While it's true that when you're studying overseas you get some of your interest wiped, you don't get it all wiped. You still have to pay the base interest of 4% or so.
And a quick perusal of the relevant IRD pages indeed reveals that it is indeed a reduction, rather than a total waiver.
I didn’t know the ins and outs, because – despite what many who wrote assumed – I don’t have, and never have had, a student loan.
Full disclosure: I was the last of the lucky buggers who paid minimal fees and were fully supported, albeit at subsistence level, by the government and by constant part-time work during holidays and term-time, in the factories of South Auckland, the family catering business, and at the elbow of dozens of wee piano pupils. (Intriguingly, Janette Fitzsimons and Winston Peters saw eye to eye on the desirability of universal student allowances, that glimmering memory of a golden age of fully affordable tertiary education, and without which I wouldn’t be where I am today).
Just as the allowances evaporated and the fees started to climb, I headed off overseas to study ... this time supported by, first, Japanese taxpayers, then far-sighted American philanthropists, and as always whatever paid work I could squeeze in and the occasional parental food package. Again, always at more or less subsistence level -- my Nana would be proud at how far a thrifty undergrad lifestyle can take you in your op-shop clothes -- but yes, to considerable personal and cultural, and I hope eventually economic, benefit.
So I don’t have a personal stake in the student loan argument, merely a principled objection to the ongoing philosophical confusion over what counts as a useful New Zealander for the purposes of national accounting.
And even though it appears - thanks Danielle -- that full-time students are exempt from interest while studying, regardless of their geographical location, I reckon I’m going to stand by my argument in the last post and argue that you might as well extend the policy to everyone. This is not necessarily an endorsement of Labour’s interest write-off per se. As the astute Jonathan Boston argued in this week’s Listener (article not online, alas), there are far smarter ways to spend, say, $300 million on tertiary education, if you want to make a difference.
To be absolutely clear, I’m quibbling with the assumptions behind the arbitrary distinction made between home and abroad, not just by Labour but all the other policies noted above.
Some wrote in to vociferously support that distinction: James, based in New Zealand, argued that it’s simply all about the tax-base, and Dave, who has been an expat, agrees. If you’re working overseas, they both argue, you are in fact a net loss to New Zealand because, by definition, you’re not paying tax in New Zealand. Writes Dave:
At some point one has to realise that it's not about being fair to the individual, or attempting to influence their choices, but is important in considering where the money goes into and leaks out of the NZ economy, and the tertiary sector machine that is supposed to drive the top end. It would seem reckless not to put a mechanism in place to recover some of the cost put in, if it is clear that it will not be recoverable through the usual payback - tax.
Fair enough. Except, not. One might argue that the loan itself is a massive tax after the fact: anyone making loan payments is effectively pouring cash into the national coffers. And anyone who owns property back home while living and working elsewhere, or has money in the bank, is paying rates and assorted taxes. When you bring back all that lovely foreign lolly you’ve saved while working in a pub, that’s a net gain for the national budget too. Moreover, some of those from overseas are running remittance programmes to families back here, which if not tax per se, is still money in the economy.
Even I’m paying tax in New Zealand. In fact, I’ve just emerged from a bit of a dust-up with the taxman over the vast fortune I make reviewing books for the Listener. After a lengthy exchange of letters with the IRD (thanks, Dad!), you will be pleased to know that New Zealand is approximately fifty bucks better off thanks to my desire to stay involved in the arts scene back here -- not to mention the intangible value of those reviews, and of the other things I plan to publish in New Zealand over the next couple of years. I like to think that makes me a net economic benefit.
Most fascinating, at least to a linguist like me, was some of the language applied to describe expat New Zealanders who dare to describe how it feels to be categorically isolated from a policy initiative. "Petulant" was my favourite, but there was also "disrespectful of those who chose to stay" (yo, re-read my 7th paragraph below), "ungrateful," and a couple of instances of that excellent verb "whine."
Lee got quite exercised about how “comfy” we are over there, and said that we “shouldn’t expect the benefits of staying behind to flow on through.” Whereas Dave maintains there is no politics of envy regarding overseas New Zealanders; in fact, he says, most back home don’t even think about them on a daily basis. This is true, in the sense that we are most often wheeled out for election purposes, then put back in the cupboard for another three years. But not true in the sense indicated by Rodney Hide (see above), and in the tone of the replies I got from current loan-burdened expats.
I got some very plaintive mail from people who find themselves in the painfully ironic position of having almost finally paid off the loan working long hours and many years overseas, and are ready to move back home free and clear... only to feel thoroughly retroactively dissed by the new policy.
Another Dave, writing from the UK, and his fiancée, have been assiduously paying their loans off in huge chunks so they can get home sooner, untrammelled by debt. They and some similarly affected friends were just raising a glass to the Labour party for making that task a smidgen easier when they read the fine print, and are now “absolutely furious.” Dave points out that overseas loans -- which he pegs at $545 million right now -- are more likely to be defaulted on as it is, so the interest write-off exclusion doesn’t exactly feel like encouragement to get on with it.
And -- my original point -- it’s not just about personal or national economic effects, but a powerful cultural subtext. Jake, writing from Auckland before heading off to study overseas, sees this as a victory for cultural nationalists over cosmopolitans, in that it favours earthbound kiwis over long-haul godwits when in fact both types are equally necessary to a healthy country. And Del, who is coming home next year after a long stint overseas, is miffed at the thought that the wee global citizen he's bringing back (a daughter) will learn in New Zealand that “staying home is the only way forward.”
Ziggy's response, however, struck me as the most sanguine of all. Here's a kiwi-godwit-sooty shearwater-whatever who is utterly unflappable:
Sure, they're gonna make me pay 7% on my $80k loan when I leave at the end of this year for new/ different/ exciting (but not necessarily better per se) pastures. While my friends who stay will get to pay their loans back faster.
Well, wow, good for them - but equally -- for all the reasons you list -- it's still well worth going.
I think you underestimate NZ's willingness to 'put in the hard yards' (etc etc ad nauseam - cheers Dad) - in exchange for some sort of reward. Don't think us flying kiwis will be put off by mere money...
Cheers, Ziggy. This is both a glorious, shining example of the godwit spirit, if there is such a thing, and the definitive explanation of how New Zealand always wins in the end. You had us at hello, you silly sausages, and you’ll always have us -- regardless of when, or whether, we come home.
Just would be nice to feel that we were still in the conversation beyond hello, eh?
---
Now, of all the feedback on my last post, by far the most definitive critique was provided by the opportunistic burglars who made off with my laptop an hour or two after I last posted. Nice welcome back to the mother country, guys (yep, I’m here for a very flying visit, flap flap flap).
So if anyone in or around Wellington has been offered a suspiciously cheap 12 inch titanium Mac powerbook, Bluetooth and Airport card, 512 MB of memory, slightly dinged up and with a distinctive diagonal scratch on the lower right hand corner of the top cover, it’s mine. Oh yes, the serial # is UV 3461 TXPHK, it’s got an American-style plug and about two thousand pictures of Busyboy on the hard drive. I’d really love to have it back. Tool of the trade, back-up brain, all that.
They also took my sister’s laptop, a couple of cameras, and a full bottle of fine whiskey, among other things, thus putting a serious dampener on what was otherwise an absolutely gorgeous Wellington weekend. Nonetheless, a big shout-out to Gus and Ursula from the Wellington Central Burglary Squad who showed up the next morning and made a certain nearly four-year-old’s holiday by assiduously fingerprinting the whole place, waving torches around, and generally being textbook police officers. As Busyboy put it, “I’m very proud of that New Zealand police guy and lady. They were awesome!”