Over at PolicyNet both Chris Trotter and Matthew Hooton say Liarbour could be planning yet another student bribe. Well, as Trotter-sky argues, it worked in 2005, so why not do so again? The pair raise the issue of 'bonding' with further tax write-offs for those who have repaid their loans. It follows earlier speculation of student allowances which were later downplayed. Trotter-sky says of bonding:
The additional tax revenue received by the state from what would be the much larger number of graduates remaining and working in New Zealand, instead of increasing the wealth of offshore economies, should make these schemes largely self-financing. A scheme of this comprehensiveness would also provide a definitive answer to the charge that the Government was doing nothing to halt the “brain-drain” to Australia and other countries. The option to have the state contribute toward the cost of a graduate’s first home would also address the enormous social dislocation caused by the introduction of “user-pays” tertiary education - especially in terms of young graduates delaying marriage and the decision to start a family. All and all a winning move - not only for the Labour Governent but for all of New Zealand society.
Indeed, Matthew Hootton also sees scope for such a bribe. And how should National respond? But swallow yet another dead rat!
Very, very early days and I agree with Chris Trotter that a massive student loan bribe could well turn the tide in Labour’s favour as it did in 2005. Chris’s ideas are a bit more innovative than the ones I have heard around Wellington - writing off 25% of every outstanding loan balance, which would be grossly unfair to those who have sacrificed to pay their loans of faster than required. But the important thing about a student loan bribe is that it does not affect the cash position much. By playing with student loans balances, the student loan asset in the Crown accounts gets reduced (and this does have a small cash effect because there would be lower repayments in the outyears) but, overall, the effect on Cullen’s $3.5 billion cash deficit - which he said at the time of the Budget was the absolute maximum New Zealand could tolerate - would be much smaller than from other potential bribes, such as increasing Working for Families payments from 1 April 2009 - but the ex-student would feel very grateful indeed. My advice to National if Cullen does make this play? Move instantly to endorse the policy. The horrors of a fourth term Clark Government are too appalling to contemplate (as tonight’s TV coverage indicated) that any rat should be swallowed to be rid of them - especially those developed by Labour's pollsters for maximum political effect.
It all may make sound politics. But what makes students so bloody special! And should Key once more say 'me too?'