New Zealand’s to-undo list is good politics but questionable policy

The trouble with being a long time in opposition is the need to trade off policy for politics.

The Labour-led government in New Zealand came to power in October with a set of expensive commitments for its first 100 days, including hundreds of millions of dollars for its flagship education policy: fee-free study for first-year tertiary students and increases in tertiary student financial support. This meant that there was nothing left for universities and colleges when finance minister Grant Robertson read his first budget last month.

The previous National-led government tightened the student financial support settings and, once the global financial crash began to recede, raised university funding rates three budgets in a row, shifting the balance slightly but definitely towards funding institutions and away from student support. Labour has done the reverse, but that shift has drawn criticism from universities on the grounds that a funding increase threatens quality. And policy commentators have claimed that easing financial pressures on students is deadweight spending; the first official figures since fees became free shows that enrolments to universities are up by just 0.3 per cent year-on-year, while enrolments to polytechnics are down by 2.6 per cent.

But, having lost three elections in a row, Labour was looking for policies with broad appeal. Students are not the powerful political lobby that they were when student union membership was compulsory, but students vote. Even more important, easing the burden on students appeals to their parents and grandparents: they vote, too.

So it’s worth another look at the policy/politics trade-offs inherent in Labour’s 2017 election policy. Apart from the policies in its 100-day plan, the party also committed to a long-term strategic review of the whole education system, as well as a review of the performance-based research fund, the main mechanism for funding university research. It has launched a major review of vocational education, too.

But most of the manifesto was a to-undo list: reversals of the previous government’s measures. Two examples stand out: a commitment to annul the decision to make postgraduate students ineligible for living allowance grants and a promise to abolish the cuts to non-formal community education programmes, under which institutions offered classes to local residents for personal interest.

The previous government argued that living allowance grants are targeted at those for whom the need to borrow is a barrier to tertiary education entry. By definition, postgraduates must have already got through that barrier. And those with postgraduate qualifications get high earnings premiums. So, from 2012, anyone taking a postgraduate qualification had to use the loan scheme for living cost support.

Student lobbyists were upset and predicted a large fall-off in postgraduate enrolments. They took their complaints to the Labour opposition, who duly included a reversal of the policy in their manifesto. But there was no drop. A recent study by independent econometricians found that the only change was the increase in borrowing as students moved from allowances to loans – precisely as planned.

There was no room in May’s budget to implement this manifesto commitment. Sensing the government’s nervousness about low-value spending, the national student union took the extraordinary step of initiating a petition calling on the government to fulfil its commitment. Significantly, no Labour politician turned up to receive the petition – that was left to a novice Green Party MP.

The community education cuts were made in 2009, at the height of the financial crisis, as the National government moved to focus provision on what it saw as high-value areas, such as literacy. The removal of funding from hobby classes, such as travellers’ Italian and community choirs, caused controversy. However, nine years on, many of those classes – patronised mainly by those with means – have resurrected themselves and operate with no government funding or institutional support. The case for restoring government funding, therefore, is weak.

The lesson for opposition politicians is that if there is any chance you’ll win the next election, by all means commit to undo all the silly things that your predecessors did, but not the sensible ones, for which they took the reputational hit. Do not sell off sound policy for the sake of politics.

Roger Smyth recently retired as head of tertiary education policy at New Zealand’s Ministry of Education. He is now an independent consultant and adviser.