One of the central concepts of the discipline of Economics is that of “opportunity cost”.
That is: what would be the next best use of the money/resources.
The new government have recently released their budget and it is dripping in opportunity cost in each spending area.
Some observers have suggested that is it “National Lite” in the sense that they do not need to spend heavily on left wing priorities such as Māori, Pasifika, the poor and the politically left wing will vote for them no matter what – so spend to the right and secure the swing voters. Money is power.
National, when in power, did the same in reverse, so it is hardly a new tactic.
It is highly cynical nevertheless and not in keeping with a government for the people.
Education has lost so heavily in this budget.
It is desperate for transformation and the best the new Minister (Hipkins) can offer is a three year talk-fest of people he invites and who are unlikely to rock his ideological boat.
The losers are our Māori, Pasifika and poorer youth.
The winners are the children of the middle class and rich who have had all of the tools and pathways to get themselves to university.
This has included my three children – two university educated in New Zealand and one in the USA.
The University of Auckland studies have made it clear that degree graduates earn approximately $1.5 million more over a career as opposed to those who take a different pathway.
That makes taking a loan to study the best investment since Dr Who took the Tardis to the 2025 Melbourne Cup and then returned to the present to bet a fortune on the winner.
A disclaimer is that my wife and I went to university in the 1980’s when you could do it almost for free and emerge with little or no debt.
However – life has changed and a $60k debt against massively improved earning potential is a winning situation.
So – what is the opportunity cost of the government’s $2.8billion bribe of a fee-less tertiary education?
It is the massive missed chance to do something about the University Entrance gap between Asian/European and Māori/Pasifika.
The 2016 published results showed that the gap at Year 13 was at 30% and no educator thinks it will be much different for 2017 and the next couple of years.
There is very little point in offering “free tertiary study to transform society” if those that need opportunity and “transformation” cannot get a ticket to ride.
It is with utter despair that I hear government and leaders of education begin to talk about “appropriate pathways” based on ethnicity and less than subtly telling many of our youth that the high remuneration pathways are not for them based on the colour of their skin.
The cynical new government takes this sector of society for granted.
Where else have these groups got to go with their vote is the reasoning.
And, to an extent, they are right, the previous government did not do enough in this area either – they were hesitant and timid and that is a very good reason for them now being on the opposition benches.
The new government, though, needs to have a conscience.
Their $2.8billion seems to have not added a single tertiary student into our schools of higher learning.
The “opportunity cost” is very clearly what could have been won for young Māori, Pasifika and low income families if it had been aimed at redressing the huge gaps at the UE level.
It may be that the risk would have been that Labour would not have been in power.
The truth is that holding to ideals always carries risk (just ask – if you could – MLK) and the current government have thrown away their ideals because they simply wanted to win.
The previous government did not do enough either – as Shakespeare so insightfully stated in 1592; “A plague o' both your houses!”