Owen Glenn: Ghosts of past return to haunt taxpayers

The introduction of the student loan policy was thought at most to cost the country $300 million a year but it has cost a lot more. Photo / Martin Sykes
The introduction of the student loan policy was thought at most to cost the country $300 million a year but it has cost a lot more. Photo / Martin Sykes

I was recently in Auckland on the first of a number of planned trips home. I loved the spirit of buoyancy and positivity but a couple of ghosts of New Zealand's past caught my attention.

They are both symptoms of the speed bumps on our road to recovery, and are indicative of how we waltz around thorny problems rather than address them directly.

The second of Labour's seven pledge card election promises announced in 2005 that removed interest payments on student loans was an unabashed example of blatant vote-buying. It seems only now that the current Government is doing something concrete about it.

At the time this created an environment in which some students who received taxpayers' money to help them through tertiary studies walked away with no intention to repay. This has left the New Zealand taxpayer to pick up the tab.

The introduction of the policy was thought at most to cost the country $300 million a year but it has cost a lot more than this and the question is why it has taken everyone so long to do something meaningful about it.

Statistics released in tandem with Revenue Minister Peter Dunne's policy announcement show the level of blowout.

There are more than 621,000 borrowers with total loans of $12.1 billion. Of that $411.6 million is overdue. There are 92,000 overseas-based borrowers with total loans of $2.3 billion.

Of that, $289 million is overdue. There are 13,000 known Australian-based borrowers with total loans of $319 million. Of that $23.4 million is well overdue.

I applaud the fact the National leadership is addressing the problems and is trying to recover these unpaid loans. I urge those owing the money, or knowing others that do, to make sure commitments are honoured.

As we do with unpaid fines why not ensure passport numbers of errant students are tagged refusing them entry into New Zealand or the ability to leave until their loans are paid or at least a payment plan established? The simple fact is that this was always meant to be a loan, it isn't their money by right, and taxpayers deserve to have it returned to the country's coffers.

In the future, New Zealand taxpayers need reassurance that when a student loan is granted not only is that student academically deserving of the money, studying a subject that has long-term practical and monetary value for the student and his or her country but that he or she is fully capable of repaying it.

They also should have an incentive to repay. When loans were made interest-free this important incentive was removed. Both politically and economically that Labour-induced policy was hardly wise.

The other ghost that got me quaking was the incendiary comment from University of Auckland Maori Studies Professor Margaret Mutu. She claims that some immigrants with European ethnicity brought white supremacist attitudes with them. From anyone else such a comment is disappointing. From someone in a position of influence, and an educationist at that, it shows a perverse attitude.

Unfortunately, Professor Mutu's people figure in some of our worst statistics. Like the student loan situation, when rights are not balanced by responsibilities others end up having to pay.

If the statistics released by the Act Party are at all accurate it makes depressing reading. Maori make up close to 15 per cent of the population but comprise:

* 38 per cent of unemployed youth.

* 35 per cent of unemployment benefits

* 42 per cent of DPB recipients.

* 51 per cent of the prison population.

With statistics like these I have to ask why Treaty settlements are not tied to initiatives that will directly benefit the Maori people and not the Maori corporations and trusts that have been created in their name.

Tie the "investment" directly to performance and rectifying the underlying causes of some of these problems through grass roots initiatives rather than leave the onus on the state. Let's get these percentages down then let's get on with the business of moving forward as a multicultural society and a great one at that.

Owen Glenn is a businessman and philanthropist and an officer of the New Zealand Order of Merit.

- NZ Herald

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