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New Zealand can't afford not to do something about the impact spiralling education costs have on our country.
The workforce in the future will need to train, retrain, and possibly retrain again. Anyone who can't, or isn't given the opportunity to, risks being left behind.
An investment of $1.2 billion when fully implemented in a decade's time, is an investment that will pay untold dividends. Those who complain we can't afford it miss a far more important point.
The world of work is changing faster than ever - international business consultants McKinsey and Company put it at 30 times faster than the industrial revolution. It is estimated that 46 per cent of all the jobs we're doing now will be automated within 20 years. We need people to have the skills and knowledge to adapt, innovate and grow our economy.
Alongside that our population is aging. Raising the skill levels of those still in the workforce has never been more important.
Today there are roughly five working age New Zealanders for every person over 65. Over the next two decades that ratio shrinks almost in half. Given that the superannuation and healthcare for those over 65 is paid for from the taxes of those still working, it stands to reason we need them to be doing well and earning good incomes.
Higher levels of education lead to higher incomes. That's a fact. Higher incomes lead to a higher tax take by government. That's also a fact.
Current tertiary education policy isn't sustainable. Every year we lend more under the student loan scheme than we collect in repayments, and that's after 25 years of student borrowing. Total loan debt will shortly clock $15b and it's still growing. The average amount borrowed per student also continues to climb as fees are ratcheted up every year.
Being saddled with a debt of $20,000 that's going to take some nine years to pay off - and yes, that's what the average student is looking at - is a financial burden that pushes every other milestone further out of reach. So people aren't able to afford homes, and they're delaying starting families.
This isn't just about university students either. The three years free scheme will cover those doing trades training, on-job apprenticeships, and a multitude of other courses.
Employers have consistently told us in our consultations on the Future of Work Commission that the biggest issue they face in growing their business and improving productivity is the availability of skilled staff.
That is what this policy will help address.
A focus on providing support to those who need extra help doesn't mean we're not also committed to tackling the root causes of inequality and disadvantage. Access to quality, free education massively levels the playing field. Of course we are going to invest in early childhood education and schooling - watch this space.
Today's world means post-school education and training is essential. Up-front investment will create a stronger, more productive and inclusive economy. The initial outlay will be more than fully repaid.
There's a pretty clear choice. We can have a short term sugar hit of tax cuts or we can use that money to build a stronger future for all of us.
Andrew Little is the leader of the Labour Party.
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