The Labour Party has made the first delivery on its promise to produce bold new policy in 2016. Free tertiary education is a daring reversal of the thrust of educational and economic policy of the past 30 years.

The proposal is simple, radical and will be popular with tertiary students and their parents, and the parents of intending students, not to mention those who teach in universities, polytechnics and training institutes. It may be enough to give Labour the lift in the polls it sorely needs after so long in Opposition.

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It calls to mind the abolition of interest on student loans in 2005 that may well have saved the Labour Government at that year's election.

A universal entitlement to three years' free tertiary education has overwhelming public appeal. Whether it is in the public interest is another question. The policy is expensive: $1.2 billion when fully implemented.

That is a considerable lump of public spending. As always when something of this magnitude is proposed, we should not look at its merits in isolation. Governments do not have infinite budgets and there is a limit to the taxation an economy can provide and remain healthy.

Labour needs to be asked, is this the most worthwhile use of $1.2 billion Is it even the most worthy use of funds allocated to education?

Many professionals (outside the tertiary sector at least) would say raising funding of pre-school education is more socially urgent and productive than relieving school-leavers of an obligation to contribute to the cost of their qualifications.

More broadly, extensions of paid parental leave, more generous welfare benefits and wage subsidies would have been expected to rank higher in Labour's priorities.

Doubtless it will say it plans to boost all of these things, and more, but that only underlines questions about free tertiary education. With so many worthy calls on Labour's compassion, why has it chosen to answer this one?

University student associations have complained about course fees and loans to cover them since they were introduced. But many thousands of graduates have paid their fees and repaid their loans over the past 20 years.


Tertiary education has seen spectacular growth over that period, attracting foreign fee-paying students as well as meeting New Zealanders' needs. Why change the funding system now?

Or to put it another way, what problem is this policy designed to fix? Labour's leader presents it as an answer to the frequent and unpredictable career changes people will need in the workforce of the future. But this "future" has been present for many years now and there has been no sign the costs of retraining have become a problem.

So long as the economy remains strong and apprenticeships are available, as they are, it seems it cannot be too hard to acquire new skills.

If the wage drop creates difficulties for those with dependants, for instance, targeted assistance would be more effective than a costly new universal entitlement.

The economy is strong in large part because public spending is under control. Expensive proposals that waste money purely for political gain could put the country's prosperity in peril.