KEY POINTS:
Bonding of tertiary students has two objectives. First, it aims to stop them being lured overseas after they have completed their training. Doctors, especially, are the subject of big-dollar offers from Australia. Second, bonding can entice graduates to work in rural or remote communities, low-decile schools or in
specialties and subjects that are stricken by a shortage of staff.
The use of voluntary bonding in many countries bears testimony to its effectiveness. It is timely that the Government has introduced a comprehensive scheme here, not just for doctors as it promised before the election, but also for nurses, midwives, teachers and veterinarians.
The effectiveness of this initiative will depend to some degree on its design. Notably, it departs from the types of scheme that apply to doctors in Australia and operate in some other countries. These, typically, involve students signing a bonded contract on entry to medical school. This, in return for a fee-paying scholarship, ties them to working in hard-to-staff communities for a period equal to the length of their degree.
The Government's new five-year scheme does not kick in until after training. Graduates who agree to work in areas such as Southland, Northland or the West Coast can opt to receive either a cash incentive or have their student loan debt progressively written off. Doctors are being offered $15,873 a year before tax, midwives $5224 and nurses $4229. Teachers who agree to work in decile-one or isolated schools will receive $3500 a year. There will be no bonding agreement, and the first lump-sum payment will be made at the end of three years.
According to the Government, the payment size equates to the average student debt level for each profession. Equally, however, doctors are offered far greater carrots to work in Australia than teachers. In the first year, the scheme is expected to cover 100 doctors and 250 midwives and nurses working in areas with critical staff shortages. Over each of the following five years, another similar-sized group will be added.
The Government's scheme seeks to bypass some of the drawbacks of those with up-front bonding contracts. Because no payment is made until after the third year of work, there are no financial ramifications if the graduate opts out before then. Nor is there a need for bureaucratic time to be taken chasing up the penalty for such breaches. The flipside is that the scheme can be walked away from more easily by those who find living in a rural community not to their liking.
There are other advantages to schemes based around scholarships and contracts. Some increase the chance of being offered a place at medical school. Another, potentially more important, is that graduates do not run up a student debt of any great magnitude. This may mean there is less inclination for young doctors to become panicky and take up big-money offers from Australia as an easy solution to their plight. A spell across the Tasman may seem a far quicker fix than five years working in rural New Zealand.
During the latest junior doctors' dispute, bonding was often mentioned as a means of stopping the drift to Australia. The National Party made it part of its election manifesto. Commendably, it has enacted its proposal quickly, adding cash incentives for those who do not need student loan writeoffs. Some may quibble at these extra payments but they are, in reality, compensation for compromised career paths. As such, the Government scheme should go some way to solving the country's medical and educational staffing woes. Whether it is tailored sufficiently well to have the maximum impact is another matter.