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Thursday, 16 October 2008

Election Lollies: Labour Vote Buys with Student Allowance

Socialism is an easy disease to catch. Labour roll out their election bribe for students and our daughter Sheridan (Sherry) gets excited. She starts Uni in March and at that point will have to quit her part-time job as the hours will conflict with her studies.

For a 16 year old she earns a fair amount of money. Being homeschooled has meant she has had the flexibility to work when other teenagers would be in school; she does her school work in the morning, works the lunch rush at a local cafe, heads to the paddock to ride her horse (which she bought and maintains on her own income), then has band practice (she bought the drum kit, electric and bass guitars for the band out of her earnings), then shops on Trade Me for T-shirts and CD’s or goes to the movies or the mall with her friends.

Given how used she is to her cashflow being rather lush and the freedom and fun it brings she is not excited about the impact on her wallet that starting Uni will mean. Like most households we earn more than the threshold so Sherry does not qualify for the student allowance.

At the point she realised how her financial situation was going to change, she had a teenage moment of refusing to go to Uni. That lasted the length of the next shift when I casually asked her how her life long career as a kitchen hand was going, she had just been complaining about how sore her feet were. She got the point. “No way am I working this hard for such a pathetic hourly rate for the rest of my life. All the adults at work, for whom this is their career, tell me they wish they could have gone to University.”

Wisdom is erratic with teenagers. Only a few short months later she hears a news headline that Labour are going to raise the student allowance threshold. Of course when the details came out she realised that she would not be benefiting from it as even when the first threshold kicks in its still set too low to help her.

I pulled her up on her disappointment. I reminded her of her anger on receiving her first pay check from her first paper-run, she was in tears because she had not realised just how much tax would come out of it when she had pre-spent it in her head – we had tried to tell her. She ranted for days about the injustice of being taxed at age 13 without the possibility of even voting for 5 more years. I asked her to think about her friends at the cafe who, like her, work hard for not much and even less after tax. She got it. They work hard, their feet hurt, the work bores them but unlike her they don’t get to dream of being whatever they want. Their reality is her part-time, short-term job. They don’t have the skills she has to lift herself higher, why should they have to pay for her education?

If she wants to get the letters after her name that will be her ticket to leave serving coffee to the realm of one of those jobs you do before you get a real job, then she has to foot the bill. The public already pay a huge part of the real cost anyway, the majority in fact, but they are not the only beneficiaries of a skilled workforce, those that gain the ability to sip the lattes on their lunch break from their highly paid jobs need to cough up some of it too.

The average student loan is less than ¼ of 1 years post-tertiary wage. It’s hardly the life-long debt we are led to believe.

Sherry doesn’t need the student allowance anyway; we will pay for her Uni fees and provide for her living costs and a bus pass to Uni. We have had 16 years to plan for this and we want her to stay at home til her brain is fully developed anyway - even if it adds a few grey hairs. Our family and friends will give her ample chances to pick up some spending money with the odd babysitting job. She'll be ok. Not being able to add a CD to her collection every week and buying her jeans from the Warehouse instead of the Lee Jeans shop for the next few years won't kill her and it certainly doesn't justify adding to the tax burden of her current workmates.

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