Penny Simmonds: Tertiary Education Minister criticises Fees Free scheme as new briefing reveals it cost over $2 billion
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What is the Fees‑Free scheme and why does it cost over $2 billion?
It was one of those adornisms that you shudder now when you hear it. Next year's on me. Remember that? Fees free. What could possibly go wrong? Well, as history shows, a lot of it didn't move the needle in terms of numbers. And the Bill New Figures show came in at $2 billion. Penny Simmons, Minister for Tertiary Education, is with us.
How does Penny Simmonds argue the scheme failed to boost participation?
Penny, very good morning to you. Good morning, Mike. So 300,000 people, they will argue, got supported by this. But they were there anyway, weren't they?
Absolutely. They would have gone anyway. Fees free was set up. I would think pretty rapidly by Ardern just after she became leader.
What perverse incentives did the Fees‑Free policy create for students?
And it was supposedly going to lift participation rate and improve equity. And over $2 billion later, it hasn't done that. And we shouldn't be funding something that doesn't do what it was supposed to do.
As a person who came from the tertiary sector yourself, at the time, could you see the theory or did you argue against it and think it didn't work?
Look, I didn't think it would work particularly, and I thought that it encouraged some fairly bad behaviours. I saw young kids, young boys that were going to enrol in a carpentry course who decided that they would go and spend a year on the farm. booze at university instead on Jacinda. They were their words but it wasn't on Jacinda, it was on the taxpayer and they eventually came back and did their carpentry after they'd had a year away on the booze.
Does the first‑year subsidy actually change students’ study choices or outcomes?
So
it created some very perverse incentives.
First year, last year, do you think that makes any difference or not?
Not really, because the last year they're going to finish. Once you get to the end of your course, you're going to finish it anyway. First year, it just encouraged people to go and have fun for a year.
Yeah. Chris Whelan, who used to turn up on this programme as the head of universities, he used to argue you are on a path. In other words, you are going to be a doctor or you are going to be a lawyer, and whatever policy settings around that doesn't really change the way you're going to study.
What are the broader implications of the $2 billion spend on taxpayers?
Is that fair, do you think?
Yes, it is. And that's global research has shown that it really doesn't change the price of fees, don't change your direction. I mean, what it did do is it stopped some people, about 300,000 people, not having quite such a high rate. but they were going to do that anyway, and you'd have to argue they are going to have better employment rates, better continuity of employment, better overall salaries, should taxpayers who don't get that benefit be paying for those that do.
All right, nice to talk to you, Penny Simmons. So $2 billion, thanks very much for coming. That was wasted. For more from the Mike Hosking Breakfast, listen live to News Talk ZB from 6 a.m. weekdays or follow the podcast on iHeartRadio.
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Chapters
5 chapters
1
What is the Fees‑Free scheme and why does it cost over $2 billion?
0:00–0:16
2
How does Penny Simmonds argue the scheme failed to boost participation?
0:16–0:35
3
What perverse incentives did the Fees‑Free policy create for students?
0:35–1:25
4
Does the first‑year subsidy actually change students’ study choices or outcomes?
1:25–1:58
5
What are the broader implications of the $2 billion spend on taxpayers?
1:58–2:47
Speakers
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