Salient. Newspaper of the Victoria University Students' Association. Vol 42 No. 13. June 11 1979
The Budget: An end to the STB? — The Budget: A Crisis for Student Bursaries
The Budget: An end to the STB?
The Budget: A Crisis for Student Bursaries
It has been the trend in recent years that whenever there is an increase in the level or a significant change to the bursary system it will be announced in the Budget. Consequently students should be looking to the 1979 Budget which will be announced by Mr Muldoon on Thursday 21 June.
In the first term considerable concern and agitation was expressed by thousands of university and technical institute students. The fuel for this was provided by a confidential document written by the Department of Labour which stated that in order to restore the value of the Standard Tertiary Bursary (STB) to its 1976 level (the year of its introduction) to take into account inflation and tax changes it would have to be increased by $9 per week for 1980.
This document was 'leaked' to Wellington's Evening Post and the call for an immediate $9 increase was taken up by the New Zealand University Students' Association (NZUSA). As a result a campaign was launched which led to thousands of university and technical institute students throughout the country participating in organised protests in appalling weather conditions on 11 April.
Actual cuts to the STB
Although the '$9 deal' paper of the Department of Education proved that NZUSA's long-standing criticisms of the inadequacy of the STB were valid, particularly with regard to the level, there is a very strong move by the Government to actually cut, in real terms, the value of the STB. Since 1976 it has been content to allow the indirect eroding effects of inflation to do this. But now it is considering more direct methods.
In its 1975 election manifesto the National Party said it was going to introduce a 'new reformed bursary.' This was designed to undermine a certain degree of popularity that the then Labour Government had with students following the announcement by Finance Minister Tizard in the 1975 Budget of its intention to introduce the STB in 1976. The very clear impression given by National through its Education Spokesman Les Gandar was that this 'new reformed bursary' would be brighter and better than the STB.
Three and a half years, two conferences and one Review of Financial Assistance for Post-Compulsory Study with its Steering Committee and three working parties later students are still waiting for this new reformed bursary.
It now appears that we are on the verge of being told what this 'new reformed bursary' will be and Damocles' Sword will be lifted on 21 June. But rather than an improvement on the STB it is expected to be a considerable dismantlement of it by a twofold process of cuts - loans and means - testing.
At the moment the STB is based on a grant system at two rates - the abated rate and the unabated rate. There is a slightly higher level on both rates for students in their fourth year or more.
The following changes are expected to the current system. - There will be one basic grant which will be at the abated rate. It is possible that this rate may be increased slightly ($19 and $22.50). This grant will be supplemented to the equivalent unabated rate by a student loan which will be made available on hardship grounds. The criteria for eligibility for this loan will be determined by means-testing. However this means-testing is likely to go by another name. This will be budget testing - a system which is supposedly based on patterns of student income and expenditure. However, it is hard to conceive of such a system not involving parental means-testing.
1. | Usually reliable sources. |
2. | The drift of comments made by Treasury and the Department of Education at the last meeting of the Steering Committee of the Government Review of Financial Assistance for Post Compulsory Study. |
3. | Such a system would be a very effective method of cutting bursary expenditure. Loans are more of a long-term cut but also in a period of uncertain employment prospects guaranteed indebtness is no incentive to take out a loan. Means-testing meanwhile is a very effective way of immediate cost gutting. |
Why Loans should be Opposed
1. | First of all it means reducing the amount given to students in the form of a grant. A grant does not have to be repaid; a loan does. The present STB is a grant. |
2. | The danger of a two-tier system with grant and loan components is that the grant component will proportionally diminish and the loan component increase. Sweden has such a system. When introduced in 1964 the grant component represented about 25% of the total assistance. By 1968 it was 22% and in late 1975 it was down to 15%. |
3. | It has not been shown that where loans have been introduced they have been successful in fact an OECD study concluded that no perfect loans system has yet been introduced. Attempts to introduce loans in Australia and Britain have failed. |
4. | For a loan system to be just, a tertiary qualification would have to be a guarantee of future lucrative employment so that students will readily be able to pay back their debts. However in New Zealand this does not appear to be the case. As Treasury noted in its submission to the 1977 Bursaries Conference: "....One factor we would see operating against extensive use being made of loans in New Zealand is the fairly egalitarian relativity of wages. In the first few years at least most graduates are not paid significantly more than the average wage." |
5. | New Zealand's unemployment situation suggests that the introduction of a loans scheme with the subsequent repayments would be inopportune. The following figures taken from the Vice Chancellors' Committee's Graduate Employment survey suggests an alarming and politically sensitive trend. |
Year | Graduates Seeking Permanent Employment (Percentage of Total) | |
---|---|---|
1976 | 6% | |
1977 | 6.3% | |
1978 | 8.5% |
A break down into selected disciplines for 1977 and 1928 is also pertinent.
Furthermore the general situation in white-collar employment is not encouraging. The March 1979 Monthly Abstract of Statistics provides some insight into trends in this area where many ex-students can be expected to be employed.
Registered Unemployed — Professional, Technical and Clerical.
Monthly Average for December Year | ||
---|---|---|
Males | Females | |
1974 | 19 | 51 |
1975 | 116 | 231 |
1976 | 165 | 347 |
1977 | 241 | 469 |
6. | A loans system does have an inherent bias towards graduates and against non-graduates. In the United States those who default on their repayments tend to be non-graduates. NZUSA understands that a large number, about 40% of those who enter university do not graduate. Non-graduates are more likely to be in a difficult position to repay their loans. |
1977 | 1978 | ||||
---|---|---|---|---|---|
Total | Percentage | Total | Percentage | ||
Agriculture / Forestry | 37 | 6.3 | 61 | 9.1 | |
Humanities | 87 | 7.2 | 115 | 8.9 | |
Social | Sciences | 74 | 7.8 | 86 | 8.5 |
Engineering | 12 | 3.1 | 42 | 10.2 | |
Law | 56 | 15.5 | 75 | 19.0 | |
Science | 92 | 7.3 | 110 | 8.5 |
Why Means-testing should
1. | It is an invasion of the [ unclear: stud] parents privacy. |
2. | It assumes that students [ unclear: shcially] dependent on their [ unclear: pare] |
3. | It is ill equipped to cater [ unclear: fo] differing attitudes towards [ unclear: fin] porting their off-spring [ unclear: throug] pulsory study. |
4. | There is a great scope for for [ unclear: a] as parental unwillingness, [ unclear: arbit] [ unclear: pport] from relatives and [ unclear: friend] |
5. | There could easily be an an ween the ages of majority and dependence. |
6. | In Norway, Sweden and [ unclear: the] where it has been tried there [ unclear: h nite] move away from parental |
7. | The West German [ unclear: experien] that means testing may [ unclear: deter e] dents from applying This [ unclear: may] the low number of applicants [ unclear: f] tested Special Hardship [ unclear: Allows] Zealand. |
8. | Means-testing in Australia, [ unclear: a] Germany and the United [ unclear: king] under strong criticism [ unclear: especiall] dent organisations. |
9. | Implementing means [ unclear: testing] most certainly involve [ unclear: enquirie] [ unclear: nancial] situation of students. [ unclear: ure] would be expected to do this periences with the Hardship [ unclear: an] ship Allowances many [ unclear: universit] der such enquiries to be an [ unclear: unr] vasion of their students' privacy Because of the increased load [ unclear: universi-] would be very reluctant to take means [ unclear: ing] on especially considering they are [ unclear: d] pressed by work on the STB. |
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Alan Phillips
[ unclear: es] for Students — Another Attack
As well as cutting the value of the STB [ unclear: nflation], loans and means testing [ unclear: Go-ment] is also likely to increase the [ unclear: fi-cial] burden on tertiary students by use of fees.
In May, Prime Minister Muldoon [ unclear: announ-] that private overseas students (outside South Pacific basin) would have to pay [ unclear: e] of $1500 per year Discriminatory fees [ unclear: e] introduced for overseas students in [ unclear: Bri-] The British experience was that this [ unclear: i] then used as a basis for instituting and [ unclear: n] increasing fees for British-born students, [ unclear: ications] are that this precedent will be [ unclear: fo-ved] in New Zealand. The first part has [ unclear: al-dy] happened.
[ unclear: at] the 'New Reformed Bursary' [ unclear: uld] really be like
There are three areas with the present [ unclear: a] where major reforms are needed.
1. Inadequate Grant-In-Aid
The underlying principle behind the [ unclear: bur-y] is that it is a partly supportive allowance [ unclear: ich] is to be supplemented by vacation [ unclear: ear-gs]. It is not intended to be a fully [ unclear: suppor-s] allowance (as student-teacher allowances [ unclear: or] a living wage.
But the ability of the bursary to be an [ unclear: equate] grant-in-aid has been severely [ unclear: re-ted] by the inability of the private [ unclear: sec-or] the traditional source of student [ unclear: em-yment] to employ students during the [ unclear: mmer] vacation.
This has become increasingly evident in the 1977-78 and 1978-79 vacations. In the former at one stage 1494 tertiary students were registered as unemployed while in the latter it was as high as 1519. Most of the potential unemployed were absorbed by the Government sponsered Student Community Service Programme.
But a related side-effect of this is underemployment. Although many tertiary students can obtain full-time employment through the SCSP the actual duration of working time is often less than in a full employment situation. Also there is no overtime in SCSP. Consequently the earning power of many students has diminished.
Unemployed and underemployed students are not the only ones affected. Women students who tend to get jobs with lower pay rates, students living in areas where seasonal employment is not readily available, and students who are required by their courses to keep studying over the vacation or to work-in unpaid or low paid jobs face particular problems.
For these reasons the Standard Tertiary Bursary has proved to be significantly inadequate as a grant-in-aid system, let alone a fully supportive allowance, and consequently NZUSA is not only campaigning for a large increase in the base bursary level but also the permanent continuation of the SCSP.
2. Indexation
There is no set system of guaranteed increases to the base level of the bursary. The Government's policy is to annually review the bursary to take into account increased costs. Its rationale behind this is flexibility.
But this flexibility is not in the interest of university and technical institute students. In reality it means giving students as little if any, as possible. The size of the increase largely depends on the strength of NZUSA a at a given time.
Under the guise of flexibility the bursary level as set out in 1976 has significantly diminished in real terms because of double digit inflation. For this reason NZUSA advocates the indexation of the bursary to an appropriate cost-of-living formula. An example of the type of index that could be used is the Consumer Price Index.
Until the bursary is indexed as costs rise, especially in the basic fields of food, accommodation and text-books, it becomes increasingly inadequate as a grant-in-aid scheme.
The '$9 deal' paper of the Department of Education reveals the extent of the loss of value through inflation. This $9 is based on the STB level at the time of introduction in 1976. However, since the time of announcement in May 1975 the STB has declined in value by 23%.
3. Abatement
Apart from the failure of the bursary to keep up with inflation it has been the abatement which has caused the most controversy. - Its effect is that the bursary is "abated" or reduced by $11 per week for students who do not have to live away from home to attend a university or a technical institute. The assumptions behind this system are that parents should contribute to a student's keep and that students should live at home. In other words the abatement is a crude form of means-testing.
a) | There is no age limit on abatement regulations as there is, for example on the unemployed benefit which pays a higher allowance to those over 20 years of age. In one case a forty year old woman and her son, attending university as full-time students received abated bursaries because they were both 'living at home.' |
b) | Married students receive abated bursaries on the grounds that they are "living at home." The exception is that two full-time students married, or married de facto, to each other receive the full bursary. |
c) | Students who are separated, divorced or widowed are treated as though married and receive the abated bursary. |
d) | Orphans are abated when they reach the age of majority. While a minor, an orphan receives an unabated bursary, unless his or her guardians live in the town where he / she studies. But when the orphan reaches the age of majority he or she is treated as independent and having no home other than where he or she lives, and is automatically abated. |
e) | If a student has lived away from his or her parent's home town and the parents move to the same town as the student, the student's bursary will be automatically abated — even if the student and parents lived apart for years. |
f) | In some cases a student parents live so far away from a tertiary institution that it is impractical to expect the student to to live at home. If, for example the student between the home and the institution exceeds 48km; the home is situated more than 2.4 km from the nearest public transport; or travelling tine one-way between the home and the institution exceeds one and half hours, the student can live away from home and get the full bursary. But these rules are arbitrary and it is bad luck for the student who just falls outside them. |
g) | Students may attend a tertiary institution outside their home town and receive unabated bursaries if their chosen course of study or major subject is not available in their home town. The exception is students living in the Auckland urban-area. They can attend a university outside Auckland and receive an unabated bursary, whatever their course of study This measure was designed to take pressure of growing student numbers off Auckland University but is nonetheless anomalous. |
h) | A student whose parents live overseas, or move overseas permanently, is granted the abated rate. |
Are the Cute Inevitable?
The short answer is no, but this rests solely with students themselves. Government will only act if enough students are angry, agitated and active in protests a— gainst the cuts. It was largely through mass student pressure that the STB was originally introduced in 1976 and subsequently the level increased albeit inadequately. We are now in the position that the 'alternative government', the Labour Party, is actually committed to the principle of indexation.
Changes and amendments to the Budget can be made up to two days prior to its announcement. Consequently NZUSA is organising, through its seven constituents, a nation-wide week of protests calling for opposition to the cuts and instead for an immediate increase to the level of the bursary (as well as for indexation and abolition of the abatement.)
Ian Powell
NZUSA Research Officer
At Victoria, we are having a rally in Pigeon Park on Wednesday, 13 June. Daring this rally, the Minister of Education, Mervyn Wellington, will be brought out and put on public trial for crimes against the education and thus the people of this country.
We expect the verdict to be severe, and the sentence will reflect the nature of the crimes: an education cut will be aimed at his neck.