OPSA Media Release

No Interest - or No Builders

Treasury papers released by Michael Cullen yesterday emphasises that no interest on student loans is vital. With student and graduate debt reaching $8 billion dollars yesterday the proposed interest wipe off will have positive outcomes for all New Zealanders.

Labour has been criticised for ignoring Treasury’s costing of this policy and creating their own. However, Treasury’s costing is based on a demonstrably flawed model:

Since 2000 students have paid no interest while studying. The huge increase in student loans Treasury predicted simply has not happen. Treasury have used similar flawed projections of increases for the costing of Labour’s latest interest free policy.

“While Treasury’s projections are completely over the top, the reality is that the country desperately needs more skilled workers.” said OPSA President, Rachel Dibble.

“Certainly if Labour’s interest free policy is implemented there will probably be small increases in student numbers. Even if these were in the absurd magnitude Treasury projects, this can only be a good thing since New Zealand suffers a skill shortage that can only be solved by improving access to courses.” said Ms Dibble.

“Has anyone tried to get a builder or plumber lately? Trades people are desperately sought after but face a huge student debt if they consider studying. If we don’t stem this debt, the brain drain will mean NZ will soon be short of many other graduates like nurses, lab technicians, and quality IT professionals” said Ms Dibble.