Through the looking glass with ACT’s Stephen Whittington, to a world where rich folk form a political party that exists only to help poor folk.
ACT’s future looks bleak this year under the leadership of Don “I’ll just leave the country for a week in the middle of my election campaign” Brash and John “not quite a Lazarus of Epsom” Banks. Judging by the campaign activity documented on ACT’s website, the most profilic ACT campaigner is actually their 7th ranked candidate Stephen Whittington, who is all of 25.
Good on Stephen for being a tireless advocate for a cause he believes in. I was interested to see what direction ACT may take in decades to come, should it survive in some form, so this month I have been reading his speeches. He is very focused on education, and while the rhetoric in these speeches is forceful, the arguments themselves are flimsy.
School choice
Stephen suggests that everyone should get the chance to go to a great school such as Auckland Grammar or Wellington Girls, whether they live in the school zone or not. He says the current system forces many students, most of whom live in families ho cannot afford to buy property in the zones of great schools, to attend lesser schools instead. Imagine we adopt his policy. There are two possible outcomes:
- If great schools were not allowed to turn people away for capacity reasons, the result would be overcrowding at good schools, which would make them less good, and tumbleweeds blowing through other underutilized schools, which would become even more downtrodden and stigmatized. That solves nothing.
- If great schools could stick to their current capacity, then the situation would be no better than today. Just as many students would attend the lesser schools. The fortunate few, however, would be selected not on the basis of geography but on the whim of the Principal. That solves nothing, either.
There is another, better, way to address the problem Stephen identifies. If the problem is that some schools aren’t very good, then the solution is to make those schools better! Pretty obvious, really. That solution, however, takes public investment, which is why ACT doesn't like it.
Tertiary fees and access to University
ACT believes tertiary fees are too low. Stephen argues that the current fees are hurting students from poor communities by leading to higher entry standards favouring (often rich) kids who went to fancy secondary schools with better teachers. The solution, they argue, is to allow fees to go up.
This proposal assumes that the fee rise will deter marginally qualified rich kids from wanting to go to University, but not deter smart but undertaught poor kids. That is how the spaces are supposed to open up for the smart poor kids. Given that the deterrent is a financial one, however, it is much more likely to act on those with limited finances than those with limited talent. The solution doesn’t solve anything.
There is, again, a better solution. Until such time as you can ensure everyone gets broadly the same quality of secondary education (see above), you could make a rule that at least the top 15% of each secondary school is guaranteed entry to a University. That is how California has dealt with the same issue.
Tertiary fees and subsidies
Stephen argues that low tertiary fees imply a massive transfer from poor people who work for a living to rich people who go to University instead. That is, of course, nonsense because poor people receive more in services than they pay in tax. Rightly, they do not subsidize anyone. The people who pay for tertiary education are today’s rich, which is fair because they got a heavily subsidized tertiary education a while ago.
Whittington also cites some OECD figures showing that the average lifetime benefit of having some kid go to University is about $70,000. $45,000 of the benefit goes to the kid, and $25,000 goes to society at large. But current (non-medical) undergraduate fees are only about $5,000 each year, or around $15,000 for a first degree. So the proposed solution, again, is for fees to rise.
Problem? The OECD figures are an average only. Why treat everyone as if they were average? The better solution is to wait and see how big the benefit is for each particular individual, and charge them accordingly. We do this through progressive taxes. Take two people who have the same background, same degree, but different salaries. The one with the higher salary has gained more as a result of their learning than the person with the lower salary (using the OECD method for apportioning these benefits). Under a system with low initial fees and progressive taxes later on, the person who receives more benefit pays more. Like we do already. And it works just fine.
Student loan interest
I should note, however, that I do not disagree with Whittington about every aspect of education policy. He thinks the current student loan scheme is a mess because of the absolute zero interest rate. I agree with him. It does not make sense for us to give young professionals financial incentives against paying off a debt to the community. Loans should have some interest on them to change those incentives. The difference is that I would take that extra money and give it back to current students through a better student allowance system, whereas ACT would give it to rich folk as tax cuts.
Stephen is a champion debater. Some of his advocacy, like ACT’s more generally, contains rather too much of that staple of debating: Proof by Intimidation. That works pretty well when presented in oral form, and when it only needs to stand up for an hour. It works rather less well as a real world policy prescription.