‘Meh’: Uni students unimpressed by National's loan plan

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1. 0:06Speaker 1: Kia ora, I'm Chelsea Daniels and this is The Front Page, a daily podcast presented by.
2. 0:11Speaker 2: The New Zealand Herald.
3. 0:16Speaker 1: National is promising to crack down on people abroad who are failing to pay back their student loans. If re-elected, the party would ease compulsory student loan repayments from 12%
4. 0:27Speaker 1: to 10% and charge those living overseas an extra 1% in annual interest. Arrest warrants could be sought for serious
5. 0:37Speaker 1: ongoing defaults. Leader Christopher Luxon has said that 93% of overdue payments are overseas and about 21% of overseas borrowers
6. 0:46Speaker 1: haven't paid back anything for 15 years and have no payment plan. But is this like holding the country's young people to ransom? Is it their fault that there are
7. 0:56Speaker 1: more higher paid opportunities overseas?
8. 0:59Speaker 2: Today on the front page, Victoria.
9. 1:01Speaker 1: University Student Association President Aidan Donoghue is with us to break it all down. First off, Aidan, what was your
10. 1:11Speaker 1: first reaction to this policy statement?
11. 1:15Speaker 3: Yeah, it was a bit of a meh, as I've been saying. I think the real crux of the issue is they've increased our loans now by a third by the removal of fees free. And now they say, oh,
12. 1:25Speaker 3: don't worry, you can pay it back now slower. I mean, $ 20 a week, if you're making over $ 75, 000 a year, I mean, it's a benefit right there. So I won't
13. 1:36Speaker 3: complain about that. But that's above the average, the median wage of New Zealand. So what graduates going out and getting that straight away? I'm not too sure.
14. 1:44Speaker 1: Yeah, they want to cut the repayment rate from 12% that it is currently to 10% from April next year, but only for borrowers who stay in New Zealand. Do
15. 1:53Speaker 1: you reckon that's a big enough reward for people to kind of stay here?
16. 1:58Speaker 3: No, I don't think so. When you compare our opportunities or wages between ourselves or Australia or the UK, I don't think that 2% change or the 1% increase to
17. 2:10Speaker 3: the interest of overseas borrowers is going to make much difference to someone who's already got their mind set on leaving.
18. 2:16Speaker 2: Why are young people leaving?
19. 2:19Speaker 1: Are there more opportunities overseas or just they pay more?
20. 2:23Speaker 3: It's a bit of both. And I think one thing everyone's got to remember in this new world of technology, it's just as easy to apply for a job overseas as it is here. So you might as well cast
21. 2:33Speaker 3: that net out wide. And, you know, a four-hour flight to Brisbane beats an eight-hour drive to Auckland. So you might as well just look if you're going to be uplifting and rerouting yourself after university anyway. So for a
22. 2:44Speaker 3: lot of young people, it's just looking. It's very similar.
23. 2:47Speaker 3: It's very easy to get into Australia. And so... If the average wage is higher, that's a benefit. If costs are around about the same, it becomes the rational choice to look elsewhere.
24. 2:55Speaker 1: Yeah, I've been doing some research this morning just on SEEK just to see, you know, what different jobs are offering overseas. So I'll run you through a couple of them.
25. 3:04Speaker 1: Registered nurse in Griffith, New South Wales at Base Hospital there,
26. 3:08Speaker 1: they're looking at between $ 81, 000 and $ 114, 000 Australian, that's $ 98, 000.
27. 3:14Speaker 1: to 138 New Zealand. They've got salary packaging up to $ 20, 000 tax-free. They've got other incentives for that rural work. Here,
28. 3:23Speaker 1: registered full-time nurse in an Auckland aged care facility is between.
29. 3:27Speaker 2: $ 79, 000 and $ 100, 000.
30. 3:28Speaker 1: And one of the benefits is that you get training and it's a nice work environment. So, If you're looking at kind of stuff like that and you're young and
31. 3:38Speaker 1: you don't mind going to Aussie for work, you don't mind going living rurally for a little bit, why wouldn't you?
32. 3:45Speaker 3: Well, that's exactly right. Nursing is such a really good example.
33. 3:47Speaker 3: We've seen graduates struggle to break in with the hiring freezes.
34. 3:52Speaker 3: And you've got to remember, nurses do 1,000 hours of unpaid professional practice. And so they're not exactly super keen to, you know, wait, risk on their laurels and wait for the right job to come up. They need to start making money quickly.
35. 4:03Speaker 1: And I thought the incentives were interesting as well because it's not only the base salary that's different in Aussie, but you've got that, yeah, for example, $ 20, 000 tax-free, another
36. 4:14Speaker 1: hospital there in Melbourne. You've got salary packaging of up to $ 12, 000 tax-free. If you want to be a lawyer,
37. 4:22Speaker 1: you get 16% superannuation, things like that. So there are other incentives that Australia is offering that we don't.
38. 4:31Speaker 3: Oh, exactly. I mean, even the award system there, you get time and a half on weekends and the conditions there, and it's just not really comparable to New Zealand.
39. 4:40Speaker 1: What do you make about adding 1% annual interest for overseas borrowers?
40. 4:46Speaker 3: Look, yeah, it's just, I don't think it's going to, like I said, it's not going to change people's minds.
41. 4:50Speaker 3: The benefit of getting the higher wages and conditions outweighs the interest you pay. It's not going to stop you, really.
42. 4:56Speaker 3: And like you said, it's about the opportunities to not only get your foot in the door, but progress in a much larger system.
43. 5:02Speaker 1: Yeah, I thought it was kind of just like keeping young Kiwis at ransom, you know, if you better stay in this country and earn less or else.
44. 5:11Speaker 3: Well, exactly. And with this whole system of that we pave our own way and what sort of loyalty do we have, I guess, is a lot of students' kind
45. 5:20Speaker 3: of vibe is, you know, I'm doing this all myself.
46. 5:23Speaker 3: I haven't had that much support. What do I owe back, you know, the state in terms of they're not giving me opportunities, they're not giving me jobs. I'll look elsewhere.
47. 5:30Speaker 1: Yeah, and rent is high. You know, the cost of cheese is high. Cheese randomly is something that I bought at the weekend, so that's why that came to mind.
48. 5:40Speaker 1: It's high. You know, in Australia, you've got, like, lower grocery costs. You've got about the same. I mean, I was looking at rent in Auckland versus Melbourne, and it
49. 5:49Speaker 1: is a bit more. It's about 10% more in Melbourne. But, A, you're in Melbourne, right? And B, your salary is going to be, what, 20% plus more than what you would
50. 6:00Speaker 1: get paid in Auckland anyway.
51. 6:01Speaker 3: Exactly. I mean, there's so much more events happening. There's a vibe. You've got the Formula One. You've got Taylor Swift playing multiple times. It's just not comparable, really. You've
52. 6:11Speaker 3: got public transport, 50 cents on the trains, et cetera.
53. 6:14Speaker 3: There's so many different aspects of life in Australia that just kind of just outweigh the potential benefits of staying.
54. 6:20Speaker 1: So National gave an example of, so an accountant on $ 75, 000 keeps an extra about $ 39 a fortnight. A junior
55. 6:28Speaker 1: doctor on $ 100, 000 keeps about $ 58 a fortnight. For your members, though, is that enough to change decisions about staying in New Zealand?
56. 6:37Speaker 1: Or is it kind of marginal compared to, yeah, your rent, your groceries, your transport, childcare costs for some?
57. 6:44Speaker 3: Yeah, I mean, it's a drop in the bucket to the cost that we face. And as you say, those wages are just such a sweet deal. To stay is almost just the worst option.
58. 6:55Speaker 2: You're a young person.
59. 6:59Speaker 1: How far ahead do you think young people think fiscally? So, for example, are young people concerned about how much they're putting into their superannuation or their KiwiSaver?
60. 7:11Speaker 3: Uh, I'll be honest then, you know, um, not, not a whole lot. I mean, you have some that might have five, 10 year plans, but, uh, particularly around Kiwi State, but it's one of those things is like, I'm not
61. 7:21Speaker 3: worrying about that at all. I'm nowhere near 65 yet.
62. 7:24Speaker 2: Yeah.
63. 7:24Speaker 1: So when it comes to kind of, um, you know, those paying off his student loan faster or doing something, I mean, looking forward, uh, 10 years or so, it's kind of just not on a young person's radar.
64. 7:35Speaker 3: Yeah. No, I wouldn't say so, at least for the average.
65. 7:38Speaker 3: You might have some of those who are really, really onto it, which, you know, I thought then, and it's probably the right thing to do, but we're really talking about young people as a group. I would imagine not.
66. 7:49Speaker 2: Yeah, you've just got to think realistically, right?
67. 7:57Speaker 4: Yeah, I think they have chosen. I think you'll find in many cases that there is a job they could have done here at home. They're choosing to go offshore.
68. 8:04Speaker 4: People will continue to do that. That's been part of the New Zealand experience for a long time. But what we're saying is for those people who stay at home, they are contributing a lot more. They're paying tax. They're
69. 8:15Speaker 4: contributing to our workplaces. They're contributing to our community. We want them to have a better deal.
70. 8:22Speaker 3: Nicola, are you saying that for every graduate who wants a job in New Zealand right now, there is a job for them?
71. 8:30Speaker 2: Because that's not what they're saying. That's not what the numbers are saying. That's not what they're saying. In terms of.
72. 8:39Speaker 1: What National is saying, overseas borrowers account for 93% of overdue debt and only about 30% meet those obligations in a given year.
73. 8:48Speaker 2: Does this surprise you at all?
74. 8:50Speaker 3: No, I don't think it surprises me. I think there's always been a bit of a culture or at least a bit of an unsaid story around how much can the government chase you up if you're overseas and if
75. 9:02Speaker 3: you're willing to not ever want to come back to New Zealand, what's the point? And we talk about, say, the assets with KiwiSaver withholding. If your debt is maybe
76. 9:11Speaker 3: five to ten times what you've got in the KiwiSaver, it's almost profitable not to. That said, I do agree that those... that agreement was made, those payments need to be redone, particularly for those who stay in the country.
77. 9:23Speaker 3: It's not fair that we are always the ones, you know, accepted to pay and we can definitely be chased up on it. But as for the implementation of what they're suggesting,
78. 9:32Speaker 3: I'm not sure how well it will work. The debt collection, I think it was $ 5 million for Australia and the UK.
79. 9:39Speaker 3: I'm interested to see how that will play out, or $ 10 million. But I could not tell you what that really means for actual repayments.
80. 9:47Speaker 1: Yeah, what about arresting people at the border? Do you think that'll be enough incentive?
81. 9:52Speaker 3: Again, it's one of those things, if you never come back, you don't have to worry about being arrested, I imagine.
82. 9:57Speaker 3: So I think there's a real balancing act there where you don't want to lock people out who have done this wrong thing but might want to make up for it.
83. 10:06Speaker 3: And so there might be a concern of, oh, I'm a bit behind. I might just go the full fall away and just never come back and not look at coming back to New Zealand, because ultimately what we really want,
84. 10:16Speaker 3: if we are to lose people in the first place.
85. 10:18Speaker 1: How does it make you feel that Australian students, A, don't start paying back their student loans until I think they earn maybe 70k plus, and then even then it's
86. 10:30Speaker 1: 15 cents on the dollar, everything after 70k. That's number one.
87. 10:35Speaker 1: Number two, if you go overseas and there's no interest, it's just an index tax, you know, the index inflation kind of thing every year, but there's no interest.
88. 10:46Speaker 2: How do you feel about that?
89. 10:47Speaker 3: It must be nice, eh? I mean, particularly, you can still be studying, and if you hit that threshold, which, by the way, has been frozen, and so I think
90. 10:58Speaker 3: it's $ 464 a week before you start getting... You'll hit that at 20 hours of minimum wage. So even while you're still studying, you're expected to start making those repayments, which is so gut-wrenching for those students who are just
91. 11:09Speaker 3: trying to get by or do a little bit more so they can actually participate in society. So there's an open goal right there is to, you know, have a delay when you start making payments to at least two
92. 11:19Speaker 3: years when you finish studying. And as for the interest side of things, it's definitely something where it's just the carrot or the stick, right? We're trying to punish people
93. 11:29Speaker 3: who want to go off. And for our political leaders who themselves have said, I had a great time in my overseas experience in the US or UK, and I've learned so much, and I've come back to bring those skills back from New Zealand, to go ahead and punish
94. 11:40Speaker 3: those students who are trying to do the same thing.
95. 11:42Speaker 3: does wreak hypocrisy.
96. 11:44Speaker 1: So if the overall goal is to keep young talent in New Zealand, what are some other incentives that you would rather see?
97. 11:52Speaker 3: Look, I think a pragmatic solution is a bit of you stay in the country for X amount of years and you have debt forgiveness per year you stay on.
98. 12:00Speaker 3: And I think that's a way we can keep those talents of our nurses, of our lawyers, of our agricultural specialists or whoever that we desperately need in this country,
99. 12:09Speaker 3: especially in such an evolving economy. And I think the whole system needs a review on how we actually pay the university. We're paying the most ever, but even then
100. 12:19Speaker 3: it's 20% of the actual cost or whatever it is, and central government has to fund the rest. It's not sustainable, and universities aren't going to hit a point where they can't just keep growing with more students. So I think
101. 12:30Speaker 3: somebody at the table needs to really have a long hard think about, is this going to work 5, 10, 20 years from now? Or if we have another COVID or another... shock to our system where we can't get
102. 12:41Speaker 3: international students to fill that gap we're going to be left with no tertiary education system and if we're not developing our talent other nations will and we're going to fall behind.
103. 12:50Speaker 1: Other than wage differences so if you were studying to be I don't know what you're studying but if you were studying to be like a commercial lawyer or something and you're looking at the wages in Melbourne and I'm
104. 13:02Speaker 1: only saying Melbourne because these are the ones that I've looked up you're looking at Melbourne or Auckland right and it is you get a higher salary in Melbourne. What
105. 13:10Speaker 1: other incentives do you think that New Zealand companies can kind of offer to make that more level?
106. 13:18Speaker 3: Yeah, I think it's a lot around opportunities for professional development and growth and putting more responsibility on our new graduates.
107. 13:25Speaker 3: Give them a different experience that kind of takes them, you know, makes them look completely different to someone else on paper and really puts a New Zealand way about
108. 13:35Speaker 3: how we go about work. And I think that's, other than wages and conditions, I think that's kind of one of the few ways you can really go about it is to really just change how we go about things.
109. 13:45Speaker 1: How are students going at the minute in terms of cost of living and paying for rent and groceries and things like that?
110. 13:51Speaker 2: How is student life?
111. 13:53Speaker 3: Pretty poor. So we did a survey of about 1,300 students and we found that a third of them had missed a meal in the last two weeks or a third of them missed class because they couldn't afford the
112. 14:04Speaker 3: cost of public transport. In that same survey, 70% said they were already looking overseas. It's... There used to be– there's always the idea that you go through a little
113. 14:15Speaker 3: bit of poverty during student life and you'll get rewarded with a job at the end of the– and that's what makes up for it. But when that social contract of getting that job at the end has been broken, we're going to find, A, people aren't that keen to
114. 14:26Speaker 3: study anymore and will fall behind, but also, B, I'm just going to look elsewhere where those jobs are.
115. 14:31Speaker 1: I thought I heard Nicola Willis saying this morning that there are opportunities in New Zealand.
116. 14:36Speaker 3: I'm sure there are, but yeah, I'm sure the number is above zero, but as you know, particularly within say public sector or government work or policy. Wellington's been gutted
117. 14:47Speaker 3: for three years straight. And so particularly where we are, we're not competing just with other graduates or graduates who've gone back for postgrad and with masters. We're competing with people who have years of experience, who've lost their job
118. 14:59Speaker 3: and are just looking for something else. It's such a tough job market here. You have to look elsewhere, but there's only so many policy opportunities outside of the capitol.
119. 15:09Speaker 3: And that's just one example, but there are plenty other with, as much as it's nice to say on paper, you can go elsewhere regionally. Not every job works that way, and there are definitely hot spots where you can find work.
120. 15:19Speaker 2: Thanks for joining us, Aidan.
121. 15:20Speaker 3: No worries. Thanks for having me.
122. 15:24Speaker 2: That's it for this episode of The Front Page.
123. 15:27Speaker 1: You can read more about today's stories and extensive news coverage at nzherald.co.nz. The Front Page is hosted and produced
124. 15:36Speaker 1: by me, Chelsea Daniels. Kane Dickey is our studio operator, Richard Martin, our producer and editor, and our executive producer is Jane Yee.
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