Axe interest free student loans says Brash

Don Brash has suggested the government axe interest free student loans in order to assist in paying for the Christchurch re-build.

Former National Party and ACT leader Don Brash says the Government should use the increased cost of the Christchurch rebuild as an excuse to ditch interest-free student loans.

Prime Minister John Key yesterday said the estimated cost of rebuilding the quake-hit city was now $40 billion, up from $30 billion in December. The direct cost to the taxpayer has been bumped up by another $2 billion, but Mr Key said this wouldn’t impact on the Government’s plan to get the books back into surplus by 2014/15.

Speaking on Firstline this morning, Dr Brash said the last Labour Government introduced “a number of very unfortunate spending programmes” which should be cut back.

“National criticised those… but has left them all in place,” he says.

“You’d think with the Christchurch earthquake costing the Government itself an estimated $15 billion, they would have used that to explain to New Zealanders why some of those programmes have to change.” 

The interest free student loan bribe was a particularly egregious election bribe by Helen Clark, and it worked. Unfortunately all the warnings made at the time have come true, and student debt has ballooned massively.

Dr Brash said cutting back on interest-free student loans and superannuation would also offset inflationary pressures additional spending would bring.

“If the Government says, ‘Look, we’ve got to spend more in Christchurch, therefore we have to spend less on interest-free student loans or New Zealand Super’ or whatever, that of course would offset the increased inflationary pressures.

“One of the headaches right now is the export sector is being squeezed, and has been squeezed now for quite some time, in part because government spending has been quite strong, and it’s kept the economy more buoyant than it would otherwise be.”

Despite calling interest-free loans a “big electoral bribe”, Dr Brash says “most people” would now support cutting it back.

“I don’t think there was any ever any great policy justification for waiving interest on student loans,” he says.

Cut it. Now. Time for students to ante-up like the rest of us and take a haircut in order to assist the economy to recover.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story.  And when he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

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