Tuesday, May 10, 2005

A place for TESS?

The Treasury has just released a request for expressions of interest to provide a Tertiary Education Savings Scheme (TESS). Doesn't it seem strange that the socialists would promote such an individualist scheme that runs counter to state welfare?

Why would our government be making such a move?

  • Reduce our exploding student debt in the long term by forcing families to save in advance.
  • They know that the cost of tertiary education is going to increase, and they see this as a means of transferring a greater proportion of the cost to the public.

Surely the socialist ideal is for the government to manage the funds - that way they have control over the tertiary institutions through funding. Is there something I'm missing here, or is this another case of the left picking up some ACT breadcrumbs and repacking it as their own?

After all, some of ACT's policy on Tertiary Education include: -

  • All students should have equal access to tertiary education regardless of race, and should be given equal support by the Government whether they choose to study at a private or public institution.
  • Students should contribute something towards the cost of their education, but should not be burdened with a debt which will take many years to repay.

To me, a TESS sounds like it is taking the debt option to its next, natural conclusion - getting people to save and pay for education in advance and not get into debt.

Personally, I've always been a fan of savings before spending, and I just hate getting into debt. So I think I agree that a TESS could be beneficial - depending on the details.

I do have a problem with the potential bureaucracy though. Why can't we leverage off the Superannuation Scheme and allow some of the same management structures to be used for both schemes - for example, an individual has multiple accounts, one for savings, one for education, and why wouldn't they go for health too? There just needs to be a bit more personal freedom in types of investments allowed.

That doesn't sound like something out of the left to me - but of course we don't know the details yet...

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