Secondary and Tertiary education and opportunity: Why fund them differently?

By Matt Nolan 25/09/2014

Note:  Eric has written a much much better and more detailed post here – my post is just a knee-jerk expression of how I consider the issue, and the types of broad principles we need to think about.

One thing I missed during the election was the debate about whether government should pay for tertiary education.  There were a number of people saying “we pay for kids to go to secondary school, why not pay for them to go to university?”.

We have to be clear about why we treat these things differently in order to answer this question – it isn’t just about cost, it is about equality of opportunity.

We fund secondary education as we believe it constitutes a minimum level of education and investment in ALL individuals in New Zealand – a level that is required to give people a fair crack at life and civic engagement.

We do not believe that tertiary education is required for all roles, all types of engagement, and for all people.  As a result, we are instead subsidising a group of people who will undertake this type of education (and receive the return associated with this investment) by taxing those who are not interested in this type of higher level study.  In other words, it is a transfer of resources from people on lower incomes who are less willing/able to take on higher education to those who (over their lifetime) will be on high incomes.

Secondary school education is paid for (and correspondingly compulsory for a long period) to offer opportunities.  Tertiary education is not as heavily subsidised, as we are generally against regressive income transfers.  We already subsidise it to a LARGE degree on the basis of assumed spillovers, and we offer interest free loans on the basis of “equalising opportunity” – but larger subsides would largely be a transfer to the rich hidden in the language of “transformational change” … just like industrial subsides to capitalists.  I find it perplexing that people view such regressive transfers as “left wing” ….