Wednesday, November 08, 2006

Campbell's $1,000 baby gift weird policy

VICTORIA - I can't think of a more curious recent policy idea than Gordon Campbell's plan to give every baby born after this year $1,000 towards post-secondary education.
The government will hang on to the money, the premier told the enthusiastic Liberal party convention crowd in Penticton.
When the babies make it out of diapers and through high school, they'll get the money with interest. Figure something like $2,000.
The $41-million-a-year plan sounds great, but it's a very odd bit of public policy.
Campbell has decided, inexplicably, that a tuition subsidy for students starting their post-secondary education in 2025 is a spending priority today. Not fixing more knees this year or homelessness or cutting taxes, but aid for individual students 18 years from now.
Think about that - a government that believes it can predict needs decades into the future. Better yet, cast your mind back the same distance in time to 1987. Could then premier Bill Vander Zalm have made a sensible spending commitment aimed at the needs of British Columbians today?
The world is changing. What if post-secondary education is free in 2025? That's not really such a far-fetched notion as we shift to a knowledge-based economy. The forest industry will still be in the fallow years following the pine beetle disaster. Other resource industries will be substituting technology for labour and expecting higher skill levels from employees. Manufacturing and service jobs will have shifted to Asia and other emerging economies.
It may well be that it makes economic sense to provide free post-secondary education.
But leaving that kind of problem aside, how can Campbell possibly decide that students' needs will be greater in 2025 than they are today?
That is what he's saying. The government could take the money it's tying up and invest it in help for students right now - bursaries or education credits or tax breaks. It could expand apprenticeship opportunities or college spaces. It could pour the $41 million into improving First Nations' dismal high-school completion rates.
Instead, it's decided the educational affordability problem will be greater in 2025.
_That's odd. The Canada Millennium Scholarship Foundation released its annual study on student debt last week. About 60 per cent of students graduate from _university owing some money.
The debt burden for B.C. grads is the second highest in the country. They owe an average $27,675 by the time they get their degrees.
That is, even today, a painful debt burden for a 22-year-old. A beginning teacher, or social worker, or nurse starts out life paying the government $360 a month for nine years.
The average debt for B.C. students has increased 39 per cent in the last three years. The cost of housing, soaring tuition and cuts to grant programs have all played a role.
But the premier figures things will be even tougher in 2025.
It gets stranger. Campbell promised the future money to every child. If the children's parents are billionaires, they'll still get the $2,000.
Which seems a poor use of public funds. A smart program would target bright kids who couldn't afford an education and worry less about the students who are already guaranteed one. It would look for merit and need in an effort to provide the greatest payback.
It is, in short, a strange idea, and an expensive one. The program will only cost $41 million next year, but what government is going to stop it? By 2025 we will be over the $1 billion in mark in money held in trust.
What's really worrying in all this is more fundamental. The $41-million cost isn't a big deal in the context of the provincial budget.
But it's real money. Our money. We expect the government to use good judgment and sound analysis in spending it to meet real needs.
And there's no evidence that happened in this case.
Footnote: There are a whole of questions unanswered about this notion, further evidence that it's more ploy than policy. What if a child moves out of province months before graduation - does he get the money? Or if most of her life is spent somewhere else? What happens if a student decides to wait several years before starting college or university?


wstander said...

I suspect it is an ideologically driven stalking horse for expanded use of "private accounts" to fund education and health care in the future. Having put in the seed money to establish the account, it will be up to the citizen to make his account grow using his or her own funds. It sounds something like Bush's so far discredited attempt to replace the existing Social Security program in the US with private accounts.

Anonymous said...

Without input, without discussion, another out of the blue and ill-conceived announcement. The fans cheer! Just the administration of such a program will eat up dollars that could be invested in the students you see in classrooms right now, today.
Having two sons attending university (4th and 6th years) I can tell you that Campbell's policies with regard to post secondary education have only hurt young (less well off) British Columbians, while helping none (except perhaps the children of those who have enjoyed 5 figure tax cuts these last several years).
I agree with the first poster and would add that every policy of Campbell's has been ideologically motivated, to hell with the repercussions on the lives of real people here and now.
I thought that when the economy improved, so were services and programs also to be enriched and improved.
Here is a leader who ignores or even exacerbates the problems of students today, and pretends to be concerned with the welfare of those that are not yet born?
Who is he kidding?

Anonymous said...

As a parent, I'd much rather see the Premier spend that money today, on starting to live up to his promise to seismically upgrade all BC schools in the next 15 years.

That way, we'd at least have some confidence that we'd have school children left to attend university in 2025 if the Big One strikes in the intervening years.

Anonymous said...

In our family we have seen three grandkids getting hosed by Campbell on tuition. The previous government froze the rates so our grandkids could afford to get into University. Their parents are farmers. The kids start in the fields a a very young age and get paid for their work. Boy do they ever know the value of a buck. As Tuition rose so rapidly, the middle one did summer school as well in the last two years as she fully expected the rates to rise again. She is now a teacher and is paying taxes at a higher amount that if she had ended in a fast food joint.The youngest is in first year and the oldest did his masters' in small bits. Full time emplyed in media.

This policy will do nothing, the money will disappear, and those kids who don't have the family support, as so many can't afford it, will not go to higher learning. The system just had to change when Gordon took over because the hated NDP had brought it in to give kids a hand up.
a quick look at the sudent loan program would see kids with massive debt well before they graduate
Smoke and Mirrors and another vision from Gordon

Anonymous said...

Several years ago I heard of a concept to have all post-secondary eduction be free (though the students would have to keep up a certain grade level). The idea was to add a 1% income tax to those students after they're generating income, for the rest of their lives. Paying 1% of your income is a lot easier to swallow than a huge student loan payment -- even if it is until you die (or maybe hit 65?). Grads who make less money would pay less, and vice versa, i.e. community newspaper reporters vs. orthdontists.
I'd rather see $1000 put aside for each baby to be kept in an RRSP until 65. With compound interest for 65 years, that would be a great help to those who are unable to contribute to an RRSP or who don't have company pensions.