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Treasury calls for policy changes

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Thu, 02 Feb 2012 1:01p.m.

Treasury has suggested reintroducing interest on student loans

Treasury has suggested reintroducing interest on student loans

The Treasury has told the government it needs to implement "wide and ambitious" policy reforms to increase economic growth and meet its target of returning to surplus in 2014/15.

In a briefing paper to ministers, released today, it says new spending in future budgets will have to be less than in the past.

It suggests "further efficiency gains" in the public service, which usually means cutting departmental budgets and jobs.

"Policy changes are needed to increase incentives to invest and conduct business in New Zealand, raise productivity and minimise cost pressures," it says.

"This would entail a wide and ambitious programme of reform across government policies relating to education, welfare, tax, regulation, science and innovation, infrastructure and the management of natural resources."

The Treasury issues advice to ministers after elections, telling them what it thinks needs to be done to generate economic growth.

Its suggestions are often considered too radical and politically dangerous to implement.

Among its latest suggested measures are:

* Reintroducing interest on student loans, which the government has previously rejected.

* Using education money more efficiently by increasing class sizes and spending more on teacher training.

* Cutting income and company tax, which the government says it can't afford.

* Contracting out some welfare services.

* Making further reforms to the Resource Management Act.

NZN

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Comments

02 Feb 2012 05:55p.m.

Sam wrote:

Increasing class sizes? Are you kidding me?! Schools don't have enough space in their classrooms for more kids. That is the dumbest thing I have ever heard. Do you want your children to be educated because having 40 kids in one class is not going to allow that to happen.

02 Feb 2012 05:49p.m.

Cam wrote:

As a student I really don't have a problem with reasonable interest being put on student loans - it will make people think about whether university is really for them. But I seriously hope they don't consider increasing class sizes at a tertiary level. Smaller classes will not only benefit the students in them, but make the degree at the end more valuable. We need to be creating a more competitive university culture not simply pushing more people through the system. I understand that with interest on loans more students = more money for the government but that's an extremely short-sighted solution.

02 Feb 2012 03:51p.m.

Christopher Wingate wrote:

The lack of fiduciary laws is why we have a failing nation. For example, "Treasury advice to ministers is often considered too radical and politically dangerous to implement"- highlights that politicians are more concerned with self interest (keeping/getting their jobs) than the survival of our nation. Another $billion here and there to buy votes is their method of management. Little wonder people are pissed at this fictional structure we call democracy. My only hope is the fact that there has been a time in the evolution of everything that works when it didn't work. In the meantime NZ continues to slip downwards both socially and economically while at the same time the politician’s waste time fighting like poorly behaved children. While outside in the real world of struggling students, parents, business people and the retired, are seeing opportunity just slipping by as we all gasp for those last breaths of hope that common sense may arrive before it is too late.