The economy is in a precarious position at the moment. Consumer confidence needs to rise to stimulate the economy proper before we get back on track. Confidence, by the last count, has hit an all time high. What needs to be the logical next step is that confidence turn into consumer spending.
The best way for consumers to spend their money is on those goods and services that both stimulate small and medium business and that insert the money directly into the economy. The best way for that is to go to restaurants, clubs, bars, buy electronics and accessories, and buy food and produce. It is not to get a mortgage, buying a house, getting a car loan (though buying a car might be helpful), or saving it (though, in the future, saving money will be important to reducing national debt).
The most spend-thrift demographic, I image, would be the 15-25 bracket. University students, 18+, would make up a good chunk of this group in Australia.
Now, assuming that universities levied a full $250 ‘union fee’ (which is what it is) to every university student. Going on 2006 numbers (because that’s the most recent I could find and as far as I was prepared to look), there are 957,176 people enroled in university, rising at 1.3% a year would be an increase of roughly 30,000, taking the number to near enough to 990,000. Let’s run with that.
If each student was hit with the $250, that would be $247, 500, 000 spread across the country.Not exactly a small sum.
This time, you were able to HECS the fee. So on one hand, for the students who can afford to pay it up-front (whether it be full fee paying or people who pay the sum at start of semester), you are sapping out money from their pocket, which in turn is preventing them from spending the money when the economy needs it. And students who can afford to pay it up-front are the sort of students who are likely to stimulate the economy with their money simply because they can afford it. $250 is 50 McDonalds meals (one a week for just under a year), 10 cheap nights out (nearly once a month for the year), 5 meals in the city, 17 DVDs (@ $15/DVD), or a television. That’s one students. Imagine if all 990,000 were to spend it like this? That’s 49.5 million McDonalds meals, 9.9 million cheap nights, 4.95 million meals at city restaurants, 18.8 million DVD sales, or a tick under a million television sold.
Ok, so not every student in the 990,000 will, or can, spend their money like that. Understandable. But even cutting those numbers in half, or into quarters (whatever the ratio is), I still want to ask this question: Is our economy better off with that much less expenditure in those sectors?
On the other hand, you are increasing the HECS debt of students, which means they have to pay off their debt over a longer time, which prevents graduates from spending the money in the future. I want to highlight this group because we all like to read about the ‘struggling students’ – the people who can’t make ends meet on their income, on Youth Allowance, etc. I have some sympathy for them, don’t get me wrong. But if we want them to be able to, you know, afford to live why are people for taking away more of their money? If they had $250 more, where do you think their money would be going? Buying food and drinks would be a start – a great investment for our economy. And, because these people are sturggling so, they would spread each and every dollar further. Next would be paying off their bills – which enables them to spend the money they’ve saved there elsewhere.
Ok, so if the HECS it, they have to pay it off later. Four years is an extra $1000 on their degree. What’s that over repayments? How many extra weeks is a graduate going without money that they could be spending otherwise? How is increasing student debt a good thing? Ok, so you’ll get the argument that there shouldn’t be debt in the first place (not an argument I subscribe to at all). There is debt, and that’s the reality of the situation. That retort is redundant for this argument.
So by not imposing this fee, the economy gets more injection of capital, people spend more, jobs are created (or maintained as is the case), it helps the small and medium business to grow, which in turn creates jobs, which provide more job opprotunities for everyone – even the university students who need to earn income to pay for university and to get living money! – which creates more spending money for people ….. are we seeing a cycle?
Is it really worth making university students pay for:
- Sport and recreation facilities that a small (certainly not a majority) fraction of students use
- Subsidise clubs and societies that have political agendas, cultural agendas, and which numbers run into resounding (/sarcasm) double figures in most cases
- Maintain buildings that could be self sufficient if they charged rent to companies to have stores there
- Pay for a university bar where louts, larrikins, and bludging students (see: Arts students) go to get drunk
- Pay for advertising for rallies and campaigns that should come out fo club and society members’ pockets
when the benefits of not hitting students up for the fee would actually benefit a larger proportion (the entire population no less!) of Australians?