Published on interest.co.nz (Auckland), 8 February 2016

The flagship policy in Labour’s ‘State of the Nation’ speech was the announcement to roll out three years of free tertiary education should Labour get in power at the next election. It is good politics since it will increase the party’s appeal to young people – and probably also to their parents.

Whether it is good policy is an entirely different matter. I have my doubts.

Before anyone calls me a hypocrite, I should start with full disclosure. Since I received all my education in Germany, I benefited from free primary, secondary and tertiary education. I even got more than three years’ worth of free university education, all the way to my doctorate.

And it is not despite but because of this personal experience that I reject the idea that tertiary education should be free. That is because it made me experience first-hand what it does to universities and their students. So read the following as my personal reflections on free tertiary education and not an analytical policy piece.

The first thing I would say about free education is that it suffers from a basic flaw: If something does not cost anything, it is not valued much either. What it means in practice is that when university courses are free, students will think about them differently. Some students may begin their studies without much commitment because, well, it does not cost anything. They might also then take a more relaxed approach to studying since, again, it does not cost them anything (other than opportunity costs which are harder to notice). With this attitude, these students may not even bring their studies to a conclusion.

There was plenty of this behaviour on display when I studied economics. At my university, you were supposed to receive your Diplom-Ökonom (equivalent to a master’s) after 9 semesters. However, the average time a student at Bochum University took when I was there was 13 semesters. Today, more than a quarter of students enrolled for a bachelor’s degree in Germany quit their studies before receiving it.

Of course, there are plenty of reasons why students can fail but a lack of proper reflection on what they really want to study and a lack of discipline caused by the fact that education is free are probably among them. The other issue I noticed was that as the recipient of something free, you are not in the best position to demand better service. As a paying customer, suppliers need to treat you better if they do not want to lose you. If customers are not paying, they may well be regarded as a nuisance.

Of course, not every lecturer or professor whose courses I attended was bad. But it is fair to say that most of them did not regard students as their clients. A great exception was a marketing professor I very much enjoyed but his client-focussed thinking was what he was teaching anyway. He only practised what he preached. For many of his colleagues, you sometimes thought they would enjoy their jobs much more if only it was not for the annoying students.

For a university to be run like any good service provider, it should think about its students as clients. And for students to take their studies seriously, they should be paying for them. Of course, for students who cannot afford to pay the fees, there need to be financing options. But university education as such should not be free.

Finally, as someone who has successfully completed a master’s and a doctorate, of course I have a much greater ability to generate income than someone without such qualifications. So the question is, why would I expect that other person to subsidise me? What right do I have to demand people with poor skills in low-wage jobs to pay for my university education that would yield me a much higher income than they would ever have? Isn’t this grossly unfair for them?

Free university education is not just middle-class welfare. It is actually the reverse of income redistribution: from the bottom to the top. It is not a progressive but a regressive policy. As such, it is surprising that it is proposed by Labour. As I said, these are just personal remarks on Labour’s proposal. I do not doubt that there are some genuine policy considerations behind the announcement.

Of course, Labour is right that in a fast-changing labour market, qualifications are important and that education policy should enable New Zealanders to participate in the ‘future of work’. With its proposal to make three years of tertiary education free for all, I just don’t think Labour will get us anywhere nearer that goal.