Govt on track for savings plan

The Government says it is forging ahead with plans for a scheme to encourage savings for tertiary education.

Finance Minister Michael Cullen said yesterday a Herald report that the scheme was being dumped totally was wrong - although he confirmed it would not be part of the Budget's savings initiatives.

On Monday the Government confirmed the tertiary savings scheme was being dropped from the Budget because of "design problems", which the Herald interpreted as it being dropped altogether.

But Dr Cullen said yesterday "further proposals" would soon come forward on the scheme and it could be announced before the Budget.

"The issue is always could you have an integrated [savings] scheme or should the tertiary scheme stand alone.

"I think fairly early on we came to a clear view that the tertiary scheme could be stand-alone and couldn't easily be fitted into a work-based savings scheme."

United Future leader Peter Dunne yesterday urged the Government to press ahead with designing such a scheme. He said it was unacceptable that the country burdened graduates with high levels of student debt just when they were beginning to contribute to the workforce, buy their first homes and start a family.

However, the New Zealand University Students Association and Association of University Staff oppose a tertiary savings scheme, arguing it will lock in user pays when they want the state to keep funding tertiary education.

United Future's recently-announced education policy includes a voluntary scheme allowing parents to save for their children's tertiary education from birth, drawing on contributions from relatives, the children themselves, charitable foundations and "appropriate Government incentives".