Strings
If you look at just the people trained by ACE who are likely to get jobs as the direct result of ACE training, then the ROI of courses such as those being ridiculed appears low – below break even. If the tutor was previously unemployed, the investment is actually lower than it appears as you would save their unemployment benefit, and the tutor may benefit from the experience of teaching an easy course before moving on to teaching more difficult practical courses.

However if you take off the blinkers and look at the wider results of this type of training you may discover other worthwhile benefits, such as improved language skills amongst the students. Even learning how to organise their lives so they can get to classes is useful when they actually start a job and need to know how to get to that job on time. However the boost in the confidence of the students may be the biggest gain, allowing them to go on to other courses or – shock! horror! – apply for a job.

Trevor.

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Jarbury
That is indeed the point. When you look at ACE it is reasonably clear that there is NO TANGIBLE ROI on it. Ergo, it is a matter of personal choice and desire, and should be left to individuals to buy or not buy as they deem fit.

It would be interesting to look at a number of government costs on the same basis – particularly some of the demographic and gender based cost centres.

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My wish list? I wish Key would get on with building that cycleway! It seems to be on the never-never. I was about to suggest that he personally ‘turn the first sod’…then realised that he’s just done that! (goodbye Mr Worth!)

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>> Myopic Irritating Commenter

Asking how we pay for your wishlist is myopic?

BJ,

I hear what you’re saying, I just disagree. I don’t think people really care what the guy above them is paying, as long as the published tax rate is higher. What they really care about is their amount of take-home pay.

I’m all for flat tax, BTW. I’d even swallow a CGT, so long as they made it tax neutral.

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BP

They don’t know what the guy next to them is paying.

I think they DO know. It isn’t like the tax RATES are a secret.

Moreover, if you scratch this sore spot you’ll find that the “perception of inequity” is WAY more effective at motivating people to change their situation or protest, than the simple lure of a few extra bucks to spend. That’s not economics, it is human nature. If we are all suffering together but everyone is seen to be equally loaded, we system can tolerate a lot more before we start to b!tch and moan.

Which, by the way, also explains some of the attitudes we take to the folks who aren’t working but we think they should. Except that THEY can’t read, follow directions or believe that they can be paid for anything they actually have the ability to do.

As for the accountants… that argument appears in every country. The thing is that there are diminishing returns on both sides and an aggressive taxation department doesn’t necessarily pay for itself when it goes after wealthy folks… striking a balance is necessary so that the wealthy don’t reach for even bigger “hired guns”.

Sweden does reasonably well and has managed to make the marginal tax approach a monotonically increasing percentage of each additional dollar earned. We aren’t anywhere close to that condition. We could be.

Basically I don’t think that the tax would or should fall that heavily anywhere but that improving it would pay us something.

Not likely to be enough to cover the holes in the budget, but I think you’d be surprised at the difference between a “perception of unfairness” and a straight financial incentive, in motivating people to do something.

respectfully
BJ

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While out fishing on Frog’s pond, for a Myopic Irritating Commenter , I quickly hooked… a BluePeter ! Too easy and of no nutritional value, so I tossed him back!

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I don’t think the economy will miss a few hippies with their spinning wheels….

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With 2009 being the ‘Year of the Natural Fibre’, – chucking the weaving course for adults is a masterstroke from National! They just can’t help themselves, can they.

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>>people LEAVE because they feel they are unfairly taxed

It’s got nothing to do with “fairness”. They don’t know what the guy next to them is paying. It’s to do with having more money in their pocket at the end of the day.

>>That “brain drain”, the net migration to Oz and points beyond, that is a cost to the country.

Agreed.

>>We’ve set things up so that the people who ACTUALLY get off their butts and change stuff – THEY change countries

Yes. I did, too. I came back here to relax in semi-retirement. F**k the socialists, I say. They got everything they deserved.

You can’t tax the wealthy unduly. We have very good accountants

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Strings, well that’s the point isn’t it – you critique the ROIs for each programme and work out which ones provide the greatest benefit and which ones provide the lowest. That would be one way to decide how to “cut”.

However, if they’re all measured to have significant benefits then maybe you should look elsewhere to make your cuts.

Somewhat fortunately, governments aren’t that much like households. The USA’s debt after WWII was well over 100% of its GDP, yet it then launched into nearly 30 years of sustained economic growth.

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BP

Are you missing the point that Cullen missed? People LEAVE because they feel they are unfairly taxed. Not the wealthiest, but the folks in the middle. The most productive. The youngest and most vital. The best educated…. but not the wealthiest.

That “brain drain”, the net migration to Oz and points beyond, that is a cost to the country. The problem is that it is an indirect cost.

It isn’t whether it is “cost effective” to go after the wealthy on the basis of what THEY pay, but whether it is cost effective in terms of perceived fairness and what everyone else does with their money.

We’ve set things up so that the people who ACTUALLY get off their butts and change stuff – THEY change countries.

THAT is the price of the bogus tax regime we live with and I’d ask you to consider that price as you consider the cost of continuing to support the inequity. Cullen left before I could answer him. You however, are here.

In truth, if the wealthy are so negligible in terms of their contribution push the tax still further so that THEY are the ones inclined to leave and the more productive (still productive) folks in the middle stay. I think the wealthy won’t (mostly) leave anyway but I don’t really think it makes a big difference. You just told me it doesn’t.

BJ

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>>there aren’t enough people on the larger incomes to make a difference

There aren’t, BJ. And those that are there have the accountants to make it look otherwise. Too costly to go after, too little return.

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Well said, Strings.

The Greens have no answer.

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Folks
The challenge in the report is that they have determined that there is an indirect-intangible return on the investment, and then gone on to allocate a tangible value to the intangible benefit.

An example. It is suggested that learning bellydancing improves fitness and therefore health, and so ascribes an indirect benefit of reduced cost in the health system. However, the reduction will not be realisable as the ‘benefit’ will potentially be spread too thinly over the population to allow us to do with one less nurse or doctor or ??? other health professinal; hence it is an ‘intangible benefit with no financial value. What they then do is ascribe an “if consolidated” dollar value and claim it as a return. While it IS VALID in economic terms, it is NOT VALID in financial terms and so does not affect the country’s budget for public expenditure.

WHat does affect the budget is removing the subsidy from intangible benefit creeation, and leaving it to the individual to fund as they see fit.

In real terms, we have exceptional assets in our schools that are woefully under utilised. THe facilities sit unused for some 80% of the time (168 hours in a week, 35 teaching hours in a week, unused time = 133 hours. Doesn’t take into account holidays and vacations). Allowing these facilities to be used at no charge by adults in the community is socially responsible; expecting the users to pay for tutors and consumable items is socially equitable as it does not advantage the few at the cost of the many. Providing teachers of ESOL is a social investment as it facilitates higher output/productivity from those members of society not able to effectively communicate as adults.

I wonder how long any one commenting here would be able to survive spending 20% MORE THAN THEY EARN YEAR AFTER YEAR? I know I wouldn’t last two years!

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BP

There are tax changes that would work better than just cutting, and I don’t agree that more money can’t be had. It just can’t be had from the middle-class that has traditionally been milked dry in this country. If I graduate into a job that comes with an attached effective marginal tax of 62% and someone on 3 times my income pays tax at HALF that rate… something is very fncking wrong. I told Cullen and I wrote to English.

Cullen said there aren’t enough people on the larger incomes to make a difference, neglecting entirely the effect of the perception of fairness for
the people being squeezed. Those are the folks who leave for Oz. Which alters the tax take in a way he did not consider.

English hasn’t yet responded in any language.

respectfully
BJ

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“The most lucid comment I’ve read all day!”

Whatever. Better than being away with the fairies.

You tell me how we afford everything we want to do whilst running deficits, then?

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There’s a lot of truthiness about this discussion. The assumption is that all education endeavors will show positive ROI, but the report does not say that.

But lets say we can’t split it out. Too hard. So we maintain funding for the lot.

Fine.

What other education service will you cut instead?

We have limited revenue. We can’t afford everything we want to do.
We can’t go on borrowing. You can’t get more blood out of the stone by way of tax.

Your options are to cut services somewhere else, or grow our earnings.

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“I’m a right wing nutcase.”

The most lucid comment I’ve read all day!

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Actually Bp, having a look at the report, it doesnt say what you suggest at all. It clearly outlines a series of multifacteted benefits from ACE, including the reduced health, justice costs and increased economic returned from skill increase but also self esteem, community cohesion etc.

AS for benefitting the middle class predominantly, the report belies you.

”A feature of the return is that the profile of ACE participants shows a large proportion from a lower socio-economic demographic. Because of this, there is a greater marginal return in improving the outcomes for these adult learners. ”

So despite your various irrelevances above, the fact remains that the demonstrated ROI indicates substantial economic benefits from the range of course offered by ACE and that to cut them will cost more than it saves. It is economically an own goal, but works politically because the people who will lose out the most are the poor.

btw as for the hip hop tour, my understanding is that it was a kind of showcasing of NZ hip hop talent. Given the money made from NZ music, it was probably a good investment. I havent done the sums so cant say for sure. Youd never guess from the media beat up though.

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Not that I want to drag the argument on to the buyback of the rail system, but I imagine that in the long-term it was decided that buying back the rail system was a better idea than to subsidise Toll. Yeah they paid too much, but that’s last year’s news.

Think of investing in education as making sure you have enough money to pay for your bus ride into work. Even if you need to borrow money for that bus ride it’s still worth the while because once you’re at work you can make back far more money than what you spent to get there. The alternative is to say “oh damn I don’t have the money for the bus” and simply stay at home.

Point being that if you have a good enough return on investment it can be worth stretching yourself to pay for it. Though, as I’ve said above, I think it’s definitely worthwhile questioning whether the return on investment is actually good enough to justify what you do.

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