National has proposed to wipe student debts for new doctors who agree to work as rural GPs for 3 or 4 years.
This looks like the sort of subsidy that could easily lead to all kinds of unintended consequences that would be sub-optimal.
For example, if new doctors who serve in rural areas have their student fees forgiven, what would the impact be on people who might have instead trained to be surgeons or psychiatrists or much-needed oncologists or some other specialty?
Their desire to acquire the skills to enable them to provide advanced clinical care will be competing with the $100K+ debt load many / most will carry on graduation.
That is a HUGE financial DIS-incentive for new doctors to pursue any medical option other than going bush.
Can anyone else think of any unintended consequences of this policy?
Perhaps a scale of rescinding fees would be better, set according to the priority attached to increasing numbers in priority medical disciplines as well as geographic locations.
Member's Day
8 minutes ago
Surgeons generally make more than rural GPs so in the long term might be better off even if their loans aren't written off.
ReplyDeleteHaving said that, I'd be happy for the loan write-offs to be offered in any area where there are shortages, but rural GPs is a good place to start.
hp: My wife got her Masters at Law in the days when Uni tuition was $129 / year. I think it's criminal for baby boomers who benefited from near-free education to be stealing from their children as they are today by making them pay fees their parents and grandparents did not have to pay. These same kids are going to have to fund baby-boomer superannuation. Ireland invested heavily in education and retraining and its economy boomed. New Zealand talked about investment while running down its human capital, importing people instead of training and retraining locals.
ReplyDeleteTo me, the problem is doctors owing those huge debts in the first place. That oney goes to the banks - ultimately with interest. If those doctors had few or no debts, the could be paid less and be better off at the same time. We taxpayers would be saving money instead of shoveling it into the banks through taxes to pay higher saleries to doctors to then pay off the loans...with interest. The cost of educating a doctor today will be cheaper than paying them an inflated salary a decade from now doing it for decades.
You are right about the importance of education.
ReplyDeleteWhen uni fees were that low people were paying tax at 66c in the $. Given the choice between a loan over which I have some control about incurring and a lot of control over paying off; and really high tax for ever - I'd take the loan.
Let's not forget taxpayers still contribute more than 70% towards the cost of tertiary education.
hp: I paid that 66% for several years before Labour cut it to 33%.
ReplyDeleteImport duties were anywhere up to 120% on "luxury" items. Sales tax was up to 45% on the same items. Cronies of whoever was government - mainly National - got "import licenses" (to print money). Ah ys, I remember it well. Muldoon would be spinning in his grave if he saw his party now. LOL!
Low uni fees weren't the reason tax was at 66% over $30,000/annum, I'm sure. :-)
I'd rater pay a bit more tax and call it "retraining insurance" I can claim back if my industry evaporates due to changes in trade law leaving me high and dry at 45.