WE’LL hear a lot about ‘fairness’ in the next week and a half or so.
That is what happens at Budget time, in good times and the bad. So let us get the fairness discussion out of the way right now: Nothing that happens next Tuesday afternoon will be fair.
Not even the government is pretending that what they are doing is fair. The cuts have been going on for so long and they have been so deep that the only aspiration of Ministers and their officials is to get through to the other side of the Budget without making a U-turn.
This is the political equivalent of that old game of ‘Operation’, where the objective is to remove vital organs from a patient without touching the sides and setting off a buzzer.
Many of us who are arguing for the protection of aspects of government spending have been trapped into a circular discussion about why our issue is more worthy than another.
The cuts aren’t going to be visited on those who caused this crisis because we can’t go back five years and unpick the bank guarantee.
Cutting the Student Maintenance Grant next week would be unfair, of course. But it would also be profoundly stupid and completely counter-productive.
Taking a scalpel to the payment might save a couple of million from the creaking Education Budget, €2.2 million for every 1% cut, but it would cost the Department of Social Welfare an extra €6 million in a full year.
Now, in the overall scheme of the economic morass we find ourselves in, €6 million might not sound like a lot of money. But, as a principle, cutting something to save money and immediately costing yourself three times more than you wanted to save is not very intelligent.
The grant system is not perfect, but it is the main support we provide to ensure equality of access to third level – to get people into college that otherwise wouldn’t have a chance. Last year, more than 75,000 students and families were supported by the maintenance grant in some form or another.
The grant has been cut, either in rate or in threshold, in each of the last four budgets. It has been pared to the bone and beyond.
At the same time, the cost of college is increasing. A recent survey by the Irish League of Credit Unions has shown that the cost of college has increased by six per cent in the past two years. Rising costs, rising rents and reduced supports are hitting families hard.
The average grant payment is €84 per week, far lower than the €188 threshold paid to social welfare recipients. Although not designed to meet the full cost of college, squeezed family incomes and a shortage of part-time jobs mean that living on just €84 a week is a reality for many students.
In 2011, officials in the Department of Public Expenditure and Reform wrote that “any reduction in the rate [of the maintenance grant] would impact most severely on students from the least well off backgrounds and possibly even contribute to an increase in rates of dropout, which would negate the overall investment made by the state”.
A young person on the dole costs twice as much as a student on a maintenance grant. The average grant recipient costs the state €3,276 per year. The average young person (under-25) on an already-reduced dole will receive €7,320 in Social Welfare payments.
So every young person who drops out of college and can’t find work costs the state €4,000 a year more than their student grant would.
According to research by the ICLU, 84 per cent of families are already struggling to meet the rising costs of third level education. Any further cut will push these families over the edge. If only 1 in every 100 students is forced to drop out and ends up on the dole (a conservative estimate), the social welfare bill will cost €6.1 million more than the cut in the grant would save.
This is the cost of a potential cut in the next year, but the long-term structural costs will be far greater. A third-level graduate will pay far more tax over the course of their career than a non-graduate. Putting third-level education out of reach of the most disadvantaged will create structural inequalities that could last for generations.
In next week’s Budget, the Government has a choice. It can cut the Student Grant, which will cost millions and hurt families in the short term, and create serious structural problems in the long term.
Or it can protect the most vulnerable students and ensure they are supported through third-level and into employment. We cannot rebuild our broken economy without the well-educated graduates need to drive growth.
It’s not just about fairness. It’s about the economy. Let’s not be stupid.
