When flagship policies start dragging the anchor

It is becoming quite the thing for ministers to drop potentially bothersome news in their portfolios while Prime Minister Jacinda Ardern is overseas. The hope seems to be that the media will be seen as churlish if they press Ardern on such issues while she is dealing with more important things like world peace, climate change and terrorism.

When Ardern was in Davos earlier this year, Phil Twyford announced he would not be able to hit the short-term target for KiwiBuild. It was to be reviewed and “recalibrated”.

It was effectively an admission that one of Labour’s key election policies was not delivering as advertised.

Finance Minister Grant Robertson has now taken advantage of Ardern’s trip to Paris to reveal a massive underspend in the Government’s “fees-free” policy.

Among $1 billion of “savings” ministers scraped together was almost $200 million left over from its fees-free policy.

That policy was to give all postsecondary school students free fees for their first year of study or training.

That $200m is a fair old chunk of the $340m the Government had initially

budgeted for it. As with KiwiBuild, fees free was one of Ardern’s key election pledges.

The savings were explained by Robertson as “due to enrolments not meeting initial forecasts”.

Robertson put this down to more jobs being available, which meant more people were going into work rather than training or higher education. The trouble is, thus far it is not only on numbers that the policy has fallen short but also in intention.

When the fees-free policy was first announced by former leader Andrew Little in 2016, it was seen as a way to boost the take-up of tertiary education and training.

It was to cost a whopping $340m in its first year alone, rising to $1.2b by 2024 when three years would be free.

It was the trade-off for scrapping National’s tax cuts — the first phase was to be funded out of the money earmarked for those tax cuts which Labour reversed.

When the mini-Budget delivered feesfree in December 2017, 80,000 students were expected to be eligible.

Of those, 30,000 (38 per cent) were expected to be at universities and 50,000 (62 per cent) at polytechnics and training institutions. By June, those estimates were revised down to 54,000. By October they were revised down again to 50,200.

Final numbers will not be known until January, but as of August, only 41,700 had taken it up and overall enrolment numbers had not lifted on the year before.

Furthermore, university students made up 56 per cent of those getting fees free — not the 37 per cent estimated.

It all gave fuel to the critics’ claims Labour was splurging for wealthier kids to get free education in areas such as law.

This was not helped by demographic data which showed Europeans benefited from it disproportionately.

When Ardern returns from Paris, she will be reunited with the dilemma of deciding whether to hang on to policies such as KiwiBuild and fees-free for the sake of pride and a promise when pragmatism dictates one or both might be better put to nigh-nighs and the money spent elsewhere.

Scrapping or downgrading either would be a major U-turn. What Ardern needs to weigh up — and fast — is not just whether the issues are simply teething problems which can be worked out. She also needs to take a good, honest look at whether the problems the policies are supposed to rectify still exist.

A government should and does have licence to scrap measures that are not working, especially if they are expensive.

U-turns on policies that were so critical to a campaign are never easy.

Former Prime Minister John Key’s U-turns were often based more on political danger than principle.

So the ill-fated plan to increase class sizes by changing the teacher-to-student ratios was promptly abandoned when it became clear it was too politically toxic for a massive group of voters: parents.

KiwiBuild is rapidly reaching that same politically toxic level. It was a solution to a particular problem at a particular time: affordable housing in a raging Auckland property market in the mid 2010s. That market is now subdued. Another of National’s U-turns was around the Auckland City Rail Link. Key had been dismissive of it, but in 2013 said he would back it. At the time, a Labour MP admired the wisdom of it, describing it as “the U-turn of the century”.

“John Key is the first man in history to do a U-turn on a train.”

That man was Twyford, now in charge of KiwiBuild.