Let's throw away Greenaway

July 14, 2000

David Greenaway has failed to realise in his report to the Russell Group that public spending on higher education is at least as good an investment for the government as it is for the individual (News, Soapbox, THES, July 7).

Greenaway argues that graduates command a wage premium of about Pounds 400,000 on average over a working life and implies that this provides no basis for the government to promote access to universities for all by increasing higher education's share of public spending.

Even if public costs per graduate are as much as Pounds 20,000, this is paltry in relation to the extra taxes the government will realise from the average graduate.

Using Greenaway's income figure, the extra income tax per graduate would be Pounds 160,000 and the VAT on after-tax spending of up to Pounds 240,000 would be up to Pounds 40,000 for a total of about Pounds 200,000. That is not bad on an investment of only Pounds 20,000. There is no other public spending that yields a comparable tax return.

Greenaway's assertion that it is the poor - from whom the government's tax return is negligible and who absorb much of government spending - who pay for the rich's tertiary education is somewhat wide of the mark.

Tim Curtin National Centre for Development Studies, Australian National University

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