Petaflops and gigawatts
Fact or Fiction

Another muddle

In his Policy Address, the Chief Executive announced that parents of children aged 3 - 6 will be given an "education voucher" worth HK$13,000 per child to contribute to kindergarten fees.  The strange thing is that rather than using means-testing to limit the cost, they announced that some kindergartens will not be eligible - either because their fees are too high (there is a maximum of HK$24,000 a year or less for half-day classes, and HK$48,000 for whole day classes) or because they are profit-making. Also, they will only available for children with right of abode in Hong Kong (so tough luck if you pay taxes but aren't a permanent resident).

I don't see why the government should be concerned about whether a kindergarten is making a profit or not - after all, many government handouts end up in the bank accounts of commercial organizations, and some government services are contracted out to profit-making companies.  The government is fully entitled to monitor the quality of kindergartens, but if they are good enough then why does it matter whether they make a profit or not?  There have been some stories in the SCMP recently suggesting that the government was reconsidering this, but today Arthur Li has denied this

Anyway, what's to stop the owner of a kindergarten paying himself a large salary or contracting out some of the services to a profit-making company that he controls? 

I also don't see why there should be a ceiling on fees. Why should parents be denied the choice to use the vouchers on the kindergarten of their choice just because it charges higher fees? 

In addition, it creates another problem for kindergartens - whilst some will carry on regardless charging higher fees and survive because of their reputation, what about the ones at the next level down?  They will have to make a difficult decision - whether to cut fees to the government's figure so that they can accept vouchers, or tough it out.  If they do cut fees, it seems inevitable that they will also cut salaries for teachers.  Which is probably not going to help with the government's aim of improving the quality of nursery education - assuming that is what this is all about.

I think to have to agree with Milton Friedman on this one:

There is nothing wrong with having a voucher scheme but it has got to be universal and without restriction by anyone and by any kindergarten that satisfies the broad criteria, regardless of the income of the parent and the tuition fees of the kindergarten," said Professor Friedman in an interview. 

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