Nash Stuart: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Nash Stuart: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9388] 
STUART NASH (Labour) 
: 
 Mr Chair I hope the reason you have given me the call last out of the Labour members who were seeking it is not that the Hawke’s Bay Magpies have beaten the Southland Stags the last two times they played. But I would not make any such assertions and I do not propose to. 
I have a question for the Minister of Revenue. He mentioned that the estimate of student loans on the book is about $10 billion. It would be interesting to know whether there is any qualitative or even quantitative research on the opportunity costs to society of not introducing interest-free student loans or student loans at all. I suspect that the value to our society our communities and our economy is a lot higher than $10 billion. I am not suggesting that the Minister said it was not but it would be interesting to know whether there is any study around that value. 
I will talk about a couple of the clauses in the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. Clauses 10(2) to 10(5) 13 and 25(2) cover interest-free student loans for residents from realm countries. This bill introduces an exemption for borrowers in realm countries from the requirement that they be present in New Zealand in order to qualify for an interest-free loan. The Minister talked about this exemption a little earlier but I think we glossed over it a little. The reason I think this exemption is so great and aspirational is that potential students do not have to make a commitment to first of all come to New Zealand before they can qualify for a student loan. It is one of the reasons why I am a little disappointed that the Greens are not supporting this bill. I understand the Green Party’s opposition to student loans from a philosophical perspective but within the legislative framework in which we currently work I think this bill moves us forward quite a long way and it would be good if the Greens could view it from within that legislative framework and support this bill for those reasons. 
This change reflects a special relationship that has been talked about that realm countries—I like the words “realm countries”; I thought they were quite outdated but let us keep them in there—have with New Zealand and aims to encourage borrowers who want to remain and make a contribution to those countries to do so. We have talked about the costs and benefits of globalisation but I think nothing is more important than empowering communities certainly within the realm countries mentioned here. If students can go back and contribute to their communities in a way that their education allows it can only be good for their communities and their countries let alone their own professional development. 
The key feature of this amendment relates to section 38AE of the Student Loan Scheme Act 1992. As mentioned it is being amended to allow further exemption to the requirement that borrowers reside in New Zealand. It means that borrowers will qualify for the interest-free loan if they are present in a realm country—Niue the Cook Islands Tokelau or the Ross Dependency—for 183 days or more. There is a little bit of a catch—well not a catch. The purpose of the amendment is to encourage those who want to live in and make a contribution to these countries to do so which is very important. Their student loans will be interest-free as if they are still living and working in New Zealand. My colleague Kelvin Davis said he was of an era where he did not have a student loan so it is hard to imagine. I caught the very end of student loans with interest and when I bought my first house the interest rate on my mortgage was lower than the interest rate on my student loan so I just tacked it on to the end of the mortgage. Thank goodness those days are over. 
I will talk about something else as well. The bill introduces an extension of the interest-free loan entitlement to students engaged in full-time study overseas under a formal exchange programme approved by the New Zealand Government or a formal agreement between a New Zealand education provider and an overseas tertiary education provider. It corrects an oversight in earlier legislation that disadvantaged certain borrowers studying overseas. Again this amendment brings us back to where we see ourselves in the world the whole area of globalisation and importing talents and skills back to this country. In the past—and there are members of this Committee who have done this—students went overseas to study and felt that their real place in society was overseas marketing their skills in different areas. This amendment allows them to come back and contribute to society in a meaningful way. 
Let us look at a bit of background on this amendment. Provisions in effect from 1 April 2000 to 31 March 2007 entitled borrowers who were resident in New Zealand for income tax purposes to a full interest write-off if they were engaged in full-time full-year study. Part-time or part-yearstudentscouldalsoqualifyiftheirincome was below a certainlevel. The student’s New Zealand tertiary education provider was required to confirm the level of study. As this had the same effect as allowing a loan to be interest-free when the extension of the exemption to undergraduate study was made it was considered that these provisions were redundant and they were repealed. There is therefore a gap in interest-free loans for some students who are or were studying overseas.