Dunne Peter: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Dunne Peter: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9389] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I will take just a brief call to respond to some of the questions that have been raised since my last intervention on the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. Mr Hipkins raised some questions about the repayment threshold and the decision that was made late last year not to increase it for this year. There are a couple of things I would say in respect of that. Firstly members will see that the bill introduces a much more transparent set of provisions for setting the interest rate that is to be payable where required and that was because I felt that the previous system allowed for a bit of manipulation. This is a clearer and more transparent way of doing it. However with regard to the determination of the income threshold although the member might be able to make the same argument in practice the reality is that some other factors also have to be taken into account. My recollection is that when the calculation was done last year as to what an increase might be given other movements that had taken place it was very minimal. Although there was a cost of around $9.6 million or something of that order which I think the member quoted from my statement the actual benefit per person was from memory something in the order of a few cents per week. On that point given the economic circumstances and the practicality we decided not to proceed. We will have to go through the same calculation at the end of this year and obviously take this year’s circumstances into account in setting that. 
Mr Robertson raised a question regarding the hardship provisions and also a general question with regard to keeping people informed of changes. I want to be absolutely clear about the hardship provisions. They take us back to where we were prior to an unintended amendment a couple of years ago. The 15 percent rate issue which the member also spoke about will be applied only in circumstances where the borrowers are in New Zealand and are receiving wages and salaries. It will be taken on a case by case basis. This decision is not arbitrary; it is designed to deal with that situation when we are fairly certain that people are here but not paying what they should pay and there will be the capacity for the commissioner to draw attention to that. 
All of that leads me neatly to the next question that Mr Robertson raised when he said that that was all very well it was a good idea and he supported it etc. but then asked how people would be kept informed about it. I think that is a critical question. Over the last couple of years we have been tending to make much more use of interactive technologies to draw borrowers’ attention to their responsibilities. I remind the member that when we did the work in 2007 to try to get a handle on how many overseas borrowers there were we used popular websites like the  
New Zealand Herald  
website—we put sidebar advertisements on it—and from memory the Stuff website because they are sites accessed by people overseas. A lot of that will continue. The usual work in drawing borrowers’ attention to the new provisions at the time they become liable will also continue. 
Again I will just conclude with the comment I made in my first intervention. Once we change the whole system and the way in which it operates to become much more interactive over the next year or so then a lot of these things will become much easier to resolve.