Katene Rahui: Student Loan Scheme Bill — Second Reading In Committee 
Katene Rahui: Student Loan Scheme Bill — Second Reading In Committee 
[Volume:675;Page:20703] 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Tena koe Mr Assistant Speaker Robertson. It is a pleasure to stand and speak on the Student Loan Scheme Bill. In our family education is a big deal. My husband earned his PhD 2 years ago. He works at Massey University so he is very much into the academic world. It was 25 years ago when I started as a full-time student doing my Bachelor of Arts degree at Waikato University. I then switched after a year to turn my focus to law. Of our five children four are university graduates and they all have student loans to pay off.  
Going back to my situation who would have thought in 1984 when I started out at Waikato University that I would now be turning that study to practical effect and implementing law in these hallowed halls? In those days our concerns were about scaling down Maori. By that I mean that it was the practice to scale down the marks of students learning te reo Maori. There is an article by Jill Bevan-Brown that tells the story of a young man’s marks in Bursary Maori being scaled down from 94 percent to 67 percent. When his mother intervened she was told that the Government could not afford the cost of large numbers of A Bursaries being earned in the Bursary Maori exam. Yet the same degree of scaling down was not applied to other languages such as Russian and French. I tell this story because it is but one issue amongst a history of various blocks and barriers that Maori students have experienced in the transition from secondary to tertiary education. Such a history provides a vital backdrop to the Maori Party’s position on tertiary education and in the specific case of this bill on the student loan scheme.  
The Maori Party believes that tertiary education is a front-end investment in the nation’s future and should be freely available to all. It is from that basis that we seek to increase accessibility to tertiary education to ensure that all people have the chance to pursue tertiary education. So how does the student loan scheme fit into this framework? The Maori Party has tried very hard to ensure that sufficient attention is paid to student loan debt repayments. It has been our position that student loan debt repayments should start only when a student starts earning one and a half times the average wage. We have also recommended that there be a 5-year grace period for repayments after graduation. That is our core position so we have been on the alert to see how this bill which repeals the Student Loan Scheme Act 1992 the current student loan scheme legislation can be seen in that light. 
Significant points of the bill currently before the House are that it will increase the loan establishment fee from $50 to $60 and establish an annual $40 Inland Revenue Department administration fee. These would not seem to be aspects that we can support. Further when we read the submissions we see that the New Zealand University Students’ Association supports the current annual assessment of earnings to determine student loan repayment obligations rather than the proposed shift in the bill to pay-period repayments. 
The New Zealand University Students’ Association is concerned about the proposed move away from a simple annual repayment threshold to a weekly fortnightly or monthly pay-period system and is opposed to any increased obligations that borrowers may therefore face under this legislation. Its argument was one of consistency. A shift to a pay-period system is inconsistent with other tax obligations. PAYE payments are determined on an annual basis with a year-end square-up of income as is child support and Working for Families. Student loan borrowers should not be treated differently particularly if the Inland Revenue Department is supposedly aiming to improve systems and remove complexity for all parties. On this ground it is the view of the Maori Party that the increase in the loan establishment fee and the introduction of an annual Inland Revenue Department administration fee will have a negative impact on students who have student loans. Numerous annual reports from Te Tahuhu o te Matauranga tell us that Maori certificate-level students carry a larger student loan debt 5 years after study reflecting notably lower earnings. Maori with bachelors’ degrees or postgraduate qualifications also have notably higher average leaving loan balances than non-Maori. 
Yet some issues have come up during our discussion on the bill that warrant further investigation. The implementation of the policy and administrative reforms through a new loan management system has proven more complicated than the Inland Revenue Department expected so this bill is a genuine attempt to make implementation easier. The bill extends the exemption for full-time full-year students from having repayment deductions made from their salaries or wages to also include students who undertake the equivalent of a full-time study workload for part of a year students who start to draw down a student loan before their study commences and students who work over short non-study periods or the Christmas period and intended to study after that period. That is a step forward in terms of being prepared to factor some flexibility into the system which we see as positive if we are serious about supporting students to access tertiary education. 
This bill also rewrites the legislation governing the administration of student loans reforming the way student loans are repaid the way borrowers manage their loans and the way loans are to be administered. The changes allow borrowers to manage their loans electronically and allow the Inland Revenue Department to provide more services to borrowers. The students’ own association the New Zealand University Students’ Association has spoken very positively about this aspect of the bill. It sees that the expansion of online services and increased electronic and personal management of outstanding student loan balances will be of great benefit to borrowers generally and will be particularly useful for overseas-based borrowers. The introduction of a new electronic loan management system will enable students to monitor and manage their loans online. From accounts that has been received positively by students. 
One of the dilemmas that parties come to—well parties that have the option of voting on principle rather than just the party line—is that we oppose some parts of the bill such as the increased costs for students but we support other parts such as the incentive to be more effective and particularly to move into the information age. Our vote reflects this dilemma. Kia ora.