Nash Stuart: Student Loan Scheme (Repayment Bonus) Amendment Bill — Second Reading 
Nash Stuart: Student Loan Scheme (Repayment Bonus) Amendment Bill — Second Reading 
[Volume:657;Page:6308] 
STUART NASH (Labour) 
: 
 I stand to speak in opposition to the Student Loan Scheme (Repayment Bonus) Amendment Bill 2009. I want to make a point about something that the honourable member Allan Peachey has just talked about. This is Financial Literacy Week. Allan Peachey said he would always encourage people to clear their debt as fast as they can no matter what sort of debt it was. That is not the thinking of the current generation and let me tell members why. This generation knows that if one can leverage debt to make a higher return than the rate of interest one is actually paying then it makes sense to use debt as a tool to encourage economic growth and economic wealth. Debt is a very appropriate tool in many instances and if more New Zealand businesses had used debt to finance growth instead of selling equity and therefore control I believe we might not have seen the level of hollowing out of our economy to the extent we have. People have not used debt for economic growth; they have sold down equity. That is the attitude of my parents’ generation. 
I want to repeat a mantra I have been parroting ever since I came into this House. It is something that is fundamental to the social democratic philosophy that this Labour Party is built upon and it is that education is the cornerstone for economic and social development. In my office I have a poster on my wall with a quote from Malcolm X which states: “Without education you’re not going anywhere in this world.” It is education that empowers personal professional community and economic growth. It is a tool that provides options to young people and it is the food that fuels the spirit of ambition and aspiration. That is what education is. The powerful words previously quoted were from a man who discovered the value of education as a tool to open eyes that had been closed to open the ears of those who refused to hear and to open the minds of those who justified hate. I would argue that one of the most significant pieces of economic development legislation passed through this House in the previous 9 years was the passage of the Act that instigated interest-free student loans. 
Louise Upston 
: It’s called the biggest election bribe out. 
STUART NASH 
: Goodness me is the member saying that we should not have given interest-free loans to students? I will tell members why this was great legislation. It is because it removed the albatross of crippling debt interest payments from around the necks of thousands of students and allowed them to remain in New Zealand to pursue their chosen career without the need to head overseas to chase the pound in order to repay or in certain circumstances escape from a debt with no end in sight. 
I ask my Labour colleagues whether they know that members opposite voted against interest-free student loans. Can they believe that? National members voted against interest-free student loans. Amazing! Obviously most of them went through a university system that was free. In the case of Paula Bennett she received a training incentive allowance which she has since had removed. The irony of that decision has not gone unnoticed amongst the vast majority of people who would have been eligible for it as Paula Bennett was. 
Members opposite voted against interest-free student loans. It just proves once again that the Labour Party is the party of students and the party of sustainable economic growth. I say to Mr Quinn that when we talk about education and robbing the poor to give to the rich—[ 
Interruption 
] How can you justify— 
Paul Quinn 
: I raise a point of order Mr Speaker. I think he referred to you: “How can you”; that is what he said. 
The ASSISTANT SPEAKER (Eric Roy) 
: I think the member mistakenly may have done that; I just caution him. 
STUART NASH 
: How does Mr Quinn go out to his constituents and justify giving $35 million to private schools while taking away $13 million from adult and community education? I would like to hear the arguments in favour of that because there are no arguments. I can report that in Hawke’s Bay where I am based none of the high schools that were offering adult and community education will now be running night classes. Adult and community education affects around 6000 people in Hawke’s Bay and adds a conservative economic impact of at least $10 million to the region. That is value for education—a return of about $50 for every dollar spent on adult and community education. Does Mr Peachey want to know about financial literacy? Maybe that member should do the figures on the return from adult and community education let alone the impact of community personal and role model advantages. Getting rid of adult and community education is very short-sighted. Giving $35 million to private schools whilst taking $13 million from night classes is very definitely a mix-up of priorities. That is simply not fair. 
Phil Twyford 
: Perhaps it was a mistake? 
STUART NASH 
: I say to Mr Twyford that maybe it was a mistake. 
Phil Twyford 
: They couldn’t possibly have meant to. 
STUART NASH 
: Well I would not think so at all. However Mrs Tolley has been told by New Zealanders up and down the country that it was wrong but she just does not seem to have listened. 
Talking of not being fair I read that Bill English’s Tax Working Group has suggested raising GST to 15 percent so the top tax rates of 38 percent and 33 percent can be lowered to 30 percent. Watch out for the 75 percent of New Zealanders who earn under $40000 per annum! That is another story but it is certainly not fair. 
I return to this bill. Apparently this is Financial Literacy Week yet we had the previous National speaker Alan Peachey who was a headmaster at one of the top schools in this country supporting legislation that the Hon Trevor Mallard has laid out in black and white does not make economic or financial sense except in very small circumstances. Why would a student take up this option when in fact it does not make financial sense? It is unbelievable. 
The question is about who this bill will actually help. I can tell Mr Dunne that it will not help those who need it and neither did the tax cuts for those earning under $40000 per annum. This bill is obviously supposed to help students with loans but let me inform the House a little bit about the students who are taking up loans. This is from a 2006 report entitled  
Student Loan Borrowers: 1997-2004:  
“Those who had studied at honours level or higher in their last year of borrowing had higher rates of payment … than average. This could be attributed to higher levels of qualification leading to higher incomes. … This leads to a faster rate of repayments”. 
Well goodness me! Higher incomes faster rate of repayment—what about all those students who are studying for degrees that do not offer the higher rates of repayment? As well the rates for full student loan repayment were highest for engineering and related technology courses. Funny that—these are the grads who coincidentally earn the most money. Students enrolled in food hospitality and personal service courses had the highest median amounts of student loan. Those are not the jobs that bring in the huge dollars yet they are just as important to our economic growth and well-being as any graduate jobs. Why does National not do something for those graduates and workers? And talking of supporting workers I certainly hope that the National-led Government will support Darien Fenton’s “A fair deal in hard times” campaign and vote for her member’s bill that guarantees redundancy to ordinary Kiwis in our communities who have been unlucky enough to lose their jobs. 
A quarter of student loan borrowers in 2005 were enrolled in society and culture courses. Are we saying that those graduates do not deserve any form of tax relief? I do not know. The majority of borrowers identified themselves as European or Maori; however those who identified themselves as Pasifika borrowed the highest amounts. 
Another thing I would like is to tell Mr Dunne that my real concern is to know how the Inland Revenue Department will administer this bill. Has Mr Dunne asked his team about that given that National has cut close to 300 jobs at the department—300 jobs have gone from the Inland Revenue Department. The old saying “Don’t call us; we’ll call you.” takes on a whole new meaning. I ask Mr Dunne once again how the Inland Revenue Department will administer this bill. Anyway all I can say is that this bill is a nonsense. It does not solve anything and it does not favour even one of this nation’s students. Thank you.