Clark David: Student Loan Scheme Amendment Bill (No 2) — First Reading 
Text is incorporated into the Bound Volume 
Clark David: Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Sitting date: 20 September 2012. Volume:684;Page:5543. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Labour will support the Student Loan Scheme Amendment Bill (No 2) because it makes some sensible small steps towards the fair collection of student loans. We will support it going to the Finance and Expenditure Committee so that we can examine some of the issues that we think need to be picked through more closely. 
Firstly I want to relate some comments to an issue raised by Mr Young about the way in which indebtedness blocks opportunities for employment. I take issue perhaps with that generality because the student loan collection system effectively works as a tax. We know that the tax rate going up is going to mean that those students who are new out of their studies will have fewer resources at their disposal and that goes to really simple things like buying appropriate clothing for the job be it a suit and tie—as in this occupation—or some gear for a job that involves a bit more physical labour and also of course having the ability to photocopy curricula vitae or to put gas in the tank so as to get to interviews. It is not quite as simple I think as Mr Young depicts it in that regard. 
The tertiary sector as we know is very important for social good in our society. It is the critic and conscience of society. Those who study take on a responsibility I believe to contribute back to society. That is part of why we as a country choose to contribute towards the costs of study through the student loan and student allowance schemes. We believe that it is the right thing to do we believe that it is the fair thing to do and we expect our citizens to give back of their best to the future of this country. I think that is a fair expectation. “Fairness” is a very important term for the Labour Party in this respect. The word “fairness” appears often in the explanation for this material and in the publicity around the changes that are proposed. I guess I want to see the changes that this Government is looking at go a bit more broadly so that they actually do begin to address the issue of fairness in greater depth. 
I contend that this bill is in fact by and large tinkering. Because most of the tinkering is positive tinkering Labour will be supporting it going to a select committee. None the less it does nothing to address the big issues in the sector. We know that access is dropping. Under this Government 25000 people have lost eligibility for student support—25000 people—in a situation where unemployment has been rising. We know that there are nearly 50000 more people unemployed under this Government. We know that 50000 people each year are leaving for Australia. We know that opportunities here are limited in a way that they should not be if the Government had more leadership. But we also know that it would be sensible in these times to make accessibility to tertiary studies a priority particularly for our younger folk. We see here that this is becoming less and less the case under this Government as the thresholds around student support become more stringent. That means that the wealthy of course can afford to study but those who are from more modest backgrounds of modest means can no longer access courses in tertiary studies to better themselves to become future taxpayers and contributors in the way that they once could. 
Mr Speaker I am trying to restrain myself because I can hear my own echo. The sound system today is very very loud but it is keeping me quiet so you will be pleased to hear that. 
The other issues of course that are not being addressed through this legislation or elsewhere by this Government include the issue of capital debt—you know those other things that would help our economy grow such as a pro-growth tax policy and research and development tax credits which of course require not only the right incentives for business but also strong graduates. We need our best and brightest to be able to access our tertiary system not just those who can afford it. We need to make sure our education system is accessible to everybody and particularly to those who are high achievers who could contribute more if they had access to our tertiary system. 
So we need to review the adequacy of our student support. There is no doubt about that. If we are going to demand fairness in repayment and fairness in contribution afterwards—and I think we should as a society—if we are going to demand that people give of their best to our country afterwards and repay their obligations we have an obligation also to make sure that the system is fair to access. That goes to the heart of the adequacy of student support. 
If we look at it over time we can see that as a percentage of the average wage student support under Governments of all stripes has gone down over the years. This is something that does need to be addressed for the good of students everywhere and for the good of our country in the long term. Because of course when our best and brightest do not study they do not end up contributing perhaps as much as they might. Those who wish to study but cannot who are deprived of the opportunity through affordability cannot give of their best and that costs us all. It costs them personally it costs their families and it costs the wider community that they are a part of but it also means that they fail to contribute the maximum that they could have contributed to our gross domestic product to our economy as a whole and to the pot of tax that we all have the privilege in this Parliament of choosing to spend in the public good in terms of other education and health benefits. 
So it is short-sighted when one sees tertiary education as a cost only. We need to see tertiary education as an investment. I am afraid that this Government seems to know the cost of everything and the value of nothing. That is a shame particularly in this respect when we know that the returns on a tertiary degree for example make it amongst the best investments anybody can make in his or her own life. The returns are phenomenal—the student loan data set tells us that—on an education. So for those who have the abilities and the desire we need to make sure that an education is accessible. 
To the issue of fairness in collecting which is directly addressed in this bill Labour does support the changes that the Government is proposing in terms of making it a fairer system. We support in principle these changes but we would like to hear more advice from officials and particularly from the Privacy Commissioner as to the impact of the Customs Service sharing detailed and personal information with the Inland Revenue Department because this is a privacy issue. Assuming that that can all be done in an appropriate fashion then we might be likely to support it. But if concerns are raised as there were indeed around the collection of data about a nominated person introduced in another piece of legislation which went through as part of the Budget then we would want to make sure that those concerns were covered off in an adequate way so that the legislation was as good as it could be. 
We in Labour want to make sure that every borrower has to make sure that they pay back what they owe for the opportunity they have been given to study. That principle of fairness should apply in terms of the bill’s measure to expand the definition of income to include business profits and income from trusts. Labour is happy to see that matter being addressed. Those who receive income from a company a trust a superannuation scheme or another source should be treated in the same way as those who earn a weekly wage. This is a small loophole that Labour is very happy to see closed. Broadening the definition of income will save the Crown I understand approximately $7 million over the next 5 years according to Treasury. 
We commend these measures to make sure that the system is fair and sustainable. We encourage the Government strongly to look at making sure that all New Zealanders can access tertiary education not just those who are already privileged. Thank you.