Upston Louise: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Upston Louise: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9363] 
LOUISE UPSTON (National—Taupo) 
: 
 I am very pleased to stand and speak in support of the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. That is the bill we are talking about. It is actually in the name of the Minister of Revenue Peter Dunne but unfortunately some of the Opposition members keep mentioning other Ministers in the House so it would be very helpful if they could remember that. This bill is in the name of the Minister of Revenue and it is a technical bill that makes some changes. I am very pleased that I am able to remind members on the opposite side of the House of that and to correct the error of their ways. 
I want to agree with other speakers today on one thing: I want to agree with an earlier speaker from the Labour benches who said that education is the cornerstone of economic growth. Clearly a National Government totally agrees with that: education is a massive platform for us in terms of growing our economy and we are extremely committed to having in place a student loan scheme that is balanced. But the important thing is also to put the right incentives in place to support and enable people to pay off their student loans faster than at present. 
I just want to put a bit of context around this bill in this second reading. We have heard from the Minister of Revenue that more than half a million New Zealanders have a student loan. Half a million—that is a huge number. On the one side it is fantastic that there has been that amount of uptake; obviously the number of people in tertiary education is high in this country and we need it to be. But one of the difficulties when as many New Zealanders as that have a student loan is that the scheme has a significant impact on our economy. I remind members on the other side of the House that hard-working New Zealanders who pay tax fund the student loan scheme. There are not just poor students with student loans; poor hard-working New Zealanders pay tax from their income to support the student loan scheme. That is another important context that I want to put across. For some people the Government’s money grows on trees and everyone gets to write fat cheques with it. No it is hard-working New Zealanders who fund the student loan scheme. 
When National came into Government it was concerned that under Labour there had been no incentives whatsoever for people to repay their loans earlier than they had to. That meant that loan holders were likely to be in debt for longer than was necessary which we know is not good for anyone. That has implications and flow-on effects for other areas of former students’ lives: delaying choices about whether to have a family when to have a family and whether to buy a house. National has fulfilled its election commitment to keep interest-free student loans for tertiary students. Part of that was also a commitment to build in a strong incentive for students to pay off their debts faster. That is great behaviour for us to reward because we believe that education is the cornerstone of economic growth. 
In effect there are three areas in this bill that I want to touch on. The first area relates to interest-free loans for the realm countries. This is particularly important to me as there is a large Pacific Island population in the electorate of Taupo so I am very keen to support the development of education for those people as well. The second area relates to the overseas study provisions and I want to talk about a case that I have had in my Cambridge office of a constituent who wanted to study overseas. The third area is the minor and technical amendments which for some reason members on the other side of the House seem to think are unimportant or boring but there are very important technical changes included in this bill. 
Let us look at the first area the interest-free loans for residents of realm countries. Many of the speakers today have talked about the importance of our support for Pacific countries. This means that borrowers in realm countries will be exempt from the requirement to be present in New Zealand in order to qualify for an interest-free loan. That is fair; it makes a lot of sense. It recognises the special relationship that we have with the realm countries. If we go back a step and look at the situation when interest-free loans were introduced in 2006 we see the scheme encouraged borrowers to remain in or come back to New Zealand. That was part of its intention. Niue the Cook Islands and Tokelau have a special relationship with New Zealand that gives their citizens the automatic right to reside and work here. So we wanted to extend the interest-free loans to borrowers who reside in these countries in order to recognise that special relationship. That is the first area of the bill—interest-free loans for residents in realm countries. 
The second area relates to overseas study and there was some very interesting discussion in the Education and Science Committee around this particular measure in the bill. One of the issues is that when people want to study overseas the situation generally is not that they want to study overseas but that they want to extend their existing study and sometimes the course that they are interested in is not available in New Zealand because of its speciality or because they want to pursue a very technical field. I have had a case of that very kind in my electorate. A constituent came to see me because her daughter wanted to study in a very specialised field and the course was not available in New Zealand. We do not want to be in the position where we restrict students’ choice by limiting their study options so this bill introduces an extension of the interest-free loan entitlement to students who are studying overseas full-time where the New Zealand Government has a formal exchange programme in place with the education provider. It means that students who want to pursue further studies in very specialised fields have that option available to them. In a case in my electorate of Taupo that was a very relevant consideration and this particular clause will be helpful for that student. 
The third aspect of the bill is the minor technical amendments. Members on the other side of the House may say that this is the not very exciting bit. Well I totally disagree with that. I think that the minor technical amendments are a critical part of this bill. Several matters are dealt with in this area of the bill. The Green member Catherine Delahunty spoke about hardship and it is fair to say that many New Zealanders are experiencing hardship at the moment. This particular measure looks at students who are repaying their loans and makes some minor changes. Currently the availability of relief is limited to the year that immediately precedes the current tax year. We as a Government want to make sure that students know about their obligations in terms of their debt. We have provided incentives for them to repay debts earlier. With regard to these changes there will be some students who unfortunately fail to have the correct deductions made or who need to pay amounts that are due so a change has been made in the deduction rate. There are also changes in some other areas relating to the early repayment of a loan and the grace period. 
This is important legislation and I am proud to support it in its second reading.