Walker Holly: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Walker Holly: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8660. Text is incorporated into the Bound Volume.] 
HOLLY WALKER (Green) 
: 
 I would like to thank the previous speaker the Hon David Cunliffe for raising the issue of intergenerational equity in relation to the student loan scheme because it is indeed the elephant in the room when we look at this Student Loan Scheme Amendment Bill (No 2). I am speaking as probably one of the few speaking on this bill who has a current student loan and who is therefore qualified to speak about the provisions in this bill so I would like to thank that member for raising that important issue. Indeed it is for many people of my generation a significant detriment to starting their lives to beginning their lives as families to considering the prospect of homeownership and to starting their adult lives with the equivalent of a significant mortgage hanging over their heads. 
Where I differ from the Hon David Cunliffe is that in the Green Party’s opinion there actually are some things wrong with this bill and that is why we oppose it and will continue to oppose it. We see this bill as part of the gradual erosion of the fairness of the student support scheme and I think we have seen under this current Government in the last 5 years or so a very damaging trend of gradual amendments to the student loan scheme that harm students and graduates disincentivise tertiary students from studying—particularly those from low incomes—and incentivise graduates to move overseas. 
In my contribution I would like to look at two elements of Part 1 of the bill that are of concern to the Green Party. The first of these is one of the two major changes that this bill makes and that is the provisions for greater information-sharing with the Customs Service. The Green Party has no problem per se with encouraging overseas borrowers to keep up with their student loan repayments but the big problem it has with the provisions in this bill that make it easier for information to be shared with the New Zealand Customs Service and to track down graduates at the border to ensure that they are meeting their repayments is that it comes in the context of the reduction of the repayment holiday from 3 years to 1 year. I note that the Minister of Revenue who is in the Chair introduced the 3-year repayment holiday and it was a very good idea and one that we were very happy to support. 
The reason we supported a 3-year repayment holiday is that we think provisions in the student loan scheme need to reflect how young New Zealanders spend time overseas. What we know is that the average young New Zealander who goes on an OE or travels and works overseas for a period of time does so for more than 1 year. That is the typical New Zealand OE experience. While doing that they gain skills and experience which they bring back to New Zealand when they return. There is a net gain to New Zealand of their return to New Zealand. However there is a big “if” over that: the “if” is “if indeed they do return to New Zealand”. 
Our concern with bringing in these punitive provisions to allow the Customs Service to share information and track graduates down at the border as this bill does in the context of only a 1-year repayment holiday is that it makes it significantly more likely that many graduates will be pinged with penalties and interest because they do tend to be overseas for more than 1 year. This creates a real disincentive for them to return to New Zealand. If their student loan bill is racking up penalties and interest there is a real disincentive for them to return. We know from talking to New Zealanders overseas who are in this position that many worry about the size of their student loan when they return. That is why the 3-year repayment holiday was such a good idea when this Minister introduced it. But now that it has been reduced to only 1 year we in the Green Party think that it will make it very difficult for graduates to meet their repayment obligations when they are overseas. The Green Party cannot support provisions that make it more punitive and more difficult for graduates and easier to track them down in the context of only a 1-year repayment holiday. It was a very short-sighted decision and for that reason we cannot support those provisions in Part 1 of the bill. 
The second part of Part 1 I wish to address in my contribution in this Committee stage is the transitional provisions and regulation-making powers inserted by the Finance and Expenditure Committee. These provisions added at the select committee allow the Inland Revenue Department to administer the changes in this Student Loan Scheme Amendment Bill (No 2). But what we have seen—and as I have mentioned this bill comes in the context of a trend of small but punitive adjustments to the student loan scheme over a number of years—is that there have now been so many small and complicated changes to the student loan scheme that the Inland Revenue Department’s computer systems and administrative systems are groaning under the weight of them. There is a real question mark about whether those systems are sufficient and are able to actually administer the changes that are being made in this bill. We have seen a similar difficulty recently with the same systems with the changes to child support. Clearly the IT at the Inland Revenue Department is in urgent need of an upgrade. What we have seen is a student loan scheme that has been tampered with so many times that that system can no longer cope with the complicated array of amendments it is expected to administer. 
The Government’s answer to this and this is the provision that has been inserted by the select committee is to introduce wide-ranging regulation-making powers to allow for transitional provisions or any changes that need to be made at the Inland Revenue Department to administer these changes to be made by Order in Council . We have a real concern in the Green Party with this model of lawmaking. We think that it represents a trend that we have seen in this House since the introduction of the Canterbury earthquake recovery legislation of introducing wide-ranging regulation-making powers under Order in Council. When there are tricky issues for a Government to administer or deal with instead of bringing them back to the House for the proper parliamentary scrutiny and due process it is easier just to shove in an Order in Council provision and deal with it that way. That is a real problem. We think the changes in this bill are representative and these transitional provisions and regulation-making powers in Part 1 inserted by the select committee are symptomatic of that approach. It is a very concerning approach that we have seen from this Government. I note that the Labour members of the select committee also expressed their reservation about this at the select committee and I am sure we will hear from them about that. But it seems to me to represent a very concerning model. 
Those two changes the transitional provisions and the information sharing with the Customs Service and tracking down borrowers at the border are the two parts under Part 1 I wish to address in this contribution. As I said at the outset of my speech the elephant in the room of course is the $12 billion of debt that is now on the backs of the people of my generation who had to pay for our education and take out a student loan. Instead of taking the opportunity to enhance the fairness of the student support system—and there are many ways to do that—this bill contributes to a gradual erosion of the fairness of that scheme and a damaging trend that will harm students and graduates disincentivise tertiary study and incentivise those graduates to move overseas or to stay overseas if they are there already.