Mackey Moana: Student Loan Scheme Amendment Bill (No 2) — Second Reading 
Mackey Moana: Student Loan Scheme Amendment Bill (No 2) — Second Reading 
[Volume:638;Page:8156] 
MOANA MACKEY (Labour) 
: 
 I am happy to stand in support of the Student Loan Scheme Amendment Bill (No 2) and I thank all the submitters who came to the select committee and who shared their points of view with us. There was not a large number of oral submitters on this bill. I think it is fair to say that submissions were pretty one-sided. With the exception of a few people who raised a few concerns here and there people were largely very happy with any legislation that would reduce the onus of the student loan scheme on those people who have borrowed money. 
It is fair to say that many of the people who raised concerns came from across the board. They were not just students; they were students’ parents grandparents and families. All of them were concerned about a number of issues including things that have come before this House more and more often such as the affordability of housing the issues we have with young people putting off having families and the pressure of work-life balance that comes from many of these things. Student loans feed into all those problems and we have seen many young people putting off buying houses getting mortgages and having families—not because it is the right decision for them to make at the time but because it is what they can afford to do with the weight of a student loan hanging over them. I personally welcome any bill that comes into this House that attempts to alleviate that in any way. 
Let us put the blame for the complexity of the student loan scheme firmly where it belongs which is with the Government that created it at the time—the National Government. I was one of those unfortunate guinea pigs who came in in the years after the student loan scheme was created. It was extraordinarily unfair. We paid interest on our loans whilst we were studying. Someone who comes from a place like Gisborne who does not have the luxury of living at home while studying has to take out a student loan. I worked all the way through from the age of about 13 to save for tertiary education. By the time I got there the goalposts had been shifted so many times that I had only enough money to pay for my fees and my first term’s board at the university hostel Weir House in Wellington. Then I had to get a job which meant I was not attributing as much time to my studies as I probably should have been particularly when it came to post-graduate study. 
It really was difficult to get by without taking out a student loan. I did not take out the maximum amount of student loan; I was very proud of myself for not taking out as much as I could have taken. But when I graduated and got that final bill from the Inland Revenue Department that showed me just how much I had borrowed and how much interest I had accrued over the time I had been at university—studying being unable to work very long hours having to support myself and not having the luxury at that time of parents who were able to support me—I was staggered. I was absolutely staggered. My loan had got up into the $20000s when I had thought it would be around $15000 or $16000. It is quite a knock for young people starting off in their working careers suddenly to realise that there is actually a very real opportunity that they may never pay off their loans. There were a lot of items around in the media at the time about the fact that a lot of women take time out from the workforce and if their loans keep accruing it is very difficult for them to get ahead. When all these studies were saying to us that there was a very real possibility that we would die with that student loan—that for the rest of our lives whenever we worked we would be paying 10 percent of our income to that loan—that really is a scary option for a young person who is starting his or her working career. 
We have heard some talk about the fact that wages are so much higher in other countries. Well they certainly are when we factor in the consideration that we are paying another 10 percent of our incomes which we never see straight to our student loans. There was certainly a time for my part when I very seriously considered getting a job overseas and working there but because I wanted to live in New Zealand—because this is where I wanted to be and because the work I had done on my science thesis was agriculturally based and this was the best place to do that—I did not. I stuck around. 
Certainly when Labour came into Government in 1999 we picked up the policy of New Zealand First which was to have no interest on loans while people were studying. That was a great policy. It was very fair. It was a good first step. Let us be in no doubt that these policies are very very expensive. There was a lot of will at the time to do far more radical things but it was very expensive. When one was starting new in Government and when there was so much call and competing interest on where money should be spent that was a good first step I thought. It made a large difference to a group of students who at least knew that when they graduated they would have to pay back largely what they had borrowed. I think that that made a huge difference to a group of students. But we have to firmly place the blame for a lot of the complexity on where it belongs. 
There has been some talk that this bill might send people overseas because there is an incentive. When we talk about student loans I have always found that people tend to think in the theoretical and ignore common sense. I wonder when people say that they have talked to students whether they really have talked to students. Certainly I know people who live overseas and who have student loans and I have tried to help them pay back those loans since we have been here. I have fed back to the Minister the many many problems a lot of them have had with the complexity of trying to pay back an income-based repayment whilst they are overseas—given that work fluctuates and they do not know whether they will be working from one week to the next and given the exchange rates and all of that. 
This bill is very sensible in setting up the 3-year repayment holiday. I think that that is a very very good step. It recognises that New Zealand students travel. They get out of university and they travel. It is part of our culture and it is becoming more and more so as air fares reduce in price. It is almost an expectation now—it is almost as if there is something wrong with people if they do not finish university and then get a job very quickly so they can go on their OEs and experience the rest of the world for a while. We have to make sure we can bring those people back. 
I do not think there is any point in talking about stopping people going on their OEs. We simply cannot do that. They may not leave simply because of their student loans but they may very well not come back. The student loan might not be the only reason but it might be the tipping point that says to them that they have all those things so they should be weighing them up. On balance because they have student loans and a lot of penalties sitting at home—because they have not made their repayments either because they have not organised them or because it has been too hard—their loans might be the tipping point that tells them they should stay in the UK or somewhere else in the world and not come back to New Zealand. That is where we lose a lot of our experienced people. 
Again we need to be realistic. In some sectors people will travel. Certainly in the scientific community there is an awful lot of inter-country movement between scientists; people want to go where the best science is. We get a lot of very good scientists coming here for example to work in geological and nuclear science disciplines. They tell us that they get people from all around the world. This country is like a living laboratory for geological and nuclear sciences. We have to learn to play that up as well if we want to bring some of these people back. But student loans are a factor. I know that because I have so many friends who have told me that they are a very large factor when they consider whether they will return to New Zealand. Most of them are away for only 2 or 3 years and the idea of a repayment holiday—even if they are still paying interest on loans—to them is a great relief. It is one less thing they have to worry about whilst they are overseas and trying to plan their repayments. 
Then on the other side we also had criticism from some submitters who said it was not fair to give a repayment holiday only to people who go overseas and that we should be giving it to all people in New Zealand with student loans. But I think it is important to remember that those who remain in New Zealand are getting interest-free student loans so it is not as if they are not getting anything. The repayment holiday is I think for a specific group of students for whom we want to address a specific issue they have which is largely time-limited—that is limited to the time they spend on their OE. So I think that this bill has a very very good balance. 
I am very pleased to hear that the National Party will be supporting the bill. I would also like to hear National members say that they will keep Labour’s policy of interest-free student loans should they ever become the Government ever again—at any time in the next 50 years. I think that is a question National members will have to answer because the student loan scheme has created an awful lot of problems and some of them we are only just starting to realise now in terms of the impact the scheme is having on 20-somethings and 30-somethings and the decisions they are making. 
We have an assumption in this country that people who go into retirement own their homes freehold. In that way we can set levels of superannuation and we know that people will not be driven into poverty. Well this situation may very well change with a generation of people who have had student loans and who because of that and because they have felt they have wanted to get rid of their loans before getting into a mortgage may well have chosen to rent instead of buy their own homes or may have put off buying for so long that by the time they retire they have not got into the position where they have been able to have freehold homes. That has a huge implication for this country when it comes to superannuation policy. So the student loan scheme has infiltrated so many other parts of our society. 
I stand here proudly and support any initiative that allows students and their families—and their future families—to alleviate the burden of the student loan scheme. I look at a lot of members in the National Party across the House whom I do not think came through the student loan scheme and whom I do not think really appreciate the kind of psychological impact it has on people. I am very thankful that I was able to come into this job where I was able to pay off my student loan because I cannot tell people the sense of relief when someone knows that he or she no longer has a student loan. There was a time in my life when I thought that I would never get rid of my loan when I thought that National Party policies might reign forever and—God forbid—when I thought that the scheme might have even become worse in terms of interest rates. So I congratulate the Minister the Hon Peter Dunne on this bill. I congratulate all the parties that are supporting it. This bill will make a real difference to New Zealand and to New Zealanders.