Robertson Grant: Student Loan Scheme Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeRobertson Grant: Student Loan Scheme Amendment Bill (No 3) — Second Reading[Sitting date: 13 February 2014. Volume:696;Page:15951. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): As we speak in this debate on the Student Loan Scheme Amendment Bill (No 3) there is a person in a country in Europe who is following the debate and that is a New Zealander who had been enrolled for a postgraduate course of study at a New Zealand university who was offered a job overseas and took up that job but continued to study for their postgraduate qualification in a New Zealand university while overseas. They had some disagreement with the Inland Revenue Department about whether or not their loan would attract interest when they were overseas and they have been in some dispute with the Inland Revenue Department for several years now as they try to resolve that matter. That person wants to come back to New Zealand at the end of March to attend the wedding of a family member. Right now—Dr Cam Calder: Then start paying the loan back.GRANT ROBERTSON: —they will not be able to do that. And Dr Calder says “Pay the loan.” Well that is the point Dr Calder. The negotiations between this personand the Inland Revenue Department have broken down. The Inland Revenue Department although it is empowered under law to be able to negotiate does not always do so and that actually came out in the select committee process.So what are we saying in this House today? Are we saying that we want people to pay their loans back that we will sit down and have a constructive conversation with somebody about what they are able to pay back?Dr Cam Calder: We are—we are.GRANT ROBERTSON: No we are not Dr Calder. What the Government is proposing today is a gimmicky punitive measure that actually will not see those loans repaid. In the Finance and Expenditure Committee we could have had a discussion about a range of options for ensuring that money is actually paid back.What about a greater role for third parties? There are a lot of parents who would be prepared to step in with a negotiated settlement and make a payment. What about basing payments more fairly? At the moment under the provisions of this bill it is a blanket approach to payments when you are overseas. It does not bear any relationship to what you actually earn when you are overseas. It is simply a blanket arrangement. There were submitters who came to the committee and asked to relook at that. They asked whether there was the capacity in this system to make arrangements based on someone’s earnings. People will be much more likely in my view to make those payments if they feel that they are fair and if they can meet them from what they are earning overseas. But the Government was not prepared to look at that option.Paul Goldsmith challenged us to say what the other options were. Well the other options are: greater use of third-party—parents—repayment greater use of negotiation by the Inland Revenue Department for sensible sums of money and a repayment scheme that is based on actual earnings. It is within the wherewithal of the Government to investigate those options. But instead what the Government has done is come to this House with what is effectively a gimmick—a distasteful gimmick. It has the effect of scaring off people like the student whom I talked about at the start who now does not know whether they can come back for their family wedding because they are still in dispute and still in discussion with the Inland Revenue Department and have a large outstanding loan balance. This aspect of the bill is nothing more than a gimmick.The New Zealand Police has said that it does not have the resources to enforce this. It is not actually going to be able to do what is required here. We know that the Inland Revenue Department wants to make an example of some people. What kind of policy making is that? Is this about getting the money back? Is this about making sure that there is some return to the taxpayer? Is it about a political gimmick and a political sideshow? I venture to suggest that it is the latter because we have not seen a proposal from the Government to start moving in on this around tax evasion have we? You know we have billions of dollars of tax evasion every year from the mates of the National Party but we do not see a bill coming in about that. No—we see a bill that is a political gimmick. It again says to this Parliament that this National Government has absolutely no commitment to expanding the range of people who are in tertiary education. That is the really sad thing.When Paul Goldsmith spoke he talked about some of the great things that the National Government had done in the areas of tertiary education and student loans. Well I am sorry to say that the reality is the opposite of that. Throughout the term of the last two National Governments we have seen a tax on the student loan scheme. We have seen reductions in the number of people who can access it. If you are over 55 years of age you can no longer access the living cost component of the student loan scheme because of what this National Government has done. You can get only 3 years’ worth of student allowance at any time of your life. If you are over 40 years of age and youwould like to come and retrain—you might have been laid off—but you have had 3 years of student allowance when you were 21 years old then that is it from National’s point of view. You are on the scrap heap if you are in that position from National’s point of view. If you are 65 you cannot get access to the loan scheme.Tracey Martin: If you’re a woman coming back after children.GRANT ROBERTSON: That is right. As Tracey Martin says if you are a woman coming back re-entering her career after raising children that is a no go if you are over 40 under the National Government. This comes from a National Government that hated the interest-free student loan scheme. John Key told this House that he was going to oppose the interest-free student loan scheme with every bone in his body. But Steven Joyce and John Key worked out that they could not do that. They could not turn over interest-free student loans. They hate the fact that they are stuck with this scheme so little by little they unpick eligibility for student loans.On this side of the House we want to see more people in tertiary education. We think tertiary education is a public good. We think that the more people who go to university to polytechs towānanga who involve themselves in apprenticeships and industry training the better it is for New Zealand. Instead we have a Government that is committed to restricting the range of people who can get into tertiary education to limiting them.Simon O’Connor: Rubbish!GRANT ROBERTSON: Simon O’Connor says: “Rubbish!”. Postgraduate students—do we want more postgraduates? Do we want more people Mr O’Connor who are going to contribute to our economy who are going to actually create the jobs for other New Zealanders? We want them to come from all backgrounds. But this Government says: “No we are cutting the allowances for postgraduate students.” It wants only the elite to be able to get into postgraduate study. I want as many New Zealanders who have the ability to do postgraduate study to carry on doing it.This Government has got no commitment to access to tertiary education. This Government has got no commitment to quality tertiary education. All it has got is a gimmicky policy designed to make the Government look good so that Paul Goldsmith can come down here and talk about defaulters. Most of these so-called defaulters are actually young New Zealanders who have gone overseas and who are trying to make something of themselves over there. I would love them to come back. This bill is not going to help with that. I would love them to pay their loans back. This bill is not going to help with that either. If there was a meaningful attempt from the National Government to actually get more repayments then it would have looked at a wide range of options. Instead it proposed only a gimmick. The arrest at the border provision is a ridiculous provision. It is punitive. It will not achieve what National claims it will achieve.I also want to speak about one other aspect of the bill and that is the question of overseas-based borrower repayment rules. What we heard at the select committee was that it would be too difficult for New Zealand to be able to base repayments on an estimate of income. Well I fail to see that that is actually true. To begin with borrowers themselves are capable of making an estimate of their own income. We have a lot of high-trust situations within the repayment model. Why not develop that further? Why not start developing it with countries where we do have taxation agreements where we could actually begin a basis for doing this? There is a lack of imagination on behalf of the National Government because frankly it is not actually trying to solve the problem.On this side of the House we understand that where there is a student loan scheme and people do borrow from it there is an obligation to repay. We accept that. We also accept that when someone goes overseas they will pay interest. That was part of theinterest-free student loan scheme. What we do not accept is that the way to make that scheme work is to put in place a silly punitive gimmick that National thinks might make it look good. We cannot on the Labour Party side of this House support this bill.