Pugh Maureen; Meager James; Webb Duncan; Watts SimonClauses 1 and 2 CHAIRPERSON (Maureen Pugh): Members we now come to the debate on clauses 1 and 2 the title and commencement.JAMES MEAGER (National—Rangitata): I move That debate on this question now close.Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you Madam Chair. I just find that extraordinary that the first thing a member of the Government can do is stand up and seek a closure without giving the Opposition so much as a look-in. It just reflects very poorly on this Government.In fact there is a matter that I wanted to just raise with the Minister around the commencement because the commencement in fact is quite a complex piece of legislation. It's quite unusual. Clause 2(7) and (8) both relate to section 44(2) of the Student Loan Scheme Act. It's a really awkward—and I actually raised this with the Minister and he sort of batted me away by saying it's about it being five years long and I had to dig around and actually find what he meant by that. And what he actually meant—and it would have been helpful if he'd been a bit clearer—is that clause 44(2) commences on 1 April 2025 and then clause 3 in fact which commences on 1 April 2030 which is an extremely long commencement date has the effect of returning to the status quo ex-ante.Now I've got a number of questions around that. The first is: why on earth—I mean what kind of bizarre drafting is that? I know that the IRD draft its own bills but firstly a commencement that is more than five years away is not good legislative practice—James Meager: OK let's go let's have a look at that.Hon Dr DUNCAN WEBB: No have a look at the legislative design—Hon Members: That's a leadership tie.Hon Dr DUNCAN WEBB: Mr Meager if you've got something to say just stand up and take an actual call. The fact of the matter is it's very poor legislative practice to have an amendment that—and the other thing is you know we were genuinely perplexed by this and it's a strange bit of drafting where you actually have to cross-refer to the commencement to understand it. And it would be very useful to have some sign-posting going on there with it.I guess the other question is: why is it that he's chosen this five-year period? In our view on this side of the Chamber we don't think the cost of our student loans should be increased for our overseas New Zealanders. But at the same time why are you time-binding it because in fact it would be a much easier thing to do to manage this in a quite different way—leave it there until you need to revisit it because it may well be that in five years' time the rate is adequately set at 1.74 and that in fact the policy reasons for the change at least in your mind still exist. So why is it that you've got this very strange change and then repeal in the same—it's essentially a kind of sunset clause. It would have been much easier in section 44(2) to actually sit there and say that for five years the rate is 1.74 after which it reverts to 0.74. That would be a much cleaner and tidier way to do it rather than actually having this kind of circular framework there.So in terms of that commencement I'm not sure I've ever seen anything which does an effective repeal by having two commencements for different subsections—it seems a very extraordinary way to do it. So as I take my seat I'd be very interested to know the Minister's response to that.Hon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Look I won't indulge on why that member in particular is generally perplexed—probably something that's outside of the scope of the bill but it probably would be worth further consideration at another point. The changes in regards to clause 2 in terms of the commencement date are as has been outlined. There are two aspects. We are making a change to bring in a change in interest rates which will occur on 1 April 2025 in order to increase it. And then on 1 April 2030 we are then reverting back and removing that 1 percent increase.The purpose of the overarching adjustment to deal with the increase in the interest rate is to deal with the unique timing circumstance in regards to the interest rates and the inflationary environment. On this side of the House we are hopeful and working towards a fiscally sustainable plan that will reduce inflation and I appreciate again that might not have been the case on the other side but that is what we do think and we do believe that in five years from now that will provide adequate time for what we're seeing in terms of a unique circumstance to no longer be the case.In regards to reducing the time of this House in the future having that clause in effect revert back avoids the need to have to come back and waste this House's time.