Tanczos Nandor: Student Loan Scheme Amendment Bill (No 2) — First Reading 
Tanczos Nandor: Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Volume:635;Page:6596] 
NANDOR TANCZOS (Green) 
: 
 I rise to indicate that the Green Party also supports the Student Loan Scheme Amendment Bill. We welcome the bill and thank Mr Dunne for its introduction. In a sense we consider this bill to be a band-aid but we recognise that a band-aid is better than a bloody wound so we do support it. 
I think it is interesting to reflect on the political context. This bill is really about cleaning up some of the anomalies that arose out of the Government’s change of policy prior to the election with regard to interest on student loans for people who stayed in New Zealand. It is worth reflecting on that because it is an example of a situation where the small parties have set the political agenda. The Green Party has had a strong position on student loans for some time and has called for a universal student allowance a loan write-off and a capping of student fees. I know that student loans have been an issue of great concern to United Future and New Zealand First for some time and that the Maori Party has had a progressive policy around student loans as well. So I think it is fair to say that the momentum that was being generated by the small parties’ concern for what I would consider to be some of the real injustices and problems arising out of the student loan scheme set the agenda and made the scheme a political issue such that the Labour Party came out with its change of policy prior to the election. We can all take that as a victory for the important role that small parties can play in setting the political agenda around such very important issues. 
Having said that I reiterate that the Green Party policy is to go much further than this bill does. We will continue to support policies that are progressive around student loans and to support in particular a universal student allowance so that all full-time students get a decent living allowance and a loan write-off—especially for those who are unable to pay off their loans over a long period of time. I say that because my particular concern is not perhaps for some of the very highly paid graduates in law medicine or whatever their profession may be who can pay off their loans relatively swiftly regardless of the fact that their loans can be significant. My concern is in some ways much more about graduates who work in areas where they will face fairly low rates of pay to the end of their days in their professions—for example social workers. We desperately need those professions. In fact some of the debate we had during question time today around Child Youth and Family—the enormous pressure on social workers and the like the under-resourcing of that sector and the need for more well-trained confident people in that area—highlights the real issues we face with regard to people who require a tertiary education in order to do what will continue to be for the foreseeable future relatively low-paid jobs. 
As I said before we also support the capping of fees because the issue is about not just living costs but also the increasing fees that are driving up student loans. 
We have a great concern about student debt because we know that it skews the demographics. There is some interesting work that shows that student loans can be correlated with delayed fertility an issue we are facing increasingly in the world today. We know that student loans impact upon the ability of young people to borrow money to buy their own home. Of course that is exacerbated by the ridiculous property prices that we have seen in this country over the last few years but certainly coming out of tertiary education with a significant debt makes buying a home even more difficult than it would otherwise be. 
We know that the student loan scheme skews people’s study and career choices. I have indicated some ways in which I think that is a very significant issue for our country. It is also a philosophical issue because if we treat education as a private good and say that students should pay for it then the corollary of that is that they will treat education as their personal private good as well. The choices they make will be about maximising the benefit to themselves rather than keeping in mind the broader picture of the benefits to the country or the community. 
We face some very significant challenges in this country at this time. The Prime Minister’s statement of the need for New Zealand to become carbon neutral showed us just one challenge we face in order to overcome the ecological degradation in the world today. If we are to become serious about those kinds of ambitions—and I desperately hope and pray that we do—then we will need educated people who are able to think creatively about the challenges that we face. That does not necessarily mean that we need a lot more accountants and lawyers—no disrespect intended at all to my accountant and lawyer colleagues. We know that we have a real issue arising from a shortage of soil scientists in this country. We have an issue around attracting people into engineering. I talked before about issues connected with the likes of social workers. Those are important issues. 
The Hon Marian Hobbs talked about the shift in tertiary education away from a focus on numbers to a focus on quality and I welcome that. It is very important that we take a strategic approach to tertiary education in a country like New Zealand which is small and has to use its resources strategically. We have to remember that it is important to address not just the issue of the drivers of our tertiary institutions but also the issue of the drivers of student choice. That is where the student loan scheme is so significant. 
The bill does not address that situation at all. It does not really begin to fix the problems with the student loan scheme as a whole at that higher level. But it does do something to mitigate some of the anomalies and to patch up some of the holes—in the words of Bill English—and I think that is useful. So as I say we support this bill. 
Graduates are rightly going overseas on their OE. They are going overseas to work for better pay and conditions than they can get here. I agree with the Hon Brian Donnelly that that is not something for us to be afraid of. Actually there are real benefits for New Zealanders in going overseas. The connections they develop the networks they make and the expertise and experience they develop can be a vital contribution to New Zealand when they return. The crucial thing is that we make sure there are no barriers to them returning—that there are no disincentives for people once they have gone overseas to return and make their contribution to New Zealand. One of the problems with the current student loan scheme is that it does set up very real and expensive barriers to graduates who want to return home. That is why this bill is a welcome addition to the legislation. In part the problem is that the current regime is largely unaffordable for graduates overseas and they often return home to significant debt after both the interest and the penalties that are attached to the loans have been taken into account. 
Green Party members are very pleased with a number of the provisions in this bill—for example the 3-year payment holiday. During that period the repayment amount is set at zero and no penalty for failure to pay will accrue. The interest will still accrue but the penalties will not. That makes a lot of sense because as previous speakers have indicated when people go overseas—for the first period of time at least—they are doing casual work they are moving from place to place they are not really in a position to necessarily make repayments and of course they are enormously difficult to keep track of in any case. So that provision makes a lot of sense. After 3 years the hope I guess is that people will have got into a more steady career and be working overseas in a more long-term fashion. 
We are also pleased that the repayment amount will be calculated as a percentage of the loan rather than being income based. In reality there is no practical way to do an income-based assessment so a simple formula that is easy to understand and easy to apply is sensible both for us here in New Zealand and for those graduates so they can understand what their obligations will be. We are also pleased to see that late penalties where they do apply have been reduced a little and that the current amnesty period for people to notify the Inland Revenue Department that they are overseas has been extended for another year. Of course there are people who go overseas and do not notify the Inland Revenue Department of that because they are attempting to evade their obligations. But is seems to me that when people who have just graduated go overseas the last thing on their mind is telling the Inland Revenue Department where they are going. They are thinking about what they are going to be doing making their plans writing to their friends or doing whatever else is needed. It is quite obvious that many people fail to contact the department so I think that provision is important. 
In the brief remaining time that I have left for this speech I will also touch on the ability to grant an interest-free loan to borrowers who are studying full-time overseas at an undergraduate level. I think that is a useful thing as well. 
Brian Donnelly talked about fairness and about how some people who have paid all of their obligations think the provisions are unfair. He made the analogy that if the student loan scheme was fair at the beginning it was fair at the end. I take that slightly differently. I do not see the student loan scheme as ever having been fair; I see it as a case of intergenerational theft. Nevertheless that is not an argument for perpetuating an unfairness or an injustice. The bill does not solve the inherent injustice or foolishness of the student loan scheme but the Green Party supports the bill because it makes the process slightly easier for graduates.