Burns Brendon: Student Loan Scheme Bill — Second Reading In Committee 
Burns Brendon: Student Loan Scheme Bill — Second Reading In Committee 
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BRENDON BURNS (Labour—Christchurch Central) 
: 
 As my colleague David Shearer has indicated Labour is supporting the Student Loan Scheme Bill through Parliament with a number of important caveats. I first acknowledge the reason why in broad principle we are supporting this bill. Obviously student loan issues is important to address. Anything that helps rein in some of the costs that have occurred in respect of some of the non-repayment issues is important to grapple with. A lot of these issues centre on those who graduate and go overseas. They make up a fairly big percentage of those who are not repaying loans and we need to try to bring them into the fold. Treasury has stated that this will bring in around $22 million a year and that is important for the revenue. 
I note a couple of things. One is the change to late-payment penalties which were nudging towards 20 percent under current arrangements. In some respects that is almost at loan shark rates—an issue the Government is finally moving on after Carol Beaumont’s excellent bill last year was rejected by the Government which left many people to pay usurious rates that were inappropriate. Now we are starting to see some action on that issue from the Government. Similarly we have the Government proposing that the interest rate that students pay on late payments should drop back to about half the rate it was down to 10.6 percent or even 8.6 percent if they enter into instalment arrangements. Obviously those repayments will be much easier with the electronic processing that is at the heart of this bill. So that is a step forward. 
I want to speak particularly though on the issue of excluding over-55-year-olds from student loan access. I speak on this issue with some real connection to it as somebody of that particular age. I say to this House that the concept that people will not be able to retrain with some assistance from the State—some hand up—is a nonsense when we consider that in this Parliament we have people in their 60s and even 70s still doing extraordinary dedicated jobs still working extraordinary hours and output rates and showing that people into their 70s are well able to contribute. In fact the whole pattern of commentary emerging is that we need to work longer if we want to have secure retirements. We are hearing that from people like the Retirement Commissioner and others yet here we have a bill that tells anybody that once they get past the magic age of 55—and a magic age it is— 
Aaron Gilmore 
: Refer to the clause that says that Brendon. 
BRENDON BURNS 
: The situation is that over-55-year-olds are excluded from— 
Amy Adams 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Yes I know what the member is going to say. The member is going to ask that the member come to what is in the bill. I ask that we just try to bring things together. 
BRENDON BURNS 
: I will move to other commentary on the bill such as student loan eligibility restrictions. I note the commentary from Te Puni Kokiri about the new restrictions stating that this is “at odds with the declared intent of the Tertiary Education Strategy to encourage more Maori and Pasifika students into tertiary education.” I ask members opposite what particular part might it have been commenting on. I also note the Ministry of Pacific Island Affairs’ statement that the “package may result in Pasifika students dropping out of university and going onto the unemployment benefit or shifting to cheaper avenues of study.” What we want to see is people encouraged to take up tertiary study so they can progress from career to career because the reality of life is as some members opposite can testify from their own CVs we can take part in three four or more careers. In that sort of environment we need the capacity to train retrain and get a helping hand from the State to assist us through that part of life and it should not end at a particular point in life. 
This bill is of course replacing the Student Loan Scheme Act of 1992. We are looking at facts that state that the loan balance is currently standing on the Inland Revenue Department’s books at around $11 billion and we have nearly 600000 people in receipt of student loans. I was interested to see in the Finance and Expenditure Committee the average amount borrowed. We have pictures in our minds I think of students borrowing tens and tens of thousands of dollars and not repaying them. In fact that is not the case as we heard from the Inland Revenue Department. The average amount borrowed is actually under $7000 per student and the repayment time for those who left tertiary study in 2006 was around 4.6 years. So the time frames and the amounts borrowed are quite modest but cumulatively we are talking very serious amounts—currently around $11 billion and projected to go to about $15 billion in the next 4 or 5 years. Obviously that issue is at the heart of this bill: the need to allow former students with student loans many of them overseas to tap into payment systems electronically and pay back their debts at a time when often they are earning good money overseas. That is at the heart of the bill and that is why Labour is broadly supporting the passage of this bill through Parliament.