Dunne Peter: Questions for Oral Answer — Questions to Ministers 
Dunne Peter: Questions for Oral Answer — Questions to Ministers 
[Volume:627;Page:22165] 
2.  
Hon PETER DUNNE (Leader—United Future) 
 to the  
Minister of Education 
: Does he agree with recent reports which suggest that the interest-free student loans policy announced last week will cost significantly more than the $300 million per annum currently estimated; if not what assumptions has he used to reach that conclusion? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 No. As I told the House last week the costing is based on 70 percent of all full-time students and 13 percent of part-time students paying their fees through a student loan and up to 50 percent of full-time students drawing down living costs. The costing is also based on up to 60 percent of full-time students and 18 percent of part-time students drawing down course-related costs. 
Hon Peter Dunne 
: What has changed since February when the Minister said that major changes in student loan policy were likely to happen only “if the country struck oil and we were guaranteed economic security for the next 50 years” and that improvements to the loan scheme will be “at the margins rather than a massive change”. 
Hon TREVOR MALLARD 
: If the member looks further down the quote he will see that I said: “but you can never rule out anything in politics”. 
Lynne Pillay 
: What feedback has he received on the proposal to scrap interest on student loans? 
Hon TREVOR MALLARD 
: What I have seen in Nelson last night is the fact that Kiwis just love it. Grandparents love it parents love it and hundreds of thousands of New Zealanders who are concerned about their families’ debt love it. This policy is travelling very well. 
Hon Bill English 
: Has the Minister seen further commentary from the National Bank which says: “While risking getting a political pasting we have to say that we agree with the thrust of Westpac’s analysis. We find it hard to believe students will not be smart enough to take advantage of the implicit arbitrage opportunity presented to them. They are supposed to be our best and brightest after all.” or does he regard that as another statement of lurid self-interest as compared with his policy? 
Hon TREVOR MALLARD 
: I note a bit of jealousy do I? As the member knows—I think he is a former Treasury official—the maximum arbitrage position is at the end of someone’s study and up until that point of course loans are already interest-free. 
Ron Mark 
: I raise a point of order Madam Speaker. It may well be a joke to some political parties that the elderly do not receive the same degree of attention in this House but I take offence at the continual belittling of the elderly people of New Zealand by comments such as that. 
Madam SPEAKER 
: I thank the member for his intervention. 
Hon Brian Donnelly 
: Is it not true that one of the reasons that some have got their calculations wrong is that they have not been aware that under present policy there is already a partial interest write-off for those not in study which was introduced in the 1998 Budget by the then Treasurer the Rt Hon Winston Peters? 
Hon TREVOR MALLARD 
: I cannot remember the exact detail of which Budget it was in but my understanding is that it actually occurred in 2000. 
Hon Brian Donnelly 
: It was in 1998. 
Hon TREVOR MALLARD 
: I accept the member’s word as to the timing but one of the reasons that a number of commentators have got it wrong is that they have not taken that and a number of other current Government policy factors into account and we are quite happy to brief either Bill English or economists on those particular questions. 
Nandor Tanczos 
: Does the Minister agree that in order to work policies aimed at addressing student debt have to be balanced by a commitment to increasing access to student allowances such as through the universal student living allowance advocated by the Green Party? 
Hon TREVOR MALLARD 
: I think we are making considerable progress with this particular policy. The policy that he has suggested would be even more regressive than the National Party’s policy suggestions. 
Hon Peter Dunne 
: Will the Minister consider to reduce the chance of a student loan cost blowout being caused by students taking out bigger loans in the future making student loans interest-free only for those who have successfully completed their course of study so that there is no chance of people accessing the cheapest loans around without any intention of actually attending a course let alone completing a degree; if not why not? 
Hon TREVOR MALLARD 
: I think that takes a fairly negative view of the majority of New Zealanders. There is not much point in someone getting a student loan for fees paid to a university if the person ends up having to pay it back. A maximum of $150 a week can be borrowed as opposed to the $800. I would point out to the member that the people who take a very long time to pay off their loans are those who do lower-level courses and do not end up with the very high incomes that are being targeted by the persons opposite. 
Hon Peter Dunne 
: Can the Minister assure the House that this policy will not be accompanied by a secondary policy to tighten up the conditions of loan repayment so that what is given with one hand is rather stealthily taken back with the other? 
Hon TREVOR MALLARD 
: I have seen no such proposals.