Student Loan Scheme Amendment Bill (No 3) — Third ReadingText is incorporated into the Bound VolumeStudent Loan Scheme Amendment Bill (No 3) — Third Reading[Sitting date: 06 March 2014. Volume:696;Page:16433. Text is incorporated into the Bound Volume.]Student Loan Scheme Amendment Bill (No 3)Third ReadingHon TODD McCLAY (Minister of Revenue): I moveThat the Student Loan Scheme Amendment Bill (No 3) be now read a third time. This bill continues the Government’s efforts to ensure proper governance over the student loan scheme by proposing tougher measures to deal with persistent non-payers and by raising the repayment obligation of overseas-based borrowers. Although the overwhelming majority of borrowers accept the responsibility to repay their taxpayer-funded loan the reality is that some do not despite having the financial ability to do so. The main provision in the bill will allow the Inland Revenue Department to seek an arrest warrant to deal with the small group of mainly overseas-based borrowers. As I previously made clear this action would be taken only in the most serious of cases when the borrower clearly has a financial ability to pay and when all other efforts to persuade that person to make their repayments to the New Zealand taxpayer have failed.The second major proposal in this bill raises the repayment obligation for overseas-based borrowers to bring them more in line with their New Zealand-based counterparts. Overseas borrowers with a loan balance over $45000 will now have their repaymentrates increased. This will speed up the repayment rates for these borrowers and reduce the amount of interest that they have to pay on their loans. These are the principal features of the bill.I want to acknowledge the work of those who have contributed to the successful passage of this bill so far. Particularly my thanks go to the policy officials and drafters who have worked on the detail of this bill. I want to recognise members of the public and representative groups who have made submissions on the proposed legislation and have come before the Finance and Expenditure Committee and the committee itself for its recommendations to improve the transparency and cohesiveness of the student loan scheme. Finally I want to thank all those who will vote in favour of this bill because what this does is it sends a very clear message to those who have been afforded a very good education—because the taxpayer has decided to provide them with loans that are interest free in New Zealand with interest when they go overseas—that they do have an obligation to hard-working New Zealanders New Zealand taxpayers up and down this country who have made this possible.Finally I must thank members of the House for recognising the importance of these measures and ensuring that the student loan scheme is managed efficiently and fairly. The student loan scheme and the student loan debt book are in better shape than they have been. They are certainly in better shape than when those opposite left the Government benches and they are much much better than they will be when—one day in the future—they come back and ruin it again. Thank you.Dr DAVID CLARK (Labour—Dunedin North): Well that was a poor excuse for a third reading speech from the member opposite the Hon Todd McClay. He is normally better than that. He really failed on the whole way through this bill the Student Loan Scheme Amendment Bill (No 3) to give any good justification for the gimmick the tasteless gimmick that is contained in this bill—the movement by that party opposite to bring populist politics into the collection of debt for the student loan scheme.On this side of the House we support entirely the collection of student debt. Those who have borrowed in order to get ahead to better their own lot to better the lot of their families we believe should repay the loans so that other generations can get ahead. This Government takes quite a different view. It does not really pursue constructive options to regain the debt. It does not. It washes its hands of it and then gives out these gimmicks that cannot be enforced and if they can be enforced they are tasteless and likely to alienate young New Zealanders. Instead it is focused on restricting access to education. This is the Government that is restricting access to education.Let us not forget that the interest-free loan scheme that we have in New Zealand was introduced by the Clark Labour Government. We had an interest-bearing loan scheme before that. Let us not forget also the many moves that Steven Joyce has taken to restrict access to tertiary education. We on the Labour Party side of the House believe that every New Zealander should have the opportunity to get ahead should have the opportunity to make the best of their talents and if they choose to pursue tertiary education for their own benefit for the benefit of their families communitieswhānau they ought to have that opportunity and they should not be restricted from studying on the basis of not having enough money in their wallets or in their parents’ wallets to pursue that education.This Government now supports the interest-free student loan scheme through gritted teeth—gritted teeth. It has introduced administration charges because it could not return interest to the loans without really facing a huge backlash. But the students of New Zealand have woken up to it. The Government is not popular on campus. When I have been to visit in Otago [Interruption] there is a rising unpopularity among students asthey realise that this Government is restricting access to education more and more and more.I have an example of that. I hear an example is being called for from the other side. There is a 23 percent drop in the number of students claiming a student allowance in Dunedin this year as compared with the previous year which shows that the Government’s policies are pricing New Zealanders out of education. Postgraduate students are no longer eligible to receive a student allowance nor are students who are studying towards a degree that takes over 200 weeks to complete. This constant restriction to access to education is a pattern. This is a Government that wants to preserve the interests of capital.It is the same justification the same reason for restricting representation on university councils. This is the Government’s latest trick: converting university councils from a representative body that produces good outcomes by virtue of having all the stakeholders—the students the unions the staff the academics and management principles—represented around the board table to a cutback model that the universities do not like that the universities have spoken out against. And the question still lingers in the air: if Steven Joyce really believes that 20 people around the board table make ineffective decisions what is he doing with that Cabinet structure?Why is Steven Joyce making these decisions in the Cabinet structure which he hates? Why is he doing that? He is imposing on universities a system that they do not want which will produce less effective outcomes for New Zealanders. He is trying to stamp down on access to education through any means possible and that is an outrage. It is an absolute outrage. We on this side of the House the party of education the Labour Party the party that believes in access to education interest-free student loans and the betterment of our society will not let that go unchallenged.Hon Amy Adams: Well in this bill you have tocos it’s not in there.Dr DAVID CLARK: Ms Adams says “Well you have to let it gocos we’re just going to make it happen.” That is the kind of arrogant out-of-touch Government that we are seeing across the House. It is saying: “We are going to roll this through and we will not listen to any voices of criticism. We will charge interest when we like. We will put gimmicks into law when we like. At the borders we will stop people who are coming home to family funerals and we will arrest them and we will make an example of them. We will alienate young New Zealanders because we are only interested in preserving the interests of capital. We do not want just anybody showing up at the university. We are going to clamp down on the management structures”—The ASSISTANT SPEAKER (Lindsay Tisch): Order! Look we are on a third reading debate. If the member looks at Speaker’s ruling 122/4 it says: “Members must confine themselves to the general principles of the bill as it emerged from the committee.” I have given some latitude and I ask the member in the time remaining to focus on the essence and the subject of what this bill is about.Dr DAVID CLARK: I will come back to the bill but I would note that the interjections opposite have inspired me to point out the hypocrisy from members across the House as they promote this as a bill that encourages education because they are against that and there are no two ways about it.The Tertiary Education Union said of this bill that it is “a poor alternative to making education more affordable and accessible”. Those are the words of a submitter to the Finance and Expenditure Committee and the Minister of Revenue got up and had the audacity to thank the submitters for making this bill easier to pass through the House. They did not like it. They tried to tell the Minister that this bill does not help with access to education that there is a cheap gimmick in it that is an attempt to popularise a voiceagainst access to education and this Government did not listen. The Minister has beans in his ears. He did not want to hear those submitters who were critical of the bill.The original intent of the student loan scheme was never to turn young New Zealanders into exiled enemies of the State. But the bill is so very National Party. There is no evidence at all that this bill will increase compliance reduce loan balances or any such thing. It is simple authoritarian posturing and I expect that students around New Zealand and those who have student loan balances will see it for what it is. This Government is a Government that is out of touch with the needs of New Zealanders. It is out of touch with the aspirations of New Zealanders to better themselves through a broader education and that is why we have this measure in the bill that is designed to further restrict access.The measure is designed to keep some of our talent overseas it seems because they will be fearful of coming home for a family wedding or a funeral. The police have said in respect of this part of the legislation the part that has the arrest at the border provision that they simply do not have the resources to implement it. So Mr Sabin opposite who was yelling before might like to ask his mates in the police why they said that and why they directly criticised this aspect of the bill that we are debating now. Why did his mates in the police say that the National Government has no idea—no idea—whatsoever what it is asking for here and that the police cannot implement this bill? You would have thought they would have spoken to each other but this is a Government that is out of touch. It is a Government that is out of touch and not interested in engaging even with those who would do the work of supporting it by implementing the populist measures it is trying to introduce today.We asked at the select committee of course for some estimates of how this would change the lot of ordinary New Zealanders what would happen at the border whether it could be implemented how it would be implemented and what measures would be used. And there was nothing convincing that told us that this bill would increase the repayment of student loan balances. We heard from the submitters only the credible answer that this will alienate young New Zealanders. This is a ridiculous measure it should not be in the bill and the Government members are very quiet about it it has to be said. There was not much in the previous speech mentioning that measure and they are rightly—and they have gone quiet—embarrassed about this legislation.John Hayes: No we’re not.Dr DAVID CLARK: Mr Hayes of course is the only one who is not and that is typical because I think he has missed the point. Mr Hayes is not embarrassed by it but he is on his own over on that side of the House and that is not an infrequent occurrence.This is a Government that is going after the big end of town. Sorry it is going out for the interests of the big end of town. I wish it was going after the big end of town. It is more interested in chasing one or two New Zealanders coming through the border who have a few thousand dollars outstanding but no means to repay it and it is letting in the meantime the likes of Google Facebook and others go completely unchallenged as they do not declare for tax purposes the revenues coming out of New Zealand. We know for example that Google declares for tax purposes only less than 5 percent of its revenues out of New Zealand.What is the Government across that side of the House doing about that? Absolutely nothing—absolutely nothing. It is chasing a few students saying “We’re going to arrest you at the border if you come home.” That is an arrogant out of touch Government that is posturing ahead of the election and that has no idea about how it is actually going to recoup the student loan balances. It is a Government that is out of touch and out of ideas and should be sent packing at the next election. We need a Labour Government thekind of Government that is interested in broadening access to education and in giving opportunities to all New Zealanders to better their lot for themselves and their families.PAUL GOLDSMITH (National): The previous speaker David Clark obviously came from the school that says that if you do not have a strong argument shout. That was his approach for that speech. It really surprises me because the Labour Party says that it supports the general principle that loan borrowers should meet repayment obligations for the money they have borrowed from the Crown. That is what it says. But when it comes to it Labour does not really want to do anything about it. The reality is that we have a problem with default for people not paying back their loans when they go overseas. We have 110000 overseas borrowers at the moment and 61370 of them are in default with an amount outstanding of $543 million and the total loan balance is estimated to be around $3 billion.That according to the Labour Party is not a problem it is not an issue and it is a ridiculous thing to even try to get it back whereas we here in the National Party take the responsible view towards taxpayers and the people who have borrowed money from the scheme. The responsible thing to do is to make sure that people pay their loans back. The alternative it seems to me is to carry on doing nothing. So when we know that somebody has a very large loan outstanding to fellow New Zealanders we just say hello to them at the airport say “Thanks. Have a nice day.” and do nothing about it. Well we are not going to do that any more and this proposal is for only when every other opportunity and avenue to encourage people to pay back their loans has been exhausted—to have a final sanction in place. I think that that is absolutely appropriate and very much in tune with the thoughts and needs of New Zealanders who want to make sure that their money is spent wisely.The Student Loan Scheme Amendment Bill (No 3) is part of National making the student loan scheme sustainable into the future because we know that we are not going to get very far if we are not even concerned about $543 million being owed to fellow New Zealanders and we are not going to lift a finger about getting it back. It seems to be a theme. There seems to be a theme in the Labour Party at the moment that you say one thing and you do another. You thunder about trusts and you have one of your own. You thunder about the politics of envy in leafy suburbs but you live in one yourself. You say that you care about paying back loans but when it comes to the crunch you do not do anything about it—you do not do anything about it. So this debate is all about making sure that the more than 100000 overseas-based borrowers do their duty and pay back those loans.I just want to drill into one area here that we are talking about. The potential for arrest at the border is a targeted measure aimed at those who consistently fail to meet their responsibility to repay their loans. I do want to say that there were some constructive comments during the select committee process particularly from the New Zealand First Party—not so much from the Labour Party unfortunately and the Greens still seem to have a rather adolescent attitude to all this which is that somehow we should just throw the money at everybody and it is not a big deal if they do not pay back the $543 million that is owed to fellow taxpayers. This bill is a responsible bill. It is about bringing some discipline back to the scheme. We have been stepping away very carefully very cautiously and sending a clear message that we expect people to pay back their loans. I think that is fitting and appropriate and on that basis I commend this bill to the House.GRANT ROBERTSON (Labour—Wellington Central): The Student Loan Scheme Amendment Bill (No 3) represents a disingenuous and confused Government when it comes to the issue of student loans and student support. It is disingenuous because despite all the high-minded rhetoric about the importance of getting our loanspaid back the Government knows that doing this will affect very few loans. It will get very very little money back as a result of this bill but it is waving a giant big stick around that will have the effect of saying to many young New Zealanders overseas: “Don’t come home. Don’t bother. We don’t want to see you. We don’t want your contribution.” So on the one hand it is the big proud Paul Goldsmith standing up and saying “We’re not going to stand up for loan defaulters.” but on the other hand all through the documentation the message is “We’re not really going to use it.” So in other words it is disingenuous.The Government is trying to look good. It is a gimmick. It is not a proper policy to see student loans paid back. It is not a proper policy that talks to young New Zealanders overseas and says: “Come back home and contribute to your country.” It is a disingenuous gimmick from the National Government to look like it is being tough on loan defaulters and to look like it is doing something about getting student loans paid back but in reality all it is doing is putting a gimmick in front of New Zealanders.This is a Government that is out of touch with those New Zealanders overseas who have that debt. I think that all members of Parliament will have received communications from people affected by this legislation. The overwhelming message from young New Zealanders overseas to us in those communications is: “This is putting me off coming home. This is making me say ‘Why should I come back to my country?’.”This Government if it was really serious about getting student loan debt repaid would be looking at other sorts of arrangements which we discussed in the Finance and Expenditure Committee. For instance we could have a repayment regime that is actually about what people living overseas can afford to pay—not some arbitrary measure that has been set in this bill but rather an earnings-based assessment. We were told by the officials: “Oh that’s too difficult.” Well it is not. For the vast majority of people they are living in countries where we have agreements that could facilitate that and we do. We are talking here about Australia and the United Kingdom. It is actually perfectly possible to come up with a regime that is about what people can afford to pay. One of the most common things we hear is that it is too complicated and it is too much money or it is not a realistic assessment of what someone is earning and their outgoings overseas. A Government committed to getting repayments would actually sit down and work out a regime where that could happen. But instead this Government wants to come up with a policy that frankly as well as being disingenuous is unworkable.At this point in the debate I would love to be able to refer to the pros and cons of this idea from the regulatory impact statement. There were a variety of options proposed for what could be done to increase repayments. The pros and cons for this particular one—border restrictions—are not here. They are not in the regulatory impact statement. They have been withheld from it. So the National Government does not actually want us to know what the arguments for and the arguments against this were. It just wants to come to the House and say: “Agree with this gimmick. It will sound good. It sounds like we’re doing something about it.” Well that is simply not good enough.It is not good enough to expect this House to agree to a provision that fundamentally changes what has been a civil matter the repayment of loans and turns it into a criminal matter. That is a serious change. If the National Government wants parties in this House to support that it should at least come with some evidence. It should at least come and say “This is why we think this will work.” But instead the regulatory impact statement is completely silent on the pros and cons—and in particular the cons—of this proposal. That is because it is not really designed to work. It is actually designed as a gimmick.What is in the paper as it outlines this option is the fact that it says—I will read you a piece. Think about how this will work: “Once the borrower is located at the airport Police would make a judgement as to whether to execute the arrest warrant or not. It is important for Police to use their discretion and the decision to make an arrest may have consequences for other passengers the airline and airport security. It may not be appropriate for example to arrest a single adult accompanying a young child if adequate arrangements cannot be made for the child.” Oh well maybe if we make arrangements for the child we will just go around and arrest people! This is ridiculous policy. It sounds like a farcical situation. The police have told us quite clearly that they do not have the resources to be sitting at the airport trying to work out whether to arrest people or not. It is a farcical policy and without proper justification.What the Government could have done in this bill was talk about what it could do to make the student loan scheme fairer. While this bill has been winding its way through Parliament the Government has made a number of changes to the student loan scheme and the student allowance scheme. It has abolished postgraduate allowances. No postgraduate student in New Zealand can now get an allowance. Along with a number of other members of this House I have been visiting university campuses over the orientation period. I have been told at our two largest universities that there has been a significant impact on the number of postgraduate enrolments.For those people who can continue to do postgraduate study there is a massive increase in debt because they will have to use a student loan scheme that does not adequately fund their living costs. In fact a number of people particularly psychologists architects ophthalmologists and those who have to do postgraduate qualifications in order to practise are leaving going overseas because once again the Government is saying: “There’s no reason to stay in New Zealand. We don’t value a postgraduate qualification if you are not rich enough to be able to pay your way yourself.” That is not good enough. So that happened while this bill was going through the House.Also what happened were the restrictions on access to loans and allowances based on age. If you are over 55 years old you cannot borrow living costs under the student loan scheme which limits the opportunities for people to retrain. If you are over 40 under this National Government there are 3 years of entitlement for allowances through your whole lifetime and it is retrospectively applied as well. If you got 3 years of allowances in your twenties and you then worked but you lost your job you then think: “I need to retrain. I need to do something so I can contribute to the economy.” This National Government says: “We don’t value you. You can’t have an allowance. You have to apply for a loan which you won’t be able to afford to live on.”John Hayes: Not true. Not true. Telling porkies.GRANT ROBERTSON: It is true Mr Hayes. Read your own policy Mr Hayes. There are no allowances if you are over 40 if you have already had 3 years of allowances. But it goes on—it goes on. It used to be that when you came to New Zealand as a new migrant you had to wait for 2 years before you could draw on the student loan and support scheme. Now it is 3 years. I have had people in my office who want to be in training and contributing to New Zealand. They have migrated to New Zealand and they want to start a life here but they are not able to do that because of the policy of this Government.So while this bill has been going through the House access to the student loan and allowance scheme has been cut back. The Government has introduced an administration fee on the student loan scheme because it was not brave enough to reintroduce interest on student loans which we know it wants to do. The Government has put on an administration fee—another additional cost.We could have been having a conversation on this Student Loan Scheme Amendment Bill (No 3) about how we use the student loan scheme to get more people into tertiary education and to give more people the opportunity to benefit themselves their communities and their families. But instead we have a silly gimmicky disingenuous policy that criminalises a whole lot of New Zealanders. It sends a message to those New Zealanders overseas: “Don’t come home. Don’t come back to contribute to your country.” On this side of the House we believe this is a backward step. It is a silly policy.What we should be doing is saying to New Zealanders overseas: “There will be opportunities for you.” I can assure those people who are overseas and their families here in New Zealand who are listening today that under a Labour-led Government we will ensure that the student loan and allowance scheme actually works to encourage people into education. Steven Joyce has said he wants to dampen demand for tertiary education. I want to see enrolments increase qualifications increase and the tertiary education system contributing to a positive future for all New Zealanders. Under this Government it is a total failure. This bill is a ridiculous gimmick and we will oppose it.HOLLY WALKER (Green): The Green Party takes tertiary education seriously. We see it primarily as a public good and we consider that all New Zealanders benefit from having a highly skilled and highly educated population. We think that tertiary education should be affordable and accessible to all and we think that every student including those aged over 40 and those doing postgraduate study deserves access to student support in the form of student loans and allowances. We think we need a fundamental review and rewrite of the student loan scheme with the principles of access and affordability at its heart. Sadly this Student Loan Scheme Amendment Bill (No 3) is not that. In fact it is one of a series of bills tinkering around the edges of the student loan scheme which is fundamentally broken and from which this National Government is trying to wring every last dollar without looking at the bigger picture of how we fund tertiary education and why we fund it. The Green Party in Government would step back and we would take stock of how we fund tertiary education and student support to implement a better smarter fairer system that reflects the public good inherent in an educated population.John Hayes: Why didn’t you bring it to the committee?HOLLY WALKER: Because I was on maternity leave Mr Hayes. It is time to stop tinkering with the system and putting even more strain on the Inland Revenue Department’s broken computer system with bills like this.It is timely that this bill should come up this week when thousands of students around the country are heading for their first or second week of lectures. Many of them will not yet be thinking about how they are going to repay their student loans or whether they are going to live in New Zealand or overseas after they graduate. They are probably not aware that this bill will have a real impact on those decisions in the future. This House has a tendency to deal in stereotypes and the “lazy” student borrowing from the “generous” student loan scheme to fund an education that will primarily deliver them personal benefit in the form of high wages is one stereotype that we hear all the time. National MPs like this stereotype because it means that they can pass punitive little bills like this one without thinking too hard or feeling too bad about whom they are affecting—never mind the fact that these so-called lazy students are the same ones whom John Key was busy takingderp-facedSelfies with up at Victoria University yesterday. I guess that they are good for just a laugh and a political photo opportunity but are not worthy of serious policy consideration.But actually although this bill will impact the future decisions of current students the people it primarily affects right away are not current students so the GovernmentMPs cannot hide behind that “lazy” stereotype this time. The changes in this bill to crack down on overseas borrowers by increasing their repayment responsibilities and allowing them to be arrested at the border—that is very disproportionate right there—will primarily affect graduates. Graduates do not fit that stereotype of the lazy student. They are people like the family who emailed me when the changes were announced in last year’s Budget. This family lives in the United States so that the husband can pursue his academic career. He earns US$41000—a fairly moderate income. His wife is also a PhD graduate. She is currently caring for their two small children. They both have student loans in New Zealand which they are fully committed to repaying. Because of the changes in this bill their minimum annual repayments will go up from $6000 a year to $9000 a year with no means testing and no accounting for the fact that only one of them is in paid work and that they have two dependants. At the current rate of exchange that means they will be paying approximately 19 percent of their income back towards their student loan debts—19 percent of their income.This family has a strong intention of returning to New Zealand. They fully intend to repay their loans and they are currently compliant with all of their student loan obligations. But these new payment obligations are totally unaffordable for this family and they cannot see a way to meet them that will not break their budget. If they default on them because they simply cannot afford to meet their repayments they now face being arrested at the border if and when they return to New Zealand. Is this fair? Is this proportionate? Is it a good use of time and resources to chase up families like this? Of course it is not. But this is how this Government chooses to spend its legislative resource.I have lived and studied overseas and I can confirm that it is quite difficult to keep up with student loan repayments while you are overseas. Information is hard to come by. Making voluntary repayments is complicated. Communicating with the Inland Revenue Department from overseas is difficult. Negotiating a repayment holiday or an interest exemption is unnecessarily complicated. Many New Zealanders living or studying overseas simply give up and resolve to deal with the problem when they return to New Zealand. Should they give up? No. Should we make it easier for people in this situation to meet their repayment obligations? Absolutely we should. But is the way to do that to whack them with non - means-tested repayment increases and arrest them at the border if they fail to comply? Absolutely not. This bill actually makes it more difficult for people in this situation to come home and sort out their student loans. That is what we should be incentivising them to do. What it does is whack them with a massive disincentive to ever come home because they will potentially face arrest and criminal conviction.It is madness I would contend for New Zealand to be introducing laws and policies that make it less likely for our tertiary graduates living overseas to come home when we have huge numbers of New Zealanders leaving every year and not coming back. We need policies that encourage them to come back to New Zealand and to stay in New Zealand. In Government the Green Party would introduce a debt write-off scheme for graduates to encourage them to stay and contribute in New Zealand because the Green Party would invest in their future. This bill is disproportionate. It is not likely to be particularly effective as we have heard from all of the advice that was given to the Finance and Expenditure Committee. It creates yet more incentives for graduates like this to never return to New Zealand. It is symptomatic of a Government that does not value tertiary education as a public good a Government that sees student support as a political nuisance and a Government that sees the student loan scheme and amendment bills like this as opportunities to put the screws on graduates and squeeze more and more students out of eligibility for student support. We have the opportunity in NewZealand to design a modern smart and fair tertiary student support system. The Green Party in Government would grasp this opportunity with both hands and invest in our future by investing in our students.Hon KATE WILKINSON (National—Waimakariri): I rise to take a brief call on the third reading of the Student Loan Scheme Amendment Bill (No 3). This bill is about sending a message that if you owe money you should pay it back. The student loan that has been granted to students to enable them to continue and advance their tertiary education is not a gift given by hard-working taxpayers in New Zealand; it is a loan and with that loan comes the reciprocal obligation that it is to be paid back.We have heard that there is about $3 billion owing by overseas-based borrowers of which there are about 100000 borrowers and of those quite a significant proportion 61000 borrowers are not meeting their repayment obligations. That is money that is owed by the students. They borrowed it fully aware that they had to pay it back. It is not a gift as I have said; they borrowed it from other New Zealand taxpayers. It is only reasonable to send them that message and to expect them to pay it back. I do not believe that it is disingenuous to expect repayment of a debt. I think that is being fair. I come from the school of thought that says if you borrow money that comes with obligations. You pay it back.What is wrong with expecting repayment of a debt? What is wrong with expecting personal responsibility? We are not talking about lazy students. We are not talking about them at all as the previous speaker Holly Walker has just said. What we are talking about is expecting them to comply with their loan obligations. It is as simple as that: sending them a message. If you owe money pay it back. This is a good bill. It sends the right message. It is certainly not tinkering when we are talking about $3 billion of taxpayer money. I commend this bill to the House.TRACEY MARTIN (NZ First): Kia ora. Unfortunately for Ms Wilkinson her numbers are somewhat inflated. The reason why there might be about $3 billion outstanding at the moment is not that there is a large number of overseas-based borrowers whose payments have been outstanding for a large period of time; it is that there has been a large number of overseas-based borrowers whose 3-year repayment holiday has just finished. That has upped the numbers as has the fact that the Inland Revenue Department does not recognise these as overdue debts until they are 5 years old. So unfortunately Ms Wilkinson might have wanted to do a little bit more study before she launched into that particular diatribe.We have attempted to talk sense with the National Party over this issue. We have attempted to get a win-win situation out of this bill the Student Loan Scheme Amendment Bill (No 3). We have attempted to get the National Party to see that it makes better sense to stop a citizen on the way into your country when they are on their way in for a period of time when they can provide you with a third party when they can organise to set up automatic payments and when they can perhaps even borrow the money from a family member and pay the debt instead of arresting them on their way out—instead of arresting your citizen on their way out.I think Ms Wilkinson has done the country a favour. She has made it quite clear that this is not about collecting debt; this is about sending a message. This is about sending a message. And the only thing I can say to the New Zealand citizens who are out there overseas listening to the fact that Ms Wilkinson said that this Government is not actually interested in your money is that it wants to send a message by making an example of you. It wants to arrest you at the border. It wants to pull you out of a line-up. It wants to make an example of you in front of your peers in front of other citizens so that other people will be afraid of their Government. There are many many people currently afraid of the National Government but this is just another little niche in thatsort of a chain. All I can say to those overseas-based borrowers is if you get arrested at the border under this legislation our website address is nzfirst.org.nz. Give us a call. Give us a call because we are one of the only parties that will actually come down there and will give you a hand.I guarantee you that when a New Zealand citizen is arrested at the border on their way out for at least one in five there will be an error from the Inland Revenue Department. I will guarantee you that they will be disadvantaged by this Government because it cannot see sense. I mean we do not expect any common sense from the life raft for this Government that is the ACT Party but we certainly tried. We tried to talk sense with the National Government. We tried to come up with a win-win situation but it would not have a bar of it. Now Ms Wilkinson has told us exactly why. It was not about a win-win situation. It was not about clearing debt. It was about sending a message. Well thank you Ms Wilkinson. Thank you very much. What about the message that is being sent?In the House earlier today we had the Minister of Women’s Affairs—I see she is still here—sweating at question time because the Opposition asked her to list the things that her department had done that her Government had done to assist women to minimise that pay equity gap. What this Government has done under recent legislation is take away the ability of 40-year-olds to access higher education. And that goes directly to women. It goes directly to the majority of women who go back in and take a second chance at their education. This sort of policy goes directly to minimising that ability for those women. So no wonder the poor Minister of Women’s Affairs was so inarticulate at question time today because we have not been able to find a common-sense answer for that either apart from sending another message to New Zealand women which is: “Don’t go into higher education. Don’t try to upskill yourself. Don’t try to minimise that gender pay gap because the National Government doesn’t like it.” So those are the two messages we have had today from the National Government.What about the ageism? What about the ageism on those aged 55 plus—the ageism that says: “We’re not going to allow you to borrow for student allowances if you’re 55 because we actually don’t believe in lifelong learning. It is a little bit of a message we put in our brochures but we’re not really keen on it. It’s not a message we want to send.”? Again we have tried to have a conversation with the National Party. What is the purpose of that? What is the purpose of that? We are going to have to make an assumption because we cannot get a sensible answer out of the National Party. All we can assume is that it is actually about the debt not being repaid. That is the message it wants to send. We hate to think that the Government might put in some legislation to arrest 55-year-olds or older if they do not pay back their student allowance.It seems to us again nonsensical when we have laws in this country where let us say the purpose is that if you are 55 or older and you have a student allowance debt the Government does not want you to actually be able to access that just in case you die with a debt. OK. Let us just say that that is its reasoning because we cannot figure it out and it will not tell us. We all know that in this country if you die with a debt your estate goes into probate. So any debt must be paid before any of the estate is then handed out to anybody else. The Government has got a backup plan. We already have it in legislation. If that person had a cent on them the Government would get it because under probate there is a debt there.Again these are things that New Zealand First has tried again and again and again to talk sense with this Government on. But this Government is ideologically directed along this path of—there is a word I was going to use that would not be allowed in this House. The Government is ideologically set on a path to do over its own citizens if it can save abuck. New Zealand First will strongly oppose this and we strongly recommend that if anybody gets arrested at the border they call us. We will help you out.JOHN HAYES (National—Wairarapa): I have to say that I was at the Finance and Expenditure Committee where all these discussions were held and that lady from New Zealand First who has just left the House now did not attend any of the discussions about this legislation the Student Loan Scheme Amendment Bill (No 3) and made no contribution. The New Zealand First representative at the select committee slept through it—slept through it. They made no contribution at all.I have listened with great interest to discussions this afternoon. Our interest-free student loan scheme is one of the most generous in the world and we want to keep it that way. The student loan scheme represents a major financial commitment by taxpayers including from my electorate in the Wairarapa to support people in tertiary education. The Government wants to support students in tertiary education but it is important for students to take personal responsibility for repaying their loans. I agree with Holly Walker that all of New Zealand has a stake in good tertiary education but loan borrowers need to keep their end of the deal and repay their loans promptly particularly people who take the money and skip overseas.I do not agree with David Clark or Grant Robertson who have spoken earlier today and who want to give taxes from hard-working people in my electorate in the Wairarapa to people who will not pay their bills or meet their obligations. This country I believe would be better governed by the first 60 people in theEketāhuna phone book than by any of the people in the Opposition who want to be elected later in this year to govern this country. We will be far better governed by the first 60 names in theEketāhuna phone book than by any of the people in this Opposition. Thank you.Dr MEGAN WOODS (Labour—Wigram): It is a pleasure to take a call after that sanctimonious lecture from someone about student loan schemes—someone who would not have paid for his own tertiary education. As someone who did pay and borrow for her tertiary education it is something that I find quite offensive. What we have had is the ongoing dribble from the opposite benches about how this is about personal responsibility and if you borrow money of course you have to pay it back—no argument over here. We have said: “Yes if people borrow money they should pay it back.” Our objection to the piece of legislation that we have in front of us the Student Loan Scheme Amendment Bill (No 3) is not only grounded in terms of equity and fairness but about the fact that it is not going to work. I will come back to that a little bit later.We have been told that this is legislation that is going to send a message and then we get some kind of character from some kind of pantomime sitting in the corner of the Government benches who just yells out “Communists!” from time to time whenever an Opposition member is speaking. Well we do not think it is communist to expect that we have some kind of equality of access to tertiary education in this country. We think there is a public good in that. We would not think it was too radical. But really what that comedy character sitting in the corner over there is demonstrating is this Government’s antipathy to people getting an education and to the fact that there should be tertiary education that is accessible to a wide variety of New Zealanders regardless of their parents’ income.This is entirely fitting with moves that the National Government has made right throughout the time this bill has been before the House to restrict the number of New Zealanders who can receive access to enter tertiary education. If you are aged over 40 this Government has told you that you are too old and not worth investing in. It has no idea of any kind of belief in lifelong learning or the fact that people can retrain and they will have some kind of value to New Zealand. No this Government has deemed thatyou are no longer worth investing in. That is it. If you have had your 3 years of student allowance you are over and out; you are not going to receive any more support from the Government.Over here on the Opposition benches we think this bill is short-sighted and again points to this Government’s rhetoric about its belief in transforming New Zealand. It shows how arrogant and out of touch the Government is that it thinks that New Zealand can get ahead by restricting education and training for New Zealanders. Over here on the Labour benches we know that New Zealand will be a better place if more people can get into education and training. Our desire is not to dampen the demand for tertiary education as is the self-declared aim of the Minister for Tertiary Education Skills and Employment—to keep people out of tertiary education. This is the same Minister who talks a big game about science and innovation leading our economy. Well he has also cut postgraduates from having a student allowance. Way to go for an innovation-led economy to stop people doing wasteful things like postgraduate research! Who knows we may turn into an economy like one of those Scandinavian nations that values things like research and that understands what that is worth to them as a country.What I would like to see through the course of this debate is one—just one—speaker from the Government benches get up. We are now at the third reading of this piece of legislation. I have sat in this House and listened to tired old drivel from the Government benches about how this is about personal responsibility about how this is sending a message. Well I would like to know how this piece of legislation is going to work. When we believe they will work Labour has supported the Government on measures to make the repayment of student loans easier and to collect more of the student loan debt. We have supported the Government on measures around making changes to the Inland Revenue Department website—the fact that it would not be so difficult that essentially international bank transfers would have to occur in order for those living overseas to meet their student loan obligations. We have supported them because we think they are positive moves and they actually will make it easier for New Zealanders living overseas to repay their student loans. But we will not support a gimmick that is not going to work that is unfair and that criminalises what is a civil matter.My colleague Grant Robertson read some bits from the regulatory impact statement—the regulatory impact statement that comes before this House—that have not been redacted because the Government does not actually want us to know what the options were. When it comes to options—other things that we consider—there is a blank page. This is how much consideration this Government has given to what the real options that might work are and perhaps why we can only hear the speech notes being regurgitated time and time again from the members opposite because they have nothing of substance to say. This is just more arrogant out-of-touch legislation that is about trying to look tough when it is not going to achieve anything.I would like to do a little bit of a reading—David Bennett: Oh don’t bother. Just don’t bother.Dr MEGAN WOODS:—from the regulatory impact statement from where it comes to how this is actually going to work in practice. Actually the comedy character in the corner is yelling out something other than “Communist!”. I wonder what it was.This is how the legislation is going to work: “…Inland Revenue would request information from airlines under section 17 of the Tax Administration Act to determine which flight a borrower is booked on. This information would be provided to Police stationed at the airport who would have to locate the defaulter before they boarded their flight.”—a good use of police resource—“Police have advised that as this would have to be achieved without photos often in large crowded areas this could be difficult and time consuming.” This is from the very organisation that is supposed to be the body thatimplements these crazy lunatic gimmicks that the Government is proposing. The police are telling them it is not going to work. But yet again Government members will stand up and they will dutifully read from their arrogant and out-of-touch speech notes that this is about sending a message and about us getting tough on defaulters when all the time they are narrowing the number of New Zealanders who will receive the benefit of a tertiary education in this country.This is a Government that will consider it a success if it can deny more and more New Zealanders access to a university a polytech or any form of training. This is not something that we think is in any way beneficial to New Zealand. We think that regardless of your ability to pay to go and learn a trade or go to university or your family’s ability to pay for you if you have the talent you should be able to do that. I have not heard one piece of evidence from the members opposite. I challenge the next Government speaker to depart from their speech notes with the tired old lines and to actually tell us how it is going to work because the police have told us that it is not. I would like to know how it is that this legislation is going to work.The original intent of the student loan scheme was to make access to education available to more New Zealanders. That is what we in Labour will cling dearly to. We will not in any way support the Government’s move to narrow access to education. If it really did want to get real about reducing the debt that defaulting student loan borrowers owe to New Zealand and to the New Zealand taxpayer then it would have looked at some things that could have worked. It would have looked at measures about entering into repayment arrangements with people. When Labour was in Government and we put in place such a scheme there was a huge surge in the number of people who went on repayment plans started paying their loans and were no longer defaulters on their loans. The Government has the evidence—a good field trial—of what actually did work but instead it is resorting to fanciful gimmicks that sounded good on Budget day to try to appeal to its base rather than something that will actually tackle this problem.This is not the way that we are going to build a better New Zealand. This is not the way that we are going to have an economy that is fit for the 21st century and based on us having a highly skilled highly educated workforce and not excluding large numbers of New Zealanders from that. Not only do the individuals suffer but we as a country will suffer from this Government’s close-minded views on tertiary education.DAVID BENNETT (National—Hamilton East): That was a shocking speech on the Student Loan Scheme Amendment Bill (No 3) from the Opposition by Dr Megan Woods but it just goes to reflect the nature of its argument here today. There are more people in tertiary education under this Government than under the previous Government. That is because we have opened access up. Opposition members are not telling the truth in this House tonight by saying that there has been a restriction on education. It is far from the truth. The real truth is that the Labour Party does not want people to pay their debts. What gives the Labour Party the Green Party and New Zealand First Party the mandate to go out there and say that you can go to a New Zealand educational institution you can get New Zealand training and then you can go overseas and get a free ride whereas if you stay in New Zealand and you make this country stronger you have to repay your debt? Under the policy of the Labour Party the Green Party and the New Zealand First Party why do we give an exemption from paying their debt back to those people who leave this country? Why do they want to do that?Hon Member: We don’t.DAVID BENNETT: They do. That is what they are saying because they do not want those people to repay their debts—that is the simple truth of it. Do you know why? It is the socialist elite over there who believe that they have a right to some higherposition in New Zealand’s social hierarchy and who believe that they should get a free education and not have to pay it back. That socialist elite that is the Labour Party has never represented the people whom they try to stand for. The people out there working in factories who pay for those educational institutions—what do they get? They get to see some other young person—who is in the socialist elite—go overseas and not repay their debt. What about those people who actually go and get training in New Zealand and then work in New Zealand? They have to pay it back. But under the Labour Party if you go overseas you get an exemption. This is disgusting to see from Labour the Greens and New Zealand First: that New Zealanders are treated differently if they leave. That is what they are saying and that is not good policy. We want New Zealanders to pay off their loans and pay their debt back.Mr DEPUTY SPEAKER: Andrew Little—five minutes.ANDREW LITTLE (Labour): It is a pleasure to have the opportunity to talk about student loans once again. It is the first time in about 20 years I might add and I had a lot to say then usually at the end of a megaphone in the front of this great building or on the streets of Wellington.The point is that this bill the Student Loan Scheme Amendment Bill (No 3) is about enacting the same powers for our Inland Revenue Department as the Russian tax department has for its tax defaulters. We know how it treats its tax defaulters. Its equivalent of our Inland Revenue Department turn up in full camouflage gear fully blacked out armed with AK-47stommy knockers and all the rest of it and they go smashing down and smashing people up when they do not pay their taxes.This is a bill that is completely over the top when it comes to enforcing the obligations of student loan defaulters. The student loan scheme was introduced and has been in place in various forms to enable people to get access to education. It is unfortunate that over the last 20 or 30 years the state of the economy for whatever reason has been such that the State cannot afford access to education for those who need it and who are capable of taking it up. We have moved to more of a user-pays system and so the student loan scheme has come in to facilitate that. But we need to make sure that we do not introduce a mechanism and a scheme that becomes so punitive and ugly in its implementation that it puts people off.There are a number of reasons as previous speakers in this House have alluded to why those who have taken out student loans and gone out into the great wide world once they have completed their studies—which is something that we encourage young New Zealanders to do—can find it difficult to commence or recommence their student loan repayments. The last thing we need is to have in place a scheme that intimidates bullies and conjures up fear for New Zealanders when they are overseas encouraging them not to return.You know what we most want in this country? We want educated young people. For those who undertake a form of tertiary education and are required to take out a loan in order to get access to it—whether it is education in our tertiary institutions in the trades or in any other form of training—we do not want to create a disincentive for them to use those skills and deploy themselves in a way that is for the benefit of New Zealand. That is what this bill will do. That is why we are so fiercely opposed to it—it is just not good for the long-term interests of young New Zealanders who take up the opportunity of tertiary education or for New Zealand itself when it comes to harnessing the skills the learning and the talents that they have developed. That is why this bill is so wrong.All the National Party members opposite have left to fall back on is the tired old rhetoric about irresponsible young people—SimonOConnor: This is ironic as well.ANDREW LITTLE: And here is the irresponsible young Mr O’Connor—the youngest oldfogey of them all—who sits there bleating out the tired old rhetoric of the tired old fogies of the National Party saying: “We don’t want irresponsible youth.” Well it is not about that. It is actually about our brightest and best who because of everything else the National Government has done race off overseas because that is the best they can do for themselves. We want to make sure that the conditions are right for them to come back. They know that when the next Labour-led Government comes inin a few months’ time they will be flooding back because that is when they will see opportunity.We do not want a law on the books that tells them that when it is time for them to come back if they have not been able to repay their loans for reasons beyond their control they are going to be harassed and harangued at the border clapped in handcuffs and frogmarched off to the nearest prison before they can enjoy their freedom. We do not want that. That is not what a responsible education system does that is not what a responsible inland revenue system does and that is not what a responsible piece of legislation does when it comes to enforcing student loans but this bill is the opposite of that.This bill is irresponsible it is nasty and it is petty—everything that the National Party is characterised by and stands for. Nastiness and pettiness are reflected in this bill and that is why we are opposed to it. We are in favour of education we are in favour of responsible students and we are in favour of responsible lending. That is why we will oppose this bill.DAVID CLENDON (Green): This has been sort of quite a big week for tertiary education. There have been a number of key announcements and here at the end of the sitting week at least we are debating this dreadful bill the Student Loan Scheme Amendment Bill (No 3) which is being foisted on our young people and indeed on anyone who participates in tertiary education. We have seen this week of course the launch of a very deeply flawed tertiary education strategy which seems to have emerged from the Ministry of Business Innovation and Employment rather than the Ministry of Education focused as it is on economic outcomes. The references to education are almost incidental which is a very sad reflection on the priorities and the sheer lack of understanding of the value of education that we have seen emanating from this Government over the past several years.We have seen the changes to the Performance-based Research Fund. There are again one or two good shifts but primarily they are a great big leap backwards to the extent that the objective that sought to ensure a fair distribution of the funding across institutions and across disciplines has been removed. In future that funding will advantage those who already have ready access to external forms of funding which is perverse when you think it through. Research that is readily commercialised for example and that therefore has ready access to external funding sources will be privileged over social research and other forms of research where there is no obvious external donor or beneficiary. It is a very backwards-looking change that has emerged.Now of course we come to this bill which is probably at least as backwards as any of the other events of this week. This legislation undoubtedly does provide yet another layer of disincentives to people participating in tertiary education in New Zealand. We have heard the phrase “dampen down demand”. Clearly this Government is very interested in rationing. The Greens and I believe our Labour colleagues believe that tertiary education based on merit is a right embedded in international and national covenants. Those who are able and who aspire to such things should have the opportunity to achieve at tertiary-level education. This Government would see it as aprivilege something that is limited and rationed to the lucky few who have the wherewithal to pay their way as they go.The disincentives are clear. We will criminalise people who for whatever reason are unable to keep up with their student loans. Our colleague from New Zealand First Tracey Martin made the very good point that we can confidently expect that there will be people whose travel plans are seriously compromised in error. I will not bore you again with the stories but I am sure others have similar ones. I have mentioned them in previous speeches on this topic like my own experience of getting two different statements two different letters on the same day about the state of my student loan with entirely different numbers on them. Those mistakes will continue. Nothing is surer. Although I do not know where my colleague from New Zealand First got the statistic of one in five it sounds about right intuitively. We will penalise people who have maintained their payments simply through errors in the bureaucracy of what is a very complex system.We are criminalising people. Absolutely if people borrow money they ought to pay it back. That is a given. We probably are too thoughtless in terms of allowing young people to get themselves heavily indebted but again for many of them there is no other option. The fact that the repayment model will not be income related is blindingly stupid. Assuming that all of our young graduates who go overseas immediately walk into highly paid jobs is a nonsense. That is not the reality for most of them.As Holly Walker said before the Greens see the public good element as well as the private benefit. We heard bellowing from the National benches earlier asking who pays. Well yes tertiary education has to be paid for. For a long time we had a very robust system where we paid for it primarily through the taxation system rather than through loading debt on young people at the point in their lives when they have got the least capacity to generate income. Let us do this through our progressive taxation system where we claw it back once people get into well-paid positions. Yes I am perfectly happy then for people through their taxes to be paying for the education system—primary tertiary secondary across the board. It is immoral almost to load debt on to young people at the point in their lives when they are least likely to be able to pay it back and then criminalise them for that failure. Thank you.TIM MACINDOE (National—Hamilton West): Contrary to the assertion of Mr Clendon the Student Loan Scheme Amendment Bill (No 3) is not dreadful but the quality of the contributions to this debate from members opposite certainly has been. This is not an immoral measure; this is a responsible and fair one. We have been far from relying on rhetoric and ideology on this side as members opposite have suggested. That has entirely characterised the contributions from those members and it is clear that they are burying their heads in the sand. This bill is fair to all parties. This bill is in the interests of the country definitely in the interests of the New Zealand taxpayer and ultimately in the interests of the students themselves. I support this bill.A party vote was called for on the questionThat the Student Loan Scheme Amendment Bill (No 3) be read a third time.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes59New Zealand Labour 34; Green Party 14; New Zealand First 7;Māori Party 2; Mana 1; Independent: Horan.Bill read a third time.