Woods Megan: Student Loan Scheme Amendment Bill (No 2) — First Reading 
Text is incorporated into the Bound Volume 
Woods Megan: Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Sitting date: 20 September 2012. Volume:684;Page:5550. Text is incorporated into the Bound Volume.] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to take a call on the Student Loan Scheme Amendment Bill (No 2) and talk about what Labour thinks about this bill and where this fits in with the vision of how we see New Zealand going. It is disappointing to see members opposite take such short calls on something that is actually so fundamental to how we will progress as a country. Unless we understand how tertiary education and its provision interlace with our economic future we stand no chance. 
Labour is supporting these changes to go to the Finance and Expenditure Committee as these changes should make the repayment of student loans fairer. Although we are supportive in principle of these changes we want to have the opportunity at the select committee to hear the advice of officials and particularly the Privacy Commissioner as to the impact of the Customs Service sharing contact details and personal information on loan borrowers with the Inland Revenue Department. Although it is useful for us to be able to think about how we link all these things together there are real concerns that Labour members do want to hear advice on from the experts at this select committee consideration. 
Student loan repayments are a huge burden on hundreds of thousands of Kiwis myself included. I have a very large student loan having had 10 years at the University of Canterbury with interest accruing on my loan during this time. For those struggling to pay off student debt while also paying their bills and saving for a house it is very very difficult. It is very difficult to hear of overseas borrowers who are making a huge amount of money and making no attempt to pay these loans back. That is why we do support some of the equity issues that are raised in these proposals. There are many people who are struggling to buy a house and to pay their bills while also paying down their debt. We do expect every borrower to make an equal effort to pay back their student loan whether they are overseas or in New Zealand. 
One of the things that we want to see is a principle of fairness applying to the bill and we do welcome this in the interest of fairness. We do welcome the measures that do not just look at income in the form of wages but look at an expanded form of income and look at it in terms of business profits and incomes from trusts as well. I know that when I was at university taking out my loan there were many of my peers who received the student allowance despite their parents earning far more than mine did because they were receiving that money as profits or as income from a trust. Also there is a similar thing for those who receive their income from superannuation. So this is a loophole that we do support seeing closed. 
But one of the things that we do want to raise in this is National’s general attitude to student support. Since Steven Joyce took the reins as Minister for Tertiary Education 2 years ago National has made a series of cuts to student support in an effort—to use his words—to dampen demand for tertiary education. This is where I started my speech. Labour does not see dampening demand for tertiary education as a positive thing. We see tertiary education whether that be at a university or at a polytech as something that is crucial for New Zealand’s future and something that we should be encouraging. So when the Minister talks of dampening demand we have real concerns and real fears. In many ways some of the rhetoric of this is in this bill and it is very much discussed in the regulatory impact statement which sits alongside this bill. 
If we take some examples of where the Minister is dampening the demand for tertiary education and look at an example that I bring up often in this House it is the $42 million of money that was allocated to have extra trade training in New Zealand following the Canterbury earthquakes. But this money has not been used because the Minister thinks there is not demand. There is $34 million sitting there earmarked for further tertiary education in this country which the Government does not think should be used. We on this side of the House think that that should be used and we do not like the dampening in demand there. 
We also have concerns about people who have been shut out of the borrowing scheme. Other members who have taken calls on this bill have talked about their concerns about those over 55 new migrants pilot trainees and part-time students not being able to access the loan scheme. There are many reasons why we should be supporting those over 55 to continue their education and to retrain. We are in an economy at the moment where many people in this age group are losing their jobs and want the chance to retrain. They may not have the money sitting in the bank to be able to go and pay for this training and we do not think that it is fair that they have been excluded from the student loan scheme. 
The changes made in Budgets 2010 and 2011 have seen 25000 people lose access to the student loan scheme. This meant that 25000 of our people cannot afford to study any more. We do not see this particularly redressed in this bill. We actually want to see more people having access to tertiary education. Labour has a proud tradition of the democratisation of education. It was Peter Fraser’s huge vision that we make not only secondary but tertiary education—following World War II—something that is accessible to far more New Zealanders. 
So although some of these changes have been made—we are not saying that every change that this Government has made in terms of the funding that is available for the tertiary education system is unreasonable. But what has been especially unreasonable by this Government is the retrospective application of many of these changes. This was particularly so in the case of the 50 percent course pass rate requirement. For people who were already enrolled who were already borrowing to have that put on them retrospectively was a very difficult set of circumstances for them. The Ministry of Education’s answers to financial review questions show that almost 800 people lost access to their student loan based on these retrospective course result requirements. This is a very large number of people to suddenly lose access to the loan scheme. Losing access to the loan scheme means you lose access to your ability to continue your studies—not something that we are particularly fond of. We already have 84000 young New Zealanders who are not in any form of education employment or training. We do not see putting in place rule changes that actually increase that category as a particularly positive thing. 
This year’s Budget hiked up the student loan repayment rate by 20 percent. This was very difficult for many new graduates. For people leaving university getting their first or their second job and still not earning a high income but nevertheless earning over the threshold to be faced with a 20 percent hike in their student loan repayments is a pretty big thing. I have a student loan myself and faced that increase in cost. That is something that I was able to bear but someone on a much lower income would not have been able to. 
But the most mind-boggling part of the changes that were introduced is postgraduate students losing their right to student allowances. This is one of the things that is discussed in the regulatory impact statement. It has gone through at what level it is that we should be targeting education to the early years. If we truly want to be an innovation-led economy then actually we need to be encouraging postgraduate research in this country. The changes that were introduced in this year’s Budget have done absolutely nothing to encourage that. We even had the regulatory impact statement on the bill identifying that actually it is not enough to be able to say that the Government’s retort to this has been: “They’re not going to get the allowance; they can go and use the loan scheme.” Well for many postgraduate students who have dependent children or other dependents in their lives the student loan is not enough. It actually was the combination of the allowance with the supplement of the loan that let them continue their study. The regulatory impact statement identifies that the loan scheme was important to provide additional support for students with higher financial needs—for example those with dependents. So this is something that is known to the Government—that it was going to cut out a whole lot of people from doing postgraduate study. We are still waiting for some kind of explanation about why there is a Government that thinks that postgraduate research is not something we need. Labour looks forward to having some of our questions answered at the select committee.