Delahunty Catherine: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Delahunty Catherine: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9361] 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Assistant Speaker Roy. The Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill has some merit but the Green Party has looked at it closely and in context and on balance we remain opposed to some of its key provisions. We may be a lone voice in the House and easily dismissed as unreasonable because some good ideas are cemented by this legislation namely the extension of interest-free loans to borrowers from Niue the Cook Islands Tokelau and the Ross Dependency. The Green Party is delighted to see the principle of interest-free loans being expanded to these communities. We hope this indicates recognition by the Government that education can be made inaccessible by both geography and market principles and that the State can positively assist access to tertiary study. But under the new Minister for Tertiary Education we are not holding our breath and under the previous Minister we were not either. There may not be many students in the Ross Dependency at the moment but who knows? If we stick to the current pathetic climate targets the area may become warm enough in the lifetimes of our children for a whole university. 
The Green Party applauds also the modifications that have been made to the bill since the select committee process. They have resulted in the Inland Revenue Department accepting after a little bit of pressure that it made a mistake in not notifying some students about overdue loan repayments and therefore could not penalise them. There was a proposal to enforce a 15 percent repayment penalty on those students but fortunately—after some discussion at the Education and Science Committee which I was happy to persist with—the department withdrew support for that idea. This is a good example of the value of select committees in highlighting anomalous provisions that would create unintended consequences and unfairness and the change is well made. 
We remain concerned about this bill mainly because of the late payment penalties. As the New Zealand Union of Students’ Associations stated in its submission the increases proposed to the compulsory repayment deduction would be unmanageable and unacceptable. Student loan repayments kick in at the very low threshold of $19084 and now is one of the worst possible times to increase student repayment rates. Whatever the optimistic economists and politicians choose to say we are in recession. Many students are part of the low paid and underpaid. They are struggling to meet rent food and clothing costs let alone debt. This especially applies to women students and to former students who are yet to experience pay equity in many occupations let alone in the public sector. It is all so easy for  
Campbell Live 
 to focus on the minority of irresponsible young people who wasted their money on inappropriate goods and behaviours. However they are not necessarily the people who will be hurt by the increase in late repayment fees. Even they are merely reflecting back to us the lessons we have taught them: that they can have it all that they can borrow and spend and that they can live with debt because they are worth no real investment and they must bear the risks. 
The relationship with debt that the student loans scheme entrenches is one of the most insidious and destructive processes invented. In a world where shopping for the latest goods and experiences that global capitalism can provide is promoted to everyone on every screen we cannot blame the young for wanting it. Then we lend them money for their education. First there was the crippling interest on all those loans and all students and then there was interest on overseas students only. Now there are murmurings of more changes to the student loans scheme by the new Minister for Tertiary Education Steven Joyce. 
It is pretty clear that Mr Joyce was not given this portfolio just as something to do while eating his lunch in between building more unnecessary motorways and that the student loans scheme could always be made worse for students. This was also signalled in the Prime Minister’s statement to this House when he waxed lyrical and said he wanted “a careful look at … student support and allowances to ensure that taxpayers’ generosity is not being exploited”. What did he mean? He is really concerned about the public getting their money’s worth but students are also members of the public and they are not getting their money’s worth. Now Steven Joyce is rolling up his sleeves to see what can be done about it. The political risk of reintroducing interest on loans seems too high right now but as Steven Joyce said last weekend “we’re going to look at other requirements around those student loans”. What does Mr Key mean by taxpayer generosity? Does he mean that all of us older politicians who had no student loans are being awfully kind by indebting the next generation and that we will demand more blood? What does Mr Joyce mean? Could he be referring to eligibility to enter study or to remain there? Will that be tightened? None of this is good news for students. 
In the meantime this bill causes concern for the Green Party mainly because of new section 20A(2)(a) which allows for an increase in the standard deduction rate of 10c in the dollar to a maximum rate of 15c in each dollar. Clause 20 which relates to section 55 talks about hardship relief. Considering that many many students are in hardship they might need to think about this provision because it could apply to a lot of people the Government is about to impose extra penalties on. If the Commissioner of Inland Revenue considers that a repayment obligation would cause serious hardship he or she can offer hardship relief. But as serious hardship is not defined and would have to be proven very many people are unlikely to be able gain this form of protection from clause 20. 
We are very concerned about adding debt to people who are already failing to repay. It does not incentivise; it punishes. This is a bit like environmental pollution whereby the burden of proof is always on the citizen and not on the polluter. The burden is on students to prove they are in hardship. Students have no choice but to have a debt if they want to study and if they are not wealthy they cannot always earn their way out of it. At the select committee there was much talk about how students could earn their way out of debt. So many people I know who have left university are not earning their way out of it because they are barely managing to live let alone get a mortgage and their student loan is still a huge burden on them. They are not progressing financially in the way that my generation just took for granted. It is purely unfair. It is a real indication of the value we put on our student body and the value we put on our society as a whole. The poor cannot earn their way out of debt when they start off with debt as young people. That is something I did not experience. 
We oppose the additional burden and the burden of proof being on students to prove that they are in hardship. We are opposed to the provisions of the bill to such an extent that we have to vote against the bill. Although we thought there was good discussion at the select committee about all the different aspects of the extension of interest-free loans and we support that extension we are deeply in opposition to clause 20 which adds to the hardship. It is just not fair to use the student loan scheme as a way of keeping people in poverty. To say that it is a debt on the country is true but we have to take responsibility for the debt that was created. We created that debt when we created the student loan scheme. Many people out there today know what I am talking about because they have not earned enough. Women migrants and refugees tangata whenua Pasifika and people with disabilities have absolutely no chance of the high-wage economy that the student loan scheme assumes is behind people’s ability to repay loans. So the Green Party will continue to be consistent and principled in our attitude towards the student loan scheme and towards added burdens on young people in their education and in future life and we will not support this bill. Kia ora.