Beaumont Carol: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Beaumont Carol: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 26 March 2013. Volume:688;Page:8949. Text is incorporated into the Bound Volume.] 
CAROL BEAUMONT (Labour) 
: 
 Thank you very much. 
The CHAIRPERSON (Eric Roy) 
: I am trying to share this around. I am sharing the love. 
CAROL BEAUMONT 
: That is wonderful thank you. 
The CHAIRPERSON (Eric Roy) 
: Mr Cunliffe has already had two calls so that is why it is your turn. 
CAROL BEAUMONT 
: That is great. Part 3 of the Student Loan Scheme Amendment Bill (No 2) as others have noted concerns the parts of the bill that amend the principal Act that apply for 2014-15 and later tax years including the amendments relating to the meaning of “adjusted net income” and the amendments relating to the repeal of the provision of the 10 percent bonus. We support the provisions around amendments relating to the meaning of “adjusted net income” because that will be fairer. We think that all borrowers should make an equal effort to pay back their student loan. We also think that those who receive their income from a company trust superannuation scheme or other source should be treated in the same way as those who earn a weekly wage—and to be honest just as an aside that is often not the case. So we are pleased to see that in this regard some of those other forms of income are being drawn in and treated equally. 
We understand that broadening the definition of income will save the Crown approximately $7.5 million over the next 5 years—that is according to Treasury—so of course that is a positive as well. Those provisions in clauses 63 through to 68 seem to us to make sense and are the reasons why we are supporting this Student Loan Scheme Amendment Bill (No 2). 
But there are concerns. As my colleague Megan Woods has talked about we have concerns about how this fits in the overall approach taken by the Government to student support. There have been quite a number of attacks made on student support in an attempt to “dampen demand” for tertiary education. To us that seems crazy. Given the kind of economic change that we need in this country given our need to be smart and agile and given the need to really lift performance in our workplaces we need to invest more. We need to be smart and innovative. A major part of that is investing in our young people—in fact in all of our learners not just young people—and anybody who wants to upskill themselves and participate to a greater extent in their career. So we are concerned about the number of changes that have been made. Some of the examples have perhaps been mentioned already but I think it is important to just reinforce them. Over-55-year-olds in Budget 2011 were stopped from accessing the student loan. That just does not make sense. We want older people to continue in the workforce for longer. Although we have high unemployment at the moment the overall demographic trend is for an ageing population when we are going to want and need older people in the workforce. That means they are going to need to be able to upskill to look at career changes and to do all of those things. Arbitrarily cutting off access to student loans at age 55 is short-sighted in the extreme. 
There are also limits on part-time students’ borrowing for course-related costs. That was a cut made in 2010. Budget 2010 also imposed a 2-year stand down on new residents accessing student loans. If people can get into some form of tertiary education and get themselves the kind of qualifications they need that is probably a very sensible way for them to commence their residence in this country. After all they do have to pay that money back. 
In 2012 the National Government passed legislation to reduce the overseas-based borrower’s repayment holiday from 3 years to 1 year. That goes counter to such a long tradition and such an important element for many New Zealanders and that is that they study they go overseas they develop contacts and networks and they have other opportunities there. They then come back to New Zealand and it is beneficial to our economy. We did not support that. 
The decision in last year’s Budget to remove the allowance eligibility for postgraduate students is the one that I want to really focus on now. That has to be the most short-sighted and unfair thing that could possibly happen given the need to make structural changes in our economy and given the need to really look at innovation to look at how we can support manufacturing in this country. The sort of manufacturing we are going to need to be involved in is not just in lightly processed commodities; it is going to need to be in elaborately transformed manufacturing and we need people with ideas and smart things. We want these people to stay here. The fact of the matter is that those students who want to continue in postgraduate studies are likely to be some of the brightest New Zealanders that we have who are wanting to keep learning to research and to do those things. What are they going to do if they cannot access support here? They will go offshore. They will be snapped up. We do have a good tertiary education system. We have a good education system overall. They will be snapped up and taken on by overseas universities and once they are there they will end up being part of a research pool and part of a brains trust in other economies and not in ours and that just does not make sense. This is an enormous waste of New Zealand’s potential. We do need more people doing postgraduate study not fewer if we are to grow our innovative economy. 
All the while during all of these cuts and dampening of demand and short-sighted economically damaging actions by the Government student debt has continued to grow with the latest figure showing it has reached $13 billion—$13 billion. Student loan debt is now a huge burden on young Kiwis starting out in their working lives and certainly for most of those people they have no concept of the dream of owning their own home for example. It is very much seen as outside of their reach. Combine that with some of the other initiatives of the Government and the chances of those students minimising the loans that they need to take out—for example bringing in youth rates. Bringing in youth rates like we just have—well one of the consequences of that will be that young people will be less able to save for their tertiary study. What does that mean? Well they are going to have to borrow more. So that is certainly counter-intuitive to reducing student loan debt. 
Keeping wages down—a 25c an hour increase in the minimum wage—is the same thing. Young people are concentrated if they can get work in minimum-wage jobs on very low wages. Even if they are not on the youth rate they are less able to save to fund their tertiary education studies and therefore have to take out greater student loans. I could go on. The point of this is that those things combined with some of the cuts into student support are just a recipe for a disastrous economic outcome for us and also for those individuals. Social mobility used to be something that we valued in this country. It was a country not that long ago where if you were a kid with ability you could go on you could learn you could get a decent job and you could expect to do well for yourself and your family. That is no longer a reality for so many New Zealanders. That is something that I think we need to really consider. Do we want to have a haves and have-nots society? Well over on this side of the Chamber we do not. Tertiary education is a very important bridge to making sure that people have opportunity. So these things are very very damaging. 
So going back to this part of the legislation to Part 3 I remind the Committee that we are supporting these provisions. We think that they are logical and fair. Unlike the Government’s overall approach to student support they are sensible. The overall approach is one that we do not agree with and we think has major economic consequences. Thank you.