Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — In Committee Third Reading 
Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — In Committee Third Reading 
[Volume:660;Page:9430] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I listened quite carefully to that contribution on the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill from National member Jo Goodhew. I thought that what was quite revealing was not so much what she said but what she did not say. At no point did she commit National to retaining the interest-free student loan scheme beyond the end of this term. She responded to a lot of the points that Labour members had made but at no point did she deny that some time in the future National wants to do away with interest-free student loans. It would not at all surprise me if that is what National wants to do because it was so vocal in opposing the interest-free student loan policy when it was first introduced. 
I will go back and respond to some of the comments that have been made. The debate in this third reading has ranged reasonably widely. I think that that is probably because in the nature of urgency we have canvassed a lot of the specific material of the bill already today. Members have talked a lot about the value of tertiary education as an investment in the future of our country and I echo some of the comments raised by members—particularly by those on this side of the House but even by some of the members on the other side of the House as well. We cannot view investment in tertiary education narrowly and only in economic terms; we have to look at the investment we make in all forms of education including tertiary education as an investment in the development of New Zealand society. Not all of that investment will necessarily lead directly to an improved economic return. But overall if we build the level of social capital within New Zealand by having a more educated society then in turn the effects of that will flow on to a more economically prosperous country—one with a higher standard of living higher wages fewer long-term health problems and so forth. So we have to look at the investments that we make in education including through the student loan scheme with that very broad picture in mind. 
With that in mind I tell the House that there has been some fairly recent research. I have just been reading a book called  
The Spirit Level 
 which talks about the fact that countries that are more even—where there are higher levels of education and where the gap between the rich and the poor is lower—generally tend to have far fewer other problems than other countries. They have lower crime rates longer life expectancy fewer health problems and so forth. So investing in education including tertiary education is an important part of making sure we increase our social capital and decrease some of those wider social problems. The student loan scheme provides a step on the ladder into tertiary education for those who otherwise could not afford it. It is a fairly recent initiative; it extends back only as far as about 1992. Of course we would not have the student loan scheme had National honoured the pre-election promise it made in 1990 to abolish all student tuition fees so that tertiary education would return to being free. Of course that is what many of the members in this House received when they undertook tertiary study. They received their tertiary education for free and a lot of them received some form of allowance during the time they were studying. Some of them may have been bonded during that time. I know that one of my parents received a tertiary education paid for by the State and was bonded as a teacher as a result. There is a whole generation of New Zealanders who benefited from policies such as those which have been taken away from the several generations that have followed. 
I note that one of the reasons the student loan scheme was established was to make sure that despite the increased cost of tertiary education people can still access it. They are not excluded on the basis of cost. Having said that I say that it is not the ideal mechanism. I for one hold out hope that one day we will return to a situation where tertiary education is far more accessible and the costs are not as prohibitive as they are now. I appreciate the economic realities of that; it will not happen overnight. I acknowledge that back in 1999 when the Labour Government was elected we were not suddenly going to revert to the days when tertiary education was completely free. That is why over time I was very supportive of the initiatives that the previous Labour Government put in place to progressively lower the cost of participating in tertiary education. It began in the early days with the cap on student tuition fees so that they did not continue to grow to the massive extent they grew in the decade prior. 
There were other things such as the abolition of interest on student loans while a student was studying. When I first entered tertiary study one of the most frustrating things about the student loan scheme was that during the time I was studying I was accumulating interest on my loan despite not earning anything and not having any ability to make any repayments. All of the money that I was earning through my part-time job—stacking bread for Quality Bakers—I was putting into reducing the amount of money that I needed to borrow in the first place. I was not making any student loan repayments and in the meantime the interest was accumulating. When the Labour Government came in in 1999 it put an end to that. I think that was a very welcome initiative although it took another 6 years before the Government was finally in a position to do away with interest on student loans altogether. As somebody who was involved in the development of that policy I can say that I am particularly proud of that. I know the huge impact that that has had on the repayment times for some of our student loan borrowers. When talking about discouraging people from leaving New Zealand—we want them to stay in New Zealand— we understand anecdotally that one of the things that drove people away was the huge mounting student loan debts they had by the time they had finished studying. Removing the interest on their student loans if they stayed in New Zealand provided an incentive for them to stay here contribute to the New Zealand economy to our country and to our society and get rid of their student loans. I think that was a very very good thing. 
There were many other things in the overall mix such as the Step Up Scholarships. Stepping up is a term that seems to have been adopted by members on the other side of the House these days but it was the last Labour Government that introduced Step Up Scholarships to make getting into tertiary education a little bit easier for some people who had previously been disadvantaged. It should be noted of course that all of the initiatives that I have just talked about were opposed by the then National Opposition and quite vocally so as well. National opposed all of those initiatives. We have well and truly canvassed John Key’s pledge to fight the introduction of interest-free student loans with every bone in his body. 
Moana Mackey 
: Oh! 
CHRIS HIPKINS 
: That is right. He pledged he would fight it with every bone in his body. Here we are a year and a bit into a National Government and interest-free student loans are still there. He pledged to fight it with every bone in his body so one can only conclude that he does not have any spine left as my colleague Moana Mackey said. 
National members have clearly demonstrated during their time in office that they do not have a lot of time for tertiary students. They are quite intent on cutting a lot of things in tertiary education that lead to an increase in social capital that help those people at the bottom end of the spectrum to get into tertiary education—or into any form of education—to upskill themselves and to move on through the system. An example is the abolition of night classes. People cannot get a student loan for night classes but they did not need one because they were relatively cheap. People did not need a student loan to get into a night class. Night classes are gone now. They were a stepping stone that led into other forms of tertiary education but they have gone. The training incentive allowance reduced the amount that people needed to borrow when they undertook tertiary education but that has gone. It was cut by the National Government. I turn to voluntary students association membership. If the Government cannot get the students associations on board with it it will do away with them altogether. It is a tried and true trick from the National Government. If the Government cannot get its opponents on board it will do everything it can to put them out of business. I think that is pretty sad. 
I think this bill is a good bill. We have talked a lot about the details and I want to thank once again the Minister in charge of the bill for his willingness to engage in the debate. I have raised several issues with him and he has responded to me. That included a commitment on behalf of both of us to work together on one or two of those issues to see whether we can further them outside the scope of this bill and I want to thank him for doing that. But my main concern with the bill is not so much with what is in it because Labour supports it but with what is not in it and what might be coming further down the track. I would be very concerned if the National Government moved away from its promise to keep the interest-free student loan scheme. That certainly seems to be what it is lining up for. John Key mentioned in his speech that the Government will be taking another look at all of the settings around student support in tertiary education. Similar comments have been made by the new Minister for Tertiary Education Steven Joyce. I think it would be very sad if the National Government went back on its promise to retain the interest-free student loan scheme whether the Government was going to go back on it at this election the next election or the one after that. I hope that the Government will maintain interest-free student loans. I think it is a very good scheme. It is one that we are very proud of; I am very proud of it. It was passed by a Labour Government despite very vocal opposition from the then National Opposition. I would like to see the scheme stay in place.