Goldsmith Paul: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Goldsmith Paul: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 26 March 2013. Volume:688;Page:8953. Text is incorporated into the Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 Thank you Mr Chairman for the opportunity to make a comment on this bill the Student Loan Scheme Amendment Bill (No 2). It was encouraging to hear the spirit of bipartisanship reaching across the room from our friend Mr Cunliffe. The thing that surprised me was why he was not quite so focused on doing sensible things when Labour introduced this excessively generous scheme which this Government inherited—this excessively generous scheme which was wide and billowing with very few checks and balances. Labour did not do anything about drawing in the full income of households. It just opened the gate as wide as possible and encouraged people to borrow as much as possible and never pay it back. 
Of course that kind of activity that attitude that lassitude you might say extended to every aspect of Government spending through the 2000s and saw Government spending increase by 50 percent during those fat years up to the point of 35 percent of GDP. This Government has been about trying to restore some order to the nation’s books and get us back on track to surplus in a very difficult and dangerous world. 
This piece of legislation—I am drawing back here to Part 3—is all about that important task of making the student loan scheme more sustainable. When we look at clauses 63 through to 66 they are about working on some of those little minutiae that are really about just getting some boundaries around the scheme making the student loan scheme sustainable in the future reducing the need for more Government borrowing and preparing students for the way ahead. 
We should not forget that the New Zealand student loan scheme is one of the most generous in the world. Some might say that there is only so much we can spend on tertiary education and that if we devote all of it to subsidising student-free loans for people who can and should be paying it back faster— 
Tracey Martin 
: Student-free loans? 
PAUL GOLDSMITH 
: —interest-free student loans—then that is less money that we can invest in investment. 
When we look down to the detail what have we done? It is worth recapping briefly that the changes we made over the last few years have reduced the cost to the Government from about 48c in every dollar that is loaned—a truly horrendous cost to other people who are paying the bill—down to 39c and we are trying to get it down further. This is a significant achievement and it is a demonstration of the Government’s priorities. When we look at Budget 2012 repealing the voluntary repayment bonus and increasing the repayment rate from 10 percent to 12 percent that has significantly increased the speed with which these loans are repaid so students can get on with their lives safe in the knowledge that they have made good progress on their loans and can save for houses and so forth and the taxpayer is not unduly bent out of shape. 
In the main provisions I just wanted to draw attention to the question of the definition of income being broadened to student loan repayment purposes to align more closely with that excellent— 
Todd McClay 
: Does it include interest from bank accounts? 
PAUL GOLDSMITH 
: No it does not but it is the same income definition used for determining entitlements for Working for Families tax credits. We have here in the Chamber Minister Bennett who has done such a good job in the welfare area. 
These changes in Part 3 are absolutely common sense. Why do we do this? Because it is about people paying back their debts to other New Zealanders. That is what this bill is about and it is only fitting and proper. I was disappointed that we were left with such a wide and billowing scheme that was unaffordable and unsustainable and this bill is a number of small targeted well-crafted steps to bring this scheme back to a more sustainable level so that we can continue to support our students at university and build that brighter future to which we all aspire. Thank you very much.