Martin Tracey: Student Loan Scheme Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeMartin Tracey: Student Loan Scheme Amendment Bill (No 3) — Second Reading[Sitting date: 13 February 2014. Volume:696;Page:15957. Text is incorporated into the Bound Volume.]TRACEY MARTIN (NZ First): Kia ora Mr Deputy Speaker. I rise to oppose this bill the Student Loan Scheme Amendment Bill (No 3) on behalf of New Zealand First. New Zealand First is of the view that such measures as arresting your own citizens at the border are Dickensian and entirely disproportionate to the nature of the offence. It is somewhat poetic that we use that word “Dickensian” as it is a documented fact that Charles Dickens was forced at 12 years old to leave school and to take up factory work after his father was thrown in a debtors’ prison in 1824. It seems fantastical that we are reinforcing the concept of debtors being arrested and brought before the courts 190 years later and it somehow seems worse that this is the considered punishment for a debt that was incurred to gain education.We also believe that measures in this bill must be viewed in a wider context. Finance company directors virtually stole billions of dollars in recent years and ruined the lives of many people yet in many cases they avoided prosecution or serious penalty. Thestudent loan scheme has already had many unintended adverse consequences and this bill will create more. We urge the Government to reconsider the excessive measures proposed in this bill. New Zealand First believes that other measures must be explored to create real incentives for repayment.The real solution to student debt issues is ensuring that there are decent-paying jobs for students to go to after they graduate so that they can repay their loans without having to go to Australia or anywhere else. In New Zealand First’s view making a group of young New Zealanders outcasts from their country is not a solution to the problem of outstanding student debt. We believe that new section 162B inserted by clause 8 which allows the District Court to issue an arrest warrant if it is satisfied that a person who had committed this offence was about to leave New Zealand is placing an ambulance—or actually in reality a police car—at the bottom of the cliff. It would make far more sense to New Zealand First that as that passport holder that citizen comes back into New Zealand an Inland Revenue Department officer is placed inside the international airport and therefore makes contact with that person on their way into this country and collects the information that is required.Why would one stop a person on their way out of the country when there is then no opportunity for them to either produce a third party or spend time with the paperwork etc. etc. and expect them to have $30000 or $40000 shoved in their back pocket? If you want to make contact with these people and you have the process ofcrossmatching information find these citizens on their way into the country and have the conversation there. Do not wait for them to be on their way out of the country. It seems ridiculous to us.The report of the Finance and Expenditure Committee says: “Under these sections as amended a court could order the borrower to pay the amount in default to enter an arrangement to do so or to provide information to the court. We would envisage the court requesting such information as the borrower’s contact details or information about their assets income or employment status.” Again we say that it seems much more sensible to us to actually seek that information as the citizen is entering the country rather than to wait until they are on their way out.We also note that it says in the report: “We also recommend inserting new section 162B(7) to make it clear that a court would be required to direct the return of any travel documents or tickets once it discharged an order not to leave New Zealand.” It seems nonsensical to us—just completely impractical. If you have somebody at the airport about to board a plane and you stop them there is no point giving them their tickets back after the plane has left. Is there any compensation to the individual if they are stopped at the border their plane has left they have $2000 worth of tickets and they have now come to an arrangement? What plane do they get on? Is the Government going to compensate? Again if you talk to the citizen on their way into the country then arrangements can be made and that situation is avoided.I want to take up the point of the somewhat rosy view of the Inland Revenue Department. My husband had a student loan. My husband cleared his student loan when he went to work. However the recording of that payment was not processed appropriately. So some time later after years of receiving a zero balance statement we received a statement for so many thousand dollars and had to go through the process of proving through our bank records that we had paid that amount. What would happen if say my husband was arrested at the border but had already paid that account? How long would it take for him to prove it? Does he have to go to court to prove it? Does he have to have all his bank account records on him if there has been an error made?If there has been an error made by the Inland Revenue Department what is the compensation available if it is mistaken? How is that citizen who has now been pulledout of a line-up and arrested at the border recompensed by their Government if it is an error from the Inland Revenue Department? Let us just put some practicality around this.I think the other thing that we want to point out too is a little point that nobody has mentioned yet. It is on page 4 of the report and it says: “We also recommend altering the definition of ‘adjusted net income’ for student loan repayment purposes to reflect provisions in the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Act 2013 requiring employees who receive certain non-cash benefits from their employer such as a motor vehicle to include them in their income calculations.”I have just had a quick look. I think this has been included in the bill because once again we have this biased view that everybody who has a student loan is somehow a doctor or a lawyer or some highfalutin individual who has a mega-income and gets all these add-ons on the side. I had a look at for example a biosecurity officer. There is a need to get a student loan in order to actually be qualified enough to become a biosecurity officer. A biosecurity officer in the first 3 years of employment can get between $35000 and $45000 in salary a year and often they get a vehicle that goes with that because they have to travel around to look for Argentine ants on Kawau Island or whatever.What we are saying now with that amendment is that the car is going to be included inside the concept of their salary which means that the amount they are supposed to repay can take them into a higher threshold. It has not been mentioned before and I think it is something that needs to be looked at. I am not quite sure whether the true practicalities of that measure have been thought all the way through to when it actually hits the ground.I want to refer now to Treasury’s notes. I am trying to find where the Government actually got this from and where it thinks it has got support from. I can imagine that it has support from only a very few of its own constituents who somehow believe what the Government tells us that this will work and that these people are bludgers. The Treasury notes say: “this proposal may have the appearance of the Police acting as debt collection agents for Inland Revenue” which would be completely inappropriate. The police have another role. We already have difficulty with the way they are viewed by many in our society. We do not want to chip away any more at the way they are viewed.The commentary on the bill states: “It has been additionally noted by officials that they do not expect the threat of an arrest warrant to be a particularly effective incentive. Inland Revenue’s new allowance to identify those for whom they believe an arrest warrant needs to be applied has been defined as punitive and unprincipled by the Legislation Advisory Committee.” So you have got Treasury you have got the police and you have got the Legislation Advisory Committee. You also have the regulatory impact statement saying: “This creates an inequity whereby two loan borrowers with the same loan balances may have different repayment obligations.” and “The impact of this policy on the compliance of overseas-based borrowers is uncertain.” and “Officials have also stated that they do not expect the faster recovery of loans.”There is not a single official in these documents¸ who truly stands behind this decision. There is another reason for this. It is not about collecting debt it is not about the practicalities of how this will work and it is not about helping New Zealand citizens. But it is possibly about putting in place the ability to arrest your citizen at the border with debt so that later on that statute sits there and can be used for another purpose.