Bradford Sue: Taxation (Annual Rates and Urgent Measures) Bill — First Reading Instruction to Finance and Expenditure Committee 
Bradford Sue: Taxation (Annual Rates and Urgent Measures) Bill — First Reading Instruction to Finance and Expenditure Committee 
[Volume:628;Page:212] 
SUE BRADFORD (Green) 
: 
 The Green Party will support this bill through all stages of its progress through the House but not without reservations. We will certainly be seeking to put up amendments at the appropriate stage in the process. Although we welcome unreservedly the bill’s improvements to the student loan scheme which I will turn to in more detail shortly it is in the area of Working for Families that we take particular exception to the underpinning assumptions that the Government is making in carrying out these reforms. This bill increases the annual income level at which the abatement of family assistance starts from $27500 to $35000 at the same time as it reduces the rate of abatement from 30 to 20 percent. Dr Cullen estimates that this would help up to 160000 families at an average additional $50 a week—great stuff! The Green Party has no objections per se to this extension to the Working for Families package. We appreciate and support any increase in assistance to families struggling to raise children in our current low-wage high-cost economy. 
However what we do object to—as we have done since Working for Families was first introduced—is that a bonus has once again been given to what the Government calls “working families” while the children of beneficiaries continue to miss out. Right from the start even through its very name Working for Families has been the latest subtle tool in an ideology promoted by National and Labour from the mid-1990s through to the present day. It is an ideology that promotes structural discrimination against children if they happen to be unfortunate enough to come from a family dependent on the benefit system for survival. According to the last publicly available Government figures over 20 percent of our country’s children still live in poverty and that is according to the Ministry of Social Development itself. A high proportion of those children come from sole parent and/or beneficiary families. On principles of social justice and human equity it is simply wrong and cruel to continue to increase the amount of Government assistance that is going to the better-off while denying that the child tax credit / in-work payment should be given to those children who need it most just because one of their parents is not in the paid workforce for 30 hours a week or more. 
As the Child Poverty Action Group stated last week “it is misleading for the Governor General to claim that the change ‘will mean tax relief for every low and middle income family with children in New Zealand.’ ” when in fact this addition to Working for Families offers nothing to the 250000 poorest children in Aotearoa. The Child Poverty Action Group’s finance spokesperson Dr Susan St John also went on to say: “The latest changes only shunt the poorest kids further to the back of an already long queue when they urgently need to be first in line”. 
On top of the intrinsic unfairness epitomised by this bill—in its current form at least—is the fact that Labour in the new Parliament appears bent on continuing with its intention to scrap the special benefit which was brought in through the legislation that also produced the initial Working for Families package. The special benefit is to be replaced by temporary additional support or “TAS” as it is colloquially known which the Government claimed would save it some $26 million in the 2006-07 financial year and a further $38 million in 2007-08. This new system as far as we are able to ascertain will mean an end to the last layer of discretionary support that allows people who do not have enough to live on to survive. The fact that a Labour Government makes no bones about saving an initial $64 million through cutting this special benefit is a disgrace. The special benefit under both the National and Labour Governments has been the only means by which Work and Income can exercise discretion in making sure that at least some of those who do not get enough to live on by other means can access the bare essentials of survival. Without a discretionary benefit like this poverty and indebtedness will only increase for those who are already suffering the consequences of unemployment sickness long-term disability or sole parenthood. Those impacted are disproportionately tangata whenua Pasifika peoples and refugees and migrants. 
Strangely enough the Hon Mark Burton in a speech to the House in 1995 criticising the National Government’s then social welfare reforms said that the removal of discretion from special benefits was “just a de facto extension of benefit cuts”. The new Minister for Social Development and Employment the Hon David Benson-Pope should take this opportunity in taking on his new portfolio to reflect on his colleague’s earlier comments and to reverse this further attack on those in our society who already have the least. Mr Benson-Pope should either allow the special benefit to continue until such time as benefits are enough for people to live on with dignity or ensure that the new temporary additional support regime continues to allow discretion and to meet people’s actual rather than imagined needs. The Government should not take Green Party support for this particular bill before the House today to mean that we accept Labour’s further consolidation of systemic bias against the children of the non-working poor nor that we will stay silent if it continues with its plans to end genuine discretion at the tough end of the benefit system. 
To those who may be asking why on earth the Green Party is supporting this bill at all given the criticisms I have just been making I must reply that not only are we giving it our backing because it does increase aid to some families but also because of what it does to student loan recipients. The current $8 billion or so of student debt is not affordable for our graduates or for our country. We have to stop seeing education as a cost and understand that it is an investment in the future of Aotearoa New Zealand. In amending the Student Loan Scheme Act 1992 to allow a full interest write-off for resident borrowers and in granting an amnesty on penalties for people who return home between April 2006 and March 2007 the Government is taking a major step towards reducing the horrendous consequences of this dreadful scheme. The Green Party has been campaigning for an end to the student loan scheme for many years. It has been a key plank for us in the last few election campaigns and we remain committed to getting rid of the whole thing alongside reducing and capping fees instituting a universal student allowance that is a truly universal allowance—not a partial one—and allowing a year for year debt write-off for people who stay in the country and still have loans outstanding. 
Meanwhile we enthusiastically welcome any moves in the right direction. Students should not be forced to borrow to live any more than beneficiaries should be forced to borrow to live. We also believe that high-quality tertiary education is a public good not a private property right. Those complaining about the potential costs of interest-free student loans are wrongly assuming that our young people will act like property speculators. National seems to be saying that if students are offered interest-free loans they will all borrow the maximum amount in order to make a profit from the State. This assertion is completely out of step with reality. The vast majority of students borrow money because they have no choice if they want to pay their course fees and study and if they want to meet their basic living costs while studying. In 1999 when Labour and the Green Party made student loans interest-free for the period of study National predicted that all students would rush out and get loans yet the pick-up rate barely moved. A recent study by the Educational Policy Institute found that New Zealand’s student loan interest rate of 7 percent is higher than any other comparable OECD country. Our graduates are paying one of the highest student loan interest rates in the world. 
For all these reasons the Green Party is therefore delighted that scrapping student loan interest as laid out here today will wipe years off the repayment schedule of many loans and will save an average of $4000 in interest payments per graduate. I imagine there will be some complaints of unfairness from graduates now living and working overseas as two of my own graduate offspring currently do. However I think it is fine to have a scheme that offers such a great incentive to our young people to come home and bring their New Zealand education and overseas experience back with them to enrich our society and our economy. Our support for this part of the bill rests on our commitment to a tertiary education system that is accessible to all and that through that accessibility can manifestly benefit the country as a whole not just students and graduates as individuals. I hope that before too long the Green Party will be part of a Government that is foresighted and courageous enough to get rid of the whole foolish student loan scheme altogether.