Dunne Peter: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Dunne Peter: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8666. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 One of the themes that has come through from just about everyone I think who has spoken in the debate so far has been sustainability and that is a critically important aspect of all of the changes over a period of time that have been made to the student loan scheme. I want to take just a little bit of time to recount some of the background and also to deal with one or two of the issues that have arisen in the Committee so far. When I became the Minister in 2005 there was very little control in place on the way in which the scheme was administered who was eligible and how repayments were chased. We did not even know at that point how many overseas-based borrowers there were let alone how many were paying their student loans off and how many had just simply gone into hiding or oblivion. So what we did in 2006-07 during the term of the previous Government was have a process whereby we sought to identify the numbers overseas as a proportion of total New Zealand borrowers so we could then start the process of tracking those people down and making sure they met their responsibilities. The attraction of the interest-free policy meant that there was more pressure on the scheme even then and the priority had to be to make sure in terms of its sustainability that we sought repayment. 
We carried on with that policy once the change of Government occurred and in 2010 we began the process of chasing defaulting student loan borrowers in Australia where the bulk of our overseas-based student borrowers are followed by the United Kingdom and various other parts of the world. What we know from the information is that domestically based borrowers on average repay their loans in around 3 to 5 years whereas the overseas-based borrowers take three to four times as long. So our focus is very much on those overseas-based borrowers for two reasons. Firstly there is a basic fairness issue. I am amazed every time I am interviewed by journalists on this subject usually young journalists with a student loan how at a certain point in the interview the journalists will always say: “These people get me angry because here am I paying off my loan and they are getting away scot-free.” It is a real gut reaction from a lot of people in this country who are genuinely seeking to make their repayments. When you see some of the examples from offshore borrowers about their arrogance in assuming that because they are offshore they are out of sight out of mind I think it really reinforces from the sustainability perspective the need to put pressure on those borrowers to repay. 
That brings me to some of the measures that are contained in this bill the Student Loan Scheme Amendment Bill (No 2) and it would be wrong to see this bill in isolation from the suite of measures that have been introduced over the last 4 or 5 years because it is one part of a continuing programme. One of the members spoke about concern about information sharing at the border. The point here is that we need to be able just as we do with recalcitrant child support payers to track down people who leave this country with a debt and actually get them to make some commitment towards repayment. That is why we introduced previously the concept of a nominated person and that is why we have started the campaigns in Australia in particular and will be extending those more broadly to other countries to physically contact those people and get repayments from them. The results we are getting so far are quite dramatic. Just recently we hit $1 million a week in repayments. That is an extraordinary achievement. It is a goal to be proceeded with in the future. I do not share the concerns about information matching and it is certainly not for any sinister purposes. It is to get a better record of where people go with debt so we can follow them and make sure they meet their obligations for repayment. 
The member Holly Walker also felt that there was some concern about the capacity of the Inland Revenue Department’s technology to cope. The system can cope with these changes. They have been designed in such a way to ensure that that is the case and the transitional provision that the Finance and Expenditure Committee has prudently inserted I think which is in the Supplementary Order Paper is designed to ensure that we can deal with some cases that have arisen—and there were some a year or so ago—quite swiftly without having to delay the issue of repayment even further. 
So I just wanted to take a call at this stage to make the point that there seems to be common ground on sustainability being a critical issue here. There is a conflict because at one stage members talked about a generous scheme. It would be great to have a generous scheme. We already do by world standards but that generosity brings you up against the sustainability argument very quickly. What we have to do in the interests of the current generation of borrowers and future borrowers to come is ensure that the scheme is sustainable. We do that firstly by prudent management of it and secondly by ensuring that people who enter into loan commitments are under some legitimate pressure to make their repayments because it sends all the wrong signals to simply let them go scot-free. So that is why this bill deliberately focuses—[ 
Bell rung 
] Mr Chairman if I can take just another few seconds. 
The CHAIRPERSON (Eric Roy) 
: Peter Dunne. 
Hon PETER DUNNE 
: If members will indulge me. I am not going to take a full 5 minutes. That is why this bill really focuses on making changes to ensure that we can track those people more responsibly. 
I acknowledge the support of other parties for this legislation. They may dismiss it as a small step. It is one of a series of continuing steps to ensure that our loan scheme remains viable that our borrowers can continue to take advantage of it and equally important that we expect them to make their repayments when they fall due.