Donnelly Brian: Student Loan Scheme Amendment Bill (No 2) — First Reading 
Donnelly Brian: Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Volume:635;Page:6594] 
Hon BRIAN DONNELLY (NZ First) 
: 
 New Zealand First has long believed that the best immigrant is a New Zealander returning home and this legislation supports that philosophy. When I grew up the concept of an overseas experience was a trip to Australia in retirement although it has to be said that in virtually all generations there were some New Zealanders who did go overseas. I think Ernest Rutherford would never have split the atom at the University of Canterbury and Kiri Te Kanawa would never have become a world-leading diva if she had remained here in New Zealand. However for the present generation of young people an OE soon after the completion of educational qualifications is the norm—the rite de passage as I would say to my friend Marian Hobbs. This should not be seen as a bad thing for our society. In fact the experience these young people gain enriches them in many ways and possibly makes them better contributors to New Zealand on their return. 
The Hon Bill English brought up the good point I think that there has been criticism of the student loan scheme that sort of stated that the levels of student debt have driven our young people off overseas. However the evidence does not seem to validate that point. It seems that it is much more of a cultural element for our young people these days. So we should not be overly concerned about the phenomenon of a large proportion of young people indulging themselves in an overseas experience. What we must be concerned about however is ensuring that those young people come home settle down here and contribute to our society both economically and socially. 
The sad fact is that the way the student loan scheme has operated has often created strong disincentives for that to take place and for the return of our best and our brightest. Many young people have left our shores unaware that they are required to contact the Inland Revenue Department and to work out a means of regular repayments on their loans and if those repayments are not made then penalties accrue. So when those young people decide to return they find out that they have a whopping great bill. For many it means that remaining overseas becomes a rational choice and that cannot be good for the nation. This bill creates an environment that will eradicate many of these disincentives. 
There is a further complication. At present with no interest on loans students may believe that when they go overseas there will be no interest accruing on the loans that they leave behind. The problem is that the interest-free situation applies only to ex-students who remain in New Zealand so in fact those people are accruing interest on their loans while they are overseas. So this legislation makes the student loan scheme more user-friendly for ex-students who are going overseas. A remit payment holiday for 3 years will assist those who take on seasonal and low-paying work—working in pubs restaurants etc.—whilst they are overseas. Even though interest will accrue there will be no penalties for non-payment during that period of time. 
The legislation is also beneficial to the general taxpayer. At present the Inland Revenue Department does not automatically have knowledge of those with student loans who happen to take off overseas. It has depended upon ex-students themselves telling the department that they plan to travel. As the Hon Peter Dunne has said compliance is calculated to be very low. This legislation will ensure that the department is alerted to anyone with a student loan who has taken off overseas through data-matching with the Customs Service. The benefits of this are twofold. It prevents ex-students from inadvertently breaking the law and getting themselves into considerable debt and it also ensures that those who are deliberately flouting the law are identified and are made to pay what they are legally required to. As has been explained a large number of people have had interest write-offs to which they were not entitled. 
There will be some who say that this legislation is unfair because they have paid back what they had to and they ask why others should be let off. I would refer those people to the parable of the vineyard workers who contracted a deal to work all day with the owner. Halfway through the day the owner realised that he would not be able to harvest all the grapes so he contracted another group of workers for the same amount. Then with 1 hour to go the owner realised that he still would not be able to harvest all the grapes and he contracted another group of workers for the same amount. At the end of the day he paid all the workers the same and the people who had worked all day said that it was unfair. The owner pointed out to them that what he had contracted with them was fair at the beginning of the day and that it was still fair then. The fact that other people had been fortunate and lucky because of the circumstances in no way changed the fairness of the circumstances of the first group. 
As Peter Dunne has said the bill will go to the Education and Science Committee—a very good committee which is probably why we are sending it there although I am sure there are other reasons too. There is no doubt that the details will be looked at very carefully. I am pleased that Bill English mentioned that he was an ex - Minister of Revenue because he will be able to bring the knowledge and expertise from that experience to bear upon the scrutiny of this bill. I have to say that ensuring the provisions will be able to be put in place by April will put some time pressure on the committee to hear submissions and to do its considerations but I am sure that the committee members themselves—as I say the very good Education and Science Committee—will be looking forward to getting their teeth into the legislation. 
To summarise New Zealand First is supportive of this legislation. I say once again that as far as New Zealand First is concerned the very best immigrant is a New Zealander coming home and we believe that this legislation will support that position.