Walker Holly: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeWalker Holly: Questions for Oral Answer — Questions to Ministers[Sitting date: 18 February 2014. Volume:696;Page:15990. Text is incorporated into the Bound Volume.]12.HOLLY WALKER (Green) to theMinister for Tertiary Education Skills and Employment: Does he share the concerns of the New Zealand Psychological Society and the New Zealand College of Clinical Psychologists that his decision to cut postgraduate student allowances could significantly impact the future psychology workforce in New Zealand?Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment): No for a couple of reasons. Firstly postgraduate psychology students are able to borrow interest-free from the student loan scheme which remains one of the most generous schemes in the world. Secondly like all postgraduate students psychology students earn considerably more once they stop studying and go into the workforce than students who graduate with lower-level qualifications. They are therefore in a much better position to pay back an interest-free student loan.Holly Walker: How are final-year psychology students expected to support themselves without a student allowance when they have to work 32 hours per week in unpaid internships in addition to a full course load?Hon STEVEN JOYCE: I believe that I answered that question in my primary answer by saying that they could borrow from the student loan scheme which provides them with a similar level of living costs to what they would have received from a student allowance. They will have to make a payment back in due course but of course it is interest-free and taxpayers write off about 40 percent of the value of that loan.Holly Walker: How can psychology students expect greater earning power when they have to drop out of their courses during their studies due to the cuts that he has made and is New Zealand facing a shortage of clinical psychologists because of these cuts given that a new survey of undergraduate psychology students found that 75 percent were less likely to continue into postgraduate study?Hon STEVEN JOYCE: In answer to the first part of your question no because—as I have pointed out to the member twice now I think—they have the opportunity to borrow from the student loan scheme so they do not have to drop out. Most Master’s degree - level students are actually earning on average around 75 percent more than the median wage 5 years after they leave university so it is a bit hard to expect those who do not attend university to pay for their allowances at that time. Secondly no I do not believe there will be a shortage. The indications we have had so far in the period this policy has been in place are that there has been no reduction in postgraduate study particularly at Master’s degree level and doctorate level.Holly Walker: Given that demand for clinical psychologists already outstrips supply and psychology remains on New Zealand’s long-term skills shortage list and professional bodies are now worried that these allowance cuts will gut their profession why is he stubbornly refusing to reconsider his short-sighted decision to cut postgraduate student allowances?Hon STEVEN JOYCE: If we strip away the hyperbole from that question the simple reality is that I have had a number of bits of correspondence from the New Zealand Psychological Society and so on and yes they do not like the policy becausethey would rather that their students managed to keep having free student allowances. Well the cost of student allowances was going up dramatically. In 2007-08 it was $385 million per year and in 2010-11 it was $620 million a year as a result of policies under the Labour-Greens Government of that time. It was unaffordable. It remains unaffordable. Postgraduate students get to borrow interest-free from the student loan scheme. I think that most New Zealanders see that as very fair. I appreciate that Mr Grant Robertson does not but he has not seen a student he does not want to throw more money at.Holly Walker: I seek leave to table research by the New Zealand Psychological Society and the New Zealand College of Clinical Psychologists on the effects of the student allowance cuts on their profession.Mr SPEAKER: Leave is sought to table research done by the society. Is there any objection to that research being tabled? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Holly Walker: I seek leave for the Education (Student Allowances Availability) Amendment Bill a member’s bill in my name to be introduced and set down as members’ order of the day No. 1.Mr SPEAKER: Leave is sought to move forward a member’s bill. There is objection.