Hutchison Paul: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Hutchison Paul: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Volume:638;Page:8229] 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I take this opportunity to speak again on Part 1 which is the major part of the Student Loan Scheme Amendment Bill (No 2). I certainly reiterate the point made by Allan Peachey. It is very important to make sure that young people understand the basic signals and disciplines required to get on in life. It was interesting to hear Brian Donnelly say that a lot of students went off overseas and did not understand their obligations. The technical term for that is denial—selective denial. Certainly I was aware of friends and relatives of mine and my children who slipped off overseas and had a great old time but they were in denial of the very serious obligations they had. 
When we think about what the student loan scheme was initiated for it was all about giving more New Zealanders the opportunity of a university or tertiary education. That is a great privilege and it carries with it a variety of obligations. Of course during the decade from the 1990s until now we have more than doubled the number of New Zealanders who participate in tertiary education. That is a great and wonderful thing and it has been right across the board in terms of all socio-economic areas and ethnicities. I think that is tremendous. 
When I was at Otago University I was told that fewer than 0.05 percent of the students down there were Maori. As I understand it the figure is now about 7 to 8 percent which is a wonderful thing. Hopefully that will be doubled in the next 10 or 15 years which will bring it up to about proportion and it may treble over the next 10 years. If we could have afforded as a country to allow a completely free tertiary education system that would be great but this is one of the ways we have got there. 
The thing we have to balance of course is the very point that in Australia where many of our young students go to work the average wage was 22 percent greater than New Zealand’s in 1999 and now 7 years later after a Labour Government the average wage in Australia is 35 percent higher than it is in New Zealand. The quid pro quo of this bill as pointed out by some of my colleagues and by Business New Zealand is that we have to inculcate disciplines and appropriate realisations that there are obligations to go with this wonderful privilege of access to tertiary education. 
One of the points that Lockwood Smith made was the difficulty of the signal between someone who declared themselves as non-resident and someone who said: “Oh well I’ll just nip over there and hope the hang that the IRD don’t find me.” One of the unfortunate realities of the amnesty situation is that in the end the person who is honest does not get any greater benefit than the person who is dishonest. Hopefully the Government will go to a great deal of effort to make sure that from when this legislation comes into place people are much more aware of their obligations and the extent to which their loans can build up so rapidly once they get on to penalties. 
I note again that the Government is changing the penalty rate from 2 percent down to 1.5 percent. Indeed 2 percent is a pretty hefty amount but it is what those out there in the commercial world have to pay—for example it is what the young sharemilker who was being talked about earlier on has to pay for his herd if he gets behind in his repayments. It is pretty hefty. One would think that a university student would hopefully have the nous to be able to find out what the consequences are of not paying back a penalty regime.