Hipkins Chris: Student Loan Scheme (Repayment Bonus) Amendment Bill — First Reading 
Hipkins Chris: Student Loan Scheme (Repayment Bonus) Amendment Bill — First Reading 
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CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Let us be clear what the Student Loan Scheme (Repayment Bonus) Amendment Bill is about. This bill is a precursor to the abolition of the interest-free student loan policy. That is exactly what this bill is about. We know that the National Party did not support interest-free student loans. National members hated that policy when it was introduced and we know that they cannot wait to get rid of it. They would not be introducing this bill into the House unless they intended to get rid of interest-free student loans. 
As long as we have interest-free student loans this bill does not make any sense because under this bill graduates would be better off to leave their money in the bank earning compound interest until they were close to repaying their total loan then make a lump-sum payment at the end. The bill does not necessarily discourage early repayment but it certainly does not encourage it which is what the bill purports to do. This is another half-baked half-thought-out on the hoof election policy from the National Party. We know that it will not work because why would anybody go for a 10 percent discount when his or her loan already attracts no interest? Students from a wealthy background who in practice would be the ones with the resources that make them more likely to be in a position to take up such an offer would also be likely to have the financial skills needed to work out that they would be better off if they invested their money elsewhere and kept their interest-free loan in its current state. 
This bill will not work. There is no evidence to suggest it will work and we know that it is a stalking horse for the abolition of interest-free student loans. We know that because one of the National Party’s chief cheerleaders Richard Long a former National chief of staff— 
Hon Darren Hughes 
: He used to run the show. 
CHRIS HIPKINS 
: —in fact he was one of the “Hollow Men”—said in his column that National should do away with the interest-free student loan scheme. He urged National to break many more pre-election promises and he said: “National may have promised not to privatise in the first term but it could probably get away with the partial sale of selected SOEs … It could axe superfluous bureaucracies.” 
Hon Darren Hughes 
: Like press secretaries! 
CHRIS HIPKINS 
: Maybe or those private purchase advisers that National has just engaged. Here is the kicker: “It could remove Labour election promises”—even though the National Party had promised that it would not do so—“such as interest-free student loans.” 
We know as my colleague Trevor Mallard has revealed that Treasury is working on policy documents that would do just that. The National Government has Treasury working on doing away with interest-free student loans. Why would the Government do that? 
Hon Trevor Mallard 
: They didn’t deny it at all. 
CHRIS HIPKINS 
: It was put to Anne Tolley and she did not deny it. It was put to Peter Dunne that graduates would be better off to leave their money in the bank rather than to pay off their student loans early and he did not deny that either. 
Clearly there is an agenda here that those members want to get rid of the interest-free student loan policy. We know that because John Key did not support it in the first place. In November 2005 when Labour was passing the interest-free student loan policy he said of it: “What a cost to the country! What an unaffordable and irresponsible cost to the country!”. That was what all the National members said. We know that they want to get rid of it. John Key went further than that. He called it “rushed and reckless thrown together in desperation”. He then turned around and said that he actually thought it was quite a good idea he quite liked it and he was going to keep it if National won the election. But we know that National never had any intention of keeping that promise. When it comes to tertiary education National is not very good at keeping its promises. 
Let us go back further. There are two very good examples. I have to be very careful not to bring the Speaker into the debate but I recall that in 1990 a certain former National Minister travelled the length and breadth of the country saying he would resign unless National abolished student fees. And what happened? National increased student fees. There is already a history. Let us go back to 1996 when National members travelled the length and breadth of the country with New Zealand First and said they were going to introduce a universal student allowance. Did they do that? No—we are still waiting. Instead they tried a little sleight of hand and tried to rename all the other funding that went into tertiary education as a “student allowance”. They thought that students would be stupid enough to think that it was an allowance. Of course students were not getting a cent extra. In fact they were paying massively higher fees and interest on their loans even while they were studying under the last National Government. Even when students were in a position where they could do nothing to repay their loans they were paying interest under the last National Government. 
Debate interrupted.