SpeechDr JIAN YANG (National): This bill intends to assist New Zealanders with student loans in purchasing their first homes. I respect the intention of the member Gareth Hughes. As a former university lecturer I have always believed that we should support our graduates—and whenever we can we do that. But this bill has some fundamental problems. The No. 1 problem of course is that it is simply too expensive. It is estimated that this legislation would have an operating cost of about $80 million or $200 million—that is the operating cost—and then you could have a one-off impairment cost of about $1.2 billion.This is on top of the huge investment the Government has put into supporting our university students. This Government in the past financial year—the 2015-16 financial year—has spent over $1.14 billion on financial support for our university students. We should remember that the Government covers 82 percent of the full cost of the tertiary education provision for our students—82 percent of the full cost. That is a lot of money.The dilemma here is that on the one hand we believe it is necessary to have wide access to our tertiary education system because we can see the benefit. We understand that with a higher level of education New Zealanders will have better outcomes and it will also have a major social and economic benefit for society. For that reason we believe our student loan scheme is doing well. It is particularly important in encouraging students to come to universities in enhancing higher-level education participation.But on the other hand we have a major challenge and that challenge is sustainability—whether we are able to retain this kind of scheme whether we are able to afford it. That is a major challenge. We should remember that this Government is committed to retaining the interest-free student loan scheme and also that it is very expensive. At the same time we should also remember that the Government is currently writing off about 40 percent of each dollar lent through that scheme—about 40 percent of each dollar we are writing off. That is a huge cost to this Government. On the one hand as I said we would like to support our students; on the other hand we need to consider the sustainability issue. This is a dilemma.Currently we believe our student loan scheme is working well. We are able to retain a balance between affordability and helping our students so there is no need to make any significant changes at this stage.There is another issue: the interests of future generations. If we are overspending today our future generations will have to take responsibility to pay it back so it is important for us to make sure that we are using money responsibly—and this is a responsibility not only to our current generation but also to our future generations. For that reason this Government has been trying to manage its finances very very responsibly.That is the first problem with this bill—that it is too expensive. The second problem with this bill is that it is not necessary. There is no statistical evidence to support the claim that student loans are basically somehow deterring people from having their first home or starting their family. There is a linkage between the size of a student loan and the size of a mortgage and that is that if you have a large-sized student loan you may need to consider the size of your mortgage. But there is no clear evidence to support the claim that the presence and size of a loan would perhaps deter people from having a home. There is no clear evidence to support that. Similarly there are also people who argue that student loans are somehow deterring people from having families or having children earlier or that they may have an impact on the number of children. This again is not really scientifically supported.I will digress a little bit here. In China we had a one-child policy for generations and then we had the problem of an ageing society and also the issue of gender imbalance. So the Chinese Government abolished the policy and people in China can now have two children. But in the major cities in China people are not having two children; they prefer having one child. This is not because they have student loans but because of other social or economic factors such as the pressure of work. So we do have to consider many other factors when it comes to some phenomena.Back to this bill—I would say that education is a kind of investment. You borrow now in the hope of getting more return in the future. There is evidence to support this claim. The higher the level of education you have the better income you will have in the future. People with a Bachelor's degree will earn 40 percent more on average than national median earners after 5 years in the workforce.According to Universities New Zealand research shows that a typical university graduate will earn around $1.6 million more over their working life than a non-graduate. This is much higher for medical doctors at $4 million; professional engineers at $3 million; and information technology graduates at $2 million—and it is still high for arts graduates with an average earnings premium of around $1 million to $1.3 million. So education is a kind of investment: you borrow today for a higher education and in the future you have a better income. This means that people with a higher education tend to be able to afford their living their homes.Also a question here is whether borrowers are left with large debts for many years. This bill is related to those who are staying in New Zealand. Borrowers who remain in New Zealand—for example of those people who graduated in 2014 but stayed in New Zealand half of them will settle their loans in 6½ years while three-quarters of them will have repaid their loans in just over 11 years. This is a kind of forecast for our students for graduates.Also I would emphasise that this Government has made a consistent effort to enforce payment. Basically this Government has made it clear to all student loan borrowers that it is their responsibility to repay. An information-sharing agreement between Australia and New Zealand last year has helped us to locate 50000 student loan borrowers in Australia with a combined loan balance of $1.2 billion. That is what we have been trying to do. Also since 1992 when this scheme began more than 500000 borrowers have now repaid in full. We need to respect those people and we need to make sure that our policy is fair to those people. Thank you.Debate interrupted.The House adjourned at 10 p.m.