Walker Holly: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Walker Holly: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8676. Text is incorporated into the Bound Volume.] 
HOLLY WALKER (Green) 
: 
 I will begin in Part 2 of the Student Loan Scheme Amendment Bill (No 2) where the previous speaker David Cunliffe left off looking at clause 57 which replaces section 146 and looking at the discretion given to the commissioner to grant relief from late payment interest. We agree that it is very sensible that the commissioner has that kind of discretion to grant relief to borrowers who are charged late-payment interest and penalties on their student loans. As we have heard those can be significant and it is sensible that the commissioner has that kind of discretion. It would be good if the commissioner still had the same discretion through the 3-year repayment holiday provision which is being repealed and shortened to 1 year to grant relief from late-payment interest and penalties to borrowers living overseas who are there for more than 1 year as most New Zealand graduates are. It is an example of the inconsistency between some of the sensible provisions of this bill and the series of very damaging changes to the student loan scheme that have been made over a number of years by this Government. 
Indeed I think the kind of discretion described in replacement section 146 in Part 2 is the kind of discretion that my colleague Tracey Martin was talking about earlier in the debate when she talked about the discretion for individual circumstances including borrowers living in New Zealand who may become learners at different stages throughout their lives to have the ability to take a repayment holiday for example from their student loan. Those are sensible provisions similar to what is proposed here and yet not supported by this Committee. 
While I am on the subject of the contribution from my colleague Tracey Martin earlier I think it is important to correct the record. She questioned the commitment of both the Green and Labour parties to free tertiary education. I was very pleased to hear my Labour colleagues reiterate the Labour Party’s commitment to free tertiary education. Of course the Green and New Zealand First parties are quite aligned on this matter. Like New Zealand First we stand for a universal student allowance we stand for the reduction of tertiary fees and we stand for exploring a debt write-off and bonding options under the student loan scheme so we have a lot in common. Of course our concern about the financial burden that students and graduates such as myself are dragging around does not detract from our commitment to that principled stance on tertiary education. 
I want to briefly turn my attention to the contribution from the Minister of Revenue earlier. I was pleased to hear him say that it would be wrong to see this bill in isolation from the suite of measures introduced over the last 4 to 5 years. 
The CHAIRPERSON (Lindsay Tisch) 
: Sorry to interrupt the member. That was in Part 1. We are now on Part 2 so just confine your comments now to Part 2. 
HOLLY WALKER 
: Thank you Mr Chair. Indeed the changes in Part 2 should not be seen in isolation either from the suite of changes that have been made to the student loan scheme over the last 4 to 5 years. 
I would like to review for the Committee what some of these changes are because they are very concerning. We have also heard in the debate on Part 2 mention of the lifetime limit of 7 years of equivalent full-time study so you cannot borrow under the student loan scheme if you have been studying for more than 7 years. That was a change introduced in the last 4 to 5 years by this Government and it is a very punitive change. It means that a student who has completed a 4-year Bachelor’s degree with honours and then starts a Master’s degree and then moves on to a PhD would lose access to their student loan part-way through their doctoral study. Similarly students who are medical students who have been studying for 7 years but are doing an 8-year course would lose access to their student loan before they have completed their medical degree. Similarly students who undertake bridging courses to prepare themselves for tertiary study then find that that has contributed to their lifetime equivalent full-time study limit and are unable to borrow later on in their degree. Those kinds of changes are very detrimental to those students and they are part of that suite of changes that we have heard about which is very concerning. 
As I began this contribution on Part 2 with the observation that the commissioner under this part has the discretion to grant relief against financial penalties and late payments similarly as I have mentioned we have seen a similar discretion be removed—the ability to grant a repayment holiday for 3 years and for that repayment holiday to be reduced to only 1 year. Under Part 2 that kind of discretion is given to the commissioner and yet it is removed by some of those other changes we have seen in the last few years. We have also seen a reduction of the academic requirement that a borrower must have passed at least half of the previous 2 years of study in order to continue qualifying for a student loan—a manifestly unfair measure that was abolished in 1993. We have seen the restriction of access to students over 55 so that they can no longer borrow under the student loan scheme. That nonsensically makes it more difficult for older people to upskill and retrain during a period of global economic recession. We have seen the Government make it more difficult for new immigrants to qualify for the student loan scheme. We have seen the Government restrict part-time students from being able to borrow for course-related costs. We have seen an increase in the administration fee of the scheme from $50 to $60 per year and we have seen the introduction of an annual $40 Inland Revenue Department administration fee for graduates who are paying off their loans. As I have mentioned we have seen the 3-year repayment holiday reduced we have seen the 10 percent voluntary repayment bonus abolished which is also referred to in Part 2 of this bill and we have seen the student loan repayment rate increase from 10c to 12c in the dollar. 
I think what is really important to keep in mind when we are looking at the amendments in this part of the bill and the bill as a whole is the question of who are the people affected. I think this House has a habit of thinking that bills that make amendments to the student loan scheme are about students alone. Actually most of the time bills that amend the student loan scheme including the parts in Part 2 are actually about graduates who are paying off their loans. These are people who have finished studying and who may not have studied now for several years. These are people who are grown-ups; graduates are grown-ups. They are employees. They are taxpayers. Many of them are aspiring homeowners. They are parents. In fact most of the people affected by this bill are your typical “mum and dad” New Zealanders—and I put quote marks around that because I hate that phrase. But actually that is who we are talking about. I know that many members of this Parliament like to think of students as being free-loading slackers and that this bill tightening up provisions around the student loan scheme just makes a very generous scheme fairer for students. It is actually not about current students; it is about graduates and they are your “mum and dad” New Zealanders. 
I think the Government in its continued slow erosion of the scheme and in making things harder for those graduates—making them pay their loans back at a higher rate for example—is actually putting a lot of pressure on everyday “mum and dad” New Zealanders. You know they are the people like the journalists whom the Minister spoke to who say they are angry with overseas borrowers. They are also angry about their increased repayment rates. I think the Government ignores that at its peril.