Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — First Reading 
Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — First Reading 
[Volume:656;Page:5871] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Here is a little bit of a history lesson for the member who just spoke Amy Adams. She may have forgotten what her leader John Key said about interest-free student loans on the day that the previous Labour Government announced them. John Key called them unaffordable and irresponsible. He said it was a sad day for New Zealand. 
Grant Robertson 
: He was going to oppose it! 
CHRIS HIPKINS 
: In fact John Key said he was going to oppose interest-free student loans with every bone in his body. How times have changed. He must not have any bones left— 
Hon Clayton Cosgrove 
: The medication will fix that! 
CHRIS HIPKINS 
: —the medication will fix that—because here we are debating the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill a bill that actually extends interest-free student loans despite the change of Government. How times have changed indeed. 
I am very proud to take a call on this bill which extends interest-free student loans. Labour is incredibly proud of the policy. It was introduced in 2005 and it was another step to making tertiary education a lot more affordable after the massive increase in the cost of tertiary education that students experienced in the 1990s. Fees were rising by thousands of dollars a year and there was very little support for students in the form of student allowances. What was even worse was that students were being charged interest on their loans while they were still studying and it was compounding daily. When students were in no position to make any repayments on their loans and when they should have been focused on studying they were busy worrying about the massive growth in the interest on their student loan. The longer they studied the higher it became. 
John Hayes 
: Have you paid yours off? 
CHRIS HIPKINS 
: I say to John Hayes that I have paid off my student loan. In fact I made the final repayments only about 2 months ago. There is a little bit of a story behind that. There are one or two administrative problems with the student loan scheme. I paid off my student loan and I changed my tax code from MSL back to M. At the end of the year when my tax return was done I had overpaid some tax so the Inland Revenue Department gave me a cheque for student loan repayments that I had overpaid then created a new debt for me which I would have had to start repaying under the MSL code. That was absolutely ridiculous. It is fair to say that I returned the cheque to the Inland Revenue Department thanked it very much for the free money which I had not asked for and told it that I did not need the student loan any more. I gave the money back to the department. That highlights an administrative error I think in the way that student loans are administered. But there are other things too. 
I also want to talk about the fact that although interest-free student loans apply to diplomats and those on overseas postings and I am sure Mr Hayes will be familiar with this they do not apply to their partners. A diplomat who is sent offshore gets an interest-free student loan for the duration of the time that he or she is away and that is something we support. But if the diplomat’s partner goes as well from the advice that I have been given by a number of people who are affected it is my understanding that he or she does not get an interest-free student loan. That appears to be an anomaly and I hope the Education and Science Committee will look at it when it considers the bill. For it to do so would be consistent with the purpose of the bill which is about extending interest-free student loans to a new group of people particularly those in the realm of New Zealand—that rather antiquated concept—and we also need to think about the people who fall through the cracks at the moment. 
I want to pick up one or two of the comments made by Catherine Delahunty. I very much agreed with some of the concerns that she raised. She was lamenting the impact that the cost of tertiary education has had on the ability of students to participate in wider social activity particularly student activism. I would say one thing in response to the points that Catherine Delahunty raised. The interest-free student loan scheme came about as a result—at least in part—of over a decade of student activism on the issue of student fees student loans student allowances and the cost of tertiary education. Student activism is by no means dead but students are now much more focused on making ends meet and that is having an impact on some students’ study. They are more worried about the cost of education than they might have been 20 or 30 years ago when the majority of the members of this House would have received their education at a fraction of the cost that students today have to pay for their tertiary education. I agreed with a lot of what Catherine Delahunty said. 
The Labour Party supports this bill however because we support interest-free student loans. The previous Labour Government introduced interest-free student loans. It was an affordable and responsible commitment that the Labour Government made in 2005. Although the National Party did not think so at the time it seems to have come round to the idea. That really highlights a difference in values. The National Party had to be dragged kicking and screaming to the point where it adopted the interest-free student loan scheme; it did not do so willingly. The previous Labour Government was very proud to introduce interest-free student loans because part of our belief is that Governments should strive to reduce the barriers to participation in tertiary education. 
One of the big barriers is cost. Rather than looking at increasing the cost of tertiary education we should be looking all the time at ways that we can reduce the costs involved. Interest-free student loans built on as I said before our policy of no interest while studying. They built on the fee freeze that the Labour Government had introduced. Immediately upon taking office Labour froze fees at their 2000 levels and then it introduced a fee maxima policy which stopped fees increasing by huge amounts year after year which had happened throughout the 1990s. Students would start their tertiary studies with no idea of how much they would end up paying by the time they finished. Fees would go up by thousands of dollars a year. A student might go into tertiary study thinking he or she could afford fees of $10000 but by the time the student finished he or she might have paid $15000 or $20000. Putting that cap in place underscored the commitment of the previous Labour Government to control the cost of tertiary education and progressively work towards lowering the cost and lowering the barrier. 
Labour did a number of things. We increased the access to student allowances. Significant numbers of additional students were made eligible for student allowances in the 2005 Budget and a further swag of them I believe were made eligible in 2007. I do not have the exact year at the top of my head but I think it was in 2007 that the next major increase in allowances was made. The goal of the Labour Government was to work towards a universal student allowance which many members of this House enjoyed the benefit of when they undertook their own tertiary studies but over time it has been taken away from future generations of students. We would like to see it reintroduced. 
The Labour Party values quality publicly funded education. In contrast the National Government’s most important priority in the area of education was an extra $35 million for private schools. An extra $35 million for private schools was more important than funding for adult and community education. It was more important than funding to increase the number of apprentices. It was more important than increasing the number of training places in industry training. It was more important than increasing the funding for polytechnics and for trades-based training. Increased funding for private schools was this Government’s No. 1 priority for additional education spending. There is no planning and no sense of priority whatsoever from this Government. It took an extra $35 million and gave it to the most privileged students in the country who already— 
Carol Beaumont 
: To 3.6 percent of them. 
CHRIS HIPKINS 
: It gave it to 3.6 percent of students. It thought that was more important than funding special-needs education. It thought that $35 million for private schools was more important than funding special-needs education. That says a lot about this Government’s priorities. 
In conclusion I support this bill. It makes a number of quite common-sense technical amendments to the student loan scheme. It is a shame the National Government is not more supportive of the whole concept of interest-free student loans. It is a shame it is not doing more to decrease the cost of tertiary education for students because education is an investment in the future of our country. It is an investment in increasing productivity. It is an investment in a brighter future for New Zealand. Thank you very much Mr Assistant Speaker Roy.