King Colin: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
King Colin: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9357] 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to take part in the second reading of the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. I start off by pointing out that National did commit to keeping interest-free student loans in place. We recognise that the scheme is a very generous contribution by taxpayers to tertiary education students so we want to see that the whole process around the student loan scheme is tidy appropriate and fair. That is the very essence of this bill. It tidies up a number of areas enhancing the student loan scheme and giving people certainty and clarity. We need to do that because 500000 New Zealanders have student loans. Therefore the scheme has a significant impact on the Crown accounts as a debt to be managed. It is in the region of $10 billion. We want to ensure that those people who enter into a student loan get quality education and that the country in return receives the most benefit from those people’s higher education by way of completions success and the students realising their potential. 
One concern we have in Government on this side of the House is that under the previous administration there was a total lack of incentive to repay one’s student loan. In fact there was a general sloppiness in the behaviour of the tertiary education sector. That is why the Government in September introduced the 10 percent bonus repayment which means that if people pay over $500 of their loan above their minimum requirement we give them a benefit or a bonus on that. 
This bill has come through the House courtesy of the Minister of Revenue who has oversight of it. I encourage everyone in the House to go on to the website and download the annual report relating to the student loan scheme. It is quite staggering to read. The principle itself is a good balance. In the context of this bill and the student loan scheme there is an enormous amount of public good but done properly there is an even greater amount of individual good. That is what we want to see. 
I will get on to the bill and interest-free loans for residents of the realm countries. We do a lot to aid those countries within our region—and when talking about our region I am referring to the South Pacific effectively—be it Niue Tokelau or the Cook Islands. Those countries have rights under our laws and one of those rights is access to interest-free student loans. Up to this date when those students came to New Zealand that was the case but when they returned home it was not the case. This bill appropriately extends the provision so that students can continue to have interest-free loans when they return to their home Islands. That change is very good because it benefits not only the Islands but it also balances out students’ rights to the student loan scheme. Otherwise invariably those students would stay in New Zealand in order to keep that right. Those Islands have an enormous need to be supported and to grow economically and one hopes that those things are gained from the student loan scheme. The change will apply when the bill is brought into law. 
This bill deals with a very interesting aspect of overseas study. At present there is a gap in our education system. At times there is no ability for students to continue their studies overseas on an interest-free loans basis even though there may be a formal relationship between an institution in New Zealand and an overseas institution. This bill addresses that matter. Where there is a formal agreement between the New Zealand tertiary education provider and an overseas tertiary provider there will now be the opportunity to retain the status of an interest-free student loan. 
Up to this date as soon as a student left the country to study or work the calculator would start ticking away. I trust that we can manage this change. We will need to register what those institutions are and what courses are being taken. The education needs to be at that higher level and one that is not provided in New Zealand. That in itself is fair but we must remember that when the interest-free student loan scheme was implemented it came to the attention of the Minister of Revenue that some 40000 students overseas were claiming interest-free student loans but were not really deserving of them so that had to be tidied up. Exemptions are an important aspect of bill and we look to this amendment to tidy up matters respectfully around that issue because we want the full ambit of opportunities to be opened up to students whether they are doing a master’s degree PhD or whatever. 
The other aspect that I thought would be controversial with regard to the Green Party minority view is that the Inland Revenue Department will have the ability to increase the rate of repayment deduction from 10c to 15c in the dollar for borrowers who have failed to have the correct deductions made or to pay any other amount when it is overdue. It became clear under examination by the Education and Science Committee that that provision does not include the occasion when there is failure by the Inland Revenue Department to send out the appropriate notification of payments. It would be unfair to be ruthless and try to claw that money back in an insensitive way. However in many situations the department needs that flexibility. When we are talking about 10c to 15c in the dollar it is not just one or the other; it is a sliding scale. 
This is a small bill and although some speakers in the first reading debate said there was not a lot of substance to it it is an important aspect of the legislation going forward. The bill adds to critiques and improves the Student Loan Scheme Act 1992. It is a balanced bill and generally speaking on the select committee we worked collegially and the advice we received from officials was very appropriate. The bill in the form returned to the House is still in much the same vein as it was at its first reading. The committee made a couple of recommendations and it was good to see that the Minister has picked up on those. On that basis it is a pleasure to commend this bill to the House in the second reading.