Sepuloni Carmel: Student Loan Scheme Bill — First Reading 
Sepuloni Carmel: Student Loan Scheme Bill — First Reading 
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CARMEL SEPULONI (Labour) 
: 
 Before I start on the Student Loan Scheme Bill I say to the previous speaker Mr Bennett that I think he should thank the member Mr Bakshi for looking at him adoringly the whole way through his speech because he was the only person to whom Mr Bennett delivered his speech. He was facing him the entire time. It is fantastic to see such strong relationships within the National caucus. I think Mr Bennett should thank Mr Bakshi. 
There is a lot that I have to say about this particular bill but I would rather talk about the wider context in terms of the tertiary environment at the moment. However before I get on to that I will touch on some of the aspects specific to this bill— 
David Bennett 
: You can’t help yourself; you can’t talk about the bill. 
CARMEL SEPULONI 
: —which is what Mr Bennett did not do. 
Labour supports this bill as it makes some positive changes that will make it easier for borrowers to manage their loans and pay back what they owe. However we hold serious reservations about some aspects of it particularly its impact on working students. We believe there are changes that need to be made at the select committee to make sure this bill is fair. 
Overall Treasury expects that the changes will increase student loan receipts by up to $22 million a year by 2014. We think that is a positive step forward for borrowers and for the Crown. Anything that assists people with paying back their student loans and making it easier for them is welcomed by this side of the House. I myself at the beginning of this year after 14 years since commencing study although I finished studying much earlier than that paid off my student loan. It took me 14 years to pay off my student loan. I know there are a few other members in the House who were in the same situation. 
To this end Labour particularly supports the changes to late-payment penalties from a total of 19.56 percent interest a year to just 10.6 percent or 8.6 percent if the student enters into instalment arrangements. We are opposed along with the Maori Party to the increase in the student loan establishment fee from $50 to $60. We believe that this is part of an effort by the National Government to reintroduce interest by stealth on to student loans. A second area of concern we would like to highlight is the way changes to the repayment system will impact on student incomes. Under the proposed changes students would have to begin making repayments weekly fortnightly or monthly depending on when they get paid. The proposal would require them to make repayments once they have earned over $367 a week. Under the current system students have to make repayments only once they earn over $19084 a year. I know my colleague Mr Grant Robertson talked a bit about that before. The problem with this is that many students would earn more than that each week during the holidays but less than $19084 over a year. This means that some of the money they were saving for the student term through their holiday jobs would have to be used to repay their loans instead and it would probably force them to increase their loans. That is an issue we have with this bill. 
Given we are talking about student loans I think it is important to talk about as I said earlier what is happening in the wider tertiary sector at the moment. We on this side of the House have major concerns in that respect. Recently I have been out and about talking to our Pacific people who are teachers academics and parents. They have concerns about what is happening right across the education sector—from early childhood education through to the compulsory sector and on to the tertiary sector which I plan to talk about now. 
Under the Labour Government tertiary education became more affordable and accessible for New Zealanders. Labour introduced the policy of paying no interest while studying so that students were not charged interest on their student loans while they were studying. This was followed in 2006 by the introduction of universal interest-free loans for all borrowers living in New Zealand. I will go back to something that Mr Dunne said earlier. He was trying to say that the legislation we are discussing today in the House is the most fundamental change to the Student Loan Scheme Act since its introduction in 1992 but I think that that might be going a bit far I tell Mr Dunne. I think as a former student and as a person who had a student loan the most fundamental change was undeniably when Labour introduced interest-free loans not the useful administrative changes that are being made by this particular bill that Mr Dunne is pushing through. 
The interest-free student loans that I talked about as being so fundamental and so important to people like me who had student loans to pay back were introduced in 2006. In 2005 the Labour Government had made changes to the parental income threshold for student allowances raising it by 20 percent followed by further 10 percent increases in 2007 and 2008. Those are the things that really matter to students and to people who are forced to take out student loans because they do not have parents with the means to pay their fees or they do not have the means themselves. I tell Mr Dunne that the administrative changes that we see in this bill—useful though they are—are hardly the most fundamental thing ever to have been done with student loans. 
What we have seen over the last 2 years from the National Government is a series of changes a series of cuts across the board to our education system in each and every one of the sectors including a $349 million cut over the next 4 years from student loan funding. This cut will be made through restricting access to student loans requiring students to pass more than 50 percent of their full-time courses over 2 years in order to keep borrowing from the student loan scheme introducing a lifetime limit on access to student loans—7 years for an undergraduate degree—and preventing permanent residents and Australians from accessing a student loan until they have lived in New Zealand for at least 2 years. 
On paper some people might look at that and think it sounds fair but we know its implications and know that it is in fact not fair. It means that those restrictions will result in 17000 students losing access to student loans and for our Pacific community the implications are even more prevalent with a disproportionate number—2500 of those 17000 students—being Pasifika. That equates to 10 percent of all Pacific students currently receiving a student loan. The introduction of student loan restrictions is a huge setback to the Government’s tertiary education strategy for 2010 to 2015 and its goal of increasing the number of Pacific students achieving at higher levels. Recently we have heard concerns raised by several different ministries including the Ministry of Pacific Island Affairs which has stated that the package may result in Pasifika students dropping out of university and going on to the unemployment benefit or shifting to cheaper avenues of study. Both of those things hardly seem aspirational—to use the word the National Government seems to like to use—yet that side of the House would continue to go down that track and put these types of changes into place. 
We are concerned because under the previous Labour Government the number of Pasifika children in early childhood education increased the percentage of Pacific young people achieving National Certificate of Educational Achievement level 2 increased the number of Pacific school-leavers taking part in Modern Apprenticeships schemes increased and the number of Pacific students in tertiary studies grew faster than for any other ethnic group. Yet all of that at the moment is at risk because of decisions being made in the tertiary education sector by the National Government. Decisions are being made that show that that side of the House has a lack of aspiration for Pacific people in education is neglectful of Pacific communities at all stages of education and undervalues both Pacific people’s culture and heritage and the importance of the contribution that the Pacific community currently makes has made and will need to make in the future. 
We heard from Mr Foss that the changes the National Government is making are supposed to be fairer on the taxpayer. Well let us keep in mind that it is the young people who are taking up student loans and are engaged or intending to be engaged in tertiary study who will be the taxpayers of the future and who will have to pay back the debt that the Government on that side of the House has incurred for our country. 
Hon Steve Chadwick 
: They won’t be there. 
CARMEL SEPULONI 
: Those members will not be there because they will be sitting pretty in their retirement villages over in Hawaii or wherever and leaving that debt to be paid back by the young New Zealanders for whom they are trying to restrict access to student loans. 
I will end it there. As I said we support this bill we are discussing in the House today but I think it is important that we look at the wider context in terms of the damage that the National Government is doing to our tertiary sector. Thank you.