Tanczos Nandor: Debate on Prime Minister’s Statement 
Tanczos Nandor: Debate on Prime Minister’s Statement 
[Volume:623;Page:18282] 
NANDOR TANCZOS (Green) 
: 
 When the Prime Minister gave her address to Parliament yesterday she spoke of making it possible for every individual to fulfil his or her potential through education. She said that that would enable our nation to fulfil its dreams. Those are nice words but they will remain just platitudes unless they are accompanied by some real action on the major problem facing tertiary students. It was curious in the context of a discussion of a universal benefit—which I support as a good move to simplify the benefit system—that a major group of people is being consistently denied a benefit: full-time students who are incapable of working full-time although some are approaching that to the enormous detriment of their study. The announcement of a universal benefit actually provides the Government with a perfect opportunity to remedy the financial plight of students and I urge it to take it. But I do that without great hope because instead the Government is hinting at a savings scheme for tertiary education. The Prime Minister has signalled that the Government would introduce incentives for people to save for tertiary education which is a great thing for those who can afford it but not much help for the bulk of students. 
The Association of University Staff general secretary Helen Kelly has said that a private savings scheme to fund individuals into tertiary education would further erode the idea that education is a public good and would strengthen the notion that tertiary education is a private benefit that should be increasingly funded through individual contributions. In fact the Green Party agrees with her that what we should do is to be committed to a publicly funded high-quality education system that provides equal access to all people not just to those who can afford to pay for it. A private savings scheme is highly regressive—let us not have any illusions about that—and it will discriminate against low-income families. Helen Kelly also pointed out the dangers of developing a two-tier tertiary education system: one for those who are able to save privately and another inferior one for those dependent on an underfunded public system. We share those fears. 
I asked the Prime Minister a question in the House today about student debt. She told the House that average student debt has decreased and she said it was due to interest fees fees maxima and the like. I cannot for the life of me think where she gets those figures from. I just cannot imagine—and I have asked around. No-one seems to know where those figures come from because the Government’s own figures from the student loan annual report show that the average loan balance has increased by more than 23.5 percent since 1999 when Labour came to power and by 4.1 percent from 2003. Let us remember that those figures include all loan balances—including those of people who have not yet completed their study and of those who have been paying their debt off and do not have much left to go—so that has skewed those figures artificially down. In contrast we got the figures from the New Zealand University Students Association that came from the income and expenditure survey of 4000 real students from 21 institutions which show that the average debt—including debts to parents banks and the loan scheme—is now at $18726 on average. That is a 36 percent increase since 2001. The average debt is 60 percent higher than it was in 1998 and more and more students are looking elsewhere for borrowings with debts to parents of over $10000 on average. In November 1999 Labour promised to increase course subsidies in order to stabilise student fees but fees have risen by 34 percent since 2001. The average cost of tuition fees for courses in 2004 was $5644. 
Student debt is now over $7 billion in this country. The Prime Minister was not the first to make mistakes with the figures. Last week Trevor Mallard had a scrap with the New Zealand University Students Association after he claimed that average debt among students is less than $10000. That is simply incorrect. The average student debt among current students is $18726. Mr Mallard also claimed that the higher a student’s loan the faster it is paid off. In fact the factors most likely to affect repayment are gender and ethnicity with women taking on average twice as long to repay their loans as men. Many students with large loans will never ever repay them in their lifetimes. 
 There is a real unacknowledged effect of student debt as well—that is the debt mentality of the current generation of students. The Prime Minister talks a lot about savings: the need to incentivise savings and the need to encourage people to save for the future. But we have a generation of students who have to borrow in order to live. We have forced a generation of students to take on Muldoon’s theories of sound economics in their personal affairs. I do not think we have begun to appreciate what that will mean in the future. 
The Prime Minister’s speech referred to every hard-working family enjoying a secure asset base and to building a society in which every New Zealander has a stake. But what impact do we think student loans have on the capacity of young New Zealanders to participate and become stakeholders in our society? Forty-four percent of students consider that student loans will impact on their ability to buy a house 48 percent on their ability to save for the future and 41 percent on deciding when to go overseas. It is not just students who are worried about those issues. According to Dr David Skilling the chief executive of the New Zealand Institute student loan debt is an increasingly significant financial issue for young people. Statistics New Zealand estimates that 47 percent of the 18 to 24-year-old population and 31 percent of the 25 to 34-year-old population have negative wealth where their debt exceeds their assets. Those developments have compromised the ability of young people to build wealth and get ahead financially in the same way as previous generations were able to by buying a home when young paying off the mortgage and benefiting from the capital gains. The student income and expenditure survey also showed that significant numbers of students consider their student loan impacts on their ability to buy a home save for their retirement and undertake further study. We have to contrast that with the good intentions of the Prime Minister to encourage homeownership. 
The Prime Minister also spoke about bringing New Zealanders home. However there is a clear link between the size of student loans and the decision to go overseas. According to Statistics New Zealand figures New Zealanders living overseas owe an average of nearly $20000 in student loans. That is almost twice as much as those at home. The statements made by the Prime Minister about an ownership society spreading economic benefits and an inclusive society are great words. It is good to hear her make those comments but students seem to have been left out of the picture. Until this Government takes seriously the enormous debt facing students and takes real courageous steps on the student loan scheme that vision will not be a reality for this country.