Dunne Peter: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Dunne Peter: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9354] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill be now read a second time 
. The measures in this bill are part of continuing efforts to ensure that the student loan scheme is managed in an efficient and consistent way. They include a suite of mainly technical changes to the repayment rules to ensure that the law is clear and consistent and that it operates as intended. The bill also extends interest-free loans to borrowers from Niue the Cook Islands and Tokelau which share a special relationship with New Zealand that is sometimes referred to as their being part of the Realm of New Zealand. I note that when I used that term in an earlier debate Mr Hayes I think took some exception to it but I quickly reminded him that it is the phrase that the Governor-General often uses in such situations and without bringing him into the debate I think it is appropriate to follow his guidance. Because the Ross Dependency is also part of the Realm of New Zealand borrowers who go there may also qualify for an interest-free loan. 
The 183-day requirement for borrowers to be present in their country is the same criterion that must be met by New Zealand - based borrowers to qualify for interest-free loan status. That requirement is in place to encourage borrowers to remain in New Zealand or to return home from overseas to make their contribution to our economy and growth. The bill applies the same 183-day requirement to borrowers from what we now describe as realm countries so that they have an incentive to return home after their study and make a positive contribution towards the economic and social future of their particular country. 
This bill also acknowledges the value that students who pursue further study overseas bring to New Zealand and extends interest-free loans to include students furthering their education overseas through full-time study under formal exchange programmes or formal agreements between New Zealand and overseas tertiary education providers. 
I acknowledge the work of the Education and Science Committee on this bill; it made several worthwhile refinements to it. The first of these extends the overseas exemption to include those engaged in full-time study overseas if their New Zealand tertiary provider has confirmed that their studies cannot be completed in New Zealand but would count towards a New Zealand qualification at level 8 or above. The other small but important change provides greater clarity by defining the term “overseas tertiary provider” so it is clear what type of organisation borrowers must be engaged in full-time study with overseas in order to qualify for interest-free loan status. 
The remaining changes in the bill are largely of a technical or remedial nature to ensure that the law works as intended. Briefly they include an amendment to correct an unintended change to the hardship relief provisions made by the Student Loan Scheme Amendment Act 2007 a change that allows the Inland Revenue Department to raise the compulsory deduction rate from 10 percent to 15 percent to help ensure that borrowers pay their correct loan repayment amounts and the removal of a technicality so that borrowers returning to New Zealand who wish to fully repay their loans before they have met the 183-day requirement to qualify for an interest-free loan can do so. 
They are the main features of the bill. I record my thanks to the select committee for its detailed consideration of this matter and for its thoughtful recommendations which have made for further improvement and clarity in this bill. I think that overall these changes will help ensure that the student loan scheme works in the way that it was intended for both borrowers and the Crown and consequently with great pleasure I commend this bill to the House.