Goldsmith Paul: Student Loan Scheme Amendment Bill — Second Reading 
Goldsmith Paul: Student Loan Scheme Amendment Bill — Second Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 I rise to speak in favour of this bill the Student Loan Scheme Amendment Bill which implements reforms announced in Budget 2011 and builds on earlier Acts passed last year. These are modest changes to a very expensive scheme. The costs have ballooned since Labour’s cynical act during the 2005 election campaign—to promise interest-free student loans. Now every dollar that we lend is immediately written down to around 54.75c and borrowers are naturally in no hurry to repay their loans when the money is free. But of course the money is not free. It has to be paid for by taxpayers and the rest of the population. So this bill will help turn things round a little and reduce the burden on the rest of society for the cost of this scheme. 
I am amazed to hear members from the other side—members from the deep south whom I would have thought would be concerned about rioting students jumping on the roofs of houses—complaining about the provisions of this bill. If anything it could be going further. 
In detail what we are looking at here is a bill that makes it mandatory to provide a New Zealand - based contact person when applying for a repayment holiday and that holiday will be cut from 3 years to 1 year. This is very simple stuff that I do not think anybody reasonably could object to. The student loan Budget package includes a change requiring every new loan received by StudyLink to include that contact person as a condition of getting a student loan. This bill would allow for that contact information to be used by the Inland Revenue Department. That is important. It is a very very small thing but there is just a practical detail of trying to contact someone who has gone overseas and disappeared without a trace and to be able to talk to the parents most likely and to catch up with where that person is will make a very significant improvement to the way we collect these student loans. 
The latest bill also includes a very important provision in relation to excluding losses from the calculation of net income. To maximise repayments from New Zealand - based borrowers the bill makes amendments to exclude losses such as rental losses from the calculation of net income for student loan repayment purposes. Again this is an important feature in terms of just trying to be more realistic about what the net income of the student is and to raise the repayment rates for the loans which are costing the rest of the country a great deal of money to maintain. 
We have heard also that the prediction is that this may be increasing repayments by around $14 million a year. It is not a large amount compared with the overall loans but it is quite a significant increase—about 2 or 3 percent—on the repayments that we are getting on a regular basis. So that is very worthwhile. It is getting extra money in to repaying what is a very large debt to the rest of the community. I am in favour of this bill and I am looking forward to hearing further about it in the Committee stage. Thank you.