Hipkins Chris: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Text is incorporated into the Bound Volume 
Hipkins Chris: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Sitting date: 28 March 2013. Volume:688;Page:9088. Text is incorporated into the Bound Volume.] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am happy to take a call on the Student Loan Scheme Amendment Bill (No 2). I can say to the member Alfred Ngaro who has just resumed his seat that I too had a student loan and I too have paid it off. I did take the responsibility of paying back my student loan very seriously and I was very pleased to. It was a great relief when I paid my loan off because it meant my pay went up every week. The money was no longer being taken off me so I was very pleased about that. 
I want to respond however to some of the comments that the member David Bennett raised earlier on. I think he completely misunderstands the way tertiary education in New Zealand is funded. When he talked about the large percentage of tertiary education funding that goes to student support and therefore argued that the institutions were being underfunded what he did not seem to acknowledge was that the majority of money that is tagged as student support actually goes to the institutions. It is called student fees. The form of student support that is paid as student fees goes to the institutions. That is the way we fund the tertiary institutions. A significant proportion of their income comes from student fees. It is tagged as student support but is money that goes to the universities and to the polytechs and so on. So to argue that because such a large proportion of our tertiary education budget goes into student support and therefore the institutions are underfunded suggests that the member has not done his homework and has not made any effort to actually understand how tertiary education funding in New Zealand works. 
The Labour Party is supporting this bill because we do believe that people have an obligation to repay their student loans. But we also believe that those people who are able to hide their income in trusts and in other complicated mechanisms should not be able to get away with not repaying their loans. It would be blatantly unfair if someone on a low income say doing a cleaning job had to make all of their mandatory student loan repayments while someone on a much higher income who was able to disguise that income did not have to make the same level of mandatory repayments simply because they were better off in the first place and able to disguise their income. This bill tightens that up and I think that is very important. It broadens the definition of income to include income from trusts companies superannuation schemes and the like. I think that is a very fair change because it means that people are not able to hide where their money is coming from and it means that everybody gets treated the same when it comes to making student loan repayments. 
The second key change that the bill makes is that it allows information sharing between the Customs Service and the Inland Revenue Department so that the Inland Revenue Department can have access to the contact details of overseas-based borrowers who are in serious default. This is probably a more controversial aspect of the bill. One of the reasons that we know graduates go overseas is that they want to get away from their student loan debt. I have done a lot of work on the student loan scheme over many many years including working on the policy of introducing interest-free student loans under the time of the previous Labour Government. I do encourage anybody who is going overseas to make sure that they make arrangements while they are away to keep their student loan repayments up to date because a number of people unexpectedly have been stung with very large penalty repayments when they return to New Zealand. It was not necessarily that they deliberately did not keep up to date; it was simply the fact that they I guess took the opportunity once they had finished their studies to go overseas to do an OE and then things might have changed. They might have met someone while they were overseas. They might have got a job. They stayed away overseas for longer than they anticipated. In some cases they might have been away for 4 or 5 years. They might even have got married and had kids in that time. They come back to New Zealand and they try to get a job. They suddenly find that they are stung with this massive bill for student loan repayment penalties because they have not kept up to date with their payments while they were away overseas. That is something that we do want to avoid happening. 
I guess the sharing of information so that people can be contacted and made to be aware of all of their obligations to repay their loans is probably a good thing. But we should not overlook the reason why people get into default in the first place while they are away overseas. Many many times it is unintentional. Also I guess we should not overlook the fact that problems with student debt are one of the reasons why students feel compelled to leave New Zealand in the first place. Of course one of the key reasons is that if they have got a large student loan balance and they can earn more money by leaving the country they may feel that they are actually in a better position to repay their loan by leaving the country. The crux of that debate therefore is how we get New Zealanders earning more money. How do we get higher-paying jobs in New Zealand so that it is not necessary for people to leave the country in order to earn enough money to repay their student loans? I think that is a very important point. 
At the Finance and Expenditure Committee privacy issues were raised. I understand from members on the select committee that they have been reassured that those issues have been addressed. The Labour Party has supported many other measures to crack down on those who are not meeting their obligations to repay their student loans although we do not agree with many of the measures that the Government has taken in respect of restricting access to student loans and in respect of other more punitive measures that in our view restrict access to tertiary education. I just want to check that this is a split call and I am going to get a— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: No no. You have got 10 minutes. 
CHRIS HIPKINS 
: No it is a split call. If I have used my 5 minutes I just wanted to make sure that— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: My apologies. Yes you have had more than that. 
CHRIS HIPKINS 
: OK. Well I will finish. Thank you. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: So you had better stop. I did ask and I put my— 
CHRIS HIPKINS 
: And I nodded. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: That meant 10 minutes. 
CHRIS HIPKINS 
: I said “split”. I did say “split”. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: My apologies. I will call Catherine Delahunty.