King Colin: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
King Colin: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Volume:638;Page:8287] 
COLIN KING (National—Kaikoura) 
: 
 That was the former member for Hamilton East Dianne Yates. She made a far greater contribution in the Education and Science Committee than she did in her third reading speech on the Student Loan Scheme Amendment Bill (No 2). 
I speak from the point of view that National supports this bill in its third reading. The bill’s gestation has been very short. It would be naive of us to ignore the fact that it is absolutely necessary and that the Inland Revenue Department basically had no way of managing a policy that was thought of for the purposes of its vote-catching capacity. In actual fact when we looked at the details of it in the select committee we saw in the highlights section of the annual report on the student loan scheme that the number of borrowers living overseas was 27000. With further research we found that the figure is 40000–odd. 
We got down to the task very quickly under the fine and admirable chairmanship of the Hon Brian Donnelly. Dealing with this bill was a very interesting experience. It has given me an insight into the process around select committees because it is one of the first bills I have worked on that has come right through and that we could wrestle with before it becomes law. On that basis I acknowledge the appropriateness of the submitters and the fact that we sat during recess one time to make sure it all worked. The way the Inland Revenue Department officials were able to bring clarification to the complex subjects being dealt with was also refreshing. The process was interesting from my point of view because it was not clouded with that warm fuzzy thinking that comes from the left when the Labour Party is totally bereft of any real straightforward thinking. From that point of view it is appropriate that we should bring into line the runaway abuse of a system. 
However I am incredibly sympathetic towards the overloaded and overburdened Inland Revenue Department with the workload it has to carry. We are asking an enormous amount of the department. We might be showing a degree of blind faith to believe that with a couple of amendments here and there under the name of the Student Loan Scheme Amendment Bill (No 2) we will block all the abuse of the system. 
I go back to what the very valuable member for Tamaki Allan Peachey alluded to which was the 2 million - odd taxpayers in New Zealand who fund the student loan scheme. We do not want to take them for granted; we want to see a lot of responsibility being taken by those people who have taken up student funding and gone on to get tertiary education. 
A lot of people have paid back their loans. We see in the highlights section of the annual report on the student loan scheme that 665900 people have taken loans and 193393 have paid them back. However at this point in time—or at the time of the report on the 2006 student loan scheme—470507 people still had a student loan. Some interesting fiscal figures around the student loan scheme going forward are that by 2015 borrowings will be in the region of $12.7 billion and it will not be until 2034 that repayments exceed borrowings. Over the next 15 years there will be some fiscal implications and we just have to note those. The total amount of borrowing is forecast to increase by 4.7 percent a year which is $66 million. On average the balance will increase by 5 percent. That is the really large figure because that 5 percent is actually going to be $526 million each year. It is a serious matter we are talking about here. Again it just emphasises the implications of the $1.5 billion election bribe that was handed out. 
From the time the interest-free loan scheme was signalled until today the number of people who have gone overseas and whom the Inland Revenue Department did not know about has cost the taxpayer another $143 million. Again it just emphasises the huge fiscal implications upon the economy. I want to emphasise that we are not begrudging that; we just want to see an enormous growth in the level of responsibility of those people who have taken other options like going on to tertiary education learning a trade or skill or working with an industry training organisation or training provider where they can earn while they learn and get very very valuable skills. As previous speakers have said we have high expectations for our young people. We want them to aim for the stars and to excel. We do expect them to make educational choices around the tertiary scene that will add value and make our economy resilient into the future. 
Another statement I want to make is that there is a significant level of private benefit around the tertiary education side of things. I do not think we are focusing enough on that. The fundamental thinking around the student loan scheme is that it is for the private good of the individual. The State still pays an enormous amount of the tertiary education bill. There needs to be an incentive around the choices we make so that that value is realised. When we stop to think about it we realise that with any investment there is a short-term sacrifice and that to get the long-term benefit we have to be able to cope with that short-term sacrifice. To quote what Benjamin Franklin said—and I fully endorse the statement—“If a man empties his purse into his head no man can take it away.” That applies to women as well I say to Dianne Yates. 
Any investment in knowledge always pays the best returns. Certainly tertiary education is hugely important. The student loan scheme has been the foundation for it and on that basis I recognise that this bill is the best attempt of a number that will come before us to try to ensure that those people who take on the obligation of a student loan either stay in New Zealand and deliver the value back to the taxpayer that we know they will or if they go overseas stick to their repayment obligations. It was interesting to get the figures from the Inland Revenue Department that show that this scheme in itself will actually start to improve the level of payment—$9 million in the first year and something like $24 million in the second year. 
Just on a finishing note I draw everybody’s attention to the noble submission made by intern doctors. It talked about their need to stay in New Zealand for another 3 years. When we look globally at the moment at the issue of getting employment as a doctor we see that in the UK for example the number of doctors is being reduced by some 20000-odd and we are very mindful that it looks as though the worm may turn. We will get back a lot of our wonderful people and that would be absolutely outstanding. 
It gives me great pleasure to stand here and speak on behalf of the National Party. I am proud of the fact that we have largely tidied up an area that was a shambles after the interest-free student loan policy was brought in. Thank you.