Shearer David: Student Loan Scheme Bill — In Committee Third Reading 
Shearer David: Student Loan Scheme Bill — In Committee Third Reading 
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DAVID SHEARER (Labour—Mt Albert) 
: 
 As has been said before the Labour Party supports the Student Loan Scheme Bill. As we have said in both the second reading and the Committee stage this bill will assist in the collection of student loans. It streamlines the student loan system. It will mean that students are able to go online see their loan status pay online and keep in communication with the Inland Revenue Department much more effectively. 
Certainly the bill will improve the situation at the moment in relation to about $2 billion worth of loans held by students who have gone overseas. Although many of those people may not want to pay off their student loans many of them possibly would like to but have difficulty accessing the system. I suggest that the sum that this upgrade purports to save by 2014 could be significantly more than $22 million just from the fact that people will pay their loans back on time simply because it is easier to do. People who are working in Australia the UK or somewhere like that will be able to pay online. If they want to come back to New Zealand they may decide to pay off a bit more of their student loan because when they do come back to New Zealand they will have to do that. 
I remind members about the size of student loans in New Zealand. The nominal value of loan balances now is around $11 billion. About 587000 people have a student loan with the Inland Revenue Department for collection. The average amount borrowed is just under $7000 although as my colleagues have said we have heard of loans in excess of $15000 and $20000. Students who remain in New Zealand pay off their loans in about 4½ years once they are earning a salary and have reached the threshold of around $19000 which actually is not very much. Nevertheless they start automatically paying back that money at that time. 
For the Labour Party the issues around the implementation of this bill are certainly not its modernising the system and moving forward which are well accepted. A couple of issues though that have come up in the course of the debates particularly in the Committee stage are worthy of mention at this point. The first is the additional charges: the $60 one-off charge and then the $40-a-year administration charge. Given the fact that this system will save us money save New Zealand money I would argue that these charges are another imposition on students. Students are stretched at the moment. Coming through the House at the moment is the Education Amendment Bill (No 4) which limits levies but we know that levies in universities in particular will go up. We know that if the voluntary student membership bill goes through it will gut the students associations. Instead of a voluntary contribution to the students associations there will be a mandatory levy. It will be levied by the university because that is what has happened in every single case in both Australia and here. The students associations provide a plethora of different services that are valuable but they will not be able to do that. 
The other thing I want to point out with regard to student loans is that they apply to every New Zealander who wants to take out a student loan bar those aged 55 and over. So from here on in this legislation has absolutely no relevance to people aged 55 and over because they are not eligible for a student loan. I would like to say that the instrument that was brought in by the Budget this year is discriminatory against those aged 55 and over. They will not be able to access the same assistance and support when they go through university as everybody aged under 55. That is discriminatory. If we are talking about an education system that is meant to be serving everybody and if we are talking about an education system that will both upskill and provide people with in-job training so that they can take on and adapt to the changes that will happen in our workforce then that provision is a major step backwards. Although I believe that this legislation will certainly help those people with loans or people who will get loans in the future that luxury that right has been taken away from some members of our society who choose to go into tertiary education. They will not be assisted to do that. 
I would argue that 55 is a pretty young age in today’s world and in today’s workforce. We are looking at the retirement age being extended further and further out if we follow the trends of all other countries in the world. If that was to happen—and we know that people would like to work longer and longer as health improves—then those people who would like to retrain will simply not be able to do that if they require additional support and assistance. I come back to the point of this legislation which is smoothing the way upgrading our ability to get back student loans and assisting those who have student loans to repay their loans. That is a good thing. It certainly is not going to be the case for many. 
Lastly I want to touch on the point that the Minister of Revenue raised in the Committee stage regarding the computer system. There is a great deal of consternation out there that around $21 million out of the $35 million that was appropriated for upgrading the computer system has been spent on the Oracle system. I accept the Minister’s argument that it is a very complicated procedure to move so much information into one computer system but I should say that we have had follies of computer systems in the past. We have had a number of occasions to I guess warn us to keep a very very close eye on the spend for this particular project. We are now going back to the first system—the Oracle system as the Minister said will kick in a bit later—so that this legislation can take effect earlier which is in principle a good thing. I come back to the fact that computer systems and upgrading computers have been hugely traumatic and problematic in the past and I hope that does not happen with this computer system. Labour will be keeping a very close eye on it. 
In conclusion once again I would like to give the Labour Party’s support to this legislation. It improves the administration and hopefully the repayment of student loans.