Hipkins Chris: Student Loan Scheme Amendment Bill — In Committee 
Hipkins Chris: Student Loan Scheme Amendment Bill — In Committee 
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CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Thank you very much Mr Chair—oh my goodness that is loud! And it is not even me this time. I am very happy to take a call on the Student Loan Scheme Amendment Bill and I want to begin perhaps just by canvassing a few of the principles behind the student loan scheme. The Labour Party is very proud of the track record we have when it comes to the student loan scheme. The student loan scheme was put in place to ensure that financial barriers do not prevent people from participating in tertiary education. That is one of the reasons why Labour took a number of steps during the term that we were in Government to make student loan scheme repayments faster which is one of the things this bill purports to want to do. Whether or not it is going to do that is the subject of some comments that I am going to make shortly. But we wanted graduates to get through their debts faster to be able to get on with their lives and that is one of the reasons why we made student loans interest-free. From memory the average— 
Hon Anne Tolley 
: No it helps to win an election. 
CHRIS HIPKINS 
: No actually—oh so it is to win an election? Well this just highlights the National Party’s stance on interest-free loans does it not? One moment John Key said he was going to fight interest-free student loans with every bone in his body; the next minute he said that it was shonky economics. Was that what it was—it was shonky economics? 
Dr David Clark 
: But it was good politics. 
CHRIS HIPKINS 
: But it was good politics. So now it is good politics for National members to support it but in their heart of hearts they do not believe in interest-free student loans. They do not believe in the policy that has seen the average repayment times for student loans more or less halved. So here they are bringing this bill to the House today which they claim is going to result in faster repayment times for student loans—faster repayment times for student loans; that is what they say this bill is going to do—yet they are opposed to the very policy—the very policy—that resulted in much much faster repayments of student loans. That was interest-free student loans.  
But coming back to the bill—I am not going to be distracted by that unruly lot over there. As the wheels start spinning off the Government you can see the desperation in those members’ eyes but I will not be distracted by that because on this side of the Chamber we do believe in faster repayment times for student loans. That is one of the reasons why the amendment put forward by Grant Robertson is a very sensible one. The advice that the Government has received is that by reducing the repayment holiday from 3 years to 1 year it will actually increase the amount of debt. It will increase the amount of debt.  
Now of course that is something this Government is quite happy with. It does not really mind about debt—debt on any number of levels. Whether it is student loan debt current account debt or Government debt this Government is happy to see it all increase. It wants to borrow. More borrowing—that is what this Government is all for. It does not matter who is doing the borrowing—whether it is people with student loans whether it is the Crown or whether it is households—borrow borrow borrow is the message that we get from this Government. Borrow borrow borrow. We are not going to borrow our way out of recession but that is what this Government seems to think. That is what this Government seems to think because this amendment that the Government is proposing to make in this bill will increase the amount of debt. That is not my view; that is what Treasury is telling the Government. Treasury is telling it that this is going to result in more debt—more debt—and yet it is going to go ahead. Let us be clear about what this is. This is all about the National Government looking like it is doing something. Actually this bill is not really going to make a huge amount of difference other than the fact that it is going to result in more debt.  
So to move to the amendment put forward by my colleague Grant Robertson—which I fully support—to restore the repayment holiday back to 3 years I believe that this is a very pragmatic decision. I am looking forward—I am really looking forward—to the contribution from Peter Dunne on this. I suspect it is going to be the defining part of this debate. It will be the contribution from Peter Dunne because he was very clear in 2007 that he thought that extending the repayment holiday from 1 year to 3 years was very sensible. It was pragmatic. That is what Peter Dunne was saying at the time. He seems to have changed his tune.  
I will be very interested to see how Peter Dunne votes on Grant Robertson’s amendment. If Peter Dunne votes against the amendment put forward by Grant Robertson that will simply confirm what everybody suspects—that Peter Dunne’s view of pragmatism is whatever it will take to keep his ministerial warrant. That is Peter Dunne’s view of pragmatism. I am looking forward to him proving us wrong—to Peter Dunne coming into the Chamber and voting in favour of Grant Robertson’s amendment. If he does do that and if that amendment passes Labour will vote for the rest of the bill because we actually do not have a problem with the rest of the bill. But we do have a problem with this provision in the bill that reduces the repayment holiday—the amount of time someone can spend overseas without having to worry about repayments—from 3 years to 1 year because we do not think it is going to work.  
John Key stood in the Westpac Stadium in Wellington and lamented the fact that 30000 New Zealanders left every year. Of course we have got more New Zealanders leaving New Zealand every year now than that. In fact we are at record levels of people leaving New Zealand and some of the people leaving New Zealand are recent graduates. They are recent graduates going off to do their OE—it is a bit of a rite of passage for New Zealanders. That is something we encourage; we just want them to come back. It is good to do an OE because you get a whole lot of experience that you might not get in New Zealand. If you are a medical graduate for example working for a few years in an overseas hospital is going to give you exposure to a whole lot of different things and experience that you might not get in New Zealand. 
Maggie Barry 
: But why should we pay for it? 
CHRIS HIPKINS 
: We should pay for it Maggie Barry because they will be better doctors when they come back to New Zealand. They will be better doctors when they come back to New Zealand. But this Government does not care about getting them back to New Zealand. It is quite happy to say “stay there”. After training them after spending all that money to train them this Government would rather have them stay overseas than come back to New Zealand. We in the Labour Party want them to come back to New Zealand. We do not want to see the trend continue as it has under this National Government under John Key’s Government for more and more New Zealanders every year to leave the country and not come back. They are not coming back because this Government is not giving them any hope that the future is going to be better for them when they do come back.  
This repayment holiday may seem like only a small thing but if you have got graduates overseas seeing penalties starting to rack up while they are away that will act as a major disincentive for them returning to New Zealand and that is the very last thing we should be doing. For a lot of our graduates 1 year is simply not enough in terms of the time. They might want to do a bit of work they might want to have a bit of holiday they might want to visit a couple of different countries and 1 year is not probably enough; 3 years is adequate time. After that time I think it is fair for New Zealanders to say: “Hey you’ve had your university education or tertiary education”—whatever variety it is—“you’ve had your OE you have had your overseas experience we now want you to come back and contribute back to New Zealand and if you don’t do that we expect you to start making repayments from wherever you are to get your loan balance back under control to start paying off your student loan.”  
That is very reasonable very fair. The Labour Party supports that. But requiring people to do that after 1 year is going to lead to more graduates in default more graduates clocking up debts and clocking up penalties and that is going to act as a disincentive to them coming home. That is one of the reasons why the amendment put forward by Grant Robertson is a very very sensible amendment—a pragmatic decision recognising that many young New Zealanders take that extended period overseas. That is what Peter Dunne said when he supported the 3-year repayment holiday before he went back to supporting the 1-year repayment holiday in the space of 3 or 4 years—but that is OK; that is Peter Dunne. As I said Peter Dunne’s view of pragmatism is whatever keeps his job.  
But I am looking forward to his proving us wrong. I am looking forward to the significant contributions from the Maori Party. I notice that we do not seem to hear so much from the Maori Party these days. It could have something to do with the fact that those members are not allowed to read their speeches any more. They have been kind of unplugged so to speak and so we do not tend to hear quite so much from the Maori Party. I am looking forward to the contributions of Mr Banks. The ACT Party’s Mr Banks will I am sure argue that we should do away with student loans altogether and that it should be the ACT Party’s view of Darwinism: survival of the fittest and whoever has got the most money should get the tertiary education; everyone else should just join the line.  
Moving on to some of the further substance of the bill I must admit I was intrigued by Minister Peter Dunne’s amendment. Actually it is the commencement clause that I was about to talk about so I will talk about that when we get to that part of the debate. But I am interested in the fact that one of these provisions comes into effect retrospectively. That is pretty unusual and I will be interested to hear the justification as to why we are imposing a retrospective clause in this bill. I will get to that when we come to that part of the debate.  
Just moving back to the points of principle that I was raising at the very beginning the Labour Party of course supports efforts to make the student loan scheme more efficient. We think that the student loan scheme is a very important way that we can ensure that everybody can participate in tertiary education and make a brighter future for themselves. Graduates should not be shirking their responsibilities to make repayments but the quid pro quo from that arrangement is that we have to make sure those repayment arrangements are fair. Removing the interest was fair; this is not fair.