Clendon David: Student Loan Scheme Amendment Bill (No 3) — First ReadingText is incorporated into the Bound VolumeClendon David: Student Loan Scheme Amendment Bill (No 3) — First Reading[Sitting date: 27 August 2013. Volume:693;Page:13032. Text is incorporated into the Bound Volume.]DAVID CLENDON (Green): I am pleased to join with my Green colleague and indeed my Labour and New Zealand First colleagues to take a brief call to speak in opposition to this very ill-conceived piece of legislation the Student Loan Scheme Amendment Bill (No 3). It is not unusual for the Greens to oppose Government legislation but occasionally I think it is incumbent on us just to retain some perspective and to ask the question: what is this Government good at? It must have some talents some abilities. One can pose the question and get quite a long silence while one waits for an answer. But it has to be said—and it has been proven a number of times just in the last few days—that this Government has an absolute talent for creating legislative sledgehammers for cracking very small nuts. It is a skill it seems to portray at every opportunity.It is indicative to me of the fact that Government members have never quite got their heads around the old saying that goes something like this: for every complex problem there is a simple clear answer and it is always wrong. This bill represents a very simple clear—and one could even say simplistic—approach to an issue that does need to be dealt with and it is a patently wrong approach. It is clear that this fondness—and again we have seen it characterised in a number of the pieces of legislation that have gone through just in the last few days—for meddling around the margins trying to tweak and meddle represents a lack of vision a lack of a strategy and a lack of an overall understanding. The world is quite a complex place and there are many reasons for people’s behaviours and simple punitive measures are seldom going to present a workable and viable solution to that.There are no doubt many reasons why individuals fail to meet their obligations to repay loans and yes loans are loans and there is an obligation on people who take them to pay them back in time. But simply criminalising New Zealand citizens some ofour best and brightest is hardly a creative approach. It does reflect a lack of imagination and a lack of ability to think through a problem and to come up with a positive solution that can actually resolve the problem. It is unlikely even to be an effective solution. One could forgive the lack of shall we say sensibility but it is very unlikely to be an effective solution. Again it is creating a great big legislative hammer that will not solve any problems that it is targeted at.The amount of money in default attributed to overseas former students we are told at 31 March was around $427 million. That is not an insignificant amount of money but again we need to put it in the context of $13 billion of accumulated loans over the years since the loan scheme was put in place. The perverse thing is that that $13 billion actually sits on the Government’s balance sheet as an asset. We have loaded $13 billion worth of debt on to some of our youngest and our not so young and some of our best and brightest and that appears on the books as an asset. That is a very peculiar form of economics in my view.It would seem to me that the Minister of Revenue has not really read very closely the regulatory impact statement because had he done so I suspect that this bill would never have seen the light of day. There are some really interesting points in it which it seems the Government has not really taken into account. One of those is the provision in the bill that raises the repayment obligation of borrowers with loan balances greater than $45000. I would like to quote from the regulatory impact statement. It says: “The impact of this policy”—the raising of the obligation at that $45000 level—“on the compliance of overseas-based borrowers is uncertain.” There is absolutely no guarantee it will have any positive effect. Indeed the regulatory impact statement goes on to say: “There is risk that some previously compliant borrowers with balances greater than $45000 will simply stop repaying or repay less than their obligation because of the higher repayment.” It is creating a very perverse incentive. It is making it easier for people to make the decision to go into default rather than continue to be compliant with their loans.I will not have time to work through all that is wrong with this bill but I would like as others have to reflect on the position that it puts the police in. The police will become debt collectors for the tax department. I look forward to critiquing this bill in future readings. Thank you.Debate interrupted.