Dunne Peter: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Dunne Peter: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Volume:638;Page:8273] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Amendment Bill (No 2) be now read a third time 
. The purpose of this bill is to remove the barriers to borrowers who are overseas returning to New Zealand and to ensure that all borrowers receive their correct entitlements under the principal Act. 
To ensure greater compliance amongst borrowers who are overseas the bill introduces targeted measures to make it easier for this group to pay their student loans. In so doing the bill will help to remove a potential disincentive to skilled New Zealanders returning home. For this group the main changes include the introduction of a repayment holiday of 3 years for borrowers going overseas. This measure acknowledges the reality that it is not always easy for people to repay their loans while they are having their OE. For borrowers who are overseas and not taking a repayment holiday the bill introduces progressive repayment obligations based on the size of their loan balances. Interest-free loans for people studying overseas will be extended to undergraduates studying full-time at bachelor degree level. This will apply only to an existing loan they had before leaving New Zealand and it does not mean that people will be able to take out a loan for study that is undertaken overseas. 
 The amnesty on penalties declared last year for non-resident borrowers who are in arrears with their payments will be extended by 1 year to 31 March 2008. The purpose of that is to allow borrowers who are identified in the proposed data-matching between the Inland Revenue Department and the New Zealand Customs Service to come within the amnesty. 
The second group of changes contained in the bill apply to all borrowers whether in New Zealand or overseas. The purpose of these changes is to update the legislation so that it is consistent with the intent of the interest-free student loan provisions which came into effect from April last year. Data matching between the Inland Revenue Department and the New Zealand Customs Service will be introduced thus making it easier for the department to identify who is overseas and to ensure that only those entitled to interest-free loans actually receive them. The late payment penalty will reduce from 2 percent a month to 1.5 percent a month. The hardship provisions in the Student Loan Scheme Act are being amended to give the Inland Revenue Department greater flexibility in administering them. 
For overseas borrowers to qualify for an interest-free loan on the basis that they are working overseas as volunteers or for token payment as the employee of a charitable organisation this bill provides that the borrowers must establish that the organisation applies its funds to one or more specified charitable purposes. 
Finally to protect the integrity of the tax system an administrative amendment to the Tax Administration Act is being made to ensure that care and management provisions apply to the Student Loan Scheme Act in relation to interest as well as to repayment obligations. As a package these changes will make it easier for borrowers to comply with their loan obligations and for the Inland Revenue Department to administer the student loan scheme fairly. 
In bringing this bill to the House for its third reading I acknowledge those who have contributed to its successful passage thus far. They include the policy officials and the drafters who have worked on the detail of the legislation; the members of the public and the tertiary education organisations that made submissions on the proposed legislation; and finally the Education and Science Committee for its consideration of the bill and for the recommendations it has made for improvement of the finer points of detail. I now have great pleasure in commending the Student Loan Scheme Amendment Bill (No 2) to the House.