Foss Craig: Taxation (Annual Rates and Urgent Measures) Bill — In Committee 
Foss Craig: Taxation (Annual Rates and Urgent Measures) Bill — In Committee 
[Volume:628;Page:784] 
CRAIG FOSS (National—Tukituki) 
: 
 In speaking to the title of this bill I suggest that the title should be changed to “Abandonment of the Kiwi Go-ahead Look After Yourself Ethic Bill”. It is absolutely outrageous. 
This bill has three parts. I find it very interesting that although the members of New Zealand First talked in support of Part 3 they actually voted against it. I say to them “Well done!”. 
I note that the student loan provisions will strike $2 billion off the balance sheet of New Zealand. I also note that when this policy was introduced the Green Party was running at about 9 percent in the polls. After its policy was taken from it it just snuck in at about 6 percent or thereabouts. I also note that this policy was alleged to be an attack on the Maori Party vote but in that sphere it failed. 
I wonder whether there is a dark secret behind this bill. It is my recollection that the Minister sponsoring this bill the Hon Dr Michael Cullen has never had any involvement in an education portfolio in the past. With the shenanigans surrounding the tertiary education sector and the interest-free student loans legislation and with that Minister being in charge of the purse strings I think there is something untoward here. I think we should watch this space. 
I also note that the publicity surrounding this issue said it was aimed at hauling New Zealanders back from overseas. Well quite frankly if the average student loan is about $14000 which is about 4000 quid and if someone is earning about another £30000 or £40000 in the UK there is still no incentive whatsoever for that person to come home even with the interest knocked off. 
I believe that New Zealanders are rational investors. They are rational economic beings; they are good people; they are sensible. Mr Bollard from the Reserve Bank agrees having recently hiked interest rates for the ninth time to discourage New Zealanders from borrowing. The Inland Revenue Department also has penalty rates of about 26 percent to discourage people from extending their borrowing. 
But I issue a challenge to every single member of any party that votes for this bill. It is very simple. Those members should give me for 5 or 10 years—they can choose—$1000. I will borrow it off them at zero percent interest. I will pop it in the bank and at the end of that time I will donate the entire proceeds from interest to a charity of their choice and I will give the principal back to them. Is that a good policy? I issue that challenge to them. I look forward to all comers taking me up on that bet. If every member on the other side of the Chamber gave me that money—the ones I presume will vote for this bill—I could put about 60 grand on deposit. 
This bill also does not quite address some of the key operational issues. A few clauses are about borrowers having to advise the Commissioner of Inland Revenue of their absence from New Zealand the discretionary power of the commissioner etc. Nowhere does it address how what the process is when and what the rules are. This will turn into a shambles. If members think the National Certificate of Educational Achievement is a shambles they should wait until our smart and rationally investing students start to see what is in front of them. Those students will play games; they will send excuses to the commissioner to try to make use of the discretion to be considered outside the 183-odd days. They will play the system quite frankly. I say again that they are rational human beings. 
I suggest also that this entire bill is a contradiction in terms of incentives. In respect of Working for Families what incentive is there to get out of bed? What incentive is there to get ahead? In respect of the student loan provisions what incentive is there to get out of bed to earn some money to pay off one’s loan? There is none zero—funnily enough that is the same as the rate of interest. 
Some people call this a student loan scheme. For me with my banking background a loan tends to have some kind of return. A zero percent loan is no longer an asset. That is why $2 billion will get knocked off the New Zealand balance sheet. New Zealand has a massive private debt problem. What will happen to New Zealand’s private debt ratios once that sum comes off? Again we will have an injection of dependency more debt and more control by this Government which is absolutely hooked on control by various means. 
My good colleague Chris Finlayson mentioned tradespeople. They invest in their future income; they invest in their brains. So why are they not included in this bill? There are so many contradictions. I would be interested to hear the Minister of Revenue take a call on in particular the provisions regarding a zero return on a taxpayer asset. I suggest he would say he was quite opposed to that if he were to take a call.