Hipkins Chris: Social Security Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeHipkins Chris: Social Security Amendment Bill (No 3) — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2629. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):Can I thank the Minister for Social Development for that clarification. She made it very clear in her comments that there is a difference in Government support between what we give to students and what we give to predominantly low and middle income people through the form of the accommodation supplement. I want to make it clear that that is the issue because the changes that are being made here potentially discourage people from studying. I disagree with the Minister’s statement that in fact student support is more generous than what someone would be getting if they were in some other form of State assistance. In fact they would probably be getting more if they were on jobseeker support than if they were on a student allowance. I have not got the figures exactly to hand but I am absolutely confident in saying that jobseeker support is probably worth more dollars in the hand per week than a student allowance is.So we actually financially penalise people who are doing the very things that the Minister talked about that have a value to New Zealand long term because they do result in their being more employable earning higher incomes and therefore paying more tax. And by making this particular change—potentially reducing the level of accommodation support to a student or a prospective student—what we are saying to them is that they would be better off to stay on a benefit. That is not what we should be doing. We should actually be encouraging people to get into tertiary education and tertiary study.But it is abundantly clear that this is one of a package of measures and they are all interconnected that are designed to do what Steven Joyce referred to as “dampening demand” for tertiary education—in other words making it more difficult for students to get into tertiary study and to support themselves financially whilst they do so. So this particular change is removing yes what was a bit of a loophole but a loophole that if it provided some support to a group of students who otherwise would not be able to engage in tertiary study then potentially it was one we should actually be looking at going the other way with. I know that talks about additional funding but I do not think we can do what the Government and even the select committee have argued and completely separate out the policy issue that is in question here. The policy issue that is in question in this very amendment is in fact whether or not the level of funding that we are giving to tertiary students is sufficient.At the moment there are clear arguments that it is not because if students are resorting to this loophole in order to support their studies and to cover the cost of their accommodation whilst they are undertaking tertiary study there is a reason for that. It is because they may not be able to do their tertiary study without it and so the policy issues are absolutely intricately linked. Just drawing this distinction that says we are going to close this loophole and pretend that there is no issue there and that we can just wander away from it is not actually right. If people are exploiting the loophole the first question we should be asking from a policy perspective is whether we should be closing the loophole to bring everybody down or whether we should be looking at increasing the level of financial support so there are no financial incentives to exploit the loophole in the first place. That is a legitimate policy question that the Government has simply washed its hands of.Actually it should have had that debate first. If Government members were coming to the House and saying: “We think students get enough. We do not think they should be exploiting this loophole because they get too much if they go through this loophole.” I would have some respect for them taking that position. I would disagree with it but I would have some respect for the position. But if somebody is saying: “Oh we’re closing the loophole and we think that there’s a legitimate question to be asked about whether students are getting insufficient accommodation support but we will deal with that some other time.” and then tomorrow never comes that is actually not right and not fair.I think the fair thing to do is have that policy discussion from the outset because when you look at the situation that tertiary students are facing the price of their accommodation—like the accommodation of just about every other New Zealander—has gone up whilst the rates of students’ financial support in the form of student allowances have remained relatively static. Their fees continue to go up whilst their rates of allowance and other financial support have remained relatively static. They have been hit by increases in GST. Students who are on very low incomes of course suffer from increases in GST. They have no way to offset the increase in GST and of course they probably did not benefit from any of the tax cuts that were introduced at the same period of time.All of these things are increasing the cost of tertiary education and making it less and less accessible and less and less affordable to greater numbers of New Zealand students or prospective New Zealand students. If we want to get serious about the knowledge economy and upskilling the workforce we should be looking for ways to increase support.