Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 26 March 2013. Volume:688;Page:8947. Text is incorporated into the Bound Volume.] 
Student Loan Scheme Amendment Bill (No 2) 
In Committee 
Debate resumed from 19 March. 
Part 3 Amendments to principal Act that apply for 2014-2015 and later tax years ( 
continued 
)  
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I want to continue talking about Part 3 of this bill and in particular about clauses 63 to 66 of this legislation and that is around the definition of income for student loan repayment purposes that is contained in this bill. This is one of the reasons why Labour is supporting this bill. We support the fairness that is enshrined in broadening out the definition of what counts as income that can be assessed for the repayment of student loans. What this bill does in clauses 63 to 66 in Part 3 of this bill is make changes to the definition of “adjusted net income” for student loan repayment purposes to ensure that a borrower’s repayment obligation accurately reflects their ability to repay their loan. Amendments make further adjustments to net income to broaden out that definition of income to include any other type of income not currently captured. 
So what this bill does is it actually tidies up and makes it much fairer where you have the definition of income now including business profits and income from trusts. Labour certainly supports measures that do move beyond looking just at wages and salaries as income for which student loan repayments should be made. 
In fact Labour supports fairer approaches to taxation and taxing wealth where it occurs across the board and an analogy would be our support for a capital gains tax and how this ties into that. So this is a loophole in this scheme that Labour is happy to see closed. 
Mike Sabin 
: What about GST on fresh fruit and veges? 
Dr MEGAN WOODS 
: And I can hear from Mr Sabin’s calling across the way that he is overjoyed with our support for this bill and with the fact that we are supporting it. Actually broadening out this definition of income will save the Crown approximately $7.5 million over the next 5 years according to Treasury advice that was given. 
But what I want to do is juxtapose the fairness that is enshrined in these clauses 63 to 66 in this broadening of the definition of income with the fact that this bill does not address some of the other unfair decisions that this Government has made in relation to the broader area of student support. This is a very technical bill that tinkers around the edges but what it does not do is comprehensively review the whole issue of student support and how it is that if we truly really want to be an innovation-led economy that is based on having a very skilled very educated and very trained workforce then what we do is we support our people into education. This bill does nothing to address that. 
What Labour thinks is that we do actually need to take this broader more holistic look at things and see how it is that we can achieve these aims. What this Government is committed to is what Steven Joyce calls the dampening down of demand for education. For Labour this is absolutely counter to the kind of New Zealand that we want to see. We want to see a New Zealand where our young people are encouraged into this training. Actually Treasury has estimated that the changes made in Budgets 2010 and 2011 would result in 25000 people losing access to student loans and do you know the people who will not go on to study to train and to get an education? It is those 25000 people who cannot afford to pay their own fees and support themselves while they are there. We do not see that cutting off access to 25000 people is a way to build the kind of New Zealand that we want. 
What this Government has done is it has made some very very unfair decisions. It has cut off student allowances for postgraduate students and this is at a time when we have a whole lot of rhetoric from the Government about how we need more people with higher degrees in this country yet we take away the student support. I just want the Government members to reflect on how this compares with the fairness that it is trying to enshrine through clauses 63 to 66 of the current legislation. I want them to pause and think about how these two decisions and these two actions fit together. I want them to dwell also on taking away the right of people aged over 55 to take out a student loan. Where is the fairness in that? We do not see that there has been fairness. I would also like them to pause and reflect on the fact that the Minister of Labour ignored advice from the Ministry of Education in passing the youth rates legislation last week which said that youth rates will add to the burden that students have to shoulder as they study. Now when they go out and they are not getting their allowance they do not have access to loan or they have reduced access to loan. To add insult to injury these young people if they are students who are aged 16 to 19 years of age will be facing youth rates when they go out there. As someone who has taught and tutored at a university I can tell you that students who spend all their time working and not applying themselves to their studies certainly do not get the most out of their education that they otherwise would. 
What is contained in these clauses 63 to 66 is one of the bases of why Labour is willing to support this bill because there is fairness in there. But in talking about the fairness that is in these clauses of the legislation I would like members opposite to think about the very unfair— 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I rise to speak to Part 3 of the Student Loan Scheme Amendment Bill (No 2). I feel that Part 3 is a really lovely encapsulation of the whole bill because it contains the aspects or themes that we see—I shall not speak about the whole bill but the aspects and themes that it covers—paralleled throughout the bill. We have as Dr Megan Woods has so eloquently enunciated a number of clauses that refer to the broader definition of income which is the aspect of the bill that is about fairness and that is about making sure that the student loan scheme is sustainable over the longer term. We on this side of the Chamber do believe in student support. We believe that it is something that is good for New Zealand and is good for those individuals involved. It leads to future prosperity. We would like to see more of it as New Zealand can afford it over time. We think this is a good thing. So the broadening of definitions is the part that we support. 
Then as we move on through this part we see that this part of the bill also contains the amendments relating to the repeal of provisions on the 10 percent bonus which of course is a Peter Dunne U-turn. This bill is rife with U-turns. This nicely encapsulated in Part 3 is not only the broadening of the definition of income which we support but the kind of embarrassment of a Government U-turn contained in this legislation. There are many of those through the bill and we have discussed the various U-turns contained in this bill in previous parts of the debate in the Committee stage. 
Finally at the end of the bill in clause 68 we also have some tidying-up. That tidying-up relates to the rushed changes that went through in Budget 2012. There we saw the Government make eligibility for student support much more difficult. We saw changes that restricted access. We saw in there an increase in the repayments threshold so that students who were on relatively modest incomes were forced to pay back a larger portion sooner and those with dependent children and so on will be feeling the pinch of that. 
So in Part 3 of the bill we have all different aspects of the bill reflected. It is kind of typical of the wider bill. We have the good intent we have the embarrassing back-down and we have the tidy-up the sweep-up after the Minister on some previous mistakes. 
The sweep-up at the end there relates to those eligibility and support mechanisms that we talked about rushing through in Budget 2012 the repayment thresholds that were adjusted in Budget 2012 and the reduced access to support. That again points to the differing attitudes between the two larger parties in this Parliament. If we remember back it was National that introduced student loans in the first place. It sought to make it a bit more challenging for students to attend university. Labour introduced interest-free student loans which made student loans more accessible and more affordable. Then subsequently this Government has introduced administration fees on those loans—a way of introducing interest again without introducing interest again. That is a clever back-door trick if you like to try to make sure there are charges on loans without going back on the promise not to introduce interest back on to loans. 
Hon Ruth Dyson 
: It’s a Clayton’s broken— 
Dr DAVID CLARK 
: It is a Clayton’s— 
Dr Megan Woods 
: Being fair like clauses 63 to 66. 
Dr DAVID CLARK 
: Yes that is right; my colleagues are right there. So Part 3 of the bill encapsulates nicely the themes that stretch across the bill. 
Labour will be supporting the bill for the fact that it is an attempt to go after those who are avoiding paying their due. We support that. We know that there are 101000 student loan borrowers living overseas. Roughly half of those are of no fixed abode—their address is not known to the taxman who collects those things. A total of $2.67 billion is owed which is a phenomenal amount. The average amount of default is somewhere between $7000 and $8000 and there are 14000 borrowers in default with debts of over $10000. It seems unfair and galling to those who are making an effort to pay back their student loans when they see others getting away with not doing it. So it is essential that this broadened definition of income is applied and that the efforts to collect that money are realistic and forthright and the data-matching proposal seems to get to that extent. Whether it can be implemented of course is a different matter. 
Carol Beaumont 
: Mr Chairman. 
Hon David Cunliffe 
: Mr Chairman. 
The CHAIRPERSON (Eric Roy) 
: Carol Beaumont. 
CAROL BEAUMONT (Labour) 
: 
 Thank you very much. 
The CHAIRPERSON (Eric Roy) 
: I am trying to share this around. I am sharing the love. 
CAROL BEAUMONT 
: That is wonderful thank you. 
The CHAIRPERSON (Eric Roy) 
: Mr Cunliffe has already had two calls so that is why it is your turn. 
CAROL BEAUMONT 
: That is great. Part 3 of the Student Loan Scheme Amendment Bill (No 2) as others have noted concerns the parts of the bill that amend the principal Act that apply for 2014-15 and later tax years including the amendments relating to the meaning of “adjusted net income” and the amendments relating to the repeal of the provision of the 10 percent bonus. We support the provisions around amendments relating to the meaning of “adjusted net income” because that will be fairer. We think that all borrowers should make an equal effort to pay back their student loan. We also think that those who receive their income from a company trust superannuation scheme or other source should be treated in the same way as those who earn a weekly wage—and to be honest just as an aside that is often not the case. So we are pleased to see that in this regard some of those other forms of income are being drawn in and treated equally. 
We understand that broadening the definition of income will save the Crown approximately $7.5 million over the next 5 years—that is according to Treasury—so of course that is a positive as well. Those provisions in clauses 63 through to 68 seem to us to make sense and are the reasons why we are supporting this Student Loan Scheme Amendment Bill (No 2). 
But there are concerns. As my colleague Megan Woods has talked about we have concerns about how this fits in the overall approach taken by the Government to student support. There have been quite a number of attacks made on student support in an attempt to “dampen demand” for tertiary education. To us that seems crazy. Given the kind of economic change that we need in this country given our need to be smart and agile and given the need to really lift performance in our workplaces we need to invest more. We need to be smart and innovative. A major part of that is investing in our young people—in fact in all of our learners not just young people—and anybody who wants to upskill themselves and participate to a greater extent in their career. So we are concerned about the number of changes that have been made. Some of the examples have perhaps been mentioned already but I think it is important to just reinforce them. Over-55-year-olds in Budget 2011 were stopped from accessing the student loan. That just does not make sense. We want older people to continue in the workforce for longer. Although we have high unemployment at the moment the overall demographic trend is for an ageing population when we are going to want and need older people in the workforce. That means they are going to need to be able to upskill to look at career changes and to do all of those things. Arbitrarily cutting off access to student loans at age 55 is short-sighted in the extreme. 
There are also limits on part-time students’ borrowing for course-related costs. That was a cut made in 2010. Budget 2010 also imposed a 2-year stand down on new residents accessing student loans. If people can get into some form of tertiary education and get themselves the kind of qualifications they need that is probably a very sensible way for them to commence their residence in this country. After all they do have to pay that money back. 
In 2012 the National Government passed legislation to reduce the overseas-based borrower’s repayment holiday from 3 years to 1 year. That goes counter to such a long tradition and such an important element for many New Zealanders and that is that they study they go overseas they develop contacts and networks and they have other opportunities there. They then come back to New Zealand and it is beneficial to our economy. We did not support that. 
The decision in last year’s Budget to remove the allowance eligibility for postgraduate students is the one that I want to really focus on now. That has to be the most short-sighted and unfair thing that could possibly happen given the need to make structural changes in our economy and given the need to really look at innovation to look at how we can support manufacturing in this country. The sort of manufacturing we are going to need to be involved in is not just in lightly processed commodities; it is going to need to be in elaborately transformed manufacturing and we need people with ideas and smart things. We want these people to stay here. The fact of the matter is that those students who want to continue in postgraduate studies are likely to be some of the brightest New Zealanders that we have who are wanting to keep learning to research and to do those things. What are they going to do if they cannot access support here? They will go offshore. They will be snapped up. We do have a good tertiary education system. We have a good education system overall. They will be snapped up and taken on by overseas universities and once they are there they will end up being part of a research pool and part of a brains trust in other economies and not in ours and that just does not make sense. This is an enormous waste of New Zealand’s potential. We do need more people doing postgraduate study not fewer if we are to grow our innovative economy. 
All the while during all of these cuts and dampening of demand and short-sighted economically damaging actions by the Government student debt has continued to grow with the latest figure showing it has reached $13 billion—$13 billion. Student loan debt is now a huge burden on young Kiwis starting out in their working lives and certainly for most of those people they have no concept of the dream of owning their own home for example. It is very much seen as outside of their reach. Combine that with some of the other initiatives of the Government and the chances of those students minimising the loans that they need to take out—for example bringing in youth rates. Bringing in youth rates like we just have—well one of the consequences of that will be that young people will be less able to save for their tertiary study. What does that mean? Well they are going to have to borrow more. So that is certainly counter-intuitive to reducing student loan debt. 
Keeping wages down—a 25c an hour increase in the minimum wage—is the same thing. Young people are concentrated if they can get work in minimum-wage jobs on very low wages. Even if they are not on the youth rate they are less able to save to fund their tertiary education studies and therefore have to take out greater student loans. I could go on. The point of this is that those things combined with some of the cuts into student support are just a recipe for a disastrous economic outcome for us and also for those individuals. Social mobility used to be something that we valued in this country. It was a country not that long ago where if you were a kid with ability you could go on you could learn you could get a decent job and you could expect to do well for yourself and your family. That is no longer a reality for so many New Zealanders. That is something that I think we need to really consider. Do we want to have a haves and have-nots society? Well over on this side of the Chamber we do not. Tertiary education is a very important bridge to making sure that people have opportunity. So these things are very very damaging. 
So going back to this part of the legislation to Part 3 I remind the Committee that we are supporting these provisions. We think that they are logical and fair. Unlike the Government’s overall approach to student support they are sensible. The overall approach is one that we do not agree with and we think has major economic consequences. Thank you. 
The CHAIRPERSON (Eric Roy) 
: I start at the Hon David Cunliffe. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you Mr Chairman that was very kind of you—eventually. Thank you very very very much. 
I would like to take this opportunity to rise and speak to Part 3 of this bill the Student Loan Scheme Amendment Bill (No 2) and do something that rather pains me which is to be nice to the Government. I am wanting to compliment the National Government for several changes that it is introducing in this part of the bill. Having said that I promise not to make a habit of this. I do not want people out there in listener land to think that we have completely lost our marbles but there are several changes here that make me think that Government members have become the Latter-day Saints of social democracy that they have discovered truth fairness and the Kiwi way because they are doing albeit a very small amount to shave some of the silver lining of the silver spoon that some are born with in their mouths— 
Dr Megan Woods 
: Next will be CGT! 
Hon DAVID CUNLIFFE 
: Who knows? Perhaps they will as Megan Woods has said introduce a capital gains tax to help the cause of fairness. But at least in this bill they are broadening the definition of income to include such things as—wait for it—trusts which the Law Commission tells us are being overused that we have one of the highest incidences of family trusts in this country. It is a major avoidance loophole and too often taxpayers are vesting assets in the hands of children simply for the purposes of minimising tax. But were any friend of the National Party doing that on this occasion—of this bill—the Government would be narrowing that avoidance loophole by saying that income from trusts will be calculated in the definition of income that is used to calculate student support entitlements. Likewise companies. That of course means a wide range of companies. It could even mean companies like I do not know Apple—Apple which is paying less than 1 percent of revenue in taxation in New Zealand even though its average profitability on revenue is over 20 percent worldwide. That would seem to be somewhat unfair but at least this bill is broadening the definition of income in student loan calculations to include income from companies as well as trusts— 
Todd McClay 
: There’s one more. You missed one out. 
Hon DAVID CUNLIFFE 
: —and superannuation schemes of which of course the member who is interjecting so rudely has many. That is of course a further broadening of the definition of income and that is a good proper and right thing to do. Why is that? I believe— 
The CHAIRPERSON (Eric Roy) 
: Part 3. 
Hon DAVID CUNLIFFE 
: Yes we are in Part 3; I am looking at clauses 63 to 66 and particularly at clause 63 which broadens the definition of “annual gross income” to include income from trusts companies and superannuation schemes. That is amplified in clause 64 which replaces section 73 and clause 65. 
That brings me to the “So what?” which is really pretty simple. In our extended families I will warrant that we know young people who are very very fixed on tertiary education and who almost no matter what the odds will go and do it. They will take on loans and they will pass the exams. We probably also in our heart of hearts have someone in our whanau who really is not cut out for tertiary education and that is just fine too; they will find their own path. What this series of reforms aims to do is to address that group in the middle: the kids who need a hand-up who need the power of the State to provide them with the confidence and the financial resources to stretch to tertiary education and the money that is involved in that needs to go a bit further. That is why the silver spoon brigade has to be able to count or should count their trust income their company income and their superannuation income. 
I am not quite sure how this actually got through the National caucus and why Todd McClay a trust fund baby from way back the esteemed chairman of the Finance and Expenditure Committee did not torpedo this out of pure self-interest but it seems he was outvoted if he did try and here it is on the Committee floor. We on this side of the Chamber think that this is a very good thing. It is a small—a very small—step in the cause of social justice from the National Government. 
That brings me to clause 67 and as David Clark has rightly pointed out this is perhaps the most exciting clause—a breathtaking clause—within Part 3. Why I hear you ask out there in TV land is clause 67 so exciting? Because it repeals the 10 percent silver spoon bonus repayment. Kids from rich— 
PAUL GOLDSMITH (National) 
: 
 Thank you Mr Chairman for the opportunity to make a comment on this bill the Student Loan Scheme Amendment Bill (No 2). It was encouraging to hear the spirit of bipartisanship reaching across the room from our friend Mr Cunliffe. The thing that surprised me was why he was not quite so focused on doing sensible things when Labour introduced this excessively generous scheme which this Government inherited—this excessively generous scheme which was wide and billowing with very few checks and balances. Labour did not do anything about drawing in the full income of households. It just opened the gate as wide as possible and encouraged people to borrow as much as possible and never pay it back. 
Of course that kind of activity that attitude that lassitude you might say extended to every aspect of Government spending through the 2000s and saw Government spending increase by 50 percent during those fat years up to the point of 35 percent of GDP. This Government has been about trying to restore some order to the nation’s books and get us back on track to surplus in a very difficult and dangerous world. 
This piece of legislation—I am drawing back here to Part 3—is all about that important task of making the student loan scheme more sustainable. When we look at clauses 63 through to 66 they are about working on some of those little minutiae that are really about just getting some boundaries around the scheme making the student loan scheme sustainable in the future reducing the need for more Government borrowing and preparing students for the way ahead. 
We should not forget that the New Zealand student loan scheme is one of the most generous in the world. Some might say that there is only so much we can spend on tertiary education and that if we devote all of it to subsidising student-free loans for people who can and should be paying it back faster— 
Tracey Martin 
: Student-free loans? 
PAUL GOLDSMITH 
: —interest-free student loans—then that is less money that we can invest in investment. 
When we look down to the detail what have we done? It is worth recapping briefly that the changes we made over the last few years have reduced the cost to the Government from about 48c in every dollar that is loaned—a truly horrendous cost to other people who are paying the bill—down to 39c and we are trying to get it down further. This is a significant achievement and it is a demonstration of the Government’s priorities. When we look at Budget 2012 repealing the voluntary repayment bonus and increasing the repayment rate from 10 percent to 12 percent that has significantly increased the speed with which these loans are repaid so students can get on with their lives safe in the knowledge that they have made good progress on their loans and can save for houses and so forth and the taxpayer is not unduly bent out of shape. 
In the main provisions I just wanted to draw attention to the question of the definition of income being broadened to student loan repayment purposes to align more closely with that excellent— 
Todd McClay 
: Does it include interest from bank accounts? 
PAUL GOLDSMITH 
: No it does not but it is the same income definition used for determining entitlements for Working for Families tax credits. We have here in the Chamber Minister Bennett who has done such a good job in the welfare area. 
These changes in Part 3 are absolutely common sense. Why do we do this? Because it is about people paying back their debts to other New Zealanders. That is what this bill is about and it is only fitting and proper. I was disappointed that we were left with such a wide and billowing scheme that was unaffordable and unsustainable and this bill is a number of small targeted well-crafted steps to bring this scheme back to a more sustainable level so that we can continue to support our students at university and build that brighter future to which we all aspire. Thank you very much. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to make another contribution on Part 3 of this bill the Student Loan Scheme Amendment Bill (No 2)—in particular clauses 63 to 66—because I think there is so much embedded in these clauses that we need a good discussion about them. One of the things that I would like to discuss is broadening the definition of what counts as income to be assessed for the purposes of student loan repayments. Of course this is going to apply not only to those graduates who are in the workforce who are domiciled in New Zealand but also to New Zealanders living overseas who have a student loan. So for New Zealanders living overseas who earn their money from a business or from a trust their income is now going to be assessable for student loan purposes. 
This brings us to another issue—and one of the things I want to talk about—in terms of these definitions and the fact that we are bringing in another whole category of people whose income can be assessed which is the changes that are made in other parts and the interaction with clauses 63 to 66 and the way in which the data of these people can be matched at the border. There were concerns raised at the Finance and Expenditure Committee around whether or not this gelled with the privacy legislation that is going to be coming before this House. These people who are caught under clauses 63 to 66 of this legislation which we think is a good thing will now be eligible for data matching at the border. This new group of people is created by these clauses under Part 3 of the bill. 
We have grave concerns as we have had yet another data breach from this Government. 
David Bennett 
: Oh get over it. 
Dr MEGAN WOODS 
: Only this week we have seen the details—and no Mr Bennett I will not get over it. There are 90000 Cantabrians who have had their details released and put out there when this is a Government that has done nothing to give Christchurch people access to that information despite the fact that they have been asking for it for months. So yes we do have concerns over the data matching that will happen for the new category of people created under clauses 63 to 66 of this legislation because this is a Government that has shown itself to not be trusted with people’s personal information. We would like to put on record that when you do data matching you have an obligation to make sure—not you Mr Chairman not you. The Government has a responsibility an obligation to make sure that it is protecting the information that it holds about New Zealanders and to not have the slapdash approach that we have seen which has led to the very serious breaches we have seen in ACC the Ministry of Social Development and the Earthquake Commission. We do not want to see this happening in terms of the new categories of people that are created under this legislation. 
We ask that Government members take a call and give us a reassurance that these new categories of people will have their data protected and that there will not be mass releases of it as there were with the people whose private information was shared in relation to their Earthquake Commission claims in Christchurch. This is an issue that we take very seriously and we would not like to see the categories of people created under clauses 63 to 66 in Part 3 of this legislation being subjected to their information being shared in this slapdash and haphazard manner. We invite the Minister in the chair the Minister of Immigration and we invite a member opposite to take a call and to give us that reassurance that this information will be protected. It is not good enough for us to just say “Get over it.” as Mr Bennett heckled from the benches opposite. We will not get over it. Labour takes seriously the fact that a Government has a responsibility to deal in a responsible manner with people’s private information. The reaction we have seen from the benches opposite and the Prime Minister’s reaction in question time today show that this is not a Government that thinks this is a serious matter. The fact that we are trusting this Government with more information and the ability to share more of this information under this legislation for the category of people created under clauses 63 64 and 65 of this legislation gives us cause to question it. We would welcome a Government call on this matter. 
The CHAIRPERSON (Lindsay Tisch) 
: Just a point that the data-matching legislation is out of scope. It is not in Part 3. 
ANDREW LITTLE (Labour) 
: 
 It is a pleasure to take a call on this bill the Student Loan Scheme Amendment Bill (No 2). I just point out that although Labour will support this bill and does support this bill it is a bill that deals with what is an unfair approach to funding tertiary education but it makes it a little fairer. In particular Part 3 and its redefinition of income means that those who can source their wealth—in particular their income—from sources that up until now would not have been captured by the definitions of income will now have that captured and that is entirely fair and appropriate. Without that it would mean that—and in fact there are people who can conceal hide or otherwise shelter their income and have it remain unassessable for the purposes of the student loan scheme and that is unfair because that is an approach that favours the wealthy and does not at all have an impact on those who find it more difficult to meet the rigorous requirements of repayment of loans under this sort of scheme. 
Let us remember that this scheme in the absence of full State funding of tertiary education and with an approach that requires more private funding for tertiary education at least knocks the rough edges off that approach. It means that it makes tertiary education accessible to people where it might not otherwise be so. But for that element of fairness to work it means that when it comes to repayment of those loans everybody should be treated in a fair and an appropriate sort of way. 
It is all very well for Mr Goldsmith to lament what he describes as the cost of the scheme and the fact that there is a large amount outstanding but actually the real measure is the number of people who now get to benefit from tertiary education. Or at least up until now because we know that those pressures are growing that those pressures are getting harder and that there are tertiary institutions where the pressure is now really on to lift fees and that is putting more pressure on the student loan scheme and more pressure on both students and of course graduates. The higher the fees are the more that has to be borrowed and the more that has to be borrowed the greater the pressure on graduates to repay it once they get out into the labour market and into the workforce. 
So in that respect the bill will help to make the scheme more viable long term by broadening the definition of income and that is a good thing—that is a welcome thing. Of course what I think is very welcome on this side of the Chamber as my colleague David Cunliffe pointed out is that that incentive which was really a godsend to those who could afford it—the very wealthy—to repay their loans very early and very quickly the 10 percent bonus will no longer apply so that everybody is treated fairly in that regard. If you accelerate your payments that is good for the scheme. If because of the job you go into—if you are a good hard-working Kiwi graduate and you go off to do some sort of honourable noble job like being a teacher or might I suggest a union lawyer—you will not be penalised because you do not have an income that means you can pay massive lump sums off your student loan. We should welcome that because this is not a Government that has enjoyed a particularly friendly relationship with teachers and even less so with union lawyers I might add from my experience. So I think these are very welcome changes and it is for that reason that we welcome it. 
But none of that should detract from the fact that every effort should be made when it comes to tertiary education to ensure that those who are talented those who display the aptitude and those who have the skills should have access to it. There are still people—young people in particular; not just young people but adult students as well—who are at a stage where they could perform well in tertiary education but simply do not have the means for whatever reason to get there and enjoy the benefits of it. The more people we can have enjoying tertiary education and lifting their skills the better that is for New Zealand as a whole. So anything that can be done to lower the barriers to make it easier and to create an incentive for people to get in there is good for New Zealand. For that reason we welcome measures like this we welcome this legislation and we will support it. 
IAN McKELVIE (National—Rangitikei) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 72 
New Zealand National 59; New Zealand First 7; Maori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 49 
New Zealand Labour 34; Green Party 14; Mana 1. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 185 in the name of the Hon Peter Dunne to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Schedule 1 
The question was put that the amendment set out on Supplementary Order Paper 185 in the name of the Hon Peter Dunne to schedule 1 be agreed to. 
Amendment agreed to. 
Schedule 1 as amended agreed to. 
Schedule 2 agreed to.  
Schedule 3 
The question was put that the amendment set out on Supplementary Order Paper 185 in the name of the Hon Peter Dunne to schedule 3 be agreed to. 
Amendment agreed to. 
Schedule 3 as amended agreed to. 
Clauses 1 and 2 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Clauses 1 and 2 in the Student Loan Scheme Amendment Bill (No 2) of course refer to the title and the commencement date. These clauses are often debated in a lively fashion and members suggest alternative titles and perhaps in some cases that the legislation should never come into effect. I do not intend to debate the timing around this bill because although we disagree with the introduction of the “Henry VIII” clause we in principle support the introduction of a fairer means of collecting. As my colleague Andrew Little has alluded to the attempt to make sure that all types of income are more fairly measured when repayments are made is something that we will support. I do however have a few suggested changes to the title so as to more fairly reflect some of what happens in the bill and I put them forward as suggestions. 
The first is that this bill could be called the “Fingers Crossed We Can Implement It Bill” because this is a bill that makes very clear and lays asunder the challenges that the Inland Revenue Department is facing in terms of implementing legislation because of its decrepit computer system. The computer system at the Inland Revenue Department as we know is 20 years old and the department has over 1 million returns that remain unprocessed and over $7 billion in outstanding tax. Those things all hint rather loudly at a computer system that is struggling and needs to be updated and we have a Government that seems to have been very reluctant to actually lay out a timetable and a credible plan for replacing this system despite not being the only country in the Western World that needs a functioning tax system. This Government has been asleep at the wheel when it comes to bringing the tax system up to date so that we can support the schools hospitals and other things that are done through a fully functioning tax system. So my first suggested title is the “Fingers Crossed We Can Implement It Bill”. 
If I read from the description at the start of the bill we can see very clearly that the provision for the relief of small amounts of loan obligations is needing to be adjusted: “Under the Student Loan Scheme Act 1992 repayment obligations under $20 were not collected and were written off. The 2011 Act changed this so that small amounts remain part of a borrower’s loan balance for future collection.” This was one of the changes this Government brought in. 
Now that the scheme will continue to be administered under the Inland Revenue Department’s current computer system it has been decided that it is not cost-effective to go down that path and so this bill reinstates the discretion to write off small obligations under $20. So we have a perfectly good provision that has been there for years then the Government says: “Right we’ll update it. We’ll make it a bit more modern.” Then it decides: “Well actually we have got a fair way down the track and we can’t do it.” The computer system simply will not cope with this little change it is not cost-effective to do it and so this bill aside from introducing those fairness components is also covering up a whole lot of humiliating back-downs that have slipped in there for things that this computer system cannot implement. The bill itself is a vehicle for getting all of those changes back through that amend—or repeal—decisions made by the Government previously. 
David Bennett 
: What about those overseas bank accounts? 
Dr DAVID CLARK 
: Mr Bennett down the back is interjecting but I cannot hear what he is saying so I shall ignore him— 
Hon Ruth Dyson 
: You haven’t missed a thing. 
Dr DAVID CLARK 
: My colleague tells me I have not missed a thing. 
My second title that I would suggest is that this is the “Small Steps Towards Fairness Bill” covering over these humiliating back-downs because more generally there are more back-downs in this bill. In fact most—well not most but a good half; no actually a majority—of the explanatory material in the front of this bill is about other back-downs and reprioritisations as a result of changes not being able to be implemented. 
So this bill recognises “that some of the changes to the administration of the … scheme originally provided for in the Student Loan Scheme Act 2011 would be too complicated to implement within the Inland Revenue Department’s current computer system and should therefore not proceed.” So this is the material that explains the remaining humiliating back-downs that are in there. It introduces four measures that are provided for in the 2011 Act that should be cancelled. I have already covered the relief for small amounts of loan obligations. In there as well is the loan interest calculation method which becomes problematic and must be adjusted. It says that the bill as it was introduced with clause 54 would change the interest calculation method in two ways effective from 1 April 2013. This then suggests by way of amendments that clause 54 is removed from the bill to retain the existing loan interest regime and it also makes related amendments. 
There is also the payment calculation—“the removal of clause 59 in the bill as introduced in order to retain the existing way in which payments are allocated to repayment obligations and debt.” Again it was too complex to administer. Then further on there are some amendments that line up adjusted net income so that it is broadly aligned with the definition of income under Working for Families tax credits. 
Finally the other suggested title that I might recommend is the “Student Loan Tsar-creation Amendment Bill” because this bill introduces a “Henry VIII” clause for goodness’ sake to manage future changes should there be more embarrassing back-downs required. So in future when these kinds of embarrassing back-downs that I have just listed come up the Government has a provision in this legislation so it does not need to bring them back to Parliament. When the computer system cannot implement them the Government behind the scenes can change the regulations and say: “Well it was roughly in line with what we were intending to do. No need to put this out to the public. We realised that we can’t do it because we haven’t yet committed to building a proper tax system a proper tax computer system. We’re still struggling along with the old one. We’re not doing our job very well and we will at some stage announce some changes but we haven’t got around to it yet and so on we go. We’ll give it a go but actually we need these tsar-like powers in case we can’t actually manage it.” 
This is an embarrassing bill for the Government in the sense that it has had to bring about a bill that although it has some useful data-matching principles in it and some useful broadening of the definition of income really it is a vehicle by and large for a number of embarrassing back-downs. So these other suggested titles are up there for consideration. I guess I am not putting any false modesty up there when I say it is unlikely these titles will get adopted but I think that they illustrate some of the limitations in this bill and some of the limitations in this Government’s thinking. We really do need as a country a functioning tax system. We need to get past the situation we have where in the last GST period in the middle of the last year 70000 phone calls went unanswered at the Inland Revenue Department where $7 billion in tax revenue— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Very narrow. 
Dr DAVID CLARK 
: I come back to the title. One of the suggested titles is the “Humiliating Back-down Bill” and I put it to you that really there is a humiliating situation at the Inland Revenue Department which is caused by the inadequacy of this computer system. That is the point that I am making because right now that department is unable to do its job properly and it is actually to do with the lack of Government planning around replacement of this computer system. It is no small beer—we are talking $1 billion here in terms of replacement cost—and we have not yet seen from this Government a credible plan to replace that tax system and no time line. This Government is sitting on its hands. John Key has talked about it over eons we have seen no action and it is typical of a Government that has taken its eye off the ball and its hands off the wheel and the economy in New Zealand is suffering. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Fortuitous—a spontaneous eruption in support of this bill the Student Loan Scheme Amendment Bill (No 2). The title and commencement debate is an opportunity for us to summarise the key themes of the bill— 
David Bennett 
: Don’t rate yourself too much mate. You only had eight vote for you. Even Kevin Rudd had more vote for him. 
Hon DAVID CUNLIFFE 
: It is not a dairy farming bill Mr Bennett. You can go back to sleep thank you very much. 
This is a bill that the Labour Opposition supports for two reasons. Firstly it does take some small steps—some would say baby steps—towards ironing out some creases on the equity side of the student loan scheme. Predominantly it broadens the definition of income to include income from trusts companies superannuation schemes and other forms of income so that net income rather than gross narrow income is the basis for calculating entitlements and that is the discussion that we have had in the previous part—Part 3. 
Secondly what it does as we have discussed earlier is allow information sharing between the Customs Service and the Inland Revenue Department so that the Inland Revenue Department can access the contact details of overseas-based borrowers who are in serious default. And that brings us to a very sobering truth. National campaigned on a brighter future. Remember those big posters—“Kiss goodbye to higher taxes not your loved ones.”? That was probably before the car-park tax and the iPad tax and a few other barking mad taxes. What have we seen? We have seen a gross— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
Hon DAVID CUNLIFFE 
: —narrowing of the scope of the debate to the commencement date and title of the bill which of course is the Student Loan Scheme Amendment Bill (No 2) in fact. 
We are in the Committee stage summing up the debate on that point by reminding listeners that this bill could be said to be the “Fiddling While Rome Burns Student Loan Amendment Bill”. We have over $2.5 billion in accumulated student loan debt and this bill over a period of—wait for it—4 or 5 years changes the balance by $7 million. How typical of the National Government—that relaxed Key “do nothing” Government. We have got a $2.5 billion problem and the Government can muster the courage signalling to address $7 million over 5 years. That is $1 million a year in the face of a $2500 million problem. Whoopee whoopee! But at least it is sensible. That is why we are supporting it—at least it is sensible. 
The fact is that the people who receive income from a trust or a company should count that as income for the purposes of their student loan repayments—that is the only fair thing. Although Labour has supported many efforts to improve the repayment of debt from overseas-based borrowers we do not support the Government’s last major change which was to cut the repayment holiday for overseas borrowers from 3 years to 1 year. We do support on the other hand the removal of the 10 percent bonus for quick repayments because of course that was— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! That is not in the bill. 
Hon DAVID CUNLIFFE 
: Yes it is in Part 3 which is covered by the— 
The CHAIRPERSON (Lindsay Tisch) 
: No. Just concentrate on what is in the bill. That is not part of the bill. 
Hon DAVID CUNLIFFE 
: Part 3 is not part of the bill? 
The CHAIRPERSON (Lindsay Tisch) 
: No we have done Part 3. 
Hon DAVID CUNLIFFE 
: We have done Part 3 exactly. 
The CHAIRPERSON (Lindsay Tisch) 
: We are on the peroration clauses 1 and 2. 
Hon DAVID CUNLIFFE 
: So taking the time on the title and commencement clauses as an opportunity to sum those themes up we could call this bill the “Student Loan Scheme Amendment (Removal of Silver Spoon Bonus Repayments) Bill”. That would of course satisfy that rule that we are able to sum up the key themes of the bill in the title. In so doing we are recognising that the 10 percent fast repayment bonus really was unnecessary and it really benefited only those who did not need to be benefited because they were already able to repay more quickly and thus have an outstanding balance for less time. 
There are all sorts of other problems with the bill. If we look at this bill perhaps we might call it the “Student Loan Amendment (Unfinished Business) Bill” because we have these weird paradoxes that the Government has not touched—in fact that it is responsible for—like you cannot have a student loan for postgraduate study. What do they think? How are people going to do postgraduate study? Or are the only people worthy of getting PhDs the trust-fund babies? Where does that come from? I mean what is the rationale for that? 
Hon Maryan Street 
: What happens to the health system? 
Hon DAVID CUNLIFFE 
: What happens to the health system as the Hon Maryan Street has just asked. How are people supposed to get postgraduate tertiary medical qualifications? [ 
Bell rung 
] Mr Chair. 
The CHAIRPERSON (Lindsay Tisch) 
: The Hon David Cunliffe. 
Hon DAVID CUNLIFFE 
: Thank you Mr Chairman for the very generous and not altogether foreseen opportunity to extend the debate on the title and commencement clauses but a very welcome one. I shall probably take only another two or three calls on this matter. 
Over-55-year-olds were stopped from accessing student loans in Budget 2011. That was disgraceful. Part-time students can no longer borrow from the student loan scheme for course-related costs as of Budget 2010. This is kind of a litany of penny-pinching is it not? Budget 2010— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Those things are not in the bill. I just ask the member to focus on what is in the bill. 
Hon DAVID CUNLIFFE 
: The bill of course is contextualised by the changes that came before but I do take your point. Thus I suggested that the title of the bill be the “Student Loan Amendment (Unfinished Business) Bill” and that is some of the business that is unfinished. Budget 2012 froze the student loan parental income threshold and that is part of the reason we are back again in this bill to broaden the definition of income as we are here today. 
In the previous part we looked at a number of technical amendments. We could also call this bill the “Student Loan (Technical Amendment Hard to Understand) Bill”. It is very important that members of Parliament do cast their eyes over so-called technical amendments because it has been known in the “Sir Humphrey rule book” that some of the most intriguing and long-lasting changes are smuggled through as a mere change of a comma the addition of a plus or minus sign or the word “not” before a sentence. Those technical amendments can often make quite a big difference—changing the decimal place on a tax rate for example might make quite a big difference depending on one’s income stratum. So it is important that we bear in mind the technical detail in a bill like this 
Summing up in terms of the title and commencement clause the title “Student Loan Scheme (Missed Opportunity) Amendment Bill” touches on two small changes: the broadening of the definition of income and the allowing of information sharing. They are good as far as they go but the bottom line is we have got a $2.5 billion debt problem. At the same time we have got a whole bunch of people who cannot access student loans. The rigidity of the scheme is creaking under its own weight and in the face of such significant problems the Government has seen fit to tweak only two definitional aspects. 
One would have thought that a title for this bill might be the “Student Loan Scheme (Everything in the Garden is Bloody Near Rosy) Bill” but it is not. Everything in the country is not nearly rosy because we have got 270000 children growing up in poverty hundreds of thousands of people unemployed a sluggish recovery— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
Hon DAVID CUNLIFFE 
: —the worst economic record in 51 years and it is time I sat down. 
The CHAIRPERSON (Lindsay Tisch) 
: I think so. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much for the chance to speak to the title and commencement clauses of the Student Loan Scheme Amendment Bill (No 2). 
As my colleagues David Clark and David Cunliffe have both chosen to do during their contributions to this title and commencement clauses debate I have chosen a number of alternative titles for this bill. I wanted to offer up one: the “Student Loan Scheme (Can We Trust This Government With Our Information?) Amendment Bill”. If I can I would like to just paint a picture as to why I think that should be the alternative title for this bill. 
Turning to clause 34 in Part 1 which looks to amend section 208 of the parent legislation it says “The purpose of this section is to facilitate the exchange of information between the Inland Revenue Department”—and I will come back to that soon—“and the New Zealand Customs Service for the purpose of establishing an information-matching programme to assist the Commissioner …” to do a number of things. Those things are offered in clause 34 of the bill. They are to: “(a) verify whether borrowers are New Zealand-based or overseas-based; and (b) verify whether borrowers are New Zealand residents; and (c) locate when they enter or leave New Zealand borrowers who are in serious default (within the meaning of … the Customs and Excise Act 1996) in relation to student loans.” 
I would suggest to this Committee and to the people at home that a lot of that information would be very sensitive information—information that you would not want to necessarily see go flying into the hands of people either who do not have the need to have it or whom you certainly would not want to have it if they had other agendas for using that information. I do think that we should consider looking at an alternative title to this bill for those reasons because of the track record of this Government around the security of very sensitive information. 
This week we have seen a rather large case around the security of information which is sensitive information that we are looking at here. So we want to make sure that within the bounds of the Student Loan Scheme Amendment Bill (No 2) and clause 34 that that information is held very tightly because we have seen 83000 pieces of information for a large number of quake claimants in Christchurch getting into the wrong hands. Again we would want to see some safeguards in this bill to make sure that did not happen again. 
Also in respect of the Inland Revenue Department which I say again I quoted as one of the parties here for the information exchange in clause 34 it has had an incidence where I believe—and I am looking at David Clark here for some guidance—around 6300 individuals were caught up in another improper release of private information. That is pertinent to clause 34 because we are talking about an agency within this bill that has been given the right to exchange information with another Government agency. We need to be sure around the security of the information that we are talking about in clause 34 because we have had a past transgression—6300 individuals concerned. We need to be sure there is some security put in place I guess at an operational level around this legislation to ensure that that does not happen again. So we do have the Inland Revenue Department involved directly in clause 34. I think that because it has had some past history of an incident we need to make sure. 
Maybe it is a question I can put to the Minister in the chair the Minister of Immigration—whether he knows what kinds of safeguards are being put in place to govern the operation of clause 34 in this bill and what kinds of safeguards there will be around that private information. 
We have also had the Accident Compensation Corporation and the Ministry of Social Development caught up in very large privacy breaches— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! That is not in the bill. 
KRIS FAAFOI 
: Yes and I certainly would not want to see this happen with this student loan scheme bill because there are 101000 New Zealanders who have got student loans. A lot of them are overseas but a lot of them are here in New Zealand. If we were to see a large privacy breach of that scale concerning 101000 New Zealanders—and I am one of them I am still paying my student loan back—I would be very upset as a citizen of this country and as someone who does not want their private information put out there. So it is a serious question to the Minister in the chair as to what safeguards have been put in place to govern clause 34 of this bill. If the Minister in the chair could afford me an opportunity to answer that I would very much appreciate that as a citizen and as a member of Parliament. Around that I guess that is where the alternative title “Student Loan Scheme (Can I Trust This Government With My Private Information?) Amendment Bill” does come through. 
Another alternative title to this bill would be the “Student Loan Scheme (A Glimmer of Hope With This Government) Amendment Bill” because Part 3 I think it is of this bill does open up the bill to change the definition of income to ensure there is a principle of fairness that applies to this bill with measures to expand the definition of what income is. So as opposed to just a general old PAYE or whatever you get paid in your contractor’s terms this provision will expand the definition of income to include people who receive their money from a company a trust a superannuation scheme or other source which should be treated in the same way as those who earn a weekly wage. 
I guess in terms of that alternative title there is a glimmer of hope that there may be a principle of fairness on the other side of the House because they are applying it to this bill. As Andrew Little said in his I think it was Part 3 speech on this bill there is a sense that the student loan scheme levels the playing field for New Zealanders to let all people regardless of their level of income to be able to get a tertiary education. That is a very fair system. Of course everyone has to pay the money back and what this bill is about is making sure we can be much more efficient with that. 
What has not been fair in the past has been when people who have been able to manipulate their earnings whether they are in a trust or a company or through their superannuation scheme or through any other source of information have not necessarily been pulling their weight to pay their fair share of their income—which is what is contained in this bill—to repay their student loan. I think in that respect this does close a number of small loopholes in the scheme which on this side we are very happy to see. Because of that I think there is an alternative title to this bill of “Student Loan Scheme (A Glimmer of Fairness From The National Party) Amendment Bill”. 
Can I just—and I do not want to try the Chair too much—go back to the privacy issue because there were quite a number of submissions to the Finance and Expenditure Committee around that. One of them came from an organisation within my electorate of Mana the Whitireia Community Law Centre which did make a very strong submission against clause 34 the use of the exchange of private information and data matching. Can I take the opportunity to speak to that because in its submission to the select committee it did point out very strong opposition to that data matching because it did have reservations with that aspect of the bill. In particular it said: “… we are concerned about the potential breach of privacy over an individual’s personal information where data matching occurs.” 
If I can just carry on to another part of the bill where on point eight of the submission it said: “The Law Centre acknowledges that there are benefits to Government Departments sharing information however the more information that is shared leads to greater risks around an individual’s civil liberties and the reason for the information being provided by an individual.” So although the Chair might have been pulling me up in terms of going maybe outside the scope of some of those instances with the other agencies there is genuine concern out there in the community because of what has happened in the past around the security of the information that is contained in clause 34 around that exchange of information between the Inland Revenue Department and the New Zealand Customs Service. 
So I do reiterate my request to the Minister in the chair given the recent events and given the historical events around the exchange of information whether he can give us some kind of indication of what the Minister or the departments are doing around the security of information which I think is a very topical issue at the moment given what has happened at the Earthquake Commission. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am pleased to take a call on Part 1 of this legislation the Student Loan Scheme Amendment Bill (No 2) in regard to the title. If we note that the title— 
The CHAIRPERSON (Lindsay Tisch) 
: We are on the clauses not the— 
Dr MEGAN WOODS 
: Sorry clause 1—clause 1 of this bill in terms of the title the Student Loan Scheme Amendment Bill (No 2). In particular I want to talk to the “No 2” aspect of this title of the legislation. Of course what we have before us is a piece of legislation that is putting in some consequential amendments to the legislation that was passed last year amending the Student Loan Scheme Act. Our concern here is that this is a Government that is having to come back and continually amend this legislation. In fact we have seen that the Minister of Revenue has lodged a number of amendments to this legislation which we are debating tonight in this Committee because they were picked up as we went through. What we think is that there is a certain amount of uncertainty in terms of what is trying to be achieved. 
What we saw throughout the submission process in relation to this concern around the very piecemeal way in which this Government was operating in regard to student support is very much encapsulated in the title of this bill that we currently have before us in that it is titled “No 2” and we are coming back only a year later for a second bite at this cherry as it were to try to get this right. We support in the main the amendments that are being put forward in terms of the redefinition of income and the data matching with the reservations that my colleague Kris Faafoi and others have outlined tonight. Although we do support that we do have a concern about the piecemeal way in which this Government is approaching the issue of student support. The fact is that this is the second piece that this is the Student Loan Scheme Amendment Bill (No 2) and that we are here debating the scheme only a year later. My colleague David Cunliffe has talked about the fact that within the consequential amendments we are seeing in this No. 2 bill there can be a lot of change that is occurring. More alarming—and my colleague Dr David Clark has talked about this tonight and indeed he has talked about it many times when this bill has been discussed at the Finance and Expenditure Committee and when we have debated this bill in the Chamber—is the “Henry VIII” clause which is the ability that the Government is giving itself to make amendments if it is seen to be within the spirit of the Act. We do have concerns about that. What we want to see is a Government that is going to get it right that is not going to take a very piecemeal approach to the very real issue of student support and that will not come back. We do not want to be debating the “Student Loan Scheme Amendment Bill (No 3)” in only a few months’ time. 
My colleagues have put forward a number of alternative titles for this bill. I think they are very colourful titles some with a bit more character than Student Loan Scheme Amendment Bill (No 2). If we have a look we have talked about the “Little Bit Fairer Bill”. Kris Faafoi had a similar theme but called it the “Glimmer of Hope Bill”. What we see is that this is a bill that is a little bit fairer. I think either of those titles would be very fitting titles for this rather than Student Loan Scheme Amendment Bill (No 2) in terms of clause 1. What we see is that this is a little bit fairer. It does redefine those incomes but it does nothing to address the fact that this is a Government with an explicit agenda to dampen down demand for tertiary education in this country. Student loans are meant to be about giving access to education to students not taking it away. Our concern is that this is the policy agenda that this Government has been going with so we would suggest that either the “Little Bit Fairer Bill” or the “Glimmer Of Hope Bill” that my colleagues have suggested would be better titles for this bill. I think they are very very good suggestions. Treasury estimates that 25000 New Zealanders have lost access to student loans due to the cumulative effects of Budget 2010 Budget 2011 and what this Budget has delivered. That is why we think a name like “Little Bit Fairer Bill” is appropriate because really what we are doing on one hand by making the assessment of income a lot fairer does not offset some of the very unfair things that this Government has done in relation to student support. So I think that is one very good suggestion that has been put through by my colleagues. 
The other that I would like to suggest is the “Tinkering Around The Edges Bill” because I think that is one that picks up some of the aspects of this bill. Although there is nothing that we really disagree with in terms of what the Government is putting through here in that it is making it a fairer scheme and is doing things to increase that it is not doing anything to holistically address the issue of student support. That is where Labour wants to see things go. We want to see students supported. We do not want to dampen down demand for education as a necessary policy objective. We think that people having access to tertiary training whether that be skills training or the ability to learn a trade to go to university or to a whole raft of different tertiary education courses is a good thing. We do not want to have an explicit policy agenda to dissuade our young New Zealanders from accessing this. So that is why we think it could be the “Tinkering Around the Edges Bill”. 
When you put this bill in the context of the other things this Government has done over the course of this term the title “Tinkering Around the Edges Bill” makes a whole lot more sense. It makes sense if you put it in the context of the Government limiting postgraduate students’ access to the student allowance and the fact that this is not a Government that wants to encourage postgraduate study. On this side of the Chamber we think it is something we should be committed to and it is certainly something that we see as vital to our future both as a society and as an economy and it is something we will seek to encourage. We also see that this is a Government that has limited access to student loans to those aged over 55. Given the high levels of unemployment that we have in this country which this Government does not seem to have any answers for or any plan for we do not think it is good to limit people aged over 55 from having the opportunity to retrain and pick up some new skills. That is why we think clause 1 would be better amended to read the “Tinkering Around the Edges Bill”. 
My colleague David Clark has gone through some other suggestions and one of his favourites I think was the “Embarrassing Back-down Bill”. This bill is something we have had to come back to and I spoke about this earlier when I spoke about the specific reference to the “No 2” part of the title of this bill. It should be called the “Embarrassing Back-down Bill” because it is something the Government has had to come back and correct over and over and over when it comes to the issue of student support. We need to get this right. We need to look at the whole issue holistically. 
My colleague Kris Faafoi made a very good contribution I thought. I particularly liked his suggestion that the title should be the “Can We Trust this Government with Our Information Bill”. I think there are some real concerns. As someone like my colleague Kris Faafoi who has a student loan I have concerns about what the Government might do with the information it holds on me in relation to my student loan and whether or not that information is safe. I have presumably just had my information about my Earthquake Commission repairs revealed to the world so I would not like to see this. That is why we think the “Can We Trust this Government with Our Information Bill” is a much better name. This is a Government that has shown that it really is not to be trusted with the information and data of many of the citizens of this nation. Indeed what was spoken about was the very agency that is named in this bill the Inland Revenue Department. We have already seen that there have been problems with the way in which the Government holds information in the Inland Revenue Department. We have had problems with 6300 people’s information in that very agency and that is why my colleague Kris Faafoi’s suggestion of the “Can We Trust the Government with Our Information Bill” is a very very good one. 
 One other thing I would like to throw in there is that the “We Don’t Want Another Novopay Debacle Bill” could be another suggestion for what this bill could be called because what we see in the officials’ report to the select committee is an acknowledgment that the computer systems are just not going to be up to it. They are not going to be able to put the systems in place. We have a section in the officials’ report here that says: “Because of the complexity of the student loan system the detailed analysis has identified that the systems design development and testing required to implement some of the 1 April 2013 changes is significantly greater than originally expected. To ensure timely delivery of the core Government policies contained in the 2011 Act and the policies that have the greatest benefit for borrowers it is proposed to not proceed with some of the measures in the 2011 Act.” 
Here we have a Government that knows it is under the gun and has seen the muck-up that it has already done in education in terms of Novopay and the fact that teachers in this country are not being paid. So we think that changing the title to “We Don’t Want Another Novopay Debacle Bill” would be another good amendment to clause 1 of this legislation rather than using the rather bland name that it has been given the Student Loan Scheme Amendment Bill (No 2). We see that the officials’ advice actually shows that this is a Government that not only is incapable of protecting our data but also is incapable of dealing with data and putting systems in place in order to deal with large numbers of data like that. So Labour does support this bill but— 
JAMI-LEE ROSS (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 72 
New Zealand National 59; New Zealand First 7; Maori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 49 
New Zealand Labour 34; Green Party 14; Mana 1. 
Motion agreed to. 
Clause 1 agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 185 in the name of the Hon Peter Dunne to clause 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 106 
New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Maori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 15 
Green Party 14; Mana 1. 
Amendments agreed to. 
Clause 2 as amended agreed to. 
Bill to be reported with amendment presently.