Clark David: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Text is incorporated into the Bound Volume 
Clark David: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Sitting date: 28 March 2013. Volume:688;Page:9072. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Labour is supporting the Student Loan Scheme Amendment Bill (No 2) because we see that a fair system for the repayment of student loans is very important. Student loan repayments are a huge burden on hundreds of thousands of Kiwis. For those struggling to pay off student debt while paying the bills and saving for a house it is galling to hear of overseas-based borrowers making no attempt whatsoever to pay back their loans. We support the principle that underlies this bill in terms of making the system fairer in terms of data matching to ensure that those who are trying to evade their responsibilities are called to account and the broadening of the definition of “income” to ensure that these things are treated fairly. 
The bill will enable the Inland Revenue Department to share information with the Customs Service to make it easier for officials to get in contact with overseas-based student loan borrowers who are in default. Labour expects every borrower to make an equal effort to pay back their student loan whether they are overseas or at home. There are some enormous challenges here when we acknowledge that half of those borrowers overseas are of unknown address. So we commend the Government’s effort to make the system fairer. 
There are problems with this bill again. Many of them have been noted in the earlier stages of the debate. Those problems are tied back many of them to— 
Hon Simon Bridges 
: This is the worst speech for 50 years. 
Hon Annette King 
: You’re the worst member of Parliament for Tauranga for 50 years. 
Dr DAVID CLARK 
: My colleague is interjecting that Mr Bridges is the worst member of Parliament in Tauranga for 50 years. I cannot possibly disagree with that but I want to come back to the point. 
The Inland Revenue Department is unlikely to be able to implement many of these changes. That is illustrated very well in the bill which contains a number of back-downs. There are in this bill a number of embarrassing positions for the Government to be seen in. It is in this bill very clear that the Government has been forced to go back on legislation that it has recently passed because it is unable to implement it with the outdated computer system at the Inland Revenue Department. That outdated computer system is over 20 years old—the first mainframe computer system. The Government has spent tens of millions of dollars on consultants to get advice on how it should replace that system but as yet the public of New Zealand is none the wiser as to the time frame for that replacement or indeed whether the Government has any kind of credible planning around it at all. That is a disgrace. 
The transparency around this process is also an embarrassment to the Government. I have sought personally under the Official Information Act to get briefings on the tens of millions of dollars that have been spent in the effort to get advice on how to upgrade this 20-year-old computer system. We know that the Government is expecting to spend in the range of about a billion dollars on this upgrade in due course—or at least that is the estimate Mr Key has put out there. The department itself suggested up to $1.5 billion and there have been other estimates in the media of somewhere around $700 million or $800 million. If we take a central point there and say that it is over a billion dollars that is about to be spent it is shameful in my view—it is shameful—that the Government cannot release anything other than the titles of documents for the past 2 years. I would assume that the department’s advisers will be giving common-sense advice on process for selecting somebody to win the tender when a billion dollars of taxpayer money is being spent. I would assume there is transparency around this process and a desire for the wider public to understand that the Government is really taking this seriously. 
We have had all kinds of debacles of which Novopay is probably the highest-profile and most recent. We have had debacles around the Government’s efforts to implement computer systems. We on this side of the House have fears that this Government is really not across the issues has not laid out a plan and is stumbling along spending taxpayers’ money hand over fist for what may well be a disastrous project. There is no doubt that the systems need to be upgraded. The Inland Revenue Department is a department under pressure. There is $7 billion in tax that remains outstanding—the most recent estimate was that $7.8 billion of New Zealand taxpayers’ money remains outstanding. 
There are currently over a million returns at the Inland Revenue Department that are unprocessed. It is a department under pressure. There were 70000 phone calls that went unanswered in last year’s July GST filing period. My colleague David Cunliffe has pointed out the problems with getting through on the telephone system of the Inland Revenue Department at the moment. It is a department under stress. It is not being supported by the Government. Staff have been cut around the areas. I know that dozens of staff have gone from my own area in Dunedin because this Government has been taking jobs out of the regions. The services are dropping. The experiences of services we heard in the Finance and Expenditure Committee for the general public are becoming increasingly poor. The public are saying that they are unhappy with the level of service being offered and we know that the system is creaking along but the Government seems like it is sitting on its hands it is not addressing the issues with the computer system and consequently in this bill here we have further retractions. We have the Government stepping away from measures it has put forward because it now knows that it cannot implement them. It is stepping back. 
It must be humiliating being over there on the backbenches on the other side of the House because they see their own Ministers putting legislation through costing expensive parliamentary time only to later on have to make embarrassing speeches—embarrassing speeches—that speak favourably in glowing terms about their Ministers and the bills that their Ministers are putting through when they know that a good part of the content of this bill has embarrassing backgrounds. It must be an awful place to be in and that is probably why they take very short calls—those backbenchers opposite—and I can kind of understand that. If I was in their position having to witness such embarrassing performances from the Ministers I too would be taking short calls because it is not a nice position to be in. Many of them are honourable and fine members of the House and I do respect their integrity in being embarrassed by it— 
Hon David Cunliffe 
: Which ones? 
Dr DAVID CLARK 
: I cannot point out which ones Mr Cunliffe. It would be unparliamentary to label the others and unkind. 
There is also in this bill one part that we object to in principle and that is the creation of a tsar clause—the creation of a “Henry VIII” clause in this bit of legislation—which is the Government’s attempt to cover itself for future humiliating back-downs. This bill itself containing humiliating back-downs contains another clause that says that in future if there are embarrassments if we cannot put things through on the computer system because it is too hard and we have not dealt with the computer system we will give the Minister regulation-making powers. The significance of that should not be underestimated. We have heard from the select committee that oversees these things in Parliament that this is an increasing trend under this Government. It is failing so miserably in managing Government departments that it is giving itself powers to circumvent the usual parliamentary scrutiny that we would expect from any responsible Government. It is embarrassed—embarrassed—by its own performance and rightly so. 
Mike Sabin 
: Go and check the facts. 
Dr DAVID CLARK 
: Mr Sabin I think understands the embarrassment and is feeling the embarrassment so he from the backbenches is defending a Government that has to put “Henry VIII” clauses into small bits of legislation that tinker with the rules around loan collection. I would be embarrassed too Mr Sabin; I understand your position. 
This bill creates some small steps towards fairness as I said at the beginning of my address and for that reason Labour will support it because we believe that everyone should have to make a fair effort to repay the debt. We want to see a sustainable student loan system because we believe in supporting more students into tertiary education not like this Government which is increasingly putting restrictions in place so that only those who are privileged can access education. We believe in expanding free education because we are the party of education. We do not believe that it should be for only those who are already privileged. We have a very different view on this from the current Government. The principle of fairness which creeps into this bill probably against the Government’s wishes is one we support and we are pleased to see that there are some small loopholes being closed. We acknowledge the humiliation the Government is facing with the back-downs in this bill and we hope that it will deal with bigger issues and make a change for New Zealanders rather than having to come to the House again with many many many more embarrassing bills.