Mahuta Nanaia: Student Loan Scheme Amendment Bill — In Committee 
Mahuta Nanaia: Student Loan Scheme Amendment Bill — In Committee 
[Volume:678;Page:1426] 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Following on from that particular contribution from Tracy Martin I want to pick up on the last point first and that is whether in the interests of fairness the holiday period should be applied to domestic student loan borrowers. I would say that if that member does believe that this is an opportunity to convince the Government that applying the same measure to domestic borrowers is something that should be considered then we would welcome the opportunity to see what her amendment to the Student Loan Scheme Amendment Bill might look like in that regard.  
On the second issue in terms of young people going overseas I think there has been quite an extensive contribution from across the Chamber on the benefits of young people going on working holidays. I would certainly be of the mind-set in respect of young people who have gone straight from school perhaps to get their qualification and have then wanted to have that experience overseas that we are certainly richer for it because we are from a small coastal nation. It is a long way away to get over to what is often the most common destination which is somewhere in Europe—often the UK—and once you are in the UK you can travel throughout the whole of Europe. That experience in itself I think adds value to the skill set that a person has got once they have gained their qualifications. I think you appreciate the context with which you can bring those skills back into the New Zealand working environment. I appreciate that experience. I think that if more New Zealand young people—and more New Zealanders—had the opportunity to travel we would see our own country through very different eyes. In fact we would appreciate far more not only the opportunities and experiences we have here but also our ability to really contribute to this country in some very positive ways.  
On the period of debt reduction from 3 years to 1 year I made the point in a previous contribution that it would seem to me just a common-sense approach to align the debt reduction period to what is commonly associated with a working holiday period which is 2 years and some of our bilateral agreements with other countries are for the 2-year period. So I was pleased to see that Grant Robertson had introduced an amendment for members to consider and support which either retained the 3-year period or in the interests of compromise set a 2-year period. I think it is worth considering that this matter—and the point was well made—was not well reviewed. In fact advice was given to the Finance and Expenditure Committee that there was no strong rationale for 3 years and that members should be urged again to consider the time period. But I would go so far as to say that this is probably a part of the bill that should be reviewed so that members actually understand what the effects are of a holiday period for loan repayments on recouping student loans. I want to confirm certainly in terms of Labour’s position that we too believe that having a good track record and paying back debt is something that people should be inspired to participate in if this bill is sending the right signals.  
The next point I want to move to is this issue around identifying a contact person. I would like the Minister to take a call on this and in the interests of clarification maybe answer these questions. When a contact person is nominated by the borrower in the first instance does the contact person have the opportunity to opt out? I ask that because implicit in the bill is that the borrower has asked the contact person whether they can pass on those details and in the frame of thinking of young borrowers they could be putting their parents’ details there and they might not have asked their parents. That is probably the most relevant example in this situation. For whatever reason the contact person may choose not to be identified as the person who is to keep track of the borrower but it is not entirely clear in the bill whether there is an opt-out provision in the first instance for the contact person to turn down the opportunity to be named.  
In the second instance it seems to me that the intention of identifying a contact person is so that the Inland Revenue Department can keep tabs on the borrower for communication purposes. I understand that and I understand the importance of that but it seems to me that for example with regard to the need for the Inland Revenue Department to capture more data or information on that borrower the contact person has to weigh up and say: “Well I am not sure whether I have full consent to give more information or not.” And how would they be treated if they do not give over more requirements of information? I take you to the part of the bill that actually says that under the regulations the loan manager can require—that is in new section 16A(1)(e) in clause 7—“any further information specified in regulations.” So it appears to me that although there is specific information outlined in the bill that must be required if there is any further information and the contact person is not sure whether they have the right or whether there are privacy issues entailed it is not clear whether they should be in fact giving this information. I think it is important for the Minister to clarify that particular issue.  
The other part that I would like to point to is that if this is intended to give confidence to borrowers that by identifying a contact person this will ease for administrative purposes the repayment of loans or the capturing of data so that loans could be repaid then the Inland Revenue Department or the loan manager should be required to review the effectiveness of this particular clause and report on it in some shape or form. I raise that as an issue for the Minister to consider and I ask whether that has been considered or whether he received advice on it. So he could clarify whether by reviewing the effectiveness and efficiency of this clause that could continue to give confidence to people who want to repay loans—confidence in the mechanism used to have a contact person identified and therefore make contact with the borrower.  
By and large there are a number of other aspects to this bill that I think have been well traversed but in the first instance I really think that it is important for the Minister to respond to some of those key points because we still have not had a satisfactory response to the setting of the period by which loans should be repaid and the reducing of the period of repayment for loans from 3 years to 1 year. That in itself is something that would be required I think for the benefit of the Committee—to clarify why the Minister of Revenue who initially supported 3 years is now proposing 1 year.  
There is a simple amendment on the Table from Grant Robertson that could be considered by members in the Committee. I think it is a common-sense proposal— 
Dr David Clark 
: Pragmatic. 
Hon NANAIA MAHUTA 
: —and very pragmatic and it does align the repayment holiday period with the working holiday period that young people go overseas for. Kia ora.