Shearer David: Student Loan Scheme Bill — Second Reading In Committee 
Shearer David: Student Loan Scheme Bill — Second Reading In Committee 
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DAVID SHEARER (Labour—Mt Albert) 
: 
 The Labour Party will be supporting the Student Loan Scheme Bill although we are opposed to one element of it which I will get to as I go through my remarks. As this bill went through the Finance and Expenditure Committee I think that it generated a degree of debate—not hostile debate but debate in terms of how we can make our student loan mechanism work much more effectively. As the Minister of Revenue just said making this system less paper-driven and streamlined in terms of the agencies that students go to—bringing those down from two to one—and certainly making it easier for students to be able to repay their loans particularly those students who have gone overseas is all good. 
The average student loan at the moment is nearly $7000 per student and about 587000 students have loans. As Minister Dunne just said about $11 billion in total is designated—curiously—as a Crown asset. I suppose in many ways it is an asset. These people are going through tertiary education which is a right that we are pleased about. 
Amy Adams 
: The debt is an asset. 
DAVID SHEARER 
: Yes I was looking at the word “asset” and using the word in terms of what we have and in terms of investing in our future. That is very important in terms of what New Zealand has been able to do throughout the history of tertiary education which is basically to provide easy access for students to be able to get to university and have that right of a good tertiary education. It is a very high-quality tertiary education. 
But $2.3 billion of that money is money that is currently with students overseas. So this bill which streamlines our ability to be able to help those students overseas to repay their loans is to be welcomed. Treasury estimates that by 2014 something like $22 million will be recoverable through the changes that have occurred as a result of this bill and $22 million is significant. Obviously the sum will accumulate over time as we get the basis of a new system a more streamlined and electronic system in place and one that can be built on and encouraged further after that. 
This is where we come to the issue that the Labour Party is not in support of. The particular aspect is the charging of a fee to students in order to be able to put this system into place. I think that at the moment students are in many ways already heavily burdened with student loans. As we are actually making close to $22 million off the back of the savings that will occur putting a yet further burden on to students of the administration fee in this bill is we believe over the top. Although we are supportive of the bill itself we are not supportive of the proposal in this bill to add an administrative fee for students to enable this system to come into play. The State will take $22 million which will increase over time so that fee I believe is unnecessary. It is a fee of only $40 per student; nevertheless it is a fee that will hit students who are perhaps in a position where they are already financially stretched and ironically it will add to the cost of the loan for people who are already struggling. 
While I am on this topic I will address the broader aspect of what is actually happening to student loans. An extraordinarily important subject for the country is the amount of money that we commit through student loans and the commitment we make as a country to tertiary education. Yet some areas of student loans such as that of people trying to get a student loan have been disadvantaged as a result of the last Budget. I am referring to those students who are over the age of 55 and who are effectively being shut out of obtaining a student loan. That says a couple of things to me. First of all it says that people over 55 have really no value in our education system because they are too old. We know that 55 is the very age at which many older workers look to retrain upskill and move on to other things. We know inevitably that people will be working longer as they continue their working lives and that they will want and need to upskill and retrain as a result of that. It seems highly discriminatory to penalise those people over the age of 55 rather than to support them to go into tertiary education to be able to change to a different pathway and to upskill their qualifications so that they can take part in the workforce and be more productive. Overall our labour productivity is one of the lowest in the world and we want to try to see that we provide every encouragement for workers to be able to move into more productive employment. This bill discriminates against those people over 55. 
The second point I will raise with regard to this legislation is that the over-55s have generally been paying taxes all of their lives but as a result of this bill when those people get to 55 the Government will say “Yes if you’re 18 you can get a student loan and the State will support you but when you get to be over 55 despite the fact that you’ve been contributing to society in most cases you have been excluded.” I think that is grossly unfair. This access to the student loan should be universal; it should not be discriminatory. It should be allowed to continue for those over 55 regardless of the fact that according to the Minister for Tertiary Education these people are considered high risk in terms of the degree to which they pay back their loans. Despite the fact that I have asked the Minister specific questions about the over-55s—in what courses and in what areas have they not been paying back their loans—I have not been able to get that information. It seems that this policy is somewhat like shooting from the hip and is not really thought through but is nevertheless a policy that is targeting and discriminating against those older members of our society who genuinely want to go back retrain relearn and upskill. That is exactly what we are trying to provide certainly on this side of the House through our education policy but in fact it is not the case at all with this bill. 
I just come back to the bill itself. As I said the Labour Party will support this legislation because it streamlines the ability to collect those loans that are outstanding. It provides a better interface for students who have perhaps gone overseas because we can communicate through electronic media. That will replace much of the paper-type aspects that have been the hallmark of the student loan system up till now. It will recoup—according to Treasury figures anyway—$22 million by 2014. In the next 3 years that amount of money will easily pay for what has been put in place in terms of the changes in this legislation. Thank you.