Robertson Grant: Student Loan Scheme Amendment Bill (No 2) — First Reading 
Text is incorporated into the Bound Volume 
Robertson Grant: Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Sitting date: 20 September 2012. Volume:684;Page:5540. Text is incorporated into the Bound Volume.] 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 The Labour Party will be supporting this bill the Student Loan Scheme Amendment Bill (No 2) going to the Finance and Expenditure Committee. As the Minister of Revenue has noted it is a largely technical bill although I think he has raised a couple of reasonably significant points which I will turn to shortly. Overall whatever concerns we might have on this side of the House with the changes the Government has made to the student loan scheme such as the eligibility change we do recognise that it is important to constantly update and monitor the way in which the scheme is administered and to ensure that it is fair. I think that the message I get time and again from parents and from borrowers themselves is that they do want to see fairness across the system and there are elements of this bill that go to that. 
One point to note in terms of our support of the bill’s referral to the select committee is about the issue of the sharing of information. Although we think that the goal is laudable we do want to hear at the select committee from the Privacy Commissioner and others to ensure that we get the procedures around that sharing of information right. There certainly is a lot of opportunity to share information between Government agencies but clearly the more that is done the more risks there are around civil liberties and around the reasons that people give information out. So we want to ensure that the committee is fully briefed by officials and the Privacy Commissioner on the impact of any information sharing under this bill. 
The point in the Minister’s speech that I do want to go back to is about the definition of income. I think the Minister has made some important points about the current definition of income leaving out important parts of what actually constitutes income and what any reasonable person would see it as: the idea that it is the money you live on—the money you gain from various sources. I am particularly interested in the idea of the inclusion of payments from trusts. The challenge I put out to the Minister—in fact more broadly to the Government—is to think about this in the broader context of the student support scheme. The biggest complaint that anybody who is involved in looking at the student support scheme gets is around the issue of people who get student allowances but appear to come from backgrounds that are not the low and modest income backgrounds that student allowances are currently targeted towards. 
Hon Peter Dunne 
: That’s been addressed already. 
GRANT ROBERTSON 
: Yes and this is an issue that we need to constantly keep under surveillance because although it is good on one side of the coin to say that we have got a new definition of income for the student loan scheme we also need to make sure that that is consistent across the allowance scheme. 
Hon Peter Dunne 
: No it’s already been done. 
GRANT ROBERTSON 
: The Minister says it has already been dealt with but there are still ongoing concerns and particularly so in the context of the Government’s misguided and wrong decision to take away allowances from postgraduate students which I believe to be one of the most backward moves in student support that I have seen in the 20-odd years I have been working in the sector. 
The whole point of the student allowance system is to say that there are people from low and modest income backgrounds who need this support to be able to continue their study and abolishing allowances for postgraduate students I believe sets up a massive inequity. The letters that came in to me when that decision was made focused on that but also on people’s concern that there were still people out there who were ensuring that money went through their parents’ trusts so that their income appeared to be low and there they were getting allowances. At the same time the Government has frozen the parental income thresholds for access to allowances meaning that the inequity grows each day as these people who actually have much higher sources of income still get the allowances while those whose parents are on more modest incomes do not. So that inequity is something that I think the Government should address. At the moment it is changing the definition of income here in the loan system but it should be looking at it in the allowance system as well to create that fairness there. 
As I said the other parts of this bill are largely about the efficient operation of the system and what happens to overseas borrowers. I note that Mr Dunne in his introduction did mention the fact that the repayment holiday had been cut from 3 years to 1 year. We did debate that in some detail. Mr Dunne has had a number of positions on this issue. In fact he has introduced a number of bills on this issue—one to create the repayment holiday and one to reduce it—in different Governments so it must be hard for even Mr Dunne to keep up with his positions on this particular matter. But I want to reiterate the Labour Party’s opposition to that change. 
In fact we are not the only ones. Treasury and the Ministry of Education told the Minister that reducing the repayment holiday from 3 years to 1 year would not improve student loan repayments and in fact was highly likely to increase the debt held by overseas borrowers and therefore discourage them from returning from overseas. So I do not think the Minister can stand proudly behind that particular change to the loan scheme. He should go back to his original position under the Labour Government and support the repayment holiday which is a pragmatic initiative to enable people to go and do their OE in the way that many New Zealanders and many members of this House will have done. Reducing it to 1 year puts great limitations on that. So that particular change is one that the Labour Party certainly does not support and we would encourage Mr Dunne to return to the position he held when he was a Minister supporting the previous Labour Government. 
The other changes to the student loan scheme that the Minister alluded to are much more problematic for this side of the House. I want to take a specific example. I think the Minister used the word “fairness” and I accept that making the scheme more efficient in terms of repayment and obligations on those who are overseas may have an element of fairness to it. What is not fair is taking away from those aged 55 and over the ability to borrow for the living cost component of the loan scheme. We have talked a lot in this House in the last few days about the loss of jobs and people who lose their jobs and we have seen hundreds of jobs lost around New Zealand. Here in Wellington where I am an MP we have seen a large number of people lose their jobs in the public sector. 
One of those people came to visit me in my electorate office recently a woman aged just over the 55-year age-limit to say that she had worked out—she was a single woman—that she would probably have somewhere between 10 to 12 years left in the workforce and that she wanted to retrain. She had been in a particular part of the Public Service she had realised that there were not going to be a lot of job opportunities for her and she wanted to retrain particularly in something around computers and IT. She cannot do that. She is no longer able to get the living cost component. She has no other way of financing her costs. Mr Joyce likes to stand up in the House and say “Well I’ve abolished allowances for postgrad students but they can all borrow it from the student loan scheme.” which is not actually correct because they cannot get the same amounts of money that they used to. This is an example of somebody who is now unable to retrain. 
Members on the other side of the House in the debate on the previous bill we were discussing the Social Security (Benefit Categories and Work Focus) Amendment Bill were going on and on about incentives to work and people being work-ready. Well here is an example of somebody who is desperate not to be on a benefit who is desperate to be at work and who has an idea of exactly the programme they would like to do and because of the changes to the student loan scheme that this Government has made that woman cannot do that study. That is wrong. Those changes to the student loan scheme are grossly unfair. I call on the Government to revisit and relook at those changes. 
It has put in a number of changes. It has reduced eligibility around having to pass more than half of your course. We need to look at what the impact of that is. We have also seen changes around residency requirements. Around 25000 people have had their eligibility for student loans cut under this Government. I think there are unfair outcomes within that particularly for those people aged over 55 and I believe the Government should revisit that. 
This bill is effectively tinkering with the loan scheme and it may be useful tinkering with the loan scheme in large part. But what is actually required when it comes to the issue of student support is for the Government to see student support as part of a package of investing in education because education is an investment that will help New Zealand’s economy grow and will lead to more social inclusion and that is something we should be seeing more of. Unfortunately this Government sees tertiary education as a cost to be cut not as an investment in our future and student support is a very important part of making sure that tertiary education works. Rather than seeing it as a cost to be cut I think the Government should be looking at an overall review of the scheme to ensure that there is a fair approach and that people get the support that they need. 
Abolishing allowances for postgraduate students sends all the wrong messages. Stopping people aged over 55 being able to borrow their living costs from the student loan scheme sends all the wrong messages. We should be supporting people to undertake tertiary education to get the skills they need to contribute to our economy. Although this bill does some useful administrative things it fails to address the real issues: that we need more people in tertiary education and we need people from all backgrounds being able to participate.