Robertson Grant: Student Loan Scheme Bill — In Committee Third Reading 
Robertson Grant: Student Loan Scheme Bill — In Committee Third Reading 
[Volume:675;Page:20747] 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I was expecting some of the members on the other side of the House who have been interjecting freely through the process to take a call on the third reading of the Student Loan Scheme Bill but clearly only the interjections are required. 
I will speak about three or four elements of the bill in this third reading. Labour is supporting the bill. It is supporting the glass half-full rather than the glass half-empty side of the debate we heard from the speaker who has just resumed his seat Kevin Hague. Some elements in this bill are positive. Moving from a paper-based system to an electronic system is overdue for the student loan scheme and I have no doubt that the changes being made here in terms of that system will assist borrowers. They will be able to interact with the Inland Revenue Department far better. They will know much more about the balance of their loan. We hope—we are assured—that compliance costs will be reduced as a result of this legislation. And the quality of information will increase. 
Many constituency MPs will have been approached over the years by borrowers concerned about aspects of how the loan scheme operates. Certainly I myself as a borrower experienced this and I have also had people come to see me about it when overpayments occur and when information is not flowing between the Inland Revenue Department and what is now called StudyLink. People under this process will actually have much more control over their own loan accounts and I think that is a very good thing. 
There are some practical steps in the bill that tidy up one or two elements relating to overpayments interest rates and so on. Those steps I believe are good things and that is why we are prepared to support this bill. There are also some changes relating to obligations on borrowers who are overseas and I support that. 
I have had my concerns over the years with the loan scheme. I support a lot of what the Green member said about the costs imposed on people who have undertaken tertiary education but once someone has borrowed from the scheme I believe they should meet their obligations. That means that when they are overseas payments should be made in accordance with the law we are amending today. So I support the changes relating to obligations within the law. 
I believe problems still exist in this bill which is about to become law in relation to the question of the pay-period assessment versus an annual assessment for repayment. I appreciate the changes that were made in the Finance and Expenditure Committee on this matter and I think they go some way toward mitigating the concerns. I am not sure that the last Green speaker completely covered off the changes that the select committee made. The select committee took on board the concerns that were raised in first reading speeches and by submitters about the impact of a pay-period assessment on someone’s earnings versus an annual assessment if that person was a student or was to continue to be a student. This provision is needed because a lot of students try to work very very hard over breaks so that they do not have to either borrow extra money while they are studying or undertake more part-time work during a study period. The changes made by the select committee acknowledge that and ensure that a wider group of students who are also borrowers will be exempt from those repayment changes. 
However that exemption is still available only on application. The student still has to get an exemption from the Commissioner of Inland Revenue. I urge the Government to work with students associations as long as they still exist to make sure that students and borrowers are aware of the fact that they can get this exemption. Some of them may not be aware of that fact. They will work very hard in part-time jobs in breaks and may not know that they are now eligible under this law to be exempt from making repayments. I think the select committee has done a good thing in making this change with regard to students in a holiday break who under the current rules would have to make repayments if they earned more than $367 per week in that holiday break. That now will not occur but only if an exemption is obtained on application. I urge the Government to ensure that students and borrowers are aware of that change. 
Although we supported that particular aspect of the change it is still true that part-time students and people with irregular incomes will now potentially be caught by the pay-period assessment. Members on the other side of the House enjoy talking about movies such as  
The Hobbit 
. It is true that people who work in that kind of industry get large amounts of money at a particular time but perhaps will not earn over the threshold for a whole year. They will be making payments now on the basis of a pay-period assessment. That presents a difficulty. But I congratulate the select committee on having listened to those submissions. That is why bills need to go to select committees so that issues like this can be dealt with. 
I still foresee some issues relating to moving from an annual assessment to a pay-period assessment. I appreciate the fact that for some people there will actually be benefits but a number of students who will still need to apply for an exemption and other borrowers who will not be able to apply for that exemption will be caught by this change. 
The other matter I will refer to has been referred to a number of times in the debate and it is the question of the new $40 administration fee which has been introduced under this bill. We on this side of the House are not convinced that there has been a justification for this fee. We have been told by the Minister of Revenue and also in the regulatory impact statement that the cost savings from the earlier part of this scheme are such that we should in fact potentially see a reduction in any administration costs relating to this scheme. We have been told that the new computer system will save money in the long term so therefore the introduction of the $40 fee seems to have no basis other than revenue generation. 
It is in fact as other colleagues have said in the debate the reintroduction by stealth of interest on student loans. We know that the National Government would rather have interest on student loans. There is no doubt about that. I am sure that if National is elected to a future term it will look at bringing that in. Politically they know they cannot do anything about it right now but in reality that is what they want to do. Steven Joyce has pushed and pushed his officials to find ways of limiting access to the student loan scheme because he cannot do the thing he really wants to do which is to put interest back on student loans. John Key said he would oppose interest-free loans with every bone in his body. That is where the National Government really stands on student loans and that is what we see in this bill with the bringing in of this administration fee. 
It is a $40 fee. Some members on the other side of the House said we should not worry about a fee that is only $40 per year. But that money still has to be paid back. Up until this bill passes today students would not have to pay that money. Although we are supporting this bill because of the positive things it does with regard to the management of the student loan scheme which we do think in the end—we hope—will reduce costs on borrowers with this clause the costs on borrowers increase. It is very disappointing to see the $40 fee in this legislation. We do believe it is interest by stealth. 
But overall this bill does positive things. When the select committee made the change around the question of pay-period assessment versus annual assessment for repayments it certainly swayed some of my Labour colleagues in favour of supporting this bill because overall it does some good. But it still has within it problems around that and particularly the problem with the fee. 
I will finish my contribution to this debate in the last minute or so remaining by talking about tertiary education which is the core of why we have a student loan scheme. I have heard in this debate members on the Government benches talk about how we should not be investing as much money in tertiary education as we do. Well the truth is that we need to. To me nothing is more important than education in order for people to achieve their potential. 
For New Zealand to achieve its potential we need more people in tertiary education more people researching and more people coming up with the ideas that will drive a productive economy. We will do that only if we invest in tertiary education and if we see it as a public good. It is a public good. We all benefit from a more qualified educated population. We benefit in terms of the services that we get we benefit in terms of the social inclusion for people who get into education and we benefit because of the great new ideas that those people have. We must invest in tertiary education for the good of our country and we cannot afford to have Governments that take money out of tertiary education because that will limit all of our futures. I believe that investment in tertiary education is one of the most important things that a Government can do. We must continue to invest in our future.