Martin Tracey: Student Loan Scheme Amendment Bill (No 3) — First ReadingText is incorporated into the Bound VolumeMartin Tracey: Student Loan Scheme Amendment Bill (No 3) — First Reading[Sitting date: 27 August 2013. Volume:693;Page:13025. Text is incorporated into the Bound Volume.]TRACEY MARTIN (NZ First): Kia ora Mr Speaker. I had hoped to start my contribution with the things that New Zealand First agrees with but unfortunately I am going to have to get sidetracked a bit and correct some of the anomalies in the information provided by Government members. This is what happens when you pass speech notes between each other—the same wrong information gets repeated.I am not sure whether Government members have bothered to read the student loan scheme report that their own officials put together for 2012. If they would like to go and have a look on page 35 I think they will find that what we are talking about is debt that has been unpaid for a period of over 5 years. It values at $284 million. There are 33000 New Zealanders whom we are talking about and 3000 of them are currently still residing in New Zealand so that gives us 30000 New Zealanders who are based overseas. Fourteen percent of that outstanding amount is to borrowers who took out their loans in 1992. So if we just put some real facts and figures on the table—and I could always get a copy of the report for Government members if they would like to read the facts—Maggie Barry: The logic remains the same.TRACEY MARTIN: Of course Ms Barry would not want to read the facts. The other thing too that we need to correct is that Minister Todd McClay said that these powers would be used only when all other methods are exhausted.If I take the Student Loan Scheme Amendment Bill (No 3) and turn to page 6 new section 162B(3) inserted by clause 8 in Part 1 states: “To avoid doubt the court may make an order under subsection (2) even if the Commissioner is able to recover the debt by other means.” So in other words it specifically says that an arrest warrant can be sought even if there are other means to gain this debt to secure this debt. Let us just put that on the record for the Minister. I can send him a copy of that highlighted as well.One other little thing before I get on to New Zealand First’s major contribution is that there is nothing as annoying as an arrogant Government that decides that legislation will be passed prior to it even having its first reading. This is an excerpt fromStudyLink today. It says: “Going overseas? ... From 1 April 2014: Inland Revenue will be able to request an arrest warrant for borrowers who knowingly defaulted on their overseas-based repayment obligation and are about to leave New Zealand.” Why on earth would we bother with democracy I would ask you if you can tell your Government department before a bill even has a reading in this House to put up the legislation that you are going to push through regardless of any submission and regardless of any common sense that might be placed in front of you?So back to the beginning—there are some things inside this legislation that New Zealand First agrees with although it is very interesting that since the introduction of the student loan scheme in 1992 there have been 15 major amendments to this Act. So I do not think it is any wonder that New Zealand citizens sometimes get a bit confused about the process by which they are able to pay back and fulfil their payment responsibilities.New Zealand First has no issue with the small amendment proposed to section 110 of the Student Loan Scheme Act that retains a constant amount of loan repayment as opposed to the current decreasing loan repayment amount. Unlike my colleague Ms Walker having previously been a debt collector and credit controller I can see that thereis actually a win-win situation out of this where the borrower has the early removal of a burden of debt and the lender has faster access to those funds for re-lending.New Zealand First also has no issue with the sharing of contact details between the Department of Internal Affairs and the Commissioner of Inland Revenue. In fact again I would have to say that if this ability had been placed inside legislation a lot earlier we would not be looking at 30000 people overseas because we would have actually been interacting with them earlier. We would not have allowed 5 years to pass before we even decided to start talking to these people appropriately and we would not have $284 million worth of defaulted debt right now.New Zealand First agrees that if you have a debt—a fair reasonable and legitimate debt—then the responsible action is to repay that debt. But one cannot get blood out of a stone. It is with great sadness that New Zealand First will be unable to support this bill at its first reading because of the inclusion of what is an incredibly blunt instrument that would allow New Zealand students graduates and citizens—because not all people with a debt who have gone overseas particularly in this economic environment are actually graduates. Not all of them are university students. Many of them have been to a polytech. They have got aStudyLink loan and they have had to leave the country for other reasons.This is a Dickensian step and it is appropriate to mention Dickens because his father was sent to a debtors’ prison back in the day prior to the Debtors Act of 1869. Imprisonment for debt was then abolished and replaced by bankruptcy law. No one could argue that our citizens were not able to travel as much as they can now to avoid debt. But I would counter that argument with the fact that with the invention of the internet credit ratings can also travel.New Zealand First can see no practical sense in waiting for the defaulting borrower to return home one day from foreign shores and hope that they have $30000 or $40000 or $50000 on them when they get to the exit gate or we are going to send them to jail—especially when there are so many other options available to the Government. There are more modern sophisticated ways of affecting a defaulter’s life no matter where they are in the world. We refer to the listing of these individuals on to international credit rating agencies so that no matter where they are in the world when they go to purchase a car or buy a home or get a store card their account will be tagged that they owe the New Zealand Government. Over a certain material threshold this will affect their ability to borrow and to purchase which is a more immediate incentive to pay off or come to an arrangement so that that tag can be removed.New Zealand First also points to the other methods already available to the Government. An example would be the provisions that are currently available in the Customs and Excise Act 1996. If one looks at section 280D(4)(h) the Customs Service and the department—and this could include the Inland Revenue Department—can facilitate the exchange of information on the date on which the person arrives in New Zealand just as they can upon the departure of that individual. Would it not be smarter to intercept the defaulter on their way into the country so as to have a greater opportunity to set in place a payment structure prior to them wishing to depart? This is supposed to be about helping our citizens meet their obligations. There is an obligation on the lender just as there is on the borrower to make sure that a relationship is created that is easy and that works for both sides without disadvantaging both sides.These are New Zealanders and they are not criminals. Today these people are students who have been driven overseas by the lack of opportunity offered for employment in their own nation. At the very worst these citizens are guilty of breaking a contract to repay. So if we are going to allow these citizens to be arrested for breaking a contract about debt will we allow banks to imprison mortgagee defaulters? Whatabout the Farmers’ Trading Co. or GE Money? Are we looking at a future where our last debtors’ prison in Dunedin which was shut in the 1860s needs to be reopened to house all those who find themselves unable to pay?It would appear that part of the motivation for this Draconian step is the idea that all these students are living in the lap of luxury laughing as they rip off the New Zealand taxpayer. I can find no documentation to support this. Perhaps this group of people is hanging out with the children of millionaires in our universities which is the reason Michael Woodhouse recently gave to all our students having to gain a debt to learn. Or perhaps they are related to the millionaireSuperGold card holders who ride for free on the Waiheke Island ferry which is another myth that this Government likes to put out to justify charging our citizens.In reality according to theStudent Loan Scheme Annual Report 2012 on page 32 compliance by overseas borrowers around payment has increased by 20.5 percent since the amendments made to this legislation in 2012 and the increase in the number of overseas borrowers with a repayment obligation rose from 42 percent to 64 percent in the 2010-11 year due to a large number of borrowers having come to the end of their repayment holiday. The Government needs to look at its figures.