Woods Megan: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Text is incorporated into the Bound Volume 
Woods Megan: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Sitting date: 28 March 2013. Volume:688;Page:9076. Text is incorporated into the Bound Volume.] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am very happy to take a call on this bill the Student Loan Scheme Amendment Bill (No 2) to continue talking first about why it is that Labour does support this bill but also about some of the concerns that we do have with it. 
It is a bill that introduces key changes to the student loan scheme. The first of these around the definition of income is something that we are very supportive of because what this bill does is broaden out the definition of what income is from just wages to include income from trusts companies and superannuation schemes. We are very happy about this and what we are seeing is—we are hoping that it is the start of a road to Damascus for members opposite where they will start to see that maybe we do need to tax things other than just wages and salaries in this country and to recognise that. We see this as the beginning of a dawning of a new era for the Government members opposite and that maybe they will see that a capital gains tax would be something that would be preferable too because much of the logic that they have applied in this bill would equally apply to them thinking about income and the way we treat that for other matters of revenue. So that is something we would like members opposite to pause and think about over the Easter break as they sit down to their hot cross buns and their Easter eggs. 
Labour does find this a particularly appealing change within this legislation because we think that it is fair. We think that it is fair that people who are earning income other than wages and salaries do make their student loan repayments and that it is not just the plumber who goes out after he or she finishes their apprenticeship and starts their job who makes repayments through their wages but also that you have people who receive income from family trusts for example making payments back into their student loan obligation. 
The other thing that this bill does of course is enable information sharing and the data matching at the border. This is all around the issue of tightening up at the border and wanting to make sure that people who have taken out loans who are now living overseas are making their contribution back into the scheme. I think that the member who spoke previously Todd McClay just thought he could score some cheap points around that point but this is something about which I would like to get Labour’s concern on the record. 
Actually if we are going to talk about data and information matching and how it is that a Government has responsibilities towards the security of that data I do not think members opposite should really be making jokes and scoring cheap points around that. Just today we have seen the Earthquake Commission in Christchurch with yet another security breach in terms of people’s data that it holds. This time it has released the bank account details and names of claimants to that scheme. What we have had— 
Hon Simon Bridges 
: But that’s the point. David Shearer didn’t. 
Dr MEGAN WOODS 
: The point Mr Bridges is that you are a Government that is not to be trusted with people’s data. You have shown this with ACC. The Inland Revenue Department—the very agency that is being empowered under this piece of legislation—has previously shown that it does not have all the measures in place to protect data. So we on this side of the House are asking this Government to give some assurances that when it is dealing with individuals’ private information it does have the necessary measures in place to ensure the security of that information. That is actually not too much to ask. I think it is what we all expect when we as citizens of this country empower the State to have a whole lot of information about us—we do expect some level of security around that and it is certainly something that we in Labour think should be a priority for any Government and we invite this Government to dwell on that fact. 
We see this legislation as pretty much benign legislation. It is doing some things that are good but we do have concerns and one of my primary concerns as the spokesperson on tertiary education is that this is yet more tinkering around the edges on the issue of student support. What we are not seeing is any comprehensive examination of how we want or expect our young people or anybody in this country actually who enters into training or tertiary education to support themselves through this year. 
What we have is a Government that wants to dampen down demand in the area of tertiary education. This is something that the Minister for Tertiary Education Skills and Employment Steven Joyce has made very clear and there have been a number of policy initiatives over the course of National being in Government that certainly demonstrate that the Government does want to dampen down demand. What we have seen as part of this dampening down is that there are now 25000 fewer people who have access to the student loan scheme because of the initiatives of Budget 2010 and 2011. There were 800 people who lost their access to student loans because of retrospective measures that were put in place—things that the Government could not even acknowledge were going to happen before the legislation was put in place following those Budgets. 
Labour would rather see rather than these tinkering around the edges pieces of legislation that we are seeing from this Government—and I would like to note that this is the second bill in 2 years—a comprehensive review of how we manage the very complicated issue of supporting our students through their study. For Labour that is a priority because we see training people gaining skills and people gaining education as absolutely vital to our future. 
It is certainly not something we want to dampen down because on this side of the House we believe that education and training are absolutely vital. We are not about just the rhetoric of an innovation-led economy; we are about doing the things that you need to do in order to have an innovation-led economy. Supporting tertiary students and making sure that the necessary mechanisms for student support are in place are very much a part of that. But what we have seen from National over the half-decade—the 5 long years—that it has been in Government is it stopping people aged over 55 from accessing the student loan scheme and it did this in the 2011 Budget. 
What this means when you put this together with a period in our history when we are experiencing very high unemployment which the Government is not doing much to address is that not only are these people not going to be able to find jobs but also for many of those aged over 55 their access to go back and retrain has been cut off. The reality is that for many working people they still have quite a long working life ahead of them from the age of 55 onwards but this Government has not put in place the student support in order to ensure that that can happen. The bill that it is considering in the House today does nothing to address this issue of student support. 
Of course one of the most alarming issues around student support for us and one that makes absolutely no logical sense is the removal of allowances for people studying at postgraduate level. If you really do want an economy a future a country and a society that is based on innovation why would you stop people doing postgraduate study? This is the very thing that drives innovation. If you look at any of the countries around the world that excel in the area of innovation they have very high levels of Master’s and PhD students and graduates. This is something that this Government does not believe in and it has stopped access to that level of training. That for us is just an absolute—we cannot understand any of the logic behind that and why it is that you would do that. 
What we are seeing here is a piece of legislation that does tinker around the edges. My colleague Dr David Clark talked about it actually being a bill that is a bit of an embarrassment to this Government because it is coming back and playing fix-up. Not only is it coming back and playing fix-up but also it has tried to play fix-up in areas where the department that has to do this the Inland Revenue Department lacks the capacity to do it. 
If we have a look at the officials’ report to the Finance and Expenditure Committee on the submissions on the bill what they spelt out to members of the committee was that “The bill includes a number of amendments needed to ensure the delivery of the remaining core policy changes enacted in the Student Loan Scheme Act 2011.” But then it goes on to say that it is not able to do this because “the new loan management system proved to be more complicated than expected”—i.e. it did not get it implemented—and “Because of the complexity of the student loan system the detailed analysis has identified that the systems design development and testing required to implement some of the 1 April 2013 changes is significantly greater than originally expected. To ensure timely delivery of the core Government policies contained in the 2011 Act and the policies that have the greatest benefit for borrowers it is proposed to not proceed with some of the measures in the 2011 Act.” 
So I guess the best thing you can say is that at least we did not have another Novopay with a system that was not ready to go. But this is a piece of legislation that does not systemically address a lot of the issues that we need to address around the very complicated issue of student support. We do support the measures that it is taking to redefine income for the purpose of student loan repayment but we do have some cautions against the information sharing and how it is the Government is going to manage this. We would like to see the Government doing more in the area of student support not just this tinkering.