Woods Megan: Student Loan Scheme Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeWoods Megan: Student Loan Scheme Amendment Bill (No 3) — In Committee[Sitting date: 18 February 2014. Volume:696;Page:16034. Text is incorporated into the Bound Volume.]Dr MEGAN WOODS (Labour—Wigram): Despite Mr Bennett’s very strange rantings in this Committee tonight nobody on this side of the Chamber disagrees that people who have borrowed money through the student loan scheme should pay back the money that they owe. I do believe that New Zealanders living overseas who have taken out a student loan should make their repayments just like I did just like many of us on this side of the Chamber did. That is not what our opposition to the Student Loan Scheme Amendment Bill (No 3) is about.I suggest that Mr Bennett rather than trying to be a one-man band rewriter of the Crosby/Textor line book by coming up with his new slogans and trying to get some traction on them for 2014 should actually stop and listen to our objections to this bill. Our objection to this bill—and why we are not voting for this piece of legislation—is that it will not work. This bill is a gimmick it is window dressing and it is not going to do what it purports to do which is to increase the rate of repayment of outstanding debt on the student loan book. It just simply is not going to work.There are a number of clauses that I want to look at tonight in Part 1 of this bill. I want to look at clause 4 clause 6 and of course clause 8 which a number of my colleagues have traversed in the course of this debate. The first one that I want to turn to is clause 4. Clause 4 and I think that Tracey Martin alluded to this in her speech is where we have this Government enacting yet another piece of retrospective legislation. It has already put these rules in place. This is legislation playing catch up because it is a Government that is not keeping up with its legislative agenda. This bill has taken a very long time—since Budget 2013—to come to this Committee and yet the Government has already put this into play. So that is one of the things I object to.Then I want to turn our attention to clause 6—which I think Grant Robertson alluded to—which is the very blunt tool that has been put in place around how borrowers who are living overseas are expected to repay their loan. So if you have a loan and you are living in New Zealand then your loan is repaid according to how much you earn but if you are living overseas your repayments are calculated on the balance of your loan. Although previously there was a three-step repayment threshold under this legislation this is now increased out to five steps. It means that if you have a loan of over NZ$60000 you are liable for repayment of NZ$5000 per year no matter what you are earning. If you are earning £150000 and you have got a loan of NZ$61000 you will pay back NZ$5000 on your loan each year. If you are earning £12000 working in a pub somewhere in London and you have got a loan of over NZ$60000 you will also be required to make a repayment of NZ$5000 per year. This is setting people up to fail. This is setting people up to get into trouble with their loan and then you know what? It will be “catch them if you can” because you can arrest them at the borders when they come back in.We are not setting in place a scheme that incentivises and makes it easy for New Zealanders who are living overseas to repay their loans. On this side of the Chamber we have supported it when the Government has put in place measures that we think will work to increase the number of people who repay their loans and make it easier for them to do so. We supported the measure around making it easier to make repayments through the Inland Revenue Department website. We thought that was a good measure and we gave our support to that because it simply was going to improve how people do it.But in increasing the thresholds under clause 6 of this bill in concert with what we have already seen in previous amendments to the Student Loan Scheme Act—I think it was amendment bill No. 2—which was about contracting the repayment holiday that was available for students we are simply setting traps for people to get into trouble. When Labour put in place the interest-free student loan scheme when we were last in Government it was done for several reasons. One was to address the amount of money that people had to pay at the end of their education.