Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
Hipkins Chris: Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill — Second Reading In Committee 
[Volume:660;Page:9369] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 It is a slightly strange feeling for me to be standing to speak in favour of a Government bill; it is something we do not get to do very often on this side of the House. It is nice to be able to support one of the initiatives that the Government has in place. The interest-free student loan scheme is one that I am particularly proud of and one that the previous Labour Government is particularly proud of. It is good to see that National has come round to supporting the interest-free student loan scheme albeit probably temporarily. We hope that it continues to support the scheme. We also think that there is actually a compelling case for passing this Student Loan Scheme (Exemptions and Miscellaneous Provisions ) Amendment Bill in a bit of a hurry because of the looming deadlines involved in this legislation unlike some of the other bills that have gone through the House under this current somewhat shambolic urgency session. 
I am pleased that the Minister of Revenue managed to get to the Chamber in time to make his second reading speech— 
Hon Member 
: Just. 
CHRIS HIPKINS 
: —only just—because we nearly missed the opportunity to debate it altogether. I am pleased that he made it here. He probably was not expecting the Government to completely mess up the procedural motions on the previous bill and he would have thought he had a little bit more time to get down here but he had to rush down to the Chamber instead. On behalf of the House I thank him for getting here in time so that we can debate this bill today as part of this urgency motion. 
I mentioned before that I was pleased that the Government seemed to have come around to the idea of interest-free student loans. In fact it seems to have come round to the idea of interest-free loans in general. Interest-free loans for Ministers who use ministerial credit cards appear to be the order of the day at the moment. I understand that the Government is a man down on the other side of the House today. The only real question is whether that member will pay interest on the money he is paying back. As the Government wants to make students who leave the country pay interest on their student loans I ask whether Phil Heatley will have to pay interest on the credit card money that he is paying back. 
I find it ironic that we are here talking about the interest-free student loan scheme at a time when the Government has already announced that it will be relooking at all of the issues relating to student support. The question that is on the minds of all students at the moment is what that means. Does that mean interest-free student loans are for the chop? Does it mean that their allowances are for the chop? Does it mean that the fees will go up? The students do not know because the statements coming from John Key and Steven Joyce are sufficiently vague that students have no idea what is looming round the corner. I am concerned that the Government is starting to soften up the ground in order to do away with interest-free student loans. I am pretty confident that it will not do it in this term of Parliament but I do not have any confidence that it would not do so in the next term of Parliament. 
When we look at the comments John Key made when the interest-free student loan scheme was introduced in the first place it is pretty clear to us that he was fundamentally opposed to the idea. What did he say? He said: “What a cost … What an unaffordable and irresponsible cost to the country!”. That was what John Key said when the policy was first announced. He called it “rushed and reckless”. He said: “Our caucus would never have signed off a zero percent interest rate because the economics are just so bad. It has never for us because we have standards.” 
Well I am not sure that the Government really wants to be talking about standards in education at the moment—not today. I am not sure that Government members will want to talk about standards in many areas today although at least we are having question time today at 2 o’clock—hopefully. I think the Government can expect a few more questions on standards in education during question time today. 
As my colleague Grant Robertson said John Key said that he would fight the interest-free student loan scheme with every bone in his body. 
Grant Robertson 
: We’re still looking for the bones. 
CHRIS HIPKINS 
: We are still looking for the bones because in this Parliament we have a bill that actually extends some of the provisions of the interest-free student loan scheme. They are sensible provisions. They are provisions that the Labour Party has supported and will continue to support such as extending interest-free student loans to borrowers in Niue the Cook Islands Tokelau and the Ross Dependency. The bill also extends interest-free student loans to students who are enrolled with a New Zealand education provider and are engaged in full-time study overseas under either a formal exchange programme approved by the Government or a formal agreement between a New Zealand tertiary provider and an overseas tertiary provider. 
I will flag one issue for the Minister for Revenue and he might like some advance warning that I will raise it during the Committee stage. I understand that although the interest-free student loan scheme will be extended to those studying overseas at the moment it covers diplomats living overseas on a posting but not their partners. Diplomats’ partners who move overseas on a posting are not eligible for an interest-free student loan but the diplomats are. It is possibly an anomaly in the scheme that the Government may want to think about correcting because ultimately the partner is on a posting as part of a Government contingent as well and I am not sure that there should be a distinction whereby diplomats’ partners do not get an interest-free loan when the diplomats do. I have not had time to check that out thoroughly but I am pretty confident that it is currently the case and I think it is something that the Government might like to look at. It seems to me to be quite consistent with the goals of this bill for that matter to be addressed during the Committee stage. We want to make sure that all New Zealanders who meet the criteria for interest-free student loans are able to get them and are not disqualified based on a technicality. 
I come back to the Prime Minister’s statement earlier in the year. John Key said he would “take a careful look at the policy settings around student support”. As I said everybody wants to know what that means and where that leaves the interest-free student loans policy. A lot of students will have heard the things that the National Government has said about interest-free student loans in the past and they will want to know whether they mean that interest is on the way back or whether other changes to the tertiary education system that will leave them worse off are likely. National’s track record on tertiary education is not actually all that flash and its track record on keeping its promises on tertiary education is not all that flash. 
I was not a tertiary education student in the 1990s but I can remember back that far. I remember when Lockwood Smith travelled the length and breadth of the country signing pledges that he would resign if student fees were not abolished altogether. Over the next 9 years that National was in Government student tuition fees increased massively and National introduced the student loan scheme as the way to pay for them. So not only did National weasel out of the promise it made to students but also it then found another way to impose more and more costs on students. That was how the student loan scheme came about. The whole student loan scheme is the result of a broken National Party election promise. 
When people hear National members saying they will not change the interest-free student loan scheme I do not think they will have much confidence in that when they also hear John Key saying things like the Government will take a careful look at the policy settings around student support all of which points to the fact that National is looking at the issue. Last year when Bill English and Anne Tolley were challenged by the Opposition over whether they had asked Treasury to look at the cost of abolishing the interest-free student loan scheme or at the potential revenue they would gain from abolishing the scheme they did not deny that they had done so. To this day National has not denied that it asked Treasury to put together the costings and the projections involved in removing the interest-free student loan scheme. That is something that students up and down the country will be worried about. 
The interest-free student loan scheme as I said at the beginning is a policy that we on this side of the House are very proud of. It allows students to repay their loans much much faster they would have done under the previous regime when interest continued to mount to the point where some students were struggling to even make the interest payments let alone to pay back the principal. Of course under the National Government that existed prior to 1999 students were charged interest even while they were studying. Although they had no ability to earn any income to pay back the loan they were still being charged interest and their loan at the time of graduation was significantly more than they had been required to borrow to pay for their fees or their living costs. There was cumulative interest over the 3 years or 5 years in some cases that they had been studying. Labour thought that was unfair and it was one of the first things the previous Labour Government did away with. 
We are pleased that this National Government has so far kept the interest-free student loans policy. We are worried that National appears to want to take that away and that all the things it is doing are preparing the ground for the reintroduction of interest on student loans and for the imposition of further cost on tertiary students which can act only as a barrier to our lifting the wage rates the productivity and the economic standing of New Zealand. An educated workforce is the way that we increase those things and interest-free student loans are an important part of the policy mechanism by which we encourage people into tertiary study.