Woods Megan: Student Loan Scheme Amendment Bill (No 2) — Second Reading 
Text is incorporated into the Bound Volume 
Woods Megan: Student Loan Scheme Amendment Bill (No 2) — Second Reading 
[Sitting date: 28 February 2013. Volume:687;Page:8343. Text is incorporated into the Bound Volume.] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 Labour is supporting this bill the Student Loan Scheme Amendment Bill (No 2). We are doing that because we think it does some useful administrative things. It makes two changes to the student loan scheme. First it broadens the definition of “income” and we think that this is actually quite a useful administrative change because what it does is it broadens this definition to include income from trusts companies superannuation schemes etc. as well as income. We think this actually is quite a useful thing to do because what it does is it means the borrowers’ repayments will be based on their whole income and not just on the income received from wages. The second thing that this bill does and I am talking about very small things—the second change that it makes—is it allows information sharing between the Customs Service and the Inland Revenue Department so the Inland Revenue Department can have access to the contact details of overseas-based borrowers who are in serious default. Labour is supporting the bill because we think that these small changes will make the scheme fairer but we are not supporting the amendment that ended up at the Finance and Expenditure Committee inserting clause 39(4) which gives the Minister the power to make regulations in order to smooth the transition of the bill. We are not supporting this subclause of the bill because we think that it gives the Minister unnecessary power and it lacks the transparency needed for borrowers to have surety of where they are at. 
So what we have and my colleague before me alluded to some of this is a bill that does some very small tinkering around the edges. We do not have a bill that addresses the big issues of the day or indeed even addresses the big issues of the need for student support. There are some very real issues that we need to address on the issue of student support and we think that the bill fails to address these. We think that we need more people in tertiary education gaining qualifications that are about making New Zealand a better place if we are to succeed. What we are doing in this bill does absolutely nothing to address these issues. 
We can start with what the bill is not doing in terms of the big issues of the day because there are some connections to it and my colleague did allude to some of these. We have an economy that is in serious trouble. We have a serious number of people and in particular young people leaving our country and this bill does nothing to support them doing that—Labour has consistently supported many efforts to improve the repayment of debt from overseas-based borrowers but we did not support the Government’s last major change which cut the repayment holiday for overseas-based borrowers from 3 years to 1 year. There was a very good reason why we did not support this. We thought that the cutting of the repayment holiday by the Government made no sense at all. It was not just Labour that thought that. In fact advice from both Treasury and the Ministry of Education said that it would not make a blind bit of difference in terms of repayments. In fact it was likely to increase the debt held by overseas borrowers because without that 3-year repayment holiday what happened was that people just gave up trying to pay their loans. All Labour is asking for is that we have some fairness and some equity with our student loan system. 
We had the previous National speaker Todd McClay tell us that this was about using Government money using it better to support students. But unfortunately that is not the case because what we have standing are the attacks on student support that we have had from National over the last 4 years. If we just run through these we can see that none of the measures in this bill that we have before us will do anything to address those. We had National cut the eligibility so that people aged over 55 could not access the student loan. They could not borrow. In Labour we do not think that it is particularly fair that you would say to someone who has reached the age of 55 and wanted either to continue their studies or to retrain: “No. We’re not even going to give you the chance to borrow that money.” So when we hear the rhetoric from the benches opposite about paying it back and how people need to take responsibility this is a Government that will not even give those aged over 55 the opportunity to do that. We certainly did not see that as a better use of our education budget. 
Part-time students—the way in which many people re-enter tertiary education—are no longer allowed to borrow for their course-related costs as of Budget 2010. For many people who are retraining or come from a background where tertiary education is not their natural progression part-time access to tertiary education is vital. To be able to access the element of the loan where you can borrow for your course-related costs which are absolutely essential for many of these courses is something that is not considered a better use of the money. Budget 2010 also imposed a 2-year stand-down on new residents accessing the student loan scheme. What we said to people coming into New Zealand who came here to make their life here was that they could not access the loan that we did not back them into higher education we did not back these people into getting tertiary qualifications and we did not back their upskilling. What that does what we think that this Government is failing to do in this piece of legislation and what it did with this change is it fails to seize the opportunity that tertiary education can give us in turning our country round. 
But I think perhaps the most short-sighted measure that this Government has taken in terms of tertiary support and one that this bill does absolutely nothing to address was last year’s Budget announcement—and what we have been living with for a year now and we have students all over the country or potential students making decisions based on this—when it cut the allowances for those doing postgraduate study. So what we have is a Government that talks very big on innovation. We have a Government that talks very big about the role of research in our economy. We have a Government that talks big about the need for and the place of this. But what we saw in the Budget last year was a Government that would not back our young people to get the qualifications necessary to be part of that future for New Zealand. The Government said: “You know what? We don’t value postgraduate education. We don’t think this is something that has sufficient good for us as a nation for us to pay you an allowance.” This is not something that Labour sees as sustainable. We think that if you are going to address the issue of student support which is what this bill before us does you absolutely have to address that issue of allowances in postgraduate education. This is the place. Anyone will tell you that the ideas machines in so many labs and so many groups around the country are indeed our postgraduate students—whether that be at master’s degree or at PhD level. This is so crucial to our future and our innovation-led future that we just cannot ignore it. 
 These are some of the things that we are absolutely not seeing in the bill that we have before us. We think that it is a real lost opportunity that we have there that what we are seeing is a piece of legislation that is not going to increase participation in tertiary education. What we would rather see rather than the piecemeal and small administrative changes like we are seeing in this piece of legislation before us is an overview review of the scheme to ensure that there is a fair approach and that people who need support to continue and participate in tertiary education can get that support. Tertiary education is not something that we can just tinker with around the edges. When we introduced a user-pays education system in this country the loan scheme was put there to ensure people did have access to it. What we see are actually growing inequalities under the present loan scheme. We see that people—because of age because of the type of study because of their time in New Zealand—do not have access to this loan scheme and this does not address the issues of equity that the loan scheme was initially put in place to address. 
So Labour supports this bill. It supports the small administrative changes that are contained in this bill but as I mentioned at the beginning of my speech it does not support the powers given to the Minister to make regulation under this. What we would like to see is a broader review of the student loan scheme.