Walker Holly: Student Loan Scheme Amendment Bill — Second Reading 
Walker Holly: Student Loan Scheme Amendment Bill — Second Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
HOLLY WALKER (Green) 
: 
 The Green Party will continue to oppose the Student Loan Scheme Amendment Bill. The main reason for our opposition to this bill has not changed after discussions at the Finance and Expenditure Committee and that is the very poor contradictory proposal that is supported by no research or analysis to reduce the repayment holiday from 3 years to 1 year. We have heard in the debate so far about the repayment holiday. It is when borrowers living overseas receive an automatic suspension from their obligations to repay their loans while they are living overseas. If we want to understand why we have a 3-year repayment holiday in the first place who better than the Minister who introduced the repayment holiday in the first place to explain the reasoning for it. I am quoting here as we heard earlier Peter Dunne from 2007: “The new rules will make it easier for people overseas to repay their student loans and will offer the chance of a fresh start for those who have fallen into arrears. There will be a repayment holiday of up to 3 years for borrowers going overseas. During that time they will not have to make repayments although their loans will still attract interest. This change recognises the fact that it is not always easy for people to repay their loans while doing their OE or working overseas …”. 
I would like to ask the Minister although he is not here and the parties that are supporting this bill including the Labour Party what has changed since then to make that statement any less true or relevant. I can tell the House one thing that has changed since the Minister made that statement and that is that more New Zealanders are moving overseas than ever before. If we want them to ever come back we should be making our policy settings in such a way that encourages them to do so. 
So we might fairly ask what impact this bill will have on borrowers’ decisions to come back to New Zealand and we have had advice from the Ministry of Education on this bill that “This can be expected to have a negative impact at the margin on borrowers’ decisions regarding whether to return to New Zealand.” Mr Dunne’s arguments about recognising the importance of the OE and offering a fresh start so that people are incentivised to come back to New Zealand after travelling are even stronger in 2012 than they were in 2007. 
We have seen in the select committee report that a typical borrower based overseas may face interest obligations after a repayment holiday that amount to two to three times the original value of the loan. So that is a huge disincentive for that person to ever pay that loan back or indeed to return to New Zealand. It is really important to note that the advice of the Government’s own officials is that this bill will have a negative impact on people repaying their loans and then returning to New Zealand. I really challenge those on the Government benches to explain why on earth we need this change. 
I think it is very important to note that the original 3-year repayment provision for a repayment holiday has not been in place for very long; the repayment holiday was introduced in 2007. So it is not actually a very long time in which to analyse the evidence of how that repayment holiday has been used and what impact it has had on people’s repayments in order to make a considered judgment about whether or not it should be shortened. The select committee heard about this. It quizzed officials about the level of evidence and how much research has been done into the impact of the 3-year repayment holiday and they said: “there was not enough empirical evidence to evaluate the effect of the three-year repayment holiday introduced in 2007 and that limited modelling has been done on the likely effect of curtailing the holiday as borrowers’ response to the change is uncertain.” They described their best estimate as a guess in the select committee. 
So why are we doing this? Why are we shortening the term of the repayment holiday from 3 years to 1 year when there is not enough empirical evidence there is limited modelling and the best that officials can provide is a guess as to how much it might change people’s behaviour when it comes to repaying their loans? It seems to me to be an ideological attempt to rein in the student loan scheme with no credible analysis of the impact and a very real risk that it will in fact influence borrowers to stay away not return to New Zealand after their OEs and not repay their student loans. 
The fact that the Government is pursuing this change with no research to back it up and against the advice of officials seems to support what we heard recently from the Prime Minister when he was speaking to an audience of property developers—and he obviously thought he was in a safe space—that he wants to rein in student loans in a big way. We have already seen some examples of the Government doing this like cutting the access to living costs for those over 55 like restricting access to StudyLink for permanent residents. It has begun already and I am very concerned about what the Prime Minister might be referring to when he says he wants to further rein in student loans in a big way. 
It is a shame that Simon Bridges has left the Chamber because he said earlier— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! The member twice has mentioned the absence of members. You cannot mention that a Minister is not here which was the first indiscretion earlier on and I did not pick you up on that but you cannot refer to the absence of a member from the Chamber. 
HOLLY WALKER 
: Thank you Mr Assistant Speaker. I apologise for that. I did want to point out that Mr Bridges said earlier that National is keeping interest-free student loans because it wants to see more students at university and polytechnic. I am sorry to break it to Mr Bridges but that is not the reason that National is keeping interest-free student loans. John Key said why when he spoke to the audience of property developers. He said that it is about the only thing that will get young people out of bed before 7 o’clock at night to vote but it is not politically sustainable to put interest back on student loans. So although we have heard from Simon Bridges that it is all about wanting to see more students at university it is in fact all about what is best not for students but for National’s votes. That is what the Prime Minister revealed to the property developers—his real attitude towards students and young people. 
I am also disappointed to see that the select committee decided not to proceed with the fruitful discussion about allowing people who have paid off their loans in full to take a second repayment holiday which was an interesting idea that came out during the hearings and which I think deserved better consideration. If someone has paid off their loan in full and they later enrol to do a second degree or course and take out a second student loan why not reward the behaviour that we want to incentivise—that they have paid off their first loan in full—with the opportunity for a second repayment holiday? As the select committee noted in its report—or as some of the members of the select committee noted—this could be especially helpful for women and for second-chance learners and I think it is a shame that the select committee did not see fit to recommend this helpful change or indeed as the previous speaker referred to to consider it seriously. 
The Green Party will continue to oppose this bill. There are as we have heard from our colleagues some provisions such as providing a contact person back in New Zealand for overseas borrowers that we think are sensible but like our colleagues in the Labour Party there are some parts we can support but there are also some parts we cannot support and those are enough for us to vote against this bill. 
The changes to the repayment holiday are significant. They are not well researched. They are not well analysed. They are not supported by officials and they will probably result in people taking longer to pay off their loans and staying away from New Zealand. So the Green Party will not support this bill.