Student Loan Scheme Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeStudent Loan Scheme Amendment Bill (No 3) — Second Reading[Sitting date: 13 February 2014. Volume:696;Page:15947. Text is incorporated into the Bound Volume.]Student Loan Scheme Amendment Bill (No 3)Second ReadingHon Peseta SAM LOTU-IIGA (Minister of Pacific Island Affairs)on behalf of theMinister of Revenue: I moveThat the Student Loan Scheme Amendment Bill (No 3) be now read a second time. This bill continues the Government’s focus on providing proper governance and oversight of the student loan scheme. Part of that means ensuring that borrowers are aware of their obligations to repay their tax-funded loans and that they honour those obligations. I am pleased to say that most borrowers do accept their responsibilities and that they should have no concerns about the principal measure proposed in this bill.This measure is targeted exclusively at a relatively small number of overseas-based borrowers who in spite of the Inland Revenue Department’s best efforts to encourage their compliance persistently ignore their responsibilities when it is clear they have the ability to repay their loan. This bill proposes to give the Inland Revenue Department greater powers to deal with these individuals including allowing the department to request an arrest warrant when the borrower attempts to leave the country after visiting New Zealand. This action would be taken only when dealing with the most serious cases of non-compliance when all other efforts by the Inland Revenue Department to persuade the borrower to make repayments have failed and only when borrowers can clearly afford to make those repayments. This is the principal proposal in the bill.The second major proposal will bring overseas-based borrowers’ repayment obligations more into line with their New Zealand - based counterparts. Under the current rules an overseas-based borrower’s repayment obligation is based on their loan balance. For New Zealand - based borrowers however their repayment levels are based on their level of income. This means the repayment obligation for an overseas-based borrower decreases as the person’s loan balance falls while a New Zealand - based borrower’s repayment increases as their personal income rises.In the interests of greater fairness the bill proposes a fixed repayment obligation for overseas-based borrowers based on their loan balance. Overseas borrowers with loan balances over $45000 will also have their repayment rates increased. This will speed uploan repayments for these borrowers and reduce the amount of interest they will ultimately have to pay on their loans.In bringing the bill to its second reading I want to acknowledge the Finance and Expenditure Committee for its consideration of the bill and in particular the chair Paul Goldsmith. I also welcome the committee’s recommendations to further improve the transparency of the offence and arrest provisions so it is absolutely clear what types of orders a District Court could impose upon a borrower. These might include for example ordering the borrower to pay the amount in default or to enter into an arrangement to do so as well as providing information about their contact details assets income and employment status.The committee has also recommended the alignment of the definition of “income” for student loan repayment purposes with that used for Working for Families tax credits. This is a very sensible efficiency measure that will align the definition with other legislation. The result will be fairer. It will result in a fairer more cohesive and efficient student loan scheme for all those involved. I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): I rise on behalf of the Labour Party to oppose this bill the Student Loan Scheme Amendment Bill (No 3). I do so with some regret. It is the Labour Party’s firm conviction that those who borrow money from the taxpayer for the purposes of bettering themselves their families and their communities ought to repay those loans. That is something that we have supported. We have certainly supported bills in this House that are designed to achieve that end.However this particular bill introduces some particularly punitive measures and we see that it is likely to cause some very unfortunate outcomes. The police have given a clear indication that they do not have the resources necessary to implement them. This “arrest at the border” provision which sits at the heart of the bill is a populist gimmick and the National Party knows that. This is posturing. This is election-year posturing in its authoritarian form and as Labour Party members we are unable to support it.The bill stands in stark contrast to the relaxed position taken opposite in response to multinational tax avoidance. We know very well that the likes of Facebook and Google are paying minimal tax in New Zealand. They are paying in many cases less tax than individual members in this House and yet the Government has no problem with that. It is not going after them. Instead it is sitting on its hands and chasing young students who do not actually have in many cases the resources to fight back.This is a Government that is obsessed with chasing the little guy. This is a Government that is obsessed with beating up small business; with tilting the playing field so that big business which does not pay tax can get ahead; and with destroying small business—destroying small business. I do not know why the National Party hates small business so much. Maybe it has lost touch with its roots. Maybe it has lost touch with the fact that small business makes up the bulk of businesses in this country that contribute to our GDP to the growth in our economy and to the provision of jobs. Maybe the Government is so out of touch and arrogant that it does not think it needs the votes of ordinary small-business folk.The Government is now so much in the pocket of big business that it is running its lines. It is interested only in protecting the interests of big business. And actually I am keen to communicate to those members opposite that even the big-business folk whom I have heard from do not like that. They want others to have the opportunity they have had to grow in New Zealand and to export their products. They do not want a country where there are fewer and fewer and fewer successful businesses. That is the environment that this Government is creating and here we have another example.I want to take a moment to pause and think about the interest-free student loan scheme that we are here discussing amendments to. This is a scheme that was one of thegreat achievements of the Clark Labour Government. Removing punitive and unsustainable interest charges from student loans defanged what had become an increasingly impractical andgenerationally unfair system for funding tertiary students. This was one of the great achievements of the Clark Labour Government.I am very proud to represent an electorate that has more students than any other in New Zealand. I am proud to represent Dunedin North where students benefit from this interest-free student loan scheme that makes possible learning that otherwise would not be possible for many of those students. It is a great scheme and I do have to note for the record how much National opposed it. It was not happy with the interest-free student loan scheme. It did not want it introduced but now it is forced to through I do not know maybe the change of principle that sat alongside decisions never to go with New Zealand First. That now means that circumstances have changed. Those kinds of flexible principles that John Key espouses—Tracey Martin: You might need us. Be careful.Dr DAVID CLARK: The member there is making clear that she has a view on these things. But it is very clear that the Government opposite is very flexible in terms of the statements it makes. It will say one thing stridently one year and change its position on that and the student loan bill is no different. It was howling at the moon when the scheme was introduced and now National members support the student loan scheme albeit through gritted teeth. They consistently look for ways to get around that ruling. We have seen the $40 charge they introduced to all borrowers to make sure that administration costs are covered. They do not like interest-free loans. They hate them.Mike Sabin: What do businesses think of your Facebook ban?Dr DAVID CLARK: I hear the member Mike Sabin opposite yelling out. He hates student loans. He hates interest-free student loans as much as the rest of them.Tracey Martin: He hates them.Dr DAVID CLARK: They hate students I am hearing—they hate students. Well perhaps that is true. Certainly those who would be at university only under the student loan scheme—Mike Sabin: I raise a point of order Mr Speaker. The member just made an allegation that I said I hated student loans—The ASSISTANT SPEAKER (Lindsay Tisch): No no. The member will sit. That is not a point of order.Dr DAVID CLARK: Thank you Mr Assistant Speaker. They are upset at having the fact pointed out that they objected to student loans when they were introduced. They did not like interest-free student loans. They still do not like them and they certainly do not like having that pointed out. I hope that the students at home watching this exchange in Parliament remember how much National members do not like the student loan interest-free provision; how much the National Government would dearly like to reintroduce more charges on student loans including the charges it has already introduced—the $40 annual charge that was introduced by the National Government!We know that this is one of the best schemes around. We know that it supports the young people in my electorate and it makes tertiary education more accessible. We also know that access to allowances has been cut by this Government. It has been responsible for—Andrew Little: Oh no!Dr DAVID CLARK: That is right Mr Little; it has been responsible for restricting access to student allowances. The Government is constantly against the wider population getting educated. It thinks that only those who have deep deep pockets should access education and we on this side of the House do not think that is fair. We think that everybody should have the opportunity to get ahead. We think that we reallyneed this interest-free student loan scheme to continue but we also think it needs to be fair. We think it needs to be well supported by the Government but fair. Those who owe the debt ought to pay it back but it should not be ridiculed by having punitive measures like this Government is introducing in the legislation that are likely to seize a few unfortunate students who are arrested at the border. They probably cannot meet their obligations currently but have come home say for a family funeral and find themselves arrested at the border because they cannot meet their commitments.We have certainly had an indication from the Inland Revenue Department that it will not be able to pursue all of the people who might fall into this category. It is likely to try to make an example out of a few. The measure will not generate money. We have asked for figures. The Government does not know how much money this policy might generate. It really is posturing. It is a distasteful gimmick and it is this National Government doing some dog-whistle politics because it cannot get rid of the interest-free student loan scheme. It is too popular. It is too good a policy. It allows too many people access to education and people would notice. So this arrogant out-of-touch National Government is looking at all the petty changes it can make to try to send that dog whistle to its core vote.Well the times they are a-changing—the times they are a-changing. We certainly heard plenty of submissions in that select committee which I will concede was well chaired by Mr Goldsmith whom I have always supported in the Finance and Expenditure Committee chair role. I am looking forward to his contribution in due course though he does sometimes adopt some punitive attitudes himself in terms of these pieces of legislation. He will I am sure talk about what a privilege it is to access these things and make very clear that the support for the student loan scheme has many conditions attached and is begrudgingly given. But we will look forward to hearing from his own mouth what he has to say when he has the opportunity.What I want to say is that Labour supports practical real solutions to improve the collection of student loans not focus group gimmick-based policies that do not address the real issue.PAUL GOLDSMITH (National): It is my pleasure to speak on this bill the Student Loan Scheme Amendment Bill (No 3). It grieves me a little bit to say—following such kind comments from the previous speaker David Clark about the work of collaboration that the Finance and Expenditure Committee did on this bill and the way that we generally work together well in a collegial fashion—that Labour is clearly on the side of the defaulters and on the side of the shirkers when it comes to student loans. Labour is on the side of the people who want to take the money and run. Surely if you look at the figures we have over 100000 overseas-based borrowers in the scheme; a significant number—61000 of them—are not meeting their repayment obligations and the Labour Party seems to think that is no problem. There are 61000 people overseas who have not bothered to start paying any payments back on the student loans. They have left the country taken the money and run and Labour thinks that is no problem. So that is not a serious policy and it is not a serious policy from a party that is not serious about this issue.National is making the student loan scheme sustainable into the future it is reducing the need for more Government borrowing and it is providing students for the jobs of the future. Our interest-free student loan scheme is one of the most generous in the world. We have only to look at the papers that were delivered for the select committee which show that OECD countries on average spend about 20 percent of their public budgets for tertiary education on financial aid for students. New Zealand spends more than double this proportion—43 percent—and is second only to the UK in the support that it gives to students. The quid pro quo for that is that we expect students to actuallypay it back once they have received their student loans. It represents a major financial commitment by the Government and taxpayers to support people in tertiary education.We want to do that because we know that it is important that New Zealand increases its level of skills. We do live in a highly competitive global environment. It is not written in stone that New Zealand will continue to be wealthy in the future. You have only to look at the Programme for International Student Assessment results and the great challenge that has been put forward particularly in our neighbourhood by China and other countries. That offers great opportunities for New Zealand to trade and to do well but it also reminds us that we have to actually keep on working hard and lifting our game here in New Zealand. A good quality tertiary education is part and parcel of that and the student loan scheme supports that. So all of New Zealand has a stake in good tertiary education but loan borrowers need to keep their end of the deal and repay any money promptly that they borrowed particularly when they go overseas. This legislation is part of an ongoing effort over a number of years by the National Government to make sure that people actually start repaying their loans.So as has been indicated the key thing that we are talking about is introducing the ability to retain people at the border—request an arrest warrant for overseas-based borrowers who persistently default. It is a small group of people but it will send a clear and powerful message that those who consistently fail to meet their obligations will be held to account.Grant Robertson: No.PAUL GOLDSMITH: The Opposition members say no. Well what do they suggest? Do you just keep on saying “Well please pay.” and do nothing about it? At some point we have to actually put a line in the sand and say “If you don’t pay you can’t just keep on continuing to have the privileges of a New Zealander going freely in and out of this country if you don’t make even the slightest attempt.” We are not suggesting that you have to pay the whole loan right on the dot at that moment but all you need to do is enter into a conversation with the Inland Revenue Department to start repaying that loan and start making some progress. That is very important.The one change from the Finance and Expenditure Committee that I just wanted to alert Parliament to was that originally the bill set out that the courts could make any other order the courts saw fit in relation to the arrested student loan borrower. The committee thought that that was too wide in scope and that there was a lack of clarity around that. As a result the bill is slightly tighter there and refers to the court within such a period that it specifies being able to ask for further information. So the committee tightened up that little area and I thought that made the bill more powerful. On that basis I am very happy to commend this bill to the House.GRANT ROBERTSON (Labour—Wellington Central): As we speak in this debate on the Student Loan Scheme Amendment Bill (No 3) there is a person in a country in Europe who is following the debate and that is a New Zealander who had been enrolled for a postgraduate course of study at a New Zealand university who was offered a job overseas and took up that job but continued to study for their postgraduate qualification in a New Zealand university while overseas. They had some disagreement with the Inland Revenue Department about whether or not their loan would attract interest when they were overseas and they have been in some dispute with the Inland Revenue Department for several years now as they try to resolve that matter. That person wants to come back to New Zealand at the end of March to attend the wedding of a family member. Right now—Dr Cam Calder: Then start paying the loan back.GRANT ROBERTSON: —they will not be able to do that. And Dr Calder says “Pay the loan.” Well that is the point Dr Calder. The negotiations between this personand the Inland Revenue Department have broken down. The Inland Revenue Department although it is empowered under law to be able to negotiate does not always do so and that actually came out in the select committee process.So what are we saying in this House today? Are we saying that we want people to pay their loans back that we will sit down and have a constructive conversation with somebody about what they are able to pay back?Dr Cam Calder: We are—we are.GRANT ROBERTSON: No we are not Dr Calder. What the Government is proposing today is a gimmicky punitive measure that actually will not see those loans repaid. In the Finance and Expenditure Committee we could have had a discussion about a range of options for ensuring that money is actually paid back.What about a greater role for third parties? There are a lot of parents who would be prepared to step in with a negotiated settlement and make a payment. What about basing payments more fairly? At the moment under the provisions of this bill it is a blanket approach to payments when you are overseas. It does not bear any relationship to what you actually earn when you are overseas. It is simply a blanket arrangement. There were submitters who came to the committee and asked to relook at that. They asked whether there was the capacity in this system to make arrangements based on someone’s earnings. People will be much more likely in my view to make those payments if they feel that they are fair and if they can meet them from what they are earning overseas. But the Government was not prepared to look at that option.Paul Goldsmith challenged us to say what the other options were. Well the other options are: greater use of third-party—parents—repayment greater use of negotiation by the Inland Revenue Department for sensible sums of money and a repayment scheme that is based on actual earnings. It is within the wherewithal of the Government to investigate those options. But instead what the Government has done is come to this House with what is effectively a gimmick—a distasteful gimmick. It has the effect of scaring off people like the student whom I talked about at the start who now does not know whether they can come back for their family wedding because they are still in dispute and still in discussion with the Inland Revenue Department and have a large outstanding loan balance. This aspect of the bill is nothing more than a gimmick.The New Zealand Police has said that it does not have the resources to enforce this. It is not actually going to be able to do what is required here. We know that the Inland Revenue Department wants to make an example of some people. What kind of policy making is that? Is this about getting the money back? Is this about making sure that there is some return to the taxpayer? Is it about a political gimmick and a political sideshow? I venture to suggest that it is the latter because we have not seen a proposal from the Government to start moving in on this around tax evasion have we? You know we have billions of dollars of tax evasion every year from the mates of the National Party but we do not see a bill coming in about that. No—we see a bill that is a political gimmick. It again says to this Parliament that this National Government has absolutely no commitment to expanding the range of people who are in tertiary education. That is the really sad thing.When Paul Goldsmith spoke he talked about some of the great things that the National Government had done in the areas of tertiary education and student loans. Well I am sorry to say that the reality is the opposite of that. Throughout the term of the last two National Governments we have seen a tax on the student loan scheme. We have seen reductions in the number of people who can access it. If you are over 55 years of age you can no longer access the living cost component of the student loan scheme because of what this National Government has done. You can get only 3 years’ worth of student allowance at any time of your life. If you are over 40 years of age and youwould like to come and retrain—you might have been laid off—but you have had 3 years of student allowance when you were 21 years old then that is it from National’s point of view. You are on the scrap heap if you are in that position from National’s point of view. If you are 65 you cannot get access to the loan scheme.Tracey Martin: If you’re a woman coming back after children.GRANT ROBERTSON: That is right. As Tracey Martin says if you are a woman coming back re-entering her career after raising children that is a no go if you are over 40 under the National Government. This comes from a National Government that hated the interest-free student loan scheme. John Key told this House that he was going to oppose the interest-free student loan scheme with every bone in his body. But Steven Joyce and John Key worked out that they could not do that. They could not turn over interest-free student loans. They hate the fact that they are stuck with this scheme so little by little they unpick eligibility for student loans.On this side of the House we want to see more people in tertiary education. We think tertiary education is a public good. We think that the more people who go to university to polytechs towānanga who involve themselves in apprenticeships and industry training the better it is for New Zealand. Instead we have a Government that is committed to restricting the range of people who can get into tertiary education to limiting them.Simon O’Connor: Rubbish!GRANT ROBERTSON: Simon O’Connor says: “Rubbish!”. Postgraduate students—do we want more postgraduates? Do we want more people Mr O’Connor who are going to contribute to our economy who are going to actually create the jobs for other New Zealanders? We want them to come from all backgrounds. But this Government says: “No we are cutting the allowances for postgraduate students.” It wants only the elite to be able to get into postgraduate study. I want as many New Zealanders who have the ability to do postgraduate study to carry on doing it.This Government has got no commitment to access to tertiary education. This Government has got no commitment to quality tertiary education. All it has got is a gimmicky policy designed to make the Government look good so that Paul Goldsmith can come down here and talk about defaulters. Most of these so-called defaulters are actually young New Zealanders who have gone overseas and who are trying to make something of themselves over there. I would love them to come back. This bill is not going to help with that. I would love them to pay their loans back. This bill is not going to help with that either. If there was a meaningful attempt from the National Government to actually get more repayments then it would have looked at a wide range of options. Instead it proposed only a gimmick. The arrest at the border provision is a ridiculous provision. It is punitive. It will not achieve what National claims it will achieve.I also want to speak about one other aspect of the bill and that is the question of overseas-based borrower repayment rules. What we heard at the select committee was that it would be too difficult for New Zealand to be able to base repayments on an estimate of income. Well I fail to see that that is actually true. To begin with borrowers themselves are capable of making an estimate of their own income. We have a lot of high-trust situations within the repayment model. Why not develop that further? Why not start developing it with countries where we do have taxation agreements where we could actually begin a basis for doing this? There is a lack of imagination on behalf of the National Government because frankly it is not actually trying to solve the problem.On this side of the House we understand that where there is a student loan scheme and people do borrow from it there is an obligation to repay. We accept that. We also accept that when someone goes overseas they will pay interest. That was part of theinterest-free student loan scheme. What we do not accept is that the way to make that scheme work is to put in place a silly punitive gimmick that National thinks might make it look good. We cannot on the Labour Party side of this House support this bill.GARETH HUGHES (Green): Kia ora Mr Assistant Speaker.Ngā mihi nui ki a koutou. Kia ora. I think what the hundreds of thousands of students in New Zealand and overseas are hearing is that this side of the House is going to take them seriously. This side of the House is going to be providing solutions for the $13 billion student loan debt. This side of the House is going to support students because educated Kiwis are our future. But what those hundreds of thousands of students are also hearing is that this Government on that side is more focused on those punitive gimmicks that we know are not going to work and that are all going to be counter-productive. That is where National’s focus is.What we have seen in 5 years of National is universities consistently sliding down the international rankings. What have seen is this Government making tertiary education less accessible less affordable and in some cases downright impossible as it shuts the doors to new students. It is not just the over-55s; it is the capped enrolments. It is the IT sector for example which is crying out for new graduates but this Government says no—David Bennett: You would know about that now wouldn’t you?GARETH HUGHES: —it is going to cap your places in computer science. What this Government does is go “We’re increasing all science places.” Tell that to the IT sector Mr Bennett when people can study astronomy or wine science but they cannot get a place in computer science despite the industry calling out for them. Students and the tertiary sector know that National is no good—sliding down the rankings and making study less affordable less accessible and in some cases downright impossible.A lot of bills we see particularly in the tax space or the tertiary education space are kind of curate’s eggs. There are some good parts and some bad stuff and you weigh up the pros and the cons of the legislation. This bill the Student Loan Scheme Amendment Bill (No 3) is an egregious punitive bill. It is a bad bill. Plainly and simply it is a gimmick it is all about political spin it is a waste of time it is going to be counter-productive and it ignores the solutions. I am not trying to exaggerate but this is a bad bill that is not going to have the desired consequences.Remember back to Budget 2013. It was a forgettable Budget I will give it that but remember all the way back to Budget 2013 when one of the headlines was that this Government was going to get tough on student loan defaulters. This bill is simply serving a political purpose for Steven Joyce to try to look tough on students. It is easy to beat up on students with student loans particularly overseas students. It is easy for this Government to pick a victim and do a bit of bullying and beating for its own political objectives but now we are seeing the consequences because those political bullying tactics have to be ushered through this Chamber through legislation as we are seeing today.What we heard in the Finance and Expenditure Committee was a chorus of opposition to this bill because it is just not going to work. People know it is just going to be a gimmick. Let us look: we are talking about 3.2 percent of the $13 billion student loan budget currently being held overseas. What we are seeing is a complete waste of police time. This is what I and many of the submitters are particularly opposed to. We do not want to see the New Zealand police force act as quite simply debt collectors. We heard that not just from the New Zealand University Students’ Association but also from Treasury. It was Treasury that noted: “This proposal may have the appearance of the Police acting as debt collection agencies for Inland Revenue.” That is the heart of this bill. Quite simply all the Inland Revenue Department has to do is request an arrestwarrant from the police to get defaulters arrested at the airport. It is a bad look for the police who do not want to be looked at as debt collection agents; they want to be protecting us—the security of our borders and the security of our people. They do not want to be running around our airports trying to find student loan defaulters. It is not going to work. It is going to be a waste of time. This is what we heard in the select committee.What we heard in the regulatory impact assessment was that the impact of this policy on the compliance of overseas-based borrowers is uncertain and the faster recovery of loans from compliant borrowers under this proposal was not expected to generate any savings in the short term. There is no evidence it is going to work. In fact there is countering evidence that it will not work. What we know is that New Zealanders are going to feel uncertain about returning home to New Zealand. They are going to try to avoid it. What we are entirely going to see is a perverse incentive. New Zealanders are just not going to feel comfortable coming home. In fact I had my best mate who lives in Manly in Sydney emailing me on Facebook saying: “Has that law come through? Because I am really worried about what is going to happen.” I am sure thousands of New Zealanders are having this experience where they are feeling uncertain and—Hon Members: Pay it back.GARETH HUGHES: No no he is a New Zealander with a loan who is repaying his debt as I understand it but what your punitive approach has said is that all New Zealanders no matter what their situation or what they are doing with their loan do not feel comfortable because your objective is simply to scare those overseas borrowers for your own political gain. So Kiwis overseas with loans are concerned. They are worried about what is going to happen when they return. What we may just see is more people avoid repaying their loans avoid going to the Inland Revenue Department to try to renegotiate or simply stop paying off their loans.What we also know is that the way the loans and repayments are being calculated is inequitable and that is exactly what the officials have advised us. They say that this bill “creates an inequity whereby two loan borrowers with the same loan balances may have different repayment obligations …”. I believe it is a serious issue given the scale of the total amount of overseas loans but what we need to do is approach smartly. This—where you simply just pick a number and that is the repayment—is the exact opposite of taking a smart approach. It should be based on the person’s earnable income overseas. I asked the officials why our Government has not been in discussions with in particular the Australian and UK Governments given we know that is where the bulk of these loan holders are based. Why have we not had discussions with those Governments with whom we have very friendly relations and tax agreements in effect right now? Why are we not talking to them where those people could either calculate their earnings in those countries so we could have a fair and progressive loan repayment rate back to the Inland Revenue Department—or in fact why are we not even starting discussions so that those loan holders could pay off their loans through other jurisdictions’ pay away or other tax systems that they have? What I heard was that they said: “We don’t think it is ever going to happen. It’s too hard so we’ve not bothered.” What we need is some political leadership on smart solutions which are not these sort of broad-brush—I hate to say the word “dumb” but it seems incredibly dumb to just pick a figure and say that that is what everyone has to pay. It creates this inequitable solution.I want to also touch on the increase of the loan repayment threshold to $45000. Again what the officials have pointed out in the regulatory impact statement is that there is a risk that some previously compliant borrowers with balances greater than the $45000 will simply stop repaying their loans. So you have this chorus of opposition not just from the public and the student bodies but also in terms of logic and commonsense from the officials. When they look at this they know it is just simply a political gimmick. It is not going to work.What we need to do is be focusing on solutions to reduce that $13 billion millstone around students in New Zealand and on the world map. What we need to focus on is tax agreements with those other Governments as I talked about. We need to have a more open and flexible approach for overseas loan holders to renegotiate their loan and repayment obligation to the Inland Revenue Department. I understand that it is easier for companies in tax avoidance and arrears to be able to renegotiate a loan than it is for a student loan holder. We need to provide these graduates with more flexibility. We even need to do simple things like make it easier for those overseas loan holders to be able to communicate with the Inland Revenue Department either online or over the phone. For example many Government departments run 0800 numbers so that people who maybe cannot afford the phone call are able to communicate with their Government. Likewise we could also investigate ways that maybe accessing an Inland Revenue Department website from overseas could actually be charged back to the Inland Revenue Department similar to a 0800 number.What we need to do is focus on incentives on carrots not just this punitive stick-based political headline - grabbing approach. So what we need is those carrots not those sticks and this is what we are going to see as those student loans of $13 billion reduce. We need a new approach to tertiary education that puts students front and centre and that listens to them addresses their problems and reduces their challenges. Ultimately a New Zealand that is prosperous a richer New Zealand depends on educated Kiwis thriving. What we are seeing is the student loan scheme across its history have an incredibly perverse outcome on New Zealanders—on New Zealand families and particularly New Zealand women. It is high time years and years after this loan scheme was started that we actually start addressing it smartly and we actually focus on solutions—on carrots not just sticks. That is what you will see on this side of the House this election—a real choice for students and a real choice for those 500000 people with student loans in New Zealand.MAGGIE BARRY (National—North Shore): I rise to speak to the Student Loan Scheme Amendment Bill (No 3) at its second reading. Let me just say from the outset that this is about making sure that student loans which are amongst the most generous in the world are going to be sustainable into the future. This Government is absolutely focused on that. They need to be sustainable and that means that people need to see their obligations through and pay off their debts. It is absolutely not a gift; it is a loan.The Opposition members rabbit on. You know there is much more flannel than fact. They talk about people who want to come back for weddings. They talk about offering carrots not sticks. What we are talking about is people taking personal responsibility for their obligations. What this loan scheme is all about is actually trying to make sure that the overseas borrowers who are in fact the people who are at fault here really step up to the plate. It is time and there are mechanisms within this bill. It was a robust process through the Finance and Expenditure Committee. We have debated it already in this House and it now comes up as something that needs to be examined more closely.Let us look at what needs to happen. People from 2010 onwards have been encouraged by this Government to repay their loans—$90 million has been repaid. We have tried a variety of measures. We have tried to encourage. We have tried to give them every form of encouragement actually and now we are stepping it up. Let me say actually from pretty much the outset of my call that I would really like to congratulate the majority of borrowers—like Simon O’Connor like many other students like many of us on this side of the House and probably on the Opposition benches as well—who have actually repaid their student loans because that is exactly what we need to do. Icommend them for that. For those of you who have paid your loans back it is an issue of fairness. Why should others who default go overseas and do not bother to meet their obligations get away with it? They need to step up to the plate and that is something that we really need to encourage.Nobody wants to arrest people at borders but let us look at the facts. Basically this bill is consistent with the Child Support Act 1991. There is a precedent there. A warrant can be issued if the court is satisfied that a liable parent will leave New Zealand with intent to avoid their child support obligations. That is the same wording that we use in relation to student loans. It is about obligations. When we look at that precedent we are saying reluctantly that if there are persistent defaulters who live overseas and who are not paying then we must look very carefully at that. It would be a last resort but we need to use these kinds of measures because when we look at the numbers when we look at the facts there are over 100000 overseas-based borrowers. A very significant number of those—61000—are just not meeting their repayment obligations.This is simply not acceptable so this measure needs to be put into place. We need to ring their parents. You know we need to put some pressure on from thewhānau and the families. In fact some of the people who came to the select committee hearing talked about this and people we have talked to on a number of occasions around this have all said the same thing—that in fact when the mother or father or the relations ring up funnily enough the children do get a sense of shame and they get on with it and repay the loan.Hon Members: Shame!MAGGIE BARRY: Well shame they are not meeting their obligations. Not meeting their obligations and having a sense of entitlement are things that the brayers andnaysayers on the other side of the House are very very expert in particularly those who are trying to heckle at the moment. Labour members do not really care if the loans do not get repaid. There is a lot of political mileage being made out of this and it is all stuff and nonsense.We are taking measures that may not be popular with your friend who wants to come back for a wedding Mr Robertson but that is just too bad. That individual should actually step up to the plate and make a point of trying to pay back their loan. If people are getting into difficulty with paying it back then they should get in touch with the Inland Revenue Department they should say that their circumstances have changed and they should try to make an arrangement because it is not fair on all those people who have paid off their student loans over the years that these people continue to get away with it.I support the Student Loan Scheme Amendment Bill (No 3) unreservedly and commend it to the House. Thank you.TRACEY MARTIN (NZ First): Kia ora Mr Deputy Speaker. I rise to oppose this bill the Student Loan Scheme Amendment Bill (No 3) on behalf of New Zealand First. New Zealand First is of the view that such measures as arresting your own citizens at the border are Dickensian and entirely disproportionate to the nature of the offence. It is somewhat poetic that we use that word “Dickensian” as it is a documented fact that Charles Dickens was forced at 12 years old to leave school and to take up factory work after his father was thrown in a debtors’ prison in 1824. It seems fantastical that we are reinforcing the concept of debtors being arrested and brought before the courts 190 years later and it somehow seems worse that this is the considered punishment for a debt that was incurred to gain education.We also believe that measures in this bill must be viewed in a wider context. Finance company directors virtually stole billions of dollars in recent years and ruined the lives of many people yet in many cases they avoided prosecution or serious penalty. Thestudent loan scheme has already had many unintended adverse consequences and this bill will create more. We urge the Government to reconsider the excessive measures proposed in this bill. New Zealand First believes that other measures must be explored to create real incentives for repayment.The real solution to student debt issues is ensuring that there are decent-paying jobs for students to go to after they graduate so that they can repay their loans without having to go to Australia or anywhere else. In New Zealand First’s view making a group of young New Zealanders outcasts from their country is not a solution to the problem of outstanding student debt. We believe that new section 162B inserted by clause 8 which allows the District Court to issue an arrest warrant if it is satisfied that a person who had committed this offence was about to leave New Zealand is placing an ambulance—or actually in reality a police car—at the bottom of the cliff. It would make far more sense to New Zealand First that as that passport holder that citizen comes back into New Zealand an Inland Revenue Department officer is placed inside the international airport and therefore makes contact with that person on their way into this country and collects the information that is required.Why would one stop a person on their way out of the country when there is then no opportunity for them to either produce a third party or spend time with the paperwork etc. etc. and expect them to have $30000 or $40000 shoved in their back pocket? If you want to make contact with these people and you have the process ofcrossmatching information find these citizens on their way into the country and have the conversation there. Do not wait for them to be on their way out of the country. It seems ridiculous to us.The report of the Finance and Expenditure Committee says: “Under these sections as amended a court could order the borrower to pay the amount in default to enter an arrangement to do so or to provide information to the court. We would envisage the court requesting such information as the borrower’s contact details or information about their assets income or employment status.” Again we say that it seems much more sensible to us to actually seek that information as the citizen is entering the country rather than to wait until they are on their way out.We also note that it says in the report: “We also recommend inserting new section 162B(7) to make it clear that a court would be required to direct the return of any travel documents or tickets once it discharged an order not to leave New Zealand.” It seems nonsensical to us—just completely impractical. If you have somebody at the airport about to board a plane and you stop them there is no point giving them their tickets back after the plane has left. Is there any compensation to the individual if they are stopped at the border their plane has left they have $2000 worth of tickets and they have now come to an arrangement? What plane do they get on? Is the Government going to compensate? Again if you talk to the citizen on their way into the country then arrangements can be made and that situation is avoided.I want to take up the point of the somewhat rosy view of the Inland Revenue Department. My husband had a student loan. My husband cleared his student loan when he went to work. However the recording of that payment was not processed appropriately. So some time later after years of receiving a zero balance statement we received a statement for so many thousand dollars and had to go through the process of proving through our bank records that we had paid that amount. What would happen if say my husband was arrested at the border but had already paid that account? How long would it take for him to prove it? Does he have to go to court to prove it? Does he have to have all his bank account records on him if there has been an error made?If there has been an error made by the Inland Revenue Department what is the compensation available if it is mistaken? How is that citizen who has now been pulledout of a line-up and arrested at the border recompensed by their Government if it is an error from the Inland Revenue Department? Let us just put some practicality around this.I think the other thing that we want to point out too is a little point that nobody has mentioned yet. It is on page 4 of the report and it says: “We also recommend altering the definition of ‘adjusted net income’ for student loan repayment purposes to reflect provisions in the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Act 2013 requiring employees who receive certain non-cash benefits from their employer such as a motor vehicle to include them in their income calculations.”I have just had a quick look. I think this has been included in the bill because once again we have this biased view that everybody who has a student loan is somehow a doctor or a lawyer or some highfalutin individual who has a mega-income and gets all these add-ons on the side. I had a look at for example a biosecurity officer. There is a need to get a student loan in order to actually be qualified enough to become a biosecurity officer. A biosecurity officer in the first 3 years of employment can get between $35000 and $45000 in salary a year and often they get a vehicle that goes with that because they have to travel around to look for Argentine ants on Kawau Island or whatever.What we are saying now with that amendment is that the car is going to be included inside the concept of their salary which means that the amount they are supposed to repay can take them into a higher threshold. It has not been mentioned before and I think it is something that needs to be looked at. I am not quite sure whether the true practicalities of that measure have been thought all the way through to when it actually hits the ground.I want to refer now to Treasury’s notes. I am trying to find where the Government actually got this from and where it thinks it has got support from. I can imagine that it has support from only a very few of its own constituents who somehow believe what the Government tells us that this will work and that these people are bludgers. The Treasury notes say: “this proposal may have the appearance of the Police acting as debt collection agents for Inland Revenue” which would be completely inappropriate. The police have another role. We already have difficulty with the way they are viewed by many in our society. We do not want to chip away any more at the way they are viewed.The commentary on the bill states: “It has been additionally noted by officials that they do not expect the threat of an arrest warrant to be a particularly effective incentive. Inland Revenue’s new allowance to identify those for whom they believe an arrest warrant needs to be applied has been defined as punitive and unprincipled by the Legislation Advisory Committee.” So you have got Treasury you have got the police and you have got the Legislation Advisory Committee. You also have the regulatory impact statement saying: “This creates an inequity whereby two loan borrowers with the same loan balances may have different repayment obligations.” and “The impact of this policy on the compliance of overseas-based borrowers is uncertain.” and “Officials have also stated that they do not expect the faster recovery of loans.”There is not a single official in these documents¸ who truly stands behind this decision. There is another reason for this. It is not about collecting debt it is not about the practicalities of how this will work and it is not about helping New Zealand citizens. But it is possibly about putting in place the ability to arrest your citizen at the border with debt so that later on that statute sits there and can be used for another purpose.Hon KATE WILKINSON (National—Waimakariri): I rise to take a short call on the second reading of the Student Loan Scheme Amendment Bill (No 3). This bill is simply about making the student loan scheme sustainable into the future. It is simplyabout students taking personal responsibility for repaying their loans and their obligations. Doing nothing in relation to the outstanding debts which are significant is not fair to the good students who pay back their obligations; nor is it fair to the taxpayers who have advanced the money in the first place. We would not need this bill if all students met their obligations to the taxpayer. Regrettably they do not. Regrettably we need the bill. This bill is a fair bill and I support its passage through the House.Dr MEGAN WOODS (Labour—Wigram): I am very pleased to take a call on the Student Loan Scheme Amendment Bill (No 3). Hot on the heels of Budget 2012 and the fantastic plan from the National Government to tax paper boys Budget 2013 delivered us the “arrest the students at the borders” measure. This is simply a gimmick that is not going to achieve what the bill purports to set out as its purpose. We have heard the tired old rhetoric of the National members opposite who tell us that this is about making the student loan scheme sustainable into the future it is about people taking personal responsibility and it is about fairness. This is simply not true. This is a piece of legislation that is not going to do anything to achieve the aims that it sets out to do. It is a gimmick for the National Government to try to look tough to their constituents.The interest-free student loan scheme was one of the great achievements of the Clark-led Labour Government. It removed the punitive and unsustainable interest charges from student loans which became increasingly impractical andgenerationally unfair in terms of how we funded tertiary education. The braying from the members opposite underlines exactly what this piece of legislation is about. This is about a Government that knowselectorally that it cannot unpick a piece of legislation wholesale that it does not like. In fact in this debate we have heard the member forTāmaki Mr Simon O’Connor calling across the House—Grant Robertson: Who?Dr MEGAN WOODS: —the member forTāmaki Mr O’Connor—that the interest-free student loan scheme that Labour instituted when last in Government was nothing but a gimmick. This cuts to the heart of what this legislation is about. This is about a Government so desperate to cling to power that it will not do what it really wants to do and that is to do away with the interest-free student loan scheme. The Government does not like the fact that actually it is the opposite to the elitist view of education in the tertiary sector that it holds which allows greater access for people to go to university and to enter into tertiary education.The Government does not like this so what we have seen over National’s last 5 years in Government instead is that it has chipped away at the scheme. We have the ridiculous measures in the Student Loan Scheme Amendment Bill (No 3) that we are currently debating. We have had the restriction of the student loan scheme in relation to the number of New Zealanders who can access this scheme. This exposes one of the fundamental differences between the Labour Party side of the House and the Government opposite. On this side of the House we in the Labour Party believe that tertiary education is an investment in our country’s future. Tertiary education is the way in which we will transform our economy. Having an educated workforce is something that we want to open up and something we encourage. We do not see tertiary education as a cost to be cut. That is how members opposite view tertiary education. The legislation that we have before us is yet another example of how the Government views tertiary education.We have had other speakers in this debate stand up and tell us about how they think this gimmick these punitive measures is going to bring in the additional revenue. It is going to make the scheme fair and it is going to make it sustainable because we will get—to use those words—“those shirking students overseas to pay what they owe”. Wein the Labour Party do not disagree with the principle that those people who have borrowed money under the student loan scheme should pay it back. We disagree with the Government however in that when we are going to introduce measures to increase payments under the student loan scheme we say they should actually work. As we have heard from the member who spoke before me Tracey Martin official after official has told this Government that the measures contained in this legislation will not work. Treasury has told the Government that it is not going to work. The police have told the Government that it is nigh on impossible for them to arrest students at the borders. It is simply not going to work. Then the Government has had advice from the Legislation Advisory Committee that this legislation is not going to work. The Government is not interested in looking at measures and at real practical solutions that will increase and have been shown to increase the collection of student loans and are not focused on gimmick policies.If we have a look at 2008 and at what the Labour-led Government did then we see that an amnesty was introduced for student loan borrowers who had fallen behind on their payments. In the short period of time that that amnesty was open 13000 borrowers signed up with the Inland Revenue Department and entered into a payment agreement with the Government. This is the kind of measure that we on this side of the House want to see. We want to see solutions that work and solutions that actually do allow the shirkers as the Government calls them to start repaying their loans and not be kept out of their own country. We do not see these people as shirkers. We see them as young New Zealanders whom we want to actually encourage to make a contribution to this country. We do not want to exclude them from New Zealand and set in stone the fact that they are never going to come back here. They are not going to share the fruits of their education. They are not going to share the fruits of the valuable experiences that they have experienced overseas.We have heard the nasty arrogant and out of touch reaction to the very personal stories that members of this House have told about people who have contacted them and who have tried to enter into negotiations with the Inland Revenue Department where those talks have broken down and now those people cannot re-enter New Zealand despite trying to enter into repayment agreements. The reactions from the other side of the House show that this is a Government that is more interested in demonising young New Zealanders than in finding real solutions for how we can address this issue. How is it that we can get more people paying back the student loan money that they owe?If we have a look at some of the other measures that this bill has in it—in terms of those who are young New Zealanders living overseas—it increases repayment rates for overseas borrowers. It makes absolutely no allowance for the amount of income earned. So if you are earning £150000 you will be paying back the same amount as someone who earns £25000 if your loan balance is over NZ$50000. This is not the kind of progressive way that we in New Zealand are used to addressing debt. This is not the progressive way in which the student loan scheme has been set up.This legislation is so very National. There is no evidence that it will increase compliance. We have not heard one speaker from the Government get up and tell us how it is going to increase compliance. Instead we have heard tired old rhetoric about a sustainable student loan scheme. We know that the Government does not like the interest-free student loan scheme so for Government members to stand up and tell us that this legislation is in the interests of protecting a scheme—about which they cannot control themselves and heckle about how bad it is—is just absolute bunkum. It makes absolutely no sense. We know that that is not what those members are trying to do. It is not going to work. It is not going to achieve its aim and it is yet more evidence of a Government that is not interested in connecting the dots of what we can achieve as anation if we truly do invest in our education system if we see education as something more than a cost to be cut and if we see the kind of country we can be with more people in tertiary education and where we do not have policies in place that explicitly seek to exclude New Zealanders from undertaking tertiary education. It is with pleasure that I have finished this speech by setting out why it is that Labour will not be supporting this legislation.DAVID BENNETT (National—Hamilton East): This afternoon we have heard the socialist Labour elite and their true beliefs. They believe that education is only for a small group of people who can then go overseas and do not have to pay it back. What about the hard-working New Zealanders who pay for people to go through that education? Should they not see that money repaid? How about the young men and women who are out there in apprenticeships and working on the farms and in the factories? They pay their taxes for somebody else to get the benefit go overseas and swan around. That is the Labour socialist elite that has always been part of that party. It is part of this current Labour party as well. It is communism coming home to roost. They do not even want democracy in this country. They will do everything to get rid of democracy in this country.New Zealand First members are in the middle. They do not know what is happening. They have not got the brown bag from Kim Dotcom to tell them how to vote today but they will get it tomorrow—Grant Robertson: I raise a point of order Mr Speaker. It is extremely out of order in this House to suggest that any member of this House is any way the subject of bribery or corruption in the way in which the member has just done about the New Zealand First Party. It is extremely out of order.Mr DEPUTY SPEAKER: Yes I am going to uphold that. I did not hear the exact context in which the member did it but the member who raises the point of order is correct. All members are honourable members and members should desist from any inferences that would suggest that that is not the case.Tracey Martin: I raise a point of order Mr Speaker.Mr DEPUTY SPEAKER: Is this the same point of order?Tracey Martin: I am offended. I am deeply offended by what Mr Bennett just suggested.Mr DEPUTY SPEAKER: The member will withdraw and apologise.DAVID BENNETT: I withdraw and apologise. But the elite of socialism are shown here today. How many more students are there in New Zealand universities now than when Labour was in power? There are more. The Labour Party comes in here today and says that we have cut down the number of students and that we do not want people to get an education. That is wrong. That is not true. It is not true. I ask the Labour Party to come up with the figures. Table the figures today showing that more people got education under the Labour Government than under this Government. That is not true and Labour cannot do it. It believes in letting somebody go overseas take advantage of the New Zealand education system and not have to repay their loan. That is patently wrong. Something that all New Zealanders want to see is fairness and equity in our system. We want New Zealanders to get an education but we want New Zealanders to repay their debts to this country and repay them fairly. This is a good bill.Mr DEPUTY SPEAKER: A split call—5 minutes; Chris Hipkins.CHRIS HIPKINS (Labour—Rimutaka): It is a bit rich to be lectured by the National Government on elitism when it comes to tertiary education. This is a Government that seems to think that the only people who should have access to tertiary education are the people who have parents who can afford to pay for it. The Government continues to put more and more financial hurdles in the way of peopleparticipating in tertiary education while it continues to erode the financial support that has previously been available.This is a Government that seems to think that tertiary education should be the preserve of the wealthy and the wealthy alone and I think that is disgraceful. We know that because we had Simon O’Connor over there before talking about the interest-free student loan scheme and calling it irresponsible. Does that not remind everybody in the House of when John Key came down to the House not that long ago—it does not seem like that long ago—and railed against interest-free student loans and said that he was going to fight them with every bone in his body? Well perhaps he is some kind of reptilian overlord after all because interest-free student loans are technically still here. But of course what the Government is doing is slowly progressively dismantling them—little bit by little bit. First the Government has introduced an administration charge which is effectively a form of interest every year which students have to pay and it is on the basis that it costs that much money to administer the student loan scheme. And yet the Inland Revenue Department does not apply that under any other policy—only for students; only under student loans do we have this administration charge. Then we have a whole lot of other punitive measures introduced by the National Government to increase the cost to students of their tertiary education and to gradually slowly erode the value of interest-free student loans because we know that Government members are opposed to them.The Government will not front up to New Zealanders before the election and admit it but the reality is that if National gets a third term interest-free student loans will be history. The National Party never wanted there to be interest-free student loans. Simon O’Connor still believes that it is irresponsible to have interest-free student loans. It is very clear that if New Zealanders have the misfortune of having a third-term National Government interest-free student loans will be gone.The other thing that this bill does is that it hangs a very big sign over New Zealand for expat New Zealanders saying: “Don’t come home. Don’t come back. If you’ve got a tertiary education you’ve borrowed for that and you’ve gone overseas don’t come back.” That is the message that this National Government is sending to those New Zealanders who have gone overseas. Actually we should be making it as easy as possible for New Zealanders overseas to come back and the prospect that they are going to be handcuffed at the border certainly will not do anything to bring them back.I do believe that people should repay their student loans but I believe that the responsibility of the Government is to make it as easy as possible for them to do that. What we have seen is this Government keep making it harder and harder. It keeps making it harder for graduates to keep on top of their student loan debt particularly those graduates who are living overseas. Actually one of the progressive things that this Government should be looking at is how we make it easier for people who are overseas to work out how much they should be paying back making it easier for them to actually keep on top of their repayments so that this problem does not arise in the first place. But no no the National Government is not interested in that at all. It is more interested in a punitive measure—Grant Robertson: A gimmick.CHRIS HIPKINS: A gimmick that basically says to people living overseas: “Don’t bother coming back to New Zealand. We don’t want you back.”Well actually here in the Labour Party we are not that arrogant. We do want people who live overseas and who are New Zealand graduates to come back to this country and to contribute to the New Zealand economy. We want to make it as easy as possible for people who are overseas to come back because of course we know that they have been leaving in droves under this National Government. Remember how John Key stood inthe stadium and talked about the Westpac Stadium - load of New Zealanders who were leaving to go to Australia every year? Well they would not fit in the Westpac Stadium—Grant Robertson: He’d have to do it at Eden Park now.CHRIS HIPKINS: He would have to do the ad at Eden Park these days because under this National Government the exodus to Australia and to other countries around the world has gotten even bigger. There are more and more New Zealanders leaving every year and we should be saying to them that we want them to come home. We value the contribution that expat New Zealanders could make to New Zealand if they came home.That is not what members of this National Government are focused on. They are interested in election-year stunts. They are interested in appearing to be tough on people who are not paying back their loans. Actually what they should be doing is making it easier for students to pay their loans back in the first place. They should be making it easier for people to participate in tertiary education in the first place. They should not be focused as they are on making sure that tertiary education is the preserve of the wealthy elite. That is very much what this Government is doing and I do not think that is right.DAVID CLENDON (Green): I am pleased to have the opportunity to take a brief call on this Student Loan Scheme Amendment Bill (No 3) because essentially this bill seeks to make better a scheme that is fundamentally flawed. It seeks to meddle in a failed attempt to improve a scheme that at its heart is a failure. This scheme is the wrong model. The loan scheme is not the way to assure that we have a well-educated community and that people have access to tertiary education. We need to fundamentally rethink how we fund tertiary education. Meddling around the margins trying to criminalise people for failing to meet their debt obligations is not a great leap forward. It lacks vision it lacks humanity and the Greens clearly will oppose it.We heard from the member for North Shore Maggie Barry—and the people of North Shore I am sure do not deserve such a member—that the scheme needs to be sustainable. This fundamentally is not sustainable. Any definition of sustainability will involve social benefit economic well-being and good environmental outcomes and this scheme and this amendment to it would fail on all three of those measures. This scheme has created a massive debt burden. It has very high transaction costs: $13 billion of debt sits on the Government books as an asset. If you think that through this asset owned by the Government reflects the burden placed predominantly on our young people compromising their ability to begin their careers to start their families to build households and to purchase homes. Older people also are severely punished in a sense financially by entering into tertiary education under this model.The Greens understand as New Zealanders did for a very long time that there is a reciprocal relationship between free tertiary education—or close-to-free education—and social obligations. At one time we did have very close-to-free access to tertiary education and there are many people still in this House who benefited from that. Out of that came a sense of social obligation. People who enjoyed the privilege of an education predominantly funded by the taxpayer understood that that brought with it a level of obligation back to the community. I think that was respected for a very long time and we need to move back to something that recognises the more appropriate balance between private good and public good wrapped up in tertiary education.This Government has proven that it is no friend of the tertiary sector. There have been constant cuts demanding that the sector do more with less. Most recently there has been an attack on the governance model of our tertiary education institutions which will do no good and potentially a great deal of harm. This Government sees educationsimply as a commercial arrangement: a commodity is produced called education and consumers purchase it. That is obviously the wrong understanding of what education is about and it underpins this Government’s flawed policies around tertiary education and much else besides.The contribution from the New Zealand First member Tracey Martin actually rang some bells with me when she quite rightly pointed out that bureaucratic errors will certainly result in people being arrested at the border imposing who knows what cost on them. I did have a student loan—a relatively small loan. I studied as a mature student. I came out of that and at the completion of my degree I was fortunate to go into quite well-paid employment. What I remember vividly are the statements that one got regularly about the state of one’s student loan. They were works of fiction. They were incomprehensible. I have a reasonably strong background in and can read financial documents. I gave up trying to understand them. On one memorable occasion I received on one day two envelopes each with a statement purporting to be the state of my student loan. Those two figure sets had no relationship to each other. There will be people who fall foul of this and who suffer serious costs because of bureaucratic mistakes alone. That is unacceptable and who will bear the cost of that? I do wonder at that.Do we really want our police force which is working hard to change the culture of policing to genuinely go out and prevent crime and to make our community safe—do we want those officers reduced to the status of debt collectors for the Inland Revenue Department? Is that what New Zealanders want their police force to be doing? I suspect that is not the case at all. These are civil issues. These are civil matters. We are going to criminalise people who otherwise would not be criminalised. It is time we put this to rest. It is time for an intelligent and informed debate about funding tertiary education. This is doomed to fail. Thank you.LOUISE UPSTON (National—Taupō): I am proud to be a member of the National Party and the National caucus which are putting so much investment and commitment into education. Whether it is trade training whether it is Youth Guarantee or whether it is apprenticeships for Māori and Pacific students there is a whole suite of work that this Government is doing to lift education achievement across the board. Part of that is making sure that our spending is responsible and that those who have the opportunities of education actually play their part and fulfil their responsibility which is as you would expect to pay that debt back.When I am in the streets of Tokoroa orTaupō and I am speaking with a teacher a bricklayer or a doctor I want to be able to say to them very confidently that this Government is minding their money and their tax and is making sure it is spent effectively and efficiently. Those who are responsible for debts to the Government should be responsible for paying them back. So anyone who takes out a student loan should do so knowingly with an expectation that it is repaid and is repaid in the most efficient way that it can be whether they are studying here in New Zealand working in New Zealand or working overseas. It is what hard-working New Zealanders expect when they pay tax every week out of their pay packets. Thank you.A party vote was called for on the questionThat the Student Loan Scheme Amendment Bill (No 3) be now read a second time.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes58New Zealand Labour 34; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Bill read a second time.