Student Loan Scheme Amendment Bill (No 2) — First Reading 
Text is incorporated into the Bound Volume 
Student Loan Scheme Amendment Bill (No 2) — First Reading 
[Sitting date: 20 September 2012. Volume:684;Page:5538. Text is incorporated into the Bound Volume.] 
Student Loan Scheme Amendment Bill (No 2) 
First Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Amendment Bill (No 2) be now read a first time. 
 I nominate the Finance and Expenditure Committee to consider the Student Loan Scheme Amendment Bill (No 2). At the appropriate time I intend to move that the bill be reported to the House by 11 February 2013. 
This bill is a continuation of the Government’s work to bring greater value efficiency and fairness to the student loan scheme. It builds upon the reforms that were contained in the Student Loan Scheme Amendment Act 2012 which focused on encouraging greater personal responsibility and accountability on the part of borrowers towards their repayment obligations. To recap the changes in that Act included giving the Inland Revenue Department the ability to receive a borrower’s contact person details from StudyLink. The purpose of that change was to help facilitate the Inland Revenue Department’s contact with a borrower who is in default and who has not updated their current address details so that they can re-enter the repayment system. To further improve the repayment levels of overseas-based borrowers the 3-year holiday provision was reduced from 3 years to 1 year from 1 April this year. At the time I said that the changes would be a significant step towards improving the overall integrity of the student loan scheme by instilling greater fairness and accountability. 
The measures that are proposed in this second Student Loan Scheme Amendment Bill are designed to further consolidate the value of the student loan scheme. As was foreshadowed in Budget 2012 this bill introduces measures to broaden the definition of income that we use to determine the loan amount a borrower has to repay each year. Under the current rules only income that is taxed at an individual level is captured by the definition of income in the Student Loan Scheme Act. That current definition includes income such as salaries and wages income-tested benefits New Zealand superannuation interest or dividends and personal business profits. However for borrowers who receive other types of income such as payments from a trust the current definition of income may not always accurately reflect their actual earnings or the person’s real financial ability to repay their loan. 
So the purpose of the change to the definition of income proposed in this bill is to strengthen the integrity and the transparency of the student loan scheme by ensuring that the student loan repayment obligations of all borrowers are determined on an equitable basis irrespective of the type of income they earn. Drawing broadly upon the same definition of income that we use for the purposes of Working for Families tax credits and other social policy programmes also means we bring greater consistency to and establish more transparency across the whole spectrum of social assistance. 
To build on earlier measures to encourage personal responsibility for loan repayments by overseas-based borrowers this bill introduces measures to introduce an information match with the New Zealand Customs Service to identify at the border borrowers who are in serious default on their loan repayments. One of the biggest problems we face in fact in collecting repayments from overseas-based borrowers is access to current contact details and information about this highly mobile group of people. These borrowers can often fail to stay in touch despite best efforts by the Inland Revenue Department to identify them to locate them and just to encourage them to do so. So under the provisions in this bill the Customs Service will be able to identify serious defaulters when they cross the border and forward their contact details which will enable the Inland Revenue Department to get in touch with those borrowers in order to do what we might euphemistically describe as discuss their situation. 
They are the main features of this bill. The remaining measures it contains are aimed largely at improving the efficiency of administering the student loan scheme and refining the technical operation of the legislation. Amongst these proposed changes borrowers who have income other than salaries and wages will be required to make an end-of-year square-up repayment only if the non - salary and wage income is $1500 or more over the current annual repayment threshold of $19084. Currently the $1500 threshold applies to some borrowers but not to others depending on the combination of the different types of non - salary and wage income. The change we are proposing will therefore bring greater equity to the scheme by applying the $1500 threshold to borrowers consistently while at the same time making it easier for the Inland Revenue Department to administer the scheme overall. 
The other technical matters in the bill confirm the current late-payment interest rules and repeal certain changes that have been rendered obsolete as a result of changes in the Inland Revenue Department’s approach to administering the student loan scheme. 
These and other changes in the bill clearly demonstrate the Government’s commitment to the good governance of the student loan scheme as a major Crown asset and in that respect I draw to the House’s attention the figures that I released during question time this week. The write-off cost of the scheme has reduced from 48c in the dollar to just over 39c in the dollar as a consequence of a range of moves that we have taken over the last few years. What this all means for taxpayers is that they can be best assured that their investment in the future intellectual capital of this country is being used efficiently and responsibly. That in turn ensures the long-term sustainability of the scheme. 
For the overwhelming number of borrowers who do take their repayment obligations seriously it will not have a huge degree of impact but it will send a very powerful signal to them and to others that we are prepared to take the necessary steps to ensure that the system is transparent and fair for all borrowers and that the obligation to repay is paramount regardless of the overall circumstances of the individual. So against that backdrop it is with real pleasure that I commend this relatively procedural but important bill to the attention of the House. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 The Labour Party will be supporting this bill the Student Loan Scheme Amendment Bill (No 2) going to the Finance and Expenditure Committee. As the Minister of Revenue has noted it is a largely technical bill although I think he has raised a couple of reasonably significant points which I will turn to shortly. Overall whatever concerns we might have on this side of the House with the changes the Government has made to the student loan scheme such as the eligibility change we do recognise that it is important to constantly update and monitor the way in which the scheme is administered and to ensure that it is fair. I think that the message I get time and again from parents and from borrowers themselves is that they do want to see fairness across the system and there are elements of this bill that go to that. 
One point to note in terms of our support of the bill’s referral to the select committee is about the issue of the sharing of information. Although we think that the goal is laudable we do want to hear at the select committee from the Privacy Commissioner and others to ensure that we get the procedures around that sharing of information right. There certainly is a lot of opportunity to share information between Government agencies but clearly the more that is done the more risks there are around civil liberties and around the reasons that people give information out. So we want to ensure that the committee is fully briefed by officials and the Privacy Commissioner on the impact of any information sharing under this bill. 
The point in the Minister’s speech that I do want to go back to is about the definition of income. I think the Minister has made some important points about the current definition of income leaving out important parts of what actually constitutes income and what any reasonable person would see it as: the idea that it is the money you live on—the money you gain from various sources. I am particularly interested in the idea of the inclusion of payments from trusts. The challenge I put out to the Minister—in fact more broadly to the Government—is to think about this in the broader context of the student support scheme. The biggest complaint that anybody who is involved in looking at the student support scheme gets is around the issue of people who get student allowances but appear to come from backgrounds that are not the low and modest income backgrounds that student allowances are currently targeted towards. 
Hon Peter Dunne 
: That’s been addressed already. 
GRANT ROBERTSON 
: Yes and this is an issue that we need to constantly keep under surveillance because although it is good on one side of the coin to say that we have got a new definition of income for the student loan scheme we also need to make sure that that is consistent across the allowance scheme. 
Hon Peter Dunne 
: No it’s already been done. 
GRANT ROBERTSON 
: The Minister says it has already been dealt with but there are still ongoing concerns and particularly so in the context of the Government’s misguided and wrong decision to take away allowances from postgraduate students which I believe to be one of the most backward moves in student support that I have seen in the 20-odd years I have been working in the sector. 
The whole point of the student allowance system is to say that there are people from low and modest income backgrounds who need this support to be able to continue their study and abolishing allowances for postgraduate students I believe sets up a massive inequity. The letters that came in to me when that decision was made focused on that but also on people’s concern that there were still people out there who were ensuring that money went through their parents’ trusts so that their income appeared to be low and there they were getting allowances. At the same time the Government has frozen the parental income thresholds for access to allowances meaning that the inequity grows each day as these people who actually have much higher sources of income still get the allowances while those whose parents are on more modest incomes do not. So that inequity is something that I think the Government should address. At the moment it is changing the definition of income here in the loan system but it should be looking at it in the allowance system as well to create that fairness there. 
As I said the other parts of this bill are largely about the efficient operation of the system and what happens to overseas borrowers. I note that Mr Dunne in his introduction did mention the fact that the repayment holiday had been cut from 3 years to 1 year. We did debate that in some detail. Mr Dunne has had a number of positions on this issue. In fact he has introduced a number of bills on this issue—one to create the repayment holiday and one to reduce it—in different Governments so it must be hard for even Mr Dunne to keep up with his positions on this particular matter. But I want to reiterate the Labour Party’s opposition to that change. 
In fact we are not the only ones. Treasury and the Ministry of Education told the Minister that reducing the repayment holiday from 3 years to 1 year would not improve student loan repayments and in fact was highly likely to increase the debt held by overseas borrowers and therefore discourage them from returning from overseas. So I do not think the Minister can stand proudly behind that particular change to the loan scheme. He should go back to his original position under the Labour Government and support the repayment holiday which is a pragmatic initiative to enable people to go and do their OE in the way that many New Zealanders and many members of this House will have done. Reducing it to 1 year puts great limitations on that. So that particular change is one that the Labour Party certainly does not support and we would encourage Mr Dunne to return to the position he held when he was a Minister supporting the previous Labour Government. 
The other changes to the student loan scheme that the Minister alluded to are much more problematic for this side of the House. I want to take a specific example. I think the Minister used the word “fairness” and I accept that making the scheme more efficient in terms of repayment and obligations on those who are overseas may have an element of fairness to it. What is not fair is taking away from those aged 55 and over the ability to borrow for the living cost component of the loan scheme. We have talked a lot in this House in the last few days about the loss of jobs and people who lose their jobs and we have seen hundreds of jobs lost around New Zealand. Here in Wellington where I am an MP we have seen a large number of people lose their jobs in the public sector. 
One of those people came to visit me in my electorate office recently a woman aged just over the 55-year age-limit to say that she had worked out—she was a single woman—that she would probably have somewhere between 10 to 12 years left in the workforce and that she wanted to retrain. She had been in a particular part of the Public Service she had realised that there were not going to be a lot of job opportunities for her and she wanted to retrain particularly in something around computers and IT. She cannot do that. She is no longer able to get the living cost component. She has no other way of financing her costs. Mr Joyce likes to stand up in the House and say “Well I’ve abolished allowances for postgrad students but they can all borrow it from the student loan scheme.” which is not actually correct because they cannot get the same amounts of money that they used to. This is an example of somebody who is now unable to retrain. 
Members on the other side of the House in the debate on the previous bill we were discussing the Social Security (Benefit Categories and Work Focus) Amendment Bill were going on and on about incentives to work and people being work-ready. Well here is an example of somebody who is desperate not to be on a benefit who is desperate to be at work and who has an idea of exactly the programme they would like to do and because of the changes to the student loan scheme that this Government has made that woman cannot do that study. That is wrong. Those changes to the student loan scheme are grossly unfair. I call on the Government to revisit and relook at those changes. 
It has put in a number of changes. It has reduced eligibility around having to pass more than half of your course. We need to look at what the impact of that is. We have also seen changes around residency requirements. Around 25000 people have had their eligibility for student loans cut under this Government. I think there are unfair outcomes within that particularly for those people aged over 55 and I believe the Government should revisit that. 
This bill is effectively tinkering with the loan scheme and it may be useful tinkering with the loan scheme in large part. But what is actually required when it comes to the issue of student support is for the Government to see student support as part of a package of investing in education because education is an investment that will help New Zealand’s economy grow and will lead to more social inclusion and that is something we should be seeing more of. Unfortunately this Government sees tertiary education as a cost to be cut not as an investment in our future and student support is a very important part of making sure that tertiary education works. Rather than seeing it as a cost to be cut I think the Government should be looking at an overall review of the scheme to ensure that there is a fair approach and that people get the support that they need. 
Abolishing allowances for postgraduate students sends all the wrong messages. Stopping people aged over 55 being able to borrow their living costs from the student loan scheme sends all the wrong messages. We should be supporting people to undertake tertiary education to get the skills they need to contribute to our economy. Although this bill does some useful administrative things it fails to address the real issues: that we need more people in tertiary education and we need people from all backgrounds being able to participate. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am happy to stand and speak to the Student Loan Scheme Amendment Bill (No 2). 
Grant Robertson 
: The sound operator was sending you a message there. 
JONATHAN YOUNG 
: Yes. Fortunately I do not have to shout as loudly as the member from Palmerston North did in the last bill. [ 
Interruption 
] Well the louder he shouted the less I could hear what was coming through. However to the previous speaker Grant Robertson I say that I think there were a number of reasonable comments there. Probably not all of them would I agree with particularly around this notional thought that he is putting out that we see tertiary education as an area where cuts can be made. I think that what we are seeing here is some adjustments to a student support scheme that bring some accountability of course and some efficiency. We want to ensure that future generations of students have access to such a scheme so we are ensuring that we will retain or build the value of this scheme for New Zealanders. 
It is true as the Minister of Revenue said in his speech that the cost of the scheme in the previous administration went to 48c in the dollar and working to bring the cost of that down to something that is more acceptable has been quite a job over these last few years. Now it is just over 39c in the dollar. What that means is that there is a better return for taxpayers but what it also means is that this scheme becomes more accessible for more students. We have been very focused on creating accessibility for tertiary students. We firmly believe that with the changes that happen in technology you cannot just roll out of high school without a qualification and hope to get a high-paid job. More and more people need to have a skill and a qualification that are going to enable them to earn a high-paid job. Of course this is all a work in progress. 
I want to just touch on some comments regarding the efficiency and the building of the efficiency of the tertiary sector. Results from 2011 show that the Government’s continued focus on performance in the tertiary sector is paying dividends. Tertiary education skills and employment Minister Steven Joyce raised this in a press release just recently on 6 September. He made the comment and I am happy to quote this that “Course completion rates have risen from 77 percent in 2009 to 82 percent in 2011 with qualification rates over the same period increasing from 62 percent to 71 percent.” So whilst we are seeing tertiary education becoming more accessible to students what we are seeing also is that there is a lift in completion rates and a lift in qualification rates. 
Some of the adjustments that we have made to the student loan scheme are part of that motivation. If somebody is going to go into a tertiary training situation and continue to receive support from the taxpayer the requirement to get a 50 percent pass rate over that 2-year period is bringing accountability. It is not just the next experience after high school. It is not just the intermediate thing between high school and possibly employment. It is actually requiring people to be stewards of the funds that the taxpayer provides and it is ensuring that the continuity of those funds is matched with hard work in that tertiary training and with a qualification that in the end is going to give them a marketable qualification so at the end of it a student does not come away with indebtedness that does not give at the same time an opportunity to gain employment. 
I believe that these measures that we are putting in place are sound. I think that they are expected. I think in difficult financial times the taxpayer wants to see not only accountability but fiscal responsibility from Government. So I do commend the work that has gone into this bill. As the previous speaker said it is a technical bill. I think the issues around data matching are important I think that his comments around that were sensible and I think that what we are going to see is some progress made to create a very robust system for the future for future generations of learners in our country. We know that we compete internationally and that the human capital of New Zealanders is very much tied to the education qualifications and skill base that we have here as a nation. So I am very happy to commend this bill. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Labour will support the Student Loan Scheme Amendment Bill (No 2) because it makes some sensible small steps towards the fair collection of student loans. We will support it going to the Finance and Expenditure Committee so that we can examine some of the issues that we think need to be picked through more closely. 
Firstly I want to relate some comments to an issue raised by Mr Young about the way in which indebtedness blocks opportunities for employment. I take issue perhaps with that generality because the student loan collection system effectively works as a tax. We know that the tax rate going up is going to mean that those students who are new out of their studies will have fewer resources at their disposal and that goes to really simple things like buying appropriate clothing for the job be it a suit and tie—as in this occupation—or some gear for a job that involves a bit more physical labour and also of course having the ability to photocopy curricula vitae or to put gas in the tank so as to get to interviews. It is not quite as simple I think as Mr Young depicts it in that regard. 
The tertiary sector as we know is very important for social good in our society. It is the critic and conscience of society. Those who study take on a responsibility I believe to contribute back to society. That is part of why we as a country choose to contribute towards the costs of study through the student loan and student allowance schemes. We believe that it is the right thing to do we believe that it is the fair thing to do and we expect our citizens to give back of their best to the future of this country. I think that is a fair expectation. “Fairness” is a very important term for the Labour Party in this respect. The word “fairness” appears often in the explanation for this material and in the publicity around the changes that are proposed. I guess I want to see the changes that this Government is looking at go a bit more broadly so that they actually do begin to address the issue of fairness in greater depth. 
I contend that this bill is in fact by and large tinkering. Because most of the tinkering is positive tinkering Labour will be supporting it going to a select committee. None the less it does nothing to address the big issues in the sector. We know that access is dropping. Under this Government 25000 people have lost eligibility for student support—25000 people—in a situation where unemployment has been rising. We know that there are nearly 50000 more people unemployed under this Government. We know that 50000 people each year are leaving for Australia. We know that opportunities here are limited in a way that they should not be if the Government had more leadership. But we also know that it would be sensible in these times to make accessibility to tertiary studies a priority particularly for our younger folk. We see here that this is becoming less and less the case under this Government as the thresholds around student support become more stringent. That means that the wealthy of course can afford to study but those who are from more modest backgrounds of modest means can no longer access courses in tertiary studies to better themselves to become future taxpayers and contributors in the way that they once could. 
Mr Speaker I am trying to restrain myself because I can hear my own echo. The sound system today is very very loud but it is keeping me quiet so you will be pleased to hear that. 
The other issues of course that are not being addressed through this legislation or elsewhere by this Government include the issue of capital debt—you know those other things that would help our economy grow such as a pro-growth tax policy and research and development tax credits which of course require not only the right incentives for business but also strong graduates. We need our best and brightest to be able to access our tertiary system not just those who can afford it. We need to make sure our education system is accessible to everybody and particularly to those who are high achievers who could contribute more if they had access to our tertiary system. 
So we need to review the adequacy of our student support. There is no doubt about that. If we are going to demand fairness in repayment and fairness in contribution afterwards—and I think we should as a society—if we are going to demand that people give of their best to our country afterwards and repay their obligations we have an obligation also to make sure that the system is fair to access. That goes to the heart of the adequacy of student support. 
If we look at it over time we can see that as a percentage of the average wage student support under Governments of all stripes has gone down over the years. This is something that does need to be addressed for the good of students everywhere and for the good of our country in the long term. Because of course when our best and brightest do not study they do not end up contributing perhaps as much as they might. Those who wish to study but cannot who are deprived of the opportunity through affordability cannot give of their best and that costs us all. It costs them personally it costs their families and it costs the wider community that they are a part of but it also means that they fail to contribute the maximum that they could have contributed to our gross domestic product to our economy as a whole and to the pot of tax that we all have the privilege in this Parliament of choosing to spend in the public good in terms of other education and health benefits. 
So it is short-sighted when one sees tertiary education as a cost only. We need to see tertiary education as an investment. I am afraid that this Government seems to know the cost of everything and the value of nothing. That is a shame particularly in this respect when we know that the returns on a tertiary degree for example make it amongst the best investments anybody can make in his or her own life. The returns are phenomenal—the student loan data set tells us that—on an education. So for those who have the abilities and the desire we need to make sure that an education is accessible. 
To the issue of fairness in collecting which is directly addressed in this bill Labour does support the changes that the Government is proposing in terms of making it a fairer system. We support in principle these changes but we would like to hear more advice from officials and particularly from the Privacy Commissioner as to the impact of the Customs Service sharing detailed and personal information with the Inland Revenue Department because this is a privacy issue. Assuming that that can all be done in an appropriate fashion then we might be likely to support it. But if concerns are raised as there were indeed around the collection of data about a nominated person introduced in another piece of legislation which went through as part of the Budget then we would want to make sure that those concerns were covered off in an adequate way so that the legislation was as good as it could be. 
We in Labour want to make sure that every borrower has to make sure that they pay back what they owe for the opportunity they have been given to study. That principle of fairness should apply in terms of the bill’s measure to expand the definition of income to include business profits and income from trusts. Labour is happy to see that matter being addressed. Those who receive income from a company a trust a superannuation scheme or another source should be treated in the same way as those who earn a weekly wage. This is a small loophole that Labour is very happy to see closed. Broadening the definition of income will save the Crown I understand approximately $7 million over the next 5 years according to Treasury. 
We commend these measures to make sure that the system is fair and sustainable. We encourage the Government strongly to look at making sure that all New Zealanders can access tertiary education not just those who are already privileged. Thank you. 
HOLLY WALKER (Green) 
: 
 For a long time now the Green Party has spoken on bills like this Student Loan Scheme Amendment Bill (No 2) to articulate what are fairly fundamental concerns about the student loan scheme per se. Those concerns relate to its fairness to the barriers in access that it creates to tertiary education to the ballooning problem of the $12 billion—and growing—of student debt that we face as a nation and to the impact that that debt will have on future generations including my own generation in terms of our ability to have a strong financial start in life to aspire to homeownership and to provide for our families. Indeed we have also long articulated fundamental concerns about what the student loan scheme does to the desirability of New Zealand as a place to live for young people and as a place to return to for people who have been living overseas. I am sorry to say that this bill although it amends the student loan scheme addresses none of these more fundamental concerns. But worse than that it may actually worsen the current situation in respect of some of these concerns. 
I want to focus my comments in this first reading debate on two aspects in particular. The first is the fact that this bill is a missed opportunity in that although it does align the definitions of income for Working for Families and the student loan scheme it actually misses the opportunity to align those in a way that would be meaningful and would actually increase fairness in terms of access to both of those schemes. The second thing I want to focus on is the greater risk I think that this bill introduces in terms of data matching between the Customs Service and the Inland Revenue Department of disincentivising young New Zealanders to return to live here and to contribute. 
First of all let us look at the definition of income because that is one of the more significant changes that this bill makes: to align the definition of income for the purposes of the student loan scheme with the definition that is used in relation to Working for Families. Although it does that we in the Green Party think that there is still a fundamental problem that remains unaddressed by this bill in terms of the definitions of income that are used. This was highlighted earlier this year when the Government introduced changes to increase the student loan repayment rate. What that highlighted was that because Working for Families entitlements are calculated on net income before student loan repayments are taken into account or deducted increasing the student loan repayment rate as was done in the Budget has a real detrimental effect on many families who are working hard to make ends meet and on the weekly budgets of those families because effectively it is a tax increase and it is not taken into account when their Working for Families entitlements are calculated. There was no corresponding increase in Working for Families entitlements and the net result is bad for the weekly budget and the back pockets of families with young children. So in seeking to align these income definitions this problem needs to be addressed and although the bill does align the definitions it does not address the fundamental problem that Working for Families entitlements are calculated before student loan repayment rates are taken into account and that just entrenches and compounds the negative changes already made in the Budget. 
 Another way that the bill entrenches and compounds negative changes that have already been made as I have outlined is in its provisions to allow greater information-sharing between the Customs Service and the Inland Revenue Department in an effort to crack down on overseas borrowers who may have defaulted on their loans. Although we have no problem per se with measures designed to encourage overseas borrowers to keep up with their student loan repayments we cannot support punitive measures to track them down at the border unless we have corresponding enabling provisions that recognise the importance of spending time overseas the important experience and skills that spending such time overseas can give to an individual and provide that individual and that potential gain to New Zealand when the individual returns from their OE. Those gains are well documented and what we do not want to do is discourage people from returning when they have spent a period of time living overseas. That is why the repayment holiday when it was 3 years was such a good idea because it allowed for individuals to spend time overseas for a period in which they were not required to meet their student loan repayment obligations and therefore were not racking up penalties and fines that might put them off returning to New Zealand. 
We thought 3 years was a good period of time to have a repayment holiday because it recognises the reality of how long most young New Zealanders spend overseas on their OE. We thought it was a realistic reasonable and appropriate time frame. Now that it has been reduced to just 1 year we have real concerns about the provisions in this bill to allow greater information-sharing between the Customs Service and the Inland Revenue Department because we think that the change that has already been made to the repayment holiday means that there will effectively be a greater number of people who through no particular fault of their own—because it is very difficult to meet your student loan repayment obligations while you are overseas—will be defaulting on their loans. And introducing this information-sharing provision means there is a much greater chance of them being pinged with huge penalties and extra debt when they return to New Zealand. 
The cumulative impact of this policy with a shortened repayment holiday and other policies that have been introduced incrementally by this Government to crack down on overseas borrowers has we feel put at real risk the decision that many New Zealanders who are living overseas have to make at some point about whether they return or not. In the Green Party we want them to return and I think no one could disagree that that should be a major priority for policy design at a time when we have record numbers of New Zealanders moving overseas every week. We want to make sure that those people come back and we need to design our student loan policy to ensure that we are not creating disincentives for them to do so. We are concerned about the cumulative impact of this bill with other changes and that the net effect of those changes will be to put talented young people off returning to New Zealand and making a contribution here. 
If the Green Party was making amendments to the student loan scheme I would like to give you an idea of what a better improved student loan scheme might look like. Bearing in mind that we continue to have fundamental concerns about the existence of this scheme at all there are ways that it could be improved. First of all we need to guarantee that it remains interest-free and that needs to be guaranteed for future borrowers and for borrowers who sign up to loan contracts now. That interest-free status of that loan needs to be guaranteed into the future. 
Secondly it needs to be freely accessible to all including students who are over the age of 55. We heard I think a particularly upsetting example from Grant Robertson earlier in the debate of exactly how punitive that policy to remove access to student loans for students over 55 is in the context of an economy where we are seeing greater job losses and reduced opportunities for people to upskill and retrain. What kind of life do we condemn people to if we do not allow them opportunity to upskill and retrain at a time when they have lost their job at a mid-point in their career? 
Thirdly there would be a reduced need to borrow for living costs because student allowances would be more widely available and they would not be tested against parental income. For financially independent adults who are well into their 20s and often have other adult obligations including children it is absurd to test their eligibility for a student allowance against their parents’ income. Student allowances also would need to be reinstated for postgraduate students. We also heard from Grant Robertson earlier about the punitive impact that that has had on postgraduate students and the fact that they now have to borrow to meet their living costs and cannot even borrow the amount that they were eligible for before when they could receive a student allowance. 
Fourthly when the time comes for graduates to repay their loan there would be a progressive repayment scheme so that rather than raising the repayment rate across the board as the Government did in the Budget earlier this year graduates’ repayment obligations would be based on their ability to pay. It is absurd at the moment that when a graduate is earning less than the full-time equivalent of a minimum wage they have to pay 12 percent of their income straight back on to their student loan. Student loan repayment rates should be progressive and they should be based on the individual’s ability to pay. 
Finally as I mentioned earlier in my contribution income definition should be aligned not in the way that this bill does but so that the impact of the student loan repayment does not negatively impact on the budgets of young families. Until we see a student loan amendment bill that makes these kinds of amendments the Green Party will oppose the Government’s punitive tinkering with the student loan scheme and will oppose this bill. 
KANWALJIT SINGH BAKSHI (National) 
: 
 Thank you for the opportunity to speak on the Student Loan Scheme Amendment Bill (No 2). As a country we need to strike the balance between educating our people and ensuring that the student loan scheme remains sustainable. If we do not do so it is fair to claim that the day when the Government will need to pull the plug on interest-free loans will not be far away. 
With the cost of education increasing by the day it is only prudent to act now. We in New Zealand need to ensure to fund our future development that we are reducing the need to borrow. Towards this end this National-led Government is introducing changes to the way student loans are administered. We are working closely with the Inland Revenue Department and the New Zealand Customs Service towards establishing a system that can identify borrowers whose student loan account is in serious default by ensuring the person provides the details of a contact person whom the Inland Revenue Department can make contact with to establish their repayment obligation. This will ensure that all those who have earned their skills and qualifications with the support of New Zealand taxpayers and are now working in professional positions on their OE meet their obligation of repayment to the New Zealand taxpayers. 
The Government is also working towards broadening the definition of income for student loan repayment purposes. The model we intend to use is one currently being used for the Working for Families scheme. 
The changes that the National-led Government has initiated since coming back have resulted in a reduction of the cost to the Government from 48c in the dollar to 39c in the dollar. Our goal was to reach 40c in the dollar; being able to surpass this is a very significant achievement. This is a clear demonstration of how the National-led Government is delivering on the priorities of managing our national finances prudently. Having more money to invest in our education system clearly means that the probability of New Zealand having a skilled workforce in the future increases significantly. 
By introducing this bill we want to focus on achievement as well. As with any other investment the Government wants to ensure that our citizens get value for the money that has been invested. To address this we have introduced performance criteria for the students. This Government is focused on providing those students who really need it with the money so that they can succeed with their studies and once they become an earning member of society are willing to repay what they have borrowed. In realising our goals we want our citizens to understand the meaning of personal responsibility and accountability. I support this bill. 
TRACEY MARTIN (NZ First) 
: 
 Kia ora Mr Speaker. I stand on behalf of New Zealand First to support the Student Loan Scheme Amendment Bill (No 2). I am pleased to see the bill back. I think it provides us with some opportunities. 
First of all just to address what the bill deals with right now we are pleased to see that it broadens the definition of income and that it aligns the definition of income with the definition used for similar entitlements such as the Working for Families tax credit. New Zealand First believes that the more things are equal and understandable the easier it is for the taxpayers to actually participate inside the system. They can make sure that they are filling out their tax returns correctly or that they know what they have access to. The more variations to that the more difficult it is for our citizens to participate fully. So we like the fact that the definition is being expanded and that that will make it easier for our citizens. 
We are also pleased to see that one of the objectives is to ensure that the aligning of those understandings or definitions should help make sure that when students are pursued for repayments to their loan we have a really clear understanding of their ability to repay. We certainly do not want to place ourselves or our citizens in a situation where they are pursued by the Inland Revenue Department when they are not truly in reality in a position to repay their student loan. We are hopeful that this will avoid that situation. 
The information matching between the New Zealand Customs Service and the Inland Revenue Department—identity matching—is always a little iffy. One always has to be careful about it particularly when a State is doing it. However people have responsibilities to pay their debts particularly when those debts are to the country that has supported them. Those obligations need to be met. They need to be met before people take a holiday or before they decide that they are going to start a new life somewhere else. So although we believe that the Privacy Commissioner needs to keep an eye on all this sort of matching that goes on around the information of our citizens we are supportive of that information matching inside this bill. 
I want to pick up on a couple of things however. There are some practical amendments in there. Clauses 7 18 and 19 seem like particularly practical solutions to us. New Zealanders who are returning from being an overseas-based borrower to New Zealand—and it is their intention to come back to build a life here now—can contact the Inland Revenue Department. They can tell it that they are going to be staying—they have bought a house they have got married they are going to be staying and they are going to meet the 183-day qualifying period. There is now an opportunity there for the Inland Revenue Department to assess their repayment obligations earlier and to have a look at that criteria to make sure that when that citizen is returning to New Zealand and committing themselves to the country that process can be shortened. We think that that is a very practical and reasonable outcome. 
Clause 23 amends section 154 which enables borrowers with unpaid amounts to enter into an arrangement with the commissioner to pay by instalments. The amendment enables a borrower to also enter into a pre-emptive arrangement in relation to an amount where the amount is not yet due but the borrower knows that he or she will not be able to meet the repayment obligation in full and on time. It is a very practical very sensible clause. I would encourage once this bill goes through any citizen who knows they have just been made redundant before they get into strife to make contact in this sort of a way with the commissioner and say: “I can see that I’m going to run into a problem. Can I please work out a solution?”. Again it is a very very very sensible clause being put in there. 
There are a couple of things that we think this opens the door for. I am hopeful that New Zealand First can have some influence perhaps to make some further amendments to what are fairly technical amendments to this bill. I want to pick up and make sure that we understand that there is a constant conversation inside this House around tertiary education. To me—and perhaps my understanding is wrong and I apologise for that if I am taking it the wrong way—the conversations always seem when we come to student loans and student debt to be around university students. It is as if there are no other students in New Zealand—no trade school students no Unitec students no polytech students no bakers no builders no labourers. It is as if there are none of the other people who are also participating in this scheme. Sometimes it is a little bit disturbing when we talk about particularly supporting our high achievers—just our high achievers. I would like to see conversations like this extend so that their success is valued and acknowledged so that those students who go into institutions like Unitec who go into polytechs who become our bakers and our builders who have gained and require student allowances and have student loans are also recognised in these conversations. It is not about just university students. 
I think the other thing to mention is to pick up on what my Labour colleague mentioned which was in respect of the access for those 55-plus to some of these allowances. There is a term that we use a lot inside of educational literature and it is “lifelong learners”. I do not see how we can stand on and say that we want to have a community of lifelong learners if we are going to start shutting doors on people—55-plus is not old any more. I am almost 50 myself and I can tell you that it is not old any more. I would like to think that if I require a second career at 55 I will be able to get a student allowance and actually be able to participate in some lifelong learning so that I can continue to support my family perhaps in some other environment. 
We also talk about fairness. People talk about fairness. I raised this when the amendment bill came into the House the first time round. There is no fairness when New Zealand - based borrowers cannot access a repayment holiday. Whether it be 1 year or 3 years there is no fairness there. New Zealand students who choose to go overseas have access to something that a person who stays here in New Zealand does not have access to. At the time my example was that of a young couple where let us say they both have a student loan and they have their first child. They are still working but their financial circumstances have changed. They cannot access a 1-year repayment holiday while they readjust their expenses. I would like to think that while this bill transitions through the House perhaps there is an opportunity for us to have a think about that and actually make that fair—make that fair for all New Zealand students who access student loans. 
The other part that I mentioned the first time the bill came into this House was around the repayment holiday being attached to the loan not the person. Again the circumstances I used related to that same young woman in the first instance with the young family. She had a student loan. She took a repayment holiday. It is attached to her not to the loan. She took that holiday and then paid off the loan over a period of time. She is now in her 40s. She wants to go back to university. She wants to retrain. She gets another student loan. She is back out in the workforce. Her marriage breaks up. She requires some time once again in her lifetime to reassess her financial circumstances. She has already proven to us the State that she is a good risk. She has already paid off one loan. Why can the repayment holiday not be attached to the loan so that this lady in her circumstances could take another repayment holiday as required inside those circumstances? Generally we are very happy to support this bill but I will be looking to try to have some influence over those sorts of issues. Thank you. 
MELISSA LEE (National) 
: 
 It is a great pleasure to rise to support the Student Loan Scheme Amendment Bill (No 2). I am going to make only a very very short contribution saying that one of this Government’s four priorities for this term is building a more competitive and productive economy. It is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide a world-class Public Service which all Kiwi families actually deserve. 
Our interest-free student loan scheme is one of the most generous in the world and we want to keep it that way. When I went to university I never had this. I was an international student who actually paid through my nose in Australia and then I moved to New Zealand. How I wish and I am sure that my parents wish that we had lived in New Zealand and had the benefit of the student loan scheme. We certainly did not but the bill is a great one and I commend it to the House. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to take a call on the Student Loan Scheme Amendment Bill (No 2) and talk about what Labour thinks about this bill and where this fits in with the vision of how we see New Zealand going. It is disappointing to see members opposite take such short calls on something that is actually so fundamental to how we will progress as a country. Unless we understand how tertiary education and its provision interlace with our economic future we stand no chance. 
Labour is supporting these changes to go to the Finance and Expenditure Committee as these changes should make the repayment of student loans fairer. Although we are supportive in principle of these changes we want to have the opportunity at the select committee to hear the advice of officials and particularly the Privacy Commissioner as to the impact of the Customs Service sharing contact details and personal information on loan borrowers with the Inland Revenue Department. Although it is useful for us to be able to think about how we link all these things together there are real concerns that Labour members do want to hear advice on from the experts at this select committee consideration. 
Student loan repayments are a huge burden on hundreds of thousands of Kiwis myself included. I have a very large student loan having had 10 years at the University of Canterbury with interest accruing on my loan during this time. For those struggling to pay off student debt while also paying their bills and saving for a house it is very very difficult. It is very difficult to hear of overseas borrowers who are making a huge amount of money and making no attempt to pay these loans back. That is why we do support some of the equity issues that are raised in these proposals. There are many people who are struggling to buy a house and to pay their bills while also paying down their debt. We do expect every borrower to make an equal effort to pay back their student loan whether they are overseas or in New Zealand. 
One of the things that we want to see is a principle of fairness applying to the bill and we do welcome this in the interest of fairness. We do welcome the measures that do not just look at income in the form of wages but look at an expanded form of income and look at it in terms of business profits and incomes from trusts as well. I know that when I was at university taking out my loan there were many of my peers who received the student allowance despite their parents earning far more than mine did because they were receiving that money as profits or as income from a trust. Also there is a similar thing for those who receive their income from superannuation. So this is a loophole that we do support seeing closed. 
But one of the things that we do want to raise in this is National’s general attitude to student support. Since Steven Joyce took the reins as Minister for Tertiary Education 2 years ago National has made a series of cuts to student support in an effort—to use his words—to dampen demand for tertiary education. This is where I started my speech. Labour does not see dampening demand for tertiary education as a positive thing. We see tertiary education whether that be at a university or at a polytech as something that is crucial for New Zealand’s future and something that we should be encouraging. So when the Minister talks of dampening demand we have real concerns and real fears. In many ways some of the rhetoric of this is in this bill and it is very much discussed in the regulatory impact statement which sits alongside this bill. 
If we take some examples of where the Minister is dampening the demand for tertiary education and look at an example that I bring up often in this House it is the $42 million of money that was allocated to have extra trade training in New Zealand following the Canterbury earthquakes. But this money has not been used because the Minister thinks there is not demand. There is $34 million sitting there earmarked for further tertiary education in this country which the Government does not think should be used. We on this side of the House think that that should be used and we do not like the dampening in demand there. 
We also have concerns about people who have been shut out of the borrowing scheme. Other members who have taken calls on this bill have talked about their concerns about those over 55 new migrants pilot trainees and part-time students not being able to access the loan scheme. There are many reasons why we should be supporting those over 55 to continue their education and to retrain. We are in an economy at the moment where many people in this age group are losing their jobs and want the chance to retrain. They may not have the money sitting in the bank to be able to go and pay for this training and we do not think that it is fair that they have been excluded from the student loan scheme. 
The changes made in Budgets 2010 and 2011 have seen 25000 people lose access to the student loan scheme. This meant that 25000 of our people cannot afford to study any more. We do not see this particularly redressed in this bill. We actually want to see more people having access to tertiary education. Labour has a proud tradition of the democratisation of education. It was Peter Fraser’s huge vision that we make not only secondary but tertiary education—following World War II—something that is accessible to far more New Zealanders. 
So although some of these changes have been made—we are not saying that every change that this Government has made in terms of the funding that is available for the tertiary education system is unreasonable. But what has been especially unreasonable by this Government is the retrospective application of many of these changes. This was particularly so in the case of the 50 percent course pass rate requirement. For people who were already enrolled who were already borrowing to have that put on them retrospectively was a very difficult set of circumstances for them. The Ministry of Education’s answers to financial review questions show that almost 800 people lost access to their student loan based on these retrospective course result requirements. This is a very large number of people to suddenly lose access to the loan scheme. Losing access to the loan scheme means you lose access to your ability to continue your studies—not something that we are particularly fond of. We already have 84000 young New Zealanders who are not in any form of education employment or training. We do not see putting in place rule changes that actually increase that category as a particularly positive thing. 
This year’s Budget hiked up the student loan repayment rate by 20 percent. This was very difficult for many new graduates. For people leaving university getting their first or their second job and still not earning a high income but nevertheless earning over the threshold to be faced with a 20 percent hike in their student loan repayments is a pretty big thing. I have a student loan myself and faced that increase in cost. That is something that I was able to bear but someone on a much lower income would not have been able to. 
But the most mind-boggling part of the changes that were introduced is postgraduate students losing their right to student allowances. This is one of the things that is discussed in the regulatory impact statement. It has gone through at what level it is that we should be targeting education to the early years. If we truly want to be an innovation-led economy then actually we need to be encouraging postgraduate research in this country. The changes that were introduced in this year’s Budget have done absolutely nothing to encourage that. We even had the regulatory impact statement on the bill identifying that actually it is not enough to be able to say that the Government’s retort to this has been: “They’re not going to get the allowance; they can go and use the loan scheme.” Well for many postgraduate students who have dependent children or other dependents in their lives the student loan is not enough. It actually was the combination of the allowance with the supplement of the loan that let them continue their study. The regulatory impact statement identifies that the loan scheme was important to provide additional support for students with higher financial needs—for example those with dependents. So this is something that is known to the Government—that it was going to cut out a whole lot of people from doing postgraduate study. We are still waiting for some kind of explanation about why there is a Government that thinks that postgraduate research is not something we need. Labour looks forward to having some of our questions answered at the select committee. 
JAMI-LEE ROSS (National—Botany) 
: 
 This bill the Student Loan Scheme Amendment Bill (No 2) is all about continuing to ensure the efficiency and affordability of the student loan scheme. It is a very big scheme—roughly $12 billion with 200000 borrowers every year. Sustainability is the key and that is what this bill helps to achieve. 
Let me give the House a couple of numbers because we keep hearing a lot tonight from the Opposition about student support services: 40 percent and 18 percent. Eighteen percent is the OECD average of funds from the tertiary education budget going into student support services. This country spends 40 percent of its tertiary education budget in student support services. So I just wish to reject the points being made across the other side of the House that we do not have enough funding going into student support services. 
The efficiency of the scheme relies on ensuring that borrowers are paying back their funds. In 2010 we had an important pilot which saw overseas borrowers targeted and sought out to get funds recovered from them. We saw $32 million coming back in repayments from overseas borrowers. This bill helps to ensure that the overseas borrowers are still looked at carefully and that we have good data-matching between the Customs Service and the Inland Revenue Department to ensure that overseas borrowers are fronting up to their obligations as well. With New Zealand based borrowers it is easier for the Inland Revenue Department to ensure that they are repaying in the manner that they should. Overseas borrowers have had some issues. It has been more difficult to match the information. It has been more difficult to ensure they are repaying their loan but this bill helps in that area. 
There are also some smaller administrative changes that are being made but they are also important and should be supported by the House. Some further changes are made and they line up with the Government’s Budget changes that we made announced and enacted indeed several months ago. I commend the bill to the House. 
Mr DEPUTY SPEAKER 
: The next call is a split call with two 5-minute calls. The first is to Louisa Wall. 
LOUISA WALL (Labour—Manurewa) 
: 
 Kia ora. It is my pleasure to speak in the first reading of the Student Loan Scheme Amendment Bill (No 2) in the name of the Hon Peter Dunne. Labour supports this bill going to the Finance and Expenditure Committee. 
When I was asked to speak about this bill I thought about my own situation. I had a student loan. My parents could not afford to pay for me to go to university. I also had a student allowance. I recognise that the scheme which started in 1992—I borrowed in 1998—was for people like me people who came from communities where the parents of my generation did not go to university. I am a bit of an anomaly in my community because I have gone there. What I entered into with the Government was a social contract. That social contract was about my increasing the education that I had so that I could be a better citizen of our country. 
I think the intention of this bill is good. Why should we differentiate between borrowers or people who get loans who live in New Zealand versus those who live overseas? In fact the intention of this bill is really good. Of the approximate total of 465000 students in our tertiary education system half are borrowers and of that half approximately 91000 live overseas. The biggest issue that we have is that those 91000 students owe $2.3 billion. In fact 41 percent of them are not paying towards their student loan. So we do have a problem. This bill is trying to rectify that. 
But what I would like to have actually is a profile of who these people are. Have these people who no longer live in New Zealand completed their tertiary studies? If they have obviously they are going to be in a much better position because we know that through tertiary education you can earn a lot more money. I am really interested in the types of vocations they are engaged in. I am really interested in the gender difference because what we do know is that 5 years post study there is an 18 percent difference between what men earn and what women earn. I also want to pick up on some of the concerns of my Green colleague Holly Walker. What is the future for these 91000 New Zealanders who are not living in New Zealand? Do we want them to come back to New Zealand and be productive citizens here? So I think some investigation does need to be made a case by case analysis of how much people borrowed whenever they borrowed it and in fact how much they owe now. One of the case studies I have read is about a gentleman who borrowed $7000 and he now owes $157000. He is not going to come back to New Zealand. He is going to stay in Australia where he currently is. I do think he should pay something back but what should that amount be? Should it be $157000 or should he pay back what he borrowed—you know the $7000 that he borrowed in the first place? 
 What this bill will do is broaden the definition of income to include income from trust companies superannuation schemes etc. That is fair because we should be including that income for all people. Secondly we will look at information sharing between the Customs Service and the Inland Revenue Department. Again if we want to find out who these 91000 people are then we will have to actually implement a scheme like that. 
I want to reinforce the position that we have on this side of the House. We will support the bill going to the select committee but we do that with the intention of having some advice from the Privacy Commissioner. We think that this information sharing does open up privacy issues so obviously we want to hear from the expert in this area. Fundamentally the point I want to make again is that the investment that the Government makes in all New Zealand citizens is a valuable one and we should be treating New Zealanders who live in New Zealand and New Zealanders who choose to live in other countries the same within the context of ensuring that they pay back their loans. Thank you. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on this bill the Student Loan Scheme Amendment Bill (No 2). Talk about fiddling while Rome burns. Talk about the punitive tinkering approach we see from this Government which is epitomised in this bill. At a time when we are facing huge economic challenges when huge numbers of Kiwis are going across the Ditch and around the world to get a brighter future presumably offshore when the student loan debt is topping $12 billion and when we know that New Zealanders are starting their families later and they are not getting into homes—there are a huge number of problems—this Government’s solution is to tinker around the edges. 
I want to take a quick call on this bill but the Green Party will not be supporting it. It is tinkering while Rome burns while that $12 billion student loan millstone is wrapped round more than 600000 Kiwis’ necks. 
Dr Cam Calder 
: Pay it all back. 
GARETH HUGHES 
: I have paid mine back. 
Hon Chris Tremain 
: And now you’re saying you wouldn’t tinker with it? 
GARETH HUGHES 
: We would tinker with it; we would improve it. What we would actually do is we would focus on carrots. We would focus on incentives. This Government’s approach is all about sticks. Where are the carrots? The context of this bill—and there are some common-sense initiatives in it like giving the Commissioner of Inland Revenue discretion on whether a debt is greater than $20 and whether that should be gotten back by the Inland Revenue Department. There is common-sense stuff like that but when you put it in the context of all the changes this Government has made around education what we know is that what it has done is make it less affordable and less accessible and in many cases it has literally closed the door to thousands of students who want to study in New Zealand. 
 Let us just run through the list of what this Government has done—a bit of context for where this Student Loan Scheme Amendment Bill (No 2) comes from. What we have seen is limited access for postgraduate students. We have seen that the Government has blocked—blocked entirely—access for students over 55 years old to student loans. The Government has increased the repayment rate. It has frozen the parental threshold rate. It has shortened the loan repayment holiday for those Kiwis who do go overseas presumably because we do not want them to come back. We have seen new fees introduced on the student loan scheme. The problem is of course that the Government wants to introduce interest but it is so unpopular amongst New Zealanders that it could not do it so it has had to introduce interest by stealth. There have been a whole bunch of new fees. The Government has egregiously as Megan Woods pointed out retrospectively applied pass rate changes—retrospectively of course—again shutting the door to hundreds of students who wanted to study. We are seeing this Government not students decide how students should organise themselves with the voluntary student membership bill. 
I want to touch now on the point made by Jami-Lee Ross who was playing with the figures—talk about spin; spin like Shane Warne—when he was talking about the percentage of money spent by the Government on student support services. It is not fair to describe it like that. We actually spend more than other countries if you use that measurement because we pay for their fees through the student loan scheme. If you compare apples with apples what we know is that we actually spend $3000 less per student than the OECD average. So it is unfair—and I do not believe that it is true—to be comparing those figures in that way and when you do compare apples with apples we are spending less. 
When you add it all up and when you see this tinkering on the fringes but the whole range of very negative changes this Government has introduced which has made it less affordable less accessible and in many cases downright impossible to be a student you have got to question the Government’s motivation. We want New Zealanders apparently to have a brighter future we want to keep our Kiwis in New Zealand and we want a high-value high-wage innovative economy. But instead what this Government wants to do is send our Kiwis overseas. It is all sticks and no carrots. It does not make sense. It is not the high-wage high-value economy we want to see focusing on education. 
I guess the big difference is that those on the Government benches see education simply as a cost. On this side of the House we see education as an investment—we see it as an investment—and that is why we would put more carrots in place not this list of changes that make it less affordable less accessible and downright impossible to be a student in New Zealand. It is unfair and that is why we will not be voting for this bill this evening. Kia ora. 
MICHAEL WOODHOUSE (National) 
: 
 I am pleased to take the last call on the Student Loan Scheme Amendment Bill (No 2). For probably the last 3½ years as a member of Parliament in Dunedin North not for Dunedin North I say that the one prevailing theme in feedback from students has been this in respect of student allowances: they are available to the very poor and the very rich and that is not fair. I am very pleased that this is the third bill in a tranche of three pieces of legislation that is going to undo some of the distortions that are in our taxation system. We were prided in the 1990 as one of the least distortionary tax systems in the world. Thanks to things like the unintended consequences of loss attributing qualifying companies trusts and a punitive top tax rate we became very distorted such that income-planning strategies that had the impact of reducing the primary earner’s tax obligations also had the impact of qualifying them for Working for Families and student allowances. 
I find it difficult to accept from members like Grant Robertson and Dr David Clark who is in fact I believe Labour’s spokesperson on revenue the statement that this bill is just tinkering with the loan scheme in sensible small steps and then to hear them talk about fairness because this bill is about restoring fairness to the student loan scheme in the same way that we have made the changes to student allowances through the No. 1 bill so that those who are most in need of a student allowance get it and those who are most able to repay a student loan get it. There is no point creating a system of increasing obligations and reducing the access to student allowances for the very well-off if one then gives them a student loan that they do not need to repay because they are sheltering income in other ways. 
Grant Robertson talked about a cost to be cut. Well we on this side of the House certainly see investment in tertiary education as just that but in terms of costs we would certainly make no apology for seeing costs for phantom students cut costs for spurious courses at polytechs cut or costs cut in terms of students who consistently fail their papers or in terms of graduates who fail to meet their repayment obligations because they go overseas and do not keep in contact with the Inland Revenue Department. The fact that we have reduced the non-repayment rate from 48 percent to 39 percent is a very good example of that. We make no apology for cutting the costs involved in managing the 5000 separate qualifications that we found when we came into office. I think those are very important costs. This is a good bill a very good bill and I support it. 
Mr DEPUTY SPEAKER 
: The question is that the motion be agreed to. Those of that opinion will say Aye to the contrary No. The Ayes have it. 
Jan Logie 
: I raise a point of order Mr Speaker. I am sorry; I missed my vote. The Greens oppose and call for a party vote. 
Mr DEPUTY SPEAKER 
: Well I think you just missed. 
Hon Trevor Mallard 
: Oh come on. Do it quickly. 
Mr DEPUTY SPEAKER 
: Righty-o. We will do it. The Clerk will conduct a party vote. 
A party vote was called for on the question  
That the Student Loan Scheme Amendment Bill (No 2) be now read a first time. 
Ayes 105 
New Zealand National 59; New Zealand Labour 34; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 14 
Green Party 13; Mana 1. 
Bill read a first time. 
Bill referred to the Finance and Expenditure Committee. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Amendment Bill (No 2) be reported to the House by 11 February 2013. 
Motion agreed to.