Ogilvy Bernie: Financial Review Debate — Procedure In Committee Speaker Recalled In Committee 
Ogilvy Bernie: Financial Review Debate — Procedure In Committee Speaker Recalled In Committee 
[Volume:616;Page:11884] 
BERNIE OGILVY (United Future) 
: 
 I want to make reference in this review to the student loan scheme. This review states that the student loan scheme will expand and double by the year 2010 to some horrendous number—over $10 billion—so I thought it would be good if members could offer some suggestions on how we could reduce that figure. Quite honestly if it continues into the future—as it is being continued with present and/or future students—it will be an insurmountable burden to our future generations and families. 
United Future would like to retain the student loan scheme but only in the context of using it for tuition fees. Borrowing money for the basic cost of living which a lot of students have done is something that we do not put up with in any other sector of our society. For instance we do not allow or expect the unemployed to borrow to meet their cost of living; neither do we ask the sick to do so yet somehow we have got into the kerfuffle of allowing students to do so and therefore allowing the debt referred to in this review only to balloon out and expand. 
 Another thing that can be done to close down the bulging student loans scheme is to change the age of eligibility for allowances. Presently as the Minister and all of us know up until the age of 25 parental income is taken into account in assessing eligibility. This policy has been in place since 1992—some 12 years—and nothing has been done to allow for price inflation or any other thing of that order. To me some elements of that policy seem quite unfair. One is that the allowance is based on the parental income threshold whereas for other members of society such as the unemployed the allowance is based on their own and not their parents’ income—even from the age of 18. Turning the scheme around and basing it on the student’s income would be a better form of reducing the bulging debt that is mounting up in the student sector. 
Secondly in the negative impact it has on women the loan scheme impacts very strongly on our future society. For instance compared with men it is more difficult for young women to get jobs and/or pay off their loans. United Future policy would be that when women have their first child or when a child is born for the next 12 months their loan would be interest-free. They would even be given some rebate on the loan for that period of raising that child. 
For graduates who had trained in subjects that are in demand in the public sector—such as doctors and nurses etc.—and were prepared to stay and work in New Zealand United Future would look at a bonding scheme to allow a progressive wiping out of loan debts. That would be a very sensible common-sense move to overcome something that really need not be loaded on to future generations. 
Lastly United Future suggests that a voluntary long-term solution would be to look at long-term savings schemes that are in existence and could be put into place for those who could afford right now to put money aside for their children’s tertiary education. When the time comes those students would have saved in advance through their parents or whomever else we wished to put into the scheme and could spend their post-degree years earning money without having to pay off debt. We think that putting some of these suggestions into the equation would help dramatically the figures in this review.