Mahuta Nanaia: Student Loan Scheme Amendment Bill — Third Reading 
Mahuta Nanaia: Student Loan Scheme Amendment Bill — Third Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 I am pleased to be able to make a contribution in the third reading debate on the Student Loan Scheme Amendment Bill. I want to make it very clear to those people listening that Labour supports the obligation of borrowers to pay back debt in the form of a student loan for their education. But it could be done better and we were simply making that point. When we look at this particular amendment bill on the back of piecemeal changes by National that have limited access to student loans we are simply saying that the signals are all in the wrong places. At the time of a recession it makes absolutely no sense to cap places in our tertiary institutions. We should be signalling that we want a highly skilled highly valued highly paid and productive workforce and now during this period of recession is the time to train and upskill. Those are the types of signals that are absolutely necessary.  
If you listened to members of the Government you would be quite easily forgiven for thinking that those people who have student loans do not want to work. But in fact what I find the most demoralising when I go into my local Work and Income office is story after story of highly skilled people graduates who are looking for work so that they can pay off their student loan but simply cannot find work. This is demoralising because the Government alongside its solution for generating a highly skilled highly valued and highly paid workforce should be also presenting a plan for jobs and it simply cannot do that. In order for students to repay debt they have to have employment and there should be an active Government principle by which it is talking about how regional development is occurring and talking about where the jobs are and those highly skilled graduates that we currently have in the workforce should be able to capture that job market but they simply cannot.  
If we think about education purely in terms of debt then we are missing the point of investing in education. Yes there is $12 billion worth of debt out there but the human capital and the lost potential of that capital not returning its skill set back to the New Zealand economy in some shape or form is a far greater debt I would say. We cannot leave that human potential to languish. It is a very important part of what will make New Zealand a thriving country going forward.  
But the signals are in the wrong place. I want to highlight that because contributions before mine have highlighted the lack of access for a number of groups that one would think under a scheme to encourage repayment would bring a greater return—for example if mature students had access to student loans. Many mature students do know what it is like to have a mortgage. They do know what it is like to balance the budget. They do know the importance of a savings record and therefore they have a debt reduction payment plan. But the National Government has limited the access of mature students transitioning from one career to another to student loans. The signal is in the wrong place.  
The other signal that is in the wrong place concerns repayments for those borrowers who go overseas. We have had this debate quite clearly in the House through the second reading and the Committee stage and this is the point where Labour really started to think again about its position. We do want those students who have got a qualification to go and have their OE and to experience life overseas. It is funny how when you go overseas you do appreciate your own country more. Too few New Zealanders go overseas to be able to have that experience.  
We thought that actually when you look at the repayment holiday it was an arbitrary decision around the setting of the 3-year period so why not align it to 2 years when most working holidays are kind of for that duration? We thought it was a common-sense approach. It was certainly supported by and large by current practice but the Government failed to recognise its virtues and did not support that particular amendment put forward by Labour. We thought it was a practical common-sense amendment that sent the right signals to those students travelling overseas to go and have their experience over there enjoy what there is to offer over there but come back. Having that repayment period looked at in the kind of way that Labour was proposing we thought sent the right signal for the right reason. We do want our skilled people to return to Aotearoa New Zealand so that they can make a contribution in this country.  
I also heard contributions in a very loose sense around the profile of the student borrower. The New Zealand Union of Students’ Associations put out a report some years ago that showed that the average profile was a 35-year-old Polynesian woman. In that regard to the extent that the repayment of student loans is something that this particular bill focuses on I would think—and I would tend to align myself with the comments made by New Zealand First—that if you are going to give a repayment holiday consideration certainly should be given to that same provision in the spirit of fairness applying here in New Zealand. Because for women in particular when they go and study simple things—by way of having children by way of putting their own needs aside for their family’s needs—present very real challenges for women who are taking up tertiary study and may need support such as that. For that reason alone I certainly support the direction of thinking that could be pursued going forward.  
It is also a really important point because at a time when we do know that this is the average profile of students going into tertiary study what did National do? It cut the training incentive allowance which allowed access for a contribution towards higher-level courses. So there are more women going into debt because of actions that the Government has taken to remove the training incentive allowance. That has increased debt for many women and it has actually made it a higher barrier for women to get a higher qualification. Again it sends the signal in the wrong place. It will not lead to a higher skilled and more productive economy. It will just put barriers up.  
There was some debate in the House also on the contact person provision. I want to limit I guess my particular focus to contact persons of those currently with student loans—those parents who might have put their names down and said yes they would be the contact person. This bill will present new obligations. I asked for clarification during the Committee stage about what the Government will do to ensure that those contact persons of existing borrowers are informed of their new obligations and whether they will have the opportunity to opt out. They may be obligations going forward that they had not quite considered. Let us face it: sometimes when your child goes away and leaves home you generally do not know what they are up to. It is just what happens.  
Finally I would really like to impress on this House and on those listening that Labour supports the intent of the bill and the repayment obligations of borrowers. We just think it can be done in a better way. By and large these amendments in this particular bill against the backdrop and panacea of piecemeal changes that the Government has made in the space of tertiary education which certainly send the wrong signals do not support what Labour believes is the future for New Zealand. We think that is a highly skilled high-value productive workforce of people who can contribute to making our country a great thriving nation. On the basis of the repayment holiday provisions that were not supported by National Labour will oppose this bill.