McClay Todd: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Text is incorporated into the Bound Volume 
McClay Todd: Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Sitting date: 28 March 2013. Volume:688;Page:9075. Text is incorporated into the Bound Volume.] 
TODD McCLAY (National—Rotorua) 
: 
 May I start my speech by joining you and wishing Roland a very happy birthday and the very best for the year. 
Hon Simon Bridges 
: Full names in this House. 
TODD McCLAY 
: No no Roland and I are on a first-name basis. Can I start by saying that I am thankful to Dr David Clark for telling us in his speech towards the end of his great speech there that Labour was supporting this bill the Student Loan Scheme Amendment Bill (No 2) because it really was not obvious for the rest of the 9½ minutes. Indeed Dr Clark is known to come to this House and proclaim the 50 years of everything. Well that was the worst haircut of 50 years the worst tie of 50 years and certainly the worst speech of 50 years when it comes to issues like this. There was absolute doom and gloom all the way through it. But surprisingly Labour has decided to join the Government in doing something that is right for New Zealanders and right for taxpayers which is helping to remind our students who have been able to get an education because of the generosity of the taxpayer and the overwhelming support of this Government that they must in turn repay their debt to the taxpayer and indeed to society. 
So there have been some important changes here because Dr Clark was correct in that the only reason why we are able to afford as taxpayers to offer this opportunity to students is that hard-working New Zealanders work and pay their taxes their taxes are loaned to students and those students have an obligation when they leave—just as under this Government they have the very best chance in over 50 years to purchase a home and get a mortgage with interest rates that are the lowest in 50 years. They must pay that obligation back to the bank to pay off their house and in this case they must pay their obligation back to the taxpayer by repaying their student loan. 
I want to explore for a moment a couple of important changes in this because what the bill has done is it has broadened the definition of income on which students must start their repayment obligation. It has also lined it up with Working for Families and the in-work tax credit that this Government is a champion of. In looking at this we have heard and decided in the Committee that we need to look at different types of income that should be applicable when that obligation kicks in for a student to repay the loan that the taxpayer has given them. We heard about fringe benefit tax and incomes being put in trusts and so on and there was agreement across the House. 
 I asked the Minister of Revenue earlier after his speech what other types of income would be included that would trigger the obligation for a student to have to start repayments—a student who is overseas for instance. If they had a bank account overseas and they had money in that bank account—I had an email the other day that somebody sent. Let us say they had half a million dollars in a bank account in a bank in New York that was receiving 2 percent interest a year that would be a return of about $10000. If that was income to them would they need to declare it to the New Zealand Inland Revenue Department if they were a tax resident here? The answer was yes. And would that income be treated as part of their earnings to trigger their obligation to start repaying their loan? The answer was yes. But what if they left America came back to New Zealand and the exchange rates were not in their favour to change American dollars to New Zealand dollars at that time? If they were still earning that income and declaring it to the Inland Revenue Department in New Zealand but not telling anybody else about it would there be an obligation on their part—with $500000 that might be in that bank account at 2 percent interest which was giving them a return of $10000 a year—to pay income tax on that in New Zealand? The answer was yes. 
And would that be counted as part of their income when it was time to meet their obligation to repay their student loan? The answer to that was yes as well. I am glad that both sides of the House are supporting this bill and that both sides of the House are agreeing that when people do have income that is declared and that they are earning they have an obligation to repay their obligation. They should declare that they should tell people about it and they should assess that as part of their obligation. So in the case of an overseas bank account in New York that was secret to everybody but I do not know the Inland Revenue Department would that be part of the obligation to include that as their earnings so they could start repaying their obligation to the New Zealand taxpayer? The answer to that was absolutely yes. 
Finally the sharing of information between the Inland Revenue Department and the Customs Service is very important because it is important that the Inland Revenue Department knows what is happening for people who come and go so they can meet their obligations. We do not want people overseas not meeting their obligations. We certainly do not want them coming back to New Zealand and not telling people about money they might have overseas in bank accounts in New York. But in this case the Inland Revenue Department and the Customs Service could share information. As an example if a New Zealander was returning to the country from a posting in New York where they had a bank account with half a million dollars in it at 2 percent interest earning $10000 a year when they came back into the country if the Customs Service stopped them to look for I do not know—we have very strong biosecurity measures in New Zealand because this Government takes it very seriously—an apple found a bank account or a bank statement and it looked like there was a hidden account that nobody should know about would it tell the Inland Revenue Department about that? Yes. Would it tell Parliament about it so that it could be declared in the member’s pecuniary interests? No that would not be part of this bill. But certainly in the case of meeting your obligations to New Zealanders who have lent money to others so that they can study so that their obligations will be kicked back in yes that bank account would be declared to the Inland Revenue Department so that New Zealanders could meet their obligations. 
So I say to Dr Clark who spoke earlier that I am glad that Labour is joining us with this. He should have moved a Supplementary Order Paper earlier to say that any information shared between the Customs Service and the Inland Revenue Department about secret bank accounts that might come into the country could be shared with this Parliament as well before the last day of January when we make our pecuniary interests; he did not. But I commend this bill to the House. Thank you.