Nash Stuart: Student Loan Scheme (Repayment Bonus) Amendment Bill — Third Reading 
Nash Stuart: Student Loan Scheme (Repayment Bonus) Amendment Bill — Third Reading 
[Volume:657;Page:6636] 
STUART NASH (Labour) 
: 
 Just before lunch we heard the Hon Sir Roger Douglas stand up in this House and tell us that the Student Loan Scheme (Repayment Bonus) Amendment Bill will take money from the pockets of the poor and give to the rich. That is very rich coming from a man who proposes to raise the level of GST so that he can cut the top personal tax rate. I would like to know how that will help struggling Kiwis who are below or on the average wage. Mr Peachey who followed Mr Douglas lectured us on financial literacy asking why graduates would not pay back an interest-free student loan so they can help the Government. Help the Government? “Help the Government?” I say to Mr Peachey. That would be like how he has helped the 70 percent of hard-working ordinary Kiwis on under $40000 a year by giving them no tax relief like how he has helped Kiwis to realise their superannuation dreams by butchering KiwiSaver like how he has helped Kiwis by cutting their adult and community education courses—and the list goes on. Wherever Mr Peachey is—there he is—I ask him to give me a break. 
I stand to speak in support of this bill in its third reading but I am actually quite ambivalent about it. It is a bit of a nothing bill which will help very few and achieve not much. The fact that we are debating this bill under urgency is a little perplexing but then again so is much of the National Government’s agenda. I must admit that some students will take up this scheme but I think the vast majority of reasons for taking it up will not be financial ones. The reasons for early debt repayment despite the financial disadvantages of repayment are varied. 
I found it interesting that Mr Dunne could not confirm that the number of students who have already expressed an interest in taking up this scheme was over and above the standard number of students who pay back their student loan early already. About 20000 Kiwis pay back their loan every year. Apparently about 180000 Kiwis have student loans and about 1 percent of them have shown an interest in early repayment. I tell members that well over 50 percent of the students who have already shown an interest in paying their loan back this year—about 600 which is the number of votes that we need in order to take the West Coast back and we will do that—are people who had already decided to pay back their student loan early anyway. They are putting out their hand for this bonus which has just come along. I would like to know how many of those people who are paying back their loan early are in the final 2 years of their loan repayments anyway. Those people will have worked out that this scheme is—for the final couple of years of their repayment schedule—a small window of financial opportunity that will actually make them better off. The Minister cannot even tell the House how many students the Inland Revenue Department has forecast will take up this scheme. I say to the Minister that I would have found that information most helpful and relevant. 
I paid off my student loan early and I did so simply by increasing my mortgage when I bought my first house. But the reason for my debt consolidation was that at that point in time the interest on my student loan was actually higher than the interest on my mortgage so debt consolidation actually made sense. But if I had an interest-free student loan—in fact I cannot remember; who brought in that student loan legislation. The previous Labour Government brought in the interest-free student loan legislation. Who voted against that interest-free student loan legislation? The National Opposition voted against the interest-free student loan legislation. I ask members whether Mr Peachey was part of that Opposition. 
Hon Member 
: Corporate tax cuts! 
STUART NASH 
: National gave corporate tax cuts as well; it is unbelievable! It is just obvious yet again that the Labour Party is the party of the students. I ask members to imagine voting against interest-free student loans. 
As I was saying there are many reasons why someone may pay off an interest-free student loan but very few of them are actually financial. For some people there may be a psychological rationale: they just do not like being in debt. But that is not a financial reason. The reason may be one of debt consolidation but that is not a financial reason. It may be that they have received a gift from their grandmother who will have to pay gift duty if the amount is over $27500 per year by the way. But that route to full debt repayment is not a financial reason because the investment of such a gift in an interest-bearing account would actually be more beneficial to the recipient. It may be that an employer has given someone a healthy bonus and he or she wants to pay off an interest-free student loan. But I contend that none of those reasons are financial ones. I think we get the point: paying off an interest-free student loan as proposed by this scheme may be taken up by some graduates but if they do so it will not be because of a financial decision. I contend that the majority of those people would have paid off their loan early anyway. 
I would support anything that helped university graduates to get ahead. I worked as the director of strategic development at the Auckland University of Technology and I wrote a draft business case for the purchase of the Manukau campus so I do know a bit about the stresses and strains that students and graduates are under in this day and age. Times have changed since the vast majority of the members in this House were students. Student loans have placed a whole different level of stress on graduates these days. Student loan debt has increased at an alarming rate. If I thought that this bill would actually make a difference and help graduates then it would have my unqualified support. But it does not do that so I do not give it unqualified support.