Cunliffe David: Student Loan Scheme Amendment Bill (No 2) — In Committee 
Text is incorporated into the Bound Volume 
Cunliffe David: Student Loan Scheme Amendment Bill (No 2) — In Committee 
[Sitting date: 19 March 2013. Volume:688;Page:8658. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is a pleasure to take a call or—who knows—a couple of calls on the Student Loan Scheme Amendment Bill (No 2) in its Committee stage where we are discussing Part 1. I wish to reaffirm that the Labour Opposition will be supporting the bill at this stage and I would like to acknowledge the work of the Finance and Expenditure Committee and indeed the Minister of Revenue in bringing the bill to the House. 
The bill does two relatively straightforward but relatively minor jobs to the student loan scheme. Firstly it broadens the definition of “income” so that it includes income from trusts companies superannuation schemes and so forth in calculating eligible student or family income. Secondly it allows information sharing between the Customs Service and the Inland Revenue Department so that the Inland Revenue Department can track students who are in serious default of their repayments when they go overseas. 
The bill however is notable not so much for what it does do but for what it does not do. Although it does save the Crown approximately $7.5 million over the next 5 years it ignores a total of $2.67 billion—that is $2.67 thousand million of accumulated student debt. There are no solutions for the student loan debt crisis in this bill nor are there any solutions for the longer-run and just as important issue of the intergenerational unfairness between the generation represented by most but not quite all members of this House which is the baby boom. I do not personally have the pleasure of being part of that generation because I just squeak into Generation X I am happy to say— 
Hon Members 
: Oh! 
Hon DAVID CUNLIFFE 
: Thank you members opposite. I know that there is a certain amount of jealousy there from the backbench of the Government benches. I may give Alfred Ngaro the benefit of the doubt but I most certainly will not be giving that member from Hamilton too much benefit on that call. It is also somewhat interesting— 
David Bennett 
: Are you going to make your speech about what I said 5 years ago? 
Hon DAVID CUNLIFFE 
: That is all right—settle down gentlemen settle down. It is also pretty interesting that the Minister in the chair the Minister of Revenue has got this bill to the Committee stage today being the day that the second of his two tax measures the cellphone tax has been torpedoed by the Prime Minister following as it does yesterday when his car-park tax was similarly torpedoed. There is of course a common theme between those measures which the Government is now seeing reason on and the measures in this bill. The common theme is that this is the “Minister for Small Changes”. The Minister has made small things happen while ignoring much bigger problems. In the tax area of course it is the gaping chasm created by a lack of a capital gains tax. We are one of only three countries in the OECD not to have one. Of course we need one says the IMF says the OECD but we do not have that debate today. 
Of course we need to have more fairness in the income tax system. Of course we need to fill in major avoidance loopholes. Those are huge jobs; they are just jobs the Government is not tackling. 
Here in the student loan scheme there are two principal strategic issues. The first is that the scheme is costing the taxpayer an arm and a leg and the debt is mounting. That debt is now to the tune of billions—$2.67 billion according to the latest information—and it is growing. This bill shaves off over 5 years perhaps $7.5 million which is not quite $1.5 million a year of cosmetic trimming to the cost of the scheme but in the meanwhile it does nothing much to address the inherent unfairnesses. 
I see that the member Holly Walker has resumed her seat. She gave a very good speech in the first reading of this bill where she drew attention to those intergenerational problems and said that the student loan scheme is putting at great risk a generation of students who are working hard playing by the rules and learning as fast as they can but who are starting their working life with a mortgage even though they have no house. 
In my first reading speech I used the example of two hypothetical people Old Peter and Young Peter—one was hypothetically the age of the current Minister and another was one of today’s students—and compared the situations faced by both of them. The results were based on some pretty straightforward calculations—for example at a minimum of $172 per week living costs and a study year of a conservative 40 weeks Young Peter would have racked up $34500 by graduation. Including fees his debt would be $64500 before he starts trying to graduate get a house get a mate or feed a family. That is the burden that today’s young people are growing up with and what we want them to know from the Labour perspective is that we understand their plight and that we are going to work tirelessly—not just through this bill but through a number of measures that we will be working on and bringing to the public before the election—on that issue of intergenerational fairness. 
We think for example that a capital gains tax and an active housing policy that provides more affordable homes for young New Zealanders is an important complement to measures like the affordability of tertiary education. We certainly do not like the arbitrary 5-year limit on receiving student loans which is essentially putting postgraduate study beyond the reach of all but those who were born with the proverbial silver spoon. 
It is interesting is it not that in the current Government there are one or two poster children for social mobility: the Prime Minister it is often said—although that is a carefully crafted narrative—and indeed the Minister for Social Development. But the difference between this side of the Chamber and that side of the Chamber is that when members on this side see someone climbing the ladder they want to make sure the ladder is there for the next generation. The difference between us and the Government is that it has made rather a nasty habit out of pulling the ladder up after itself to save money from its own tax bill and damn the torpedoes of the implications for the next generation. This bill—although we support it because it does nothing wrong and it takes minor steps towards making the scheme slightly fairer—is a bill of two small things while the elephant in the room is a scheme that is foundering under the weight of debt and foundering under a growing and pressing problem of intergenerational unfairness. It is time that the Minister responsible for the student loan scheme the Hon Peter Dunne stood up and took responsibility for those major issues just as he should stand up and take responsibility for the major issues in the revenue portfolio. 
New Zealand does not need just tinkering. We do not need more of the same. We do not need lipstick on the pig that is the New Zealand economy. What we want is a step change. We want vision we want strategy we want “go forward” and we want jobs for hundreds of thousands of New Zealanders currently without work so that they can get ahead so that they can make the best— 
Mike Sabin 
: Lipstick on pigs is not something I’d be bringing up. 
Hon DAVID CUNLIFFE 
: —of their potential and in this context Mike Sabin so that they can pay off their student loans because if they do not have a job they cannot pay back their loans. It is well known that we face— 
Andrew Little 
: Step change not a small change. 
Hon DAVID CUNLIFFE 
: It is a step change not a small change—well put Andrew Little. Unfortunately we have got the “Minister for Small Change not Step Change” in the chair—the “Minister for Small Change not Step Change”—and we need a step change. It is well known that in the next few weeks hundreds or possibly thousands of workers in one of New Zealand’s largest telecommunications companies—many of them smart young people on good wages—are going to lose their jobs and the question is where are the replacement jobs when hundreds of telecommunications company workers hit the streets? What about the jobs for the smart new graduates from the business school and the engineering school who would like opportunities like that which will not exist? And what about those like Young Peter who start work with a mortgage of greater than $60000 because they are similarly burdened by debt? 
Mike Sabin 
: Where’s that aspirational positive attitude we’ve come to see? 
Hon DAVID CUNLIFFE 
: Well the member over there talks about aspiration. I have aspiration for my children and that is that they can get a good tertiary education that I can help them and they can pay the balance and that they will get a job when they finish and they will maximise their potential and thereby their contribution to this country. When we have a small change not a step change we are leaving a generation out in the cold. Those people deserve better. They deserve these small changes but they deserve a whole lot more besides.