Banks John: Student Loan Scheme Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Banks John: Student Loan Scheme Amendment Bill — Third Reading 
[Sitting date: 03 April 2012. Volume:679;Page:1602. Text is incorporated into the Bound Volume.] 
Hon JOHN BANKS (Minister for Regulatory Reform) 
: 
 I rise to support the Student Loan Scheme Amendment Bill. The ACT Party supports this bill because it is tackling a very real problem. Well it is tackling a very real problem at the margins only. That problem is that not enough graduates are repaying student loan money lent to them by hard-working taxpayers across the country. Last year taxpayers loaned out $762 million more than they got back in repayments. Much of it they will never get back. The same gap is forecast to be $1.1 billion by 2030 if we do not make changes.  
The Ministry of Education calculates that for every $1000 lent over $450 will never come home. As one of my ACT Party predecessors recently wrote the taxpayers would be better off just giving students a $400 loan that they never have to pay back rather than loaning students $1000 under the current scheme. This scheme leaks money like a sieve. It leaks money like a sieve. The sieve is the system by which it is funnelled out to so-called students and the number of students is falling. So in a country that is borrowing to pay the bills—approximately $250 million a week—substantially from the Chinese to pay for the Crown account how can we afford to continue to fund this when it is not actually working? It is not getting more tertiary students into tertiary education.  
This bill is a step in the right direction—and I support my benchmate Peter Dunne in his endeavours—but the real issue is that interest-free loans are a problematic issue for this country. This bill makes only small changes; it does not solve the problem. Someone must stand up in this Parliament and say that we cannot continue to fund these payments to students when it is not working at getting more students into the tertiary sector and many of them are taking out the loans and walking away from them. For every $1000 handed out only $450 will come home.  
Everybody in this House knows that interest on student loans is the emperor’s missing clothing. The Labour Party knows this because in Government in 2005 it moved to introduce interest-free student loans which was the biggest election bribe in history. That is what it was in 2005. This is the biggest election bribe in history. It got the vote. The Minister of Education knows it. I quote from the regulatory impact statement prepared for this bill: “the current Government … does not want to reverse the interest-free student loan policy. This is a significant constraint on the options available [to the current Government] to contain government expenditure and improve the performance of the Scheme.”  
The uptake of loans has increased dramatically following the interest-free loan structure from 56 percent in 2006 to 71 percent in 2009. So the uptake is increasing the number of students in tertiary education is decreasing the number of loans is increasing and the number of repayments is decreasing. We have a bill in Parliament which I support but it tinkers at the margins. And who is earning this money to lend to students? The same farmers who milk cows night and morning on the farms are earning this money to lend to the students who are not necessarily using it for tertiary education but to do all sorts of other stuff when the number of students is decreasing and they are not paying back the loans. These are hard-working taxpayers.  
The Labour Party members of course are apologists for this because they are the people who put in place interest-free student loans and no one else gets it. Graduates shoot through after a world-class education and some do not come back to the country. So I say to the Government good on you for putting in place some structures that are going to deal with some of this. Interest-free student loans are middle-class welfare for middle-class graduates. That is what they are: middle-class welfare for middle-class graduates. They are a back to front Robin Hood policy that steals from the poor to give to the rich—middle-class kids. And the poor—hard-working people up and down the country—are funding this.  
I sum up the ACT Party and this bill. We know that the student loan scheme sieve needs to be plugged and we commend the Minister of Revenue for this attempt. We say good on him. But we also know that the real problem is too much borrowing and not enough repayment. Students are borrowing too much they are not repaying enough they continue to borrow and the number of students in tertiary education continues to decline. And the loans are interest-free. What about the retailers in Nuffield Street in my electorate in Epsom? They do not get interest-free payments. 
Sitting suspended from 6 p.m. to 7.30 p.m.