Robertson Grant: Student Loan Scheme Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeRobertson Grant: Student Loan Scheme Amendment Bill (No 3) — In Committee[Sitting date: 18 February 2014. Volume:696;Page:16044. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): Clause 1 of course as we know is the title clause and this bill is called the Student Loan Scheme Amendment Bill (No 3). The critical element in that title is the number three because we have been subjected in this House to the National Party’s tinkering with the student loan scheme. The National Government has come to this House repeatedly since it came into officein 2008 to make small incremental changes to the student loan scheme because it did not have the guts to say to New Zealanders the thing that Steven Joyce and John Key believe which is that the interest-free student loan scheme is wrong. They do not like it.National Party members are fully entitled to their view that interest-free student loans are wrong but if that is the view of National Party members then they should have the gumption to come to New Zealanders and to come to this House and say that they are putting interest back on student loans. But they have not done that because they know that it is politically unpopular. So instead Steven Joyce’s approach is to introduce bills with innocuous titles like the Student Loan Scheme Amendment Bill (No 3) and to make the changes that effectively limit the enabling mechanism that is the student loan scheme.So the Student Loan Scheme Amendment Bill (No 3) as we have been traversing tonight is essentially a set of slogans and gimmicks around the arrest at the border provision. It is the latest attempt by the National Government to come to this House and make changes that will restrict people’s ability to get loans and in this case it will actually provide a disincentive to paying them back. From day one it is saying to students that the interest-free student loan scheme will not be available to people who are 55 years old or over when it comes to living costs and is saying to people that the $172.50 that is the living cost component of student loans will not be altered despite the fact that rents are spiralling well ahead of that particularly in Auckland and Wellington. The Government has put on an administration fee which is effectively adding interest because it is an administration fee that has no basis and it has no justification. That has been added in an earlier student loan scheme amendment bill.Little by little the eligibility for these loans has been restricted while at the same time eligibility for the student allowance scheme which is covered in the regulatory impact statement for this bill has also been restricted. If you are over 40 you can have only 3 years of student allowances in your whole lifetime—only 3 years in your whole lifetime. If you are trying to do postgraduate study you cannot have student allowances at all no matter what your circumstances are.These kinds of restrictions and limitations on loans and allowances are limiting the ability of New Zealanders to get a tertiary education. So it is all very well to propose a bill with an innocuous title like this but it is one further step in limiting opportunities for New Zealanders. It is one further step in Steven Joyce’s stated desire in 2010 to dampen the demand for tertiary education and to restrict in other words the number of people receiving tertiary education.We on this side of the Chamber stand for the opposite of that. We stand for investing in tertiary education and investing in New Zealand’s future by encouraging people into study. We are proud of the fact that we expanded eligibility for student allowances and that we made loans interest-free because we wanted to give New Zealanders an opportunity.If you wanted to retitle this bill it could actually be called the “Student Loan Scheme (Denying New Zealanders Opportunity) Amendment Bill” because that is what this bill in effect does. It adds to a litany of decisions around the student loan and student allowance schemes that are actually limiting those opportunities for New Zealanders.The other element of clauses 1 2 and 3 is of course the question of the commencement date. There is a little bit of confusion about this because proposed new section 4 of the bill has a commencement date of 1 April 2012. I might be mistaken but 1 April 2012 was a couple of years ago now—I think that is right is it not? I have not lost those years. It has been a terrible terrible time over the last few years with a National Government and I have tried to block out a number of the years that we have been through under National but I am pretty confident we have been past 1 April 2012.That is because new section 4 effectively covers yet another mistake from this Government when it comes to the student loan scheme having failed to deal with the way in which deductions occur from a borrower’s account. So we have got retrospective legislation within new section 4.Then proposed new section 6 which is the one around the repayment obligations that we have previously covered comes into force on 1 April 2014 and well it might come into force on April Fool’s Day because it is a foolish decision to set such an arbitrary repayment figure for borrowers who are overseas. The decision that has been made there is that effectively no matter what you are earning when you are overseas you are subject to these flat rates. People who are actually meeting their obligations under the loans scheme will not even be able to pay their loans back because of the flat rates. It is called flat-spotting. We went through it as borrowers in New Zealand before we introduced interest-free loans while studying.Dr David Clark: I got flat-spotting.GRANT ROBERTSON: Flat-spotting was another of the things that happened in Dunedin I think Dr Clark but in this case it means people who cannot even meet the interest payments on their loans.What is needed here is some imagination from the National Government to try to come up with a scheme that is based on actual earnings and to actually work with borrowers so that they identify their own earnings and then identify what they can pay. That would be an inventive way of dealing with this but instead new section 6 of the bill in coming into force on April Fool’s Day simply implements an arbitrary repayment regime that I do not believe will improve repayment rates whatsoever.Then proposed new section 7 just to ensure that we do not get ahead of ourselves comes into force we are told in clause 2 on 1 April 2013. So it is back to last year for new section 7 of the bill which is around late payment interest reductions. Here the Government is clearly covering up for yet another mistake that it made in one of its many student loan scheme amendment bills.Clauses 1 and 2 of this bill highlight for me the fact that this Government has not got a clear idea of what it is trying to do with student loans and allowances. All Steven Joyce can see are costs that he wants to cut. He does not see the opportunity to invest in the future of New Zealand and in the potential of New Zealanders. On this side of the Chamber we see student loans and allowances as an opportunity for New Zealanders to get ahead. We will continue to support those.We do need to review the student loans and allowances systems. They have not kept up with the changes in terms of the cost of living for people and too many incremental changes have been made to it so there are now loopholes. There are now places where people can hide money in trusts and get allowances for their children while other people who cannot afford accountants do not get those allowances. Labour is committed to a review of this scheme but it is a review that is about increasing the opportunities for people to study and to be supported while they are studying. We cannot support this bill although we would like to see more legislation that actually helps people pay their loans back and helps people get through tertiary education. This bill is not that.