Martin Tracey: Student Loan Scheme Amendment Bill — Second Reading 
Martin Tracey: Student Loan Scheme Amendment Bill — Second Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
TRACEY MARTIN (NZ First) 
: 
 I stand on behalf of New Zealand First to provide our conditional support for this bill the Student Loan Scheme Amendment Bill to the next phase of the House. 
Tim Macindoe 
: Unconditional? 
TRACEY MARTIN 
: Conditional support sir. We note that one of the purposes of this bill is to improve compliance and to encourage personal responsibility around loan repayments. [ 
Interruption 
] Mr Goldsmith New Zealand First is a party that believes in personal responsibility and as a previous credit controller whose working life was spent in the pursuit of those who were avoiding paying debt I also understand some of the necessities of this bill. But today we are talking about student debt. 
Students are those young New Zealanders who we all in this House agree are the future of this nation—those young New Zealanders to whom we consistently send the message that they must seek higher education and must prepare for their own financial future through recognition of their achieved skill levels and that can be via a university or a unitech. We as a society send this message again and again and again: “Go and get some higher education.” and when they take our advice we charge them for it. We give them a debt. But ultimately the purpose of this bill and its amendments is to lower the levels of student debt and to encourage repayment of student loans. 
We note that there are several administrative clauses such as the recommended insertion of clause 30B which would amend schedule 1. We would like to draw the attention of the House to the fact that this requirement had originally been included in the Student Loan Scheme Act 1992 but it got omitted from the Student Loan Scheme Act in 2011 through an oversight. We would respectfully suggest that this is what happens when legislation is rushed through the House to meet a predetermined predescribed politically comfortable date as opposed to the goal being good legislation that then does not need to come back into this House a second or a third time for amendment. However New Zealand First sees the logic of the provision for a New Zealand - based contact person for borrowers. We are sure that there will be many a mum and a dad or any other contact person out there who will be breathing a sigh of relief to read that by becoming that New Zealand - based contact person they will bear no liability for the loan repayments although we are unclear as to the enforcement that might be suggested if they choose not to provide borrowers’ current contract details. 
There are two points that New Zealand First would like to bring to the attention of this House. We take this opportunity to remind the House that since the tertiary education fees were introduced in 1989 student debt has as has been mentioned spiralled out of control. The latest figure is $12.07 billion affecting 621000 New Zealanders. New Zealand First advocates that not only are some of these amendments required to tighten a bill rushed through in 2011 but it is actually time for a change of direction around some of the tools used in student debt reduction. 
 I sit on the Education and Science Committee and I have heard from the National Institute of Water and Atmospheric Research the Ministry of Science and Innovation and AgResearch. Each of them has explained to that committee about the need to encourage more studies in science so that this nation can move forward with greater economic development and the need for the retention and return of those graduates to this nation and those industries. We hear the same in the area of medicine and education but rather than trying to pick “winner and loser” industries which history has taught us is very dangerous New Zealand First believes that the authors of this bill should consider the inclusion of New Zealand First’s dollar for dollar student debt write-off scheme for those graduates who remain and work in New Zealand. We should recognise that those who participate in such a scheme will be working and paying taxes in New Zealand—all taxes not just PAYE but GST on every purchase fringe benefit tax if they happen to get a good job with some perks and resident withholding tax if they manage to save some money. But by removing some of the administrative cost on pursuing debt collection—people like me are quite expensive when we seek out debt—it is possible that this scheme may well to coin a phrase from the National Government become fiscally neutral. 
The second point that we want to draw the House’s attention to and it has already been mentioned by our Labour and Green colleagues is new section 107B(3)(a) in clause 17. We see this as a serious flaw in this amendment bill. This section refers to the ability of an individual to access repayment holidays and from our reading—and I am pleased to see that it has been picked up by others—it restricts repayment holidays. I quote subsection (3): “a borrower reaches the borrower’s limit if—(a) the borrower has had 1 or more repayment holidays granted under this Act for a period of 365 days or for periods that total 365 days;”. We note in the commentary which is at the front of the bill that the Finance and Expenditure Committee considered how this might affect second-chance learners and women. For some reason that is not mentioned in the commentary although there is a paternalistic comment towards the end about protecting people from themselves this access has been restricted. 
It is worth pointing out that this is not suggesting that a borrower can take a repayment holiday and another repayment holiday. These are people who have already paid off their loan; they are the very people we want to encourage to use the system. It is exactly what the Government is trying to do—get people to repay the loan. So those people have already proved themselves to be reliable creditors. They have taken advantage of the repayment holiday for the period then they completed the contract and that contract was between themselves and the State in that moment. I do not know of any other contractual law where you go to borrow money pay it back and prove to be a good creditor and then suddenly somebody says they are now going to remove something from you. So those people have achieved what was asked of them. They have upskilled themselves and have repaid their financial debt to the nation. 
I ask the House to consider that section again with particular attention and I draw its attention to the reality of what this means in women’s lives. It is very very likely and is a reality of our world that a young woman will go to tertiary education and as we have heard already 58 percent of the people we are talking about here are women. She will go to tertiary education and will seek a higher qualification using the student loan scheme. Just as with her male counterpart she will then if there are any jobs go out and actually find herself a job and repay her loan during that time. She might take a loan holiday let us say on the birth of her first child just while she and her family readjust. That does not mean she is not working but it may mean that she wants to take that 365 days while they get over the birth of their first child re-suss out their financial priorities reset their budget and move on. Later on in life and as a more mature woman I can speak to this after we have looked after our families and fed our husbands and our children have grown up a bit we might like to upskill a bit more. That means we might need to go and reaccess the student loan scheme. Unfortunately if my husband leaves me and I now need another 365 days to figure out how the children and I are going to live and just readjust our financial circumstances I do not get a repayment holiday. I do not think that the reality of these circumstances has been considered by the select committee. I would ask that they be considered before we come to the Committee stage. 
Just to close New Zealand First will be supporting this bill but the support will be conditional—I must repeat conditional—on some of these issues and possibly we could have discussion on these issues prior to the next level. Thank you.