Student Loan Scheme Amendment Bill (No 2) — Third Reading 
Text is incorporated into the Bound Volume 
Student Loan Scheme Amendment Bill (No 2) — Third Reading 
[Sitting date: 28 March 2013. Volume:688;Page:9071. Text is incorporated into the Bound Volume.] 
Student Loan Scheme Amendment Bill (No 2) 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Amendment Bill (No 2) be now read a third time 
. This bill continues the Government’s commitment to the proper governance of this major Crown asset by introducing new measures to bring greater fairness and transparency to the student loan scheme. The principal measure in the bill proposes to broaden the definition of income used to determine the loan amount a New Zealand based borrower has to repay each year. That will bring the definition of income used for student loans broadly into line with the definition used for the purposes of Working for Families tax credits and other social policy contracts. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Would members leaving the Chamber show some courtesy to the member who is trying to address the business of the House. It is good conduct and it is being considerate of others. Thank you. 
Hon PETER DUNNE 
: As I was saying the broadening of the definition of income to match the definitions we use for Working for Families tax credits and other social policy programmes will ensure that the repayment obligations of New Zealand based borrowers are determined on an equitable basis irrespective of the type of income that they earn and will hopefully put an end to the mounting criticism over the years about people being able to shelter or hide income to avoid student loan repayment obligations. 
A second important measure contained in the bill proposes an information match with the New Zealand Customs Service. The point of that is to allow the Customs Service to identify borrowers at the border when they are in serious default on their loan repayments and to then be able to forward the contact details for those borrowers to the Inland Revenue Department. In turn the Inland Revenue Department will be able to make contact with those borrowers to discuss their situation. Again that is part of making sure we have a better approach to the handling of overseas-based borrowers—being able to track them down identify them and make sure that like their domestically based counterparts they meet their repayment obligations. It is part of a theme that lies behind all of the changes we have made to the student loan scheme which is that the requirement to repay a student loan is an important part of the taking out of the loan in the first place. There is an active responsibility involved which too often gets overlooked and particularly so in the case of some of the overseas-based borrowers. 
The remaining measures of the bill are largely administrative. They are designed to improve the operation of the existing legislation. They include clarifying the repayment obligation rules for new borrowers in their first year of borrowing confirming the current late-payment interest rules and repealing changes from earlier legislation that are now no longer needed. When the package is taken together the changes in the bill will bring greater value more efficiency and better fairness to the existing student loan system. 
I want to record my thanks to those who have contributed to the successful passage of the bill so far: firstly to the policy officials and the drafters who have worked on the detail of the bill; second to those who made submissions to the Finance and Expenditure Committee; and third to the Finance and Expenditure Committee for its recommendations to further refine the bill’s form and function. I also acknowledge that this bill has widespread support in the House and I thank members for that. With that I now commend the bill to the House for its third reading. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Labour is supporting the Student Loan Scheme Amendment Bill (No 2) because we see that a fair system for the repayment of student loans is very important. Student loan repayments are a huge burden on hundreds of thousands of Kiwis. For those struggling to pay off student debt while paying the bills and saving for a house it is galling to hear of overseas-based borrowers making no attempt whatsoever to pay back their loans. We support the principle that underlies this bill in terms of making the system fairer in terms of data matching to ensure that those who are trying to evade their responsibilities are called to account and the broadening of the definition of “income” to ensure that these things are treated fairly. 
The bill will enable the Inland Revenue Department to share information with the Customs Service to make it easier for officials to get in contact with overseas-based student loan borrowers who are in default. Labour expects every borrower to make an equal effort to pay back their student loan whether they are overseas or at home. There are some enormous challenges here when we acknowledge that half of those borrowers overseas are of unknown address. So we commend the Government’s effort to make the system fairer. 
There are problems with this bill again. Many of them have been noted in the earlier stages of the debate. Those problems are tied back many of them to— 
Hon Simon Bridges 
: This is the worst speech for 50 years. 
Hon Annette King 
: You’re the worst member of Parliament for Tauranga for 50 years. 
Dr DAVID CLARK 
: My colleague is interjecting that Mr Bridges is the worst member of Parliament in Tauranga for 50 years. I cannot possibly disagree with that but I want to come back to the point. 
The Inland Revenue Department is unlikely to be able to implement many of these changes. That is illustrated very well in the bill which contains a number of back-downs. There are in this bill a number of embarrassing positions for the Government to be seen in. It is in this bill very clear that the Government has been forced to go back on legislation that it has recently passed because it is unable to implement it with the outdated computer system at the Inland Revenue Department. That outdated computer system is over 20 years old—the first mainframe computer system. The Government has spent tens of millions of dollars on consultants to get advice on how it should replace that system but as yet the public of New Zealand is none the wiser as to the time frame for that replacement or indeed whether the Government has any kind of credible planning around it at all. That is a disgrace. 
The transparency around this process is also an embarrassment to the Government. I have sought personally under the Official Information Act to get briefings on the tens of millions of dollars that have been spent in the effort to get advice on how to upgrade this 20-year-old computer system. We know that the Government is expecting to spend in the range of about a billion dollars on this upgrade in due course—or at least that is the estimate Mr Key has put out there. The department itself suggested up to $1.5 billion and there have been other estimates in the media of somewhere around $700 million or $800 million. If we take a central point there and say that it is over a billion dollars that is about to be spent it is shameful in my view—it is shameful—that the Government cannot release anything other than the titles of documents for the past 2 years. I would assume that the department’s advisers will be giving common-sense advice on process for selecting somebody to win the tender when a billion dollars of taxpayer money is being spent. I would assume there is transparency around this process and a desire for the wider public to understand that the Government is really taking this seriously. 
We have had all kinds of debacles of which Novopay is probably the highest-profile and most recent. We have had debacles around the Government’s efforts to implement computer systems. We on this side of the House have fears that this Government is really not across the issues has not laid out a plan and is stumbling along spending taxpayers’ money hand over fist for what may well be a disastrous project. There is no doubt that the systems need to be upgraded. The Inland Revenue Department is a department under pressure. There is $7 billion in tax that remains outstanding—the most recent estimate was that $7.8 billion of New Zealand taxpayers’ money remains outstanding. 
There are currently over a million returns at the Inland Revenue Department that are unprocessed. It is a department under pressure. There were 70000 phone calls that went unanswered in last year’s July GST filing period. My colleague David Cunliffe has pointed out the problems with getting through on the telephone system of the Inland Revenue Department at the moment. It is a department under stress. It is not being supported by the Government. Staff have been cut around the areas. I know that dozens of staff have gone from my own area in Dunedin because this Government has been taking jobs out of the regions. The services are dropping. The experiences of services we heard in the Finance and Expenditure Committee for the general public are becoming increasingly poor. The public are saying that they are unhappy with the level of service being offered and we know that the system is creaking along but the Government seems like it is sitting on its hands it is not addressing the issues with the computer system and consequently in this bill here we have further retractions. We have the Government stepping away from measures it has put forward because it now knows that it cannot implement them. It is stepping back. 
It must be humiliating being over there on the backbenches on the other side of the House because they see their own Ministers putting legislation through costing expensive parliamentary time only to later on have to make embarrassing speeches—embarrassing speeches—that speak favourably in glowing terms about their Ministers and the bills that their Ministers are putting through when they know that a good part of the content of this bill has embarrassing backgrounds. It must be an awful place to be in and that is probably why they take very short calls—those backbenchers opposite—and I can kind of understand that. If I was in their position having to witness such embarrassing performances from the Ministers I too would be taking short calls because it is not a nice position to be in. Many of them are honourable and fine members of the House and I do respect their integrity in being embarrassed by it— 
Hon David Cunliffe 
: Which ones? 
Dr DAVID CLARK 
: I cannot point out which ones Mr Cunliffe. It would be unparliamentary to label the others and unkind. 
There is also in this bill one part that we object to in principle and that is the creation of a tsar clause—the creation of a “Henry VIII” clause in this bit of legislation—which is the Government’s attempt to cover itself for future humiliating back-downs. This bill itself containing humiliating back-downs contains another clause that says that in future if there are embarrassments if we cannot put things through on the computer system because it is too hard and we have not dealt with the computer system we will give the Minister regulation-making powers. The significance of that should not be underestimated. We have heard from the select committee that oversees these things in Parliament that this is an increasing trend under this Government. It is failing so miserably in managing Government departments that it is giving itself powers to circumvent the usual parliamentary scrutiny that we would expect from any responsible Government. It is embarrassed—embarrassed—by its own performance and rightly so. 
Mike Sabin 
: Go and check the facts. 
Dr DAVID CLARK 
: Mr Sabin I think understands the embarrassment and is feeling the embarrassment so he from the backbenches is defending a Government that has to put “Henry VIII” clauses into small bits of legislation that tinker with the rules around loan collection. I would be embarrassed too Mr Sabin; I understand your position. 
This bill creates some small steps towards fairness as I said at the beginning of my address and for that reason Labour will support it because we believe that everyone should have to make a fair effort to repay the debt. We want to see a sustainable student loan system because we believe in supporting more students into tertiary education not like this Government which is increasingly putting restrictions in place so that only those who are privileged can access education. We believe in expanding free education because we are the party of education. We do not believe that it should be for only those who are already privileged. We have a very different view on this from the current Government. The principle of fairness which creeps into this bill probably against the Government’s wishes is one we support and we are pleased to see that there are some small loopholes being closed. We acknowledge the humiliation the Government is facing with the back-downs in this bill and we hope that it will deal with bigger issues and make a change for New Zealanders rather than having to come to the House again with many many many more embarrassing bills. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I call the honourable member Todd McClay. Having said that of course I should acknowledge my assistant on my right whose birthday it is today. 
Hon Simon Bridges 
: It’s not my birthday! 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: It is Roland’s birthday—it is Roland’s birthday. 
TODD McCLAY (National—Rotorua) 
: 
 May I start my speech by joining you and wishing Roland a very happy birthday and the very best for the year. 
Hon Simon Bridges 
: Full names in this House. 
TODD McCLAY 
: No no Roland and I are on a first-name basis. Can I start by saying that I am thankful to Dr David Clark for telling us in his speech towards the end of his great speech there that Labour was supporting this bill the Student Loan Scheme Amendment Bill (No 2) because it really was not obvious for the rest of the 9½ minutes. Indeed Dr Clark is known to come to this House and proclaim the 50 years of everything. Well that was the worst haircut of 50 years the worst tie of 50 years and certainly the worst speech of 50 years when it comes to issues like this. There was absolute doom and gloom all the way through it. But surprisingly Labour has decided to join the Government in doing something that is right for New Zealanders and right for taxpayers which is helping to remind our students who have been able to get an education because of the generosity of the taxpayer and the overwhelming support of this Government that they must in turn repay their debt to the taxpayer and indeed to society. 
So there have been some important changes here because Dr Clark was correct in that the only reason why we are able to afford as taxpayers to offer this opportunity to students is that hard-working New Zealanders work and pay their taxes their taxes are loaned to students and those students have an obligation when they leave—just as under this Government they have the very best chance in over 50 years to purchase a home and get a mortgage with interest rates that are the lowest in 50 years. They must pay that obligation back to the bank to pay off their house and in this case they must pay their obligation back to the taxpayer by repaying their student loan. 
I want to explore for a moment a couple of important changes in this because what the bill has done is it has broadened the definition of income on which students must start their repayment obligation. It has also lined it up with Working for Families and the in-work tax credit that this Government is a champion of. In looking at this we have heard and decided in the Committee that we need to look at different types of income that should be applicable when that obligation kicks in for a student to repay the loan that the taxpayer has given them. We heard about fringe benefit tax and incomes being put in trusts and so on and there was agreement across the House. 
 I asked the Minister of Revenue earlier after his speech what other types of income would be included that would trigger the obligation for a student to have to start repayments—a student who is overseas for instance. If they had a bank account overseas and they had money in that bank account—I had an email the other day that somebody sent. Let us say they had half a million dollars in a bank account in a bank in New York that was receiving 2 percent interest a year that would be a return of about $10000. If that was income to them would they need to declare it to the New Zealand Inland Revenue Department if they were a tax resident here? The answer was yes. And would that income be treated as part of their earnings to trigger their obligation to start repaying their loan? The answer was yes. But what if they left America came back to New Zealand and the exchange rates were not in their favour to change American dollars to New Zealand dollars at that time? If they were still earning that income and declaring it to the Inland Revenue Department in New Zealand but not telling anybody else about it would there be an obligation on their part—with $500000 that might be in that bank account at 2 percent interest which was giving them a return of $10000 a year—to pay income tax on that in New Zealand? The answer was yes. 
And would that be counted as part of their income when it was time to meet their obligation to repay their student loan? The answer to that was yes as well. I am glad that both sides of the House are supporting this bill and that both sides of the House are agreeing that when people do have income that is declared and that they are earning they have an obligation to repay their obligation. They should declare that they should tell people about it and they should assess that as part of their obligation. So in the case of an overseas bank account in New York that was secret to everybody but I do not know the Inland Revenue Department would that be part of the obligation to include that as their earnings so they could start repaying their obligation to the New Zealand taxpayer? The answer to that was absolutely yes. 
Finally the sharing of information between the Inland Revenue Department and the Customs Service is very important because it is important that the Inland Revenue Department knows what is happening for people who come and go so they can meet their obligations. We do not want people overseas not meeting their obligations. We certainly do not want them coming back to New Zealand and not telling people about money they might have overseas in bank accounts in New York. But in this case the Inland Revenue Department and the Customs Service could share information. As an example if a New Zealander was returning to the country from a posting in New York where they had a bank account with half a million dollars in it at 2 percent interest earning $10000 a year when they came back into the country if the Customs Service stopped them to look for I do not know—we have very strong biosecurity measures in New Zealand because this Government takes it very seriously—an apple found a bank account or a bank statement and it looked like there was a hidden account that nobody should know about would it tell the Inland Revenue Department about that? Yes. Would it tell Parliament about it so that it could be declared in the member’s pecuniary interests? No that would not be part of this bill. But certainly in the case of meeting your obligations to New Zealanders who have lent money to others so that they can study so that their obligations will be kicked back in yes that bank account would be declared to the Inland Revenue Department so that New Zealanders could meet their obligations. 
So I say to Dr Clark who spoke earlier that I am glad that Labour is joining us with this. He should have moved a Supplementary Order Paper earlier to say that any information shared between the Customs Service and the Inland Revenue Department about secret bank accounts that might come into the country could be shared with this Parliament as well before the last day of January when we make our pecuniary interests; he did not. But I commend this bill to the House. Thank you. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am very happy to take a call on this bill the Student Loan Scheme Amendment Bill (No 2) to continue talking first about why it is that Labour does support this bill but also about some of the concerns that we do have with it. 
It is a bill that introduces key changes to the student loan scheme. The first of these around the definition of income is something that we are very supportive of because what this bill does is broaden out the definition of what income is from just wages to include income from trusts companies and superannuation schemes. We are very happy about this and what we are seeing is—we are hoping that it is the start of a road to Damascus for members opposite where they will start to see that maybe we do need to tax things other than just wages and salaries in this country and to recognise that. We see this as the beginning of a dawning of a new era for the Government members opposite and that maybe they will see that a capital gains tax would be something that would be preferable too because much of the logic that they have applied in this bill would equally apply to them thinking about income and the way we treat that for other matters of revenue. So that is something we would like members opposite to pause and think about over the Easter break as they sit down to their hot cross buns and their Easter eggs. 
Labour does find this a particularly appealing change within this legislation because we think that it is fair. We think that it is fair that people who are earning income other than wages and salaries do make their student loan repayments and that it is not just the plumber who goes out after he or she finishes their apprenticeship and starts their job who makes repayments through their wages but also that you have people who receive income from family trusts for example making payments back into their student loan obligation. 
The other thing that this bill does of course is enable information sharing and the data matching at the border. This is all around the issue of tightening up at the border and wanting to make sure that people who have taken out loans who are now living overseas are making their contribution back into the scheme. I think that the member who spoke previously Todd McClay just thought he could score some cheap points around that point but this is something about which I would like to get Labour’s concern on the record. 
Actually if we are going to talk about data and information matching and how it is that a Government has responsibilities towards the security of that data I do not think members opposite should really be making jokes and scoring cheap points around that. Just today we have seen the Earthquake Commission in Christchurch with yet another security breach in terms of people’s data that it holds. This time it has released the bank account details and names of claimants to that scheme. What we have had— 
Hon Simon Bridges 
: But that’s the point. David Shearer didn’t. 
Dr MEGAN WOODS 
: The point Mr Bridges is that you are a Government that is not to be trusted with people’s data. You have shown this with ACC. The Inland Revenue Department—the very agency that is being empowered under this piece of legislation—has previously shown that it does not have all the measures in place to protect data. So we on this side of the House are asking this Government to give some assurances that when it is dealing with individuals’ private information it does have the necessary measures in place to ensure the security of that information. That is actually not too much to ask. I think it is what we all expect when we as citizens of this country empower the State to have a whole lot of information about us—we do expect some level of security around that and it is certainly something that we in Labour think should be a priority for any Government and we invite this Government to dwell on that fact. 
We see this legislation as pretty much benign legislation. It is doing some things that are good but we do have concerns and one of my primary concerns as the spokesperson on tertiary education is that this is yet more tinkering around the edges on the issue of student support. What we are not seeing is any comprehensive examination of how we want or expect our young people or anybody in this country actually who enters into training or tertiary education to support themselves through this year. 
What we have is a Government that wants to dampen down demand in the area of tertiary education. This is something that the Minister for Tertiary Education Skills and Employment Steven Joyce has made very clear and there have been a number of policy initiatives over the course of National being in Government that certainly demonstrate that the Government does want to dampen down demand. What we have seen as part of this dampening down is that there are now 25000 fewer people who have access to the student loan scheme because of the initiatives of Budget 2010 and 2011. There were 800 people who lost their access to student loans because of retrospective measures that were put in place—things that the Government could not even acknowledge were going to happen before the legislation was put in place following those Budgets. 
Labour would rather see rather than these tinkering around the edges pieces of legislation that we are seeing from this Government—and I would like to note that this is the second bill in 2 years—a comprehensive review of how we manage the very complicated issue of supporting our students through their study. For Labour that is a priority because we see training people gaining skills and people gaining education as absolutely vital to our future. 
It is certainly not something we want to dampen down because on this side of the House we believe that education and training are absolutely vital. We are not about just the rhetoric of an innovation-led economy; we are about doing the things that you need to do in order to have an innovation-led economy. Supporting tertiary students and making sure that the necessary mechanisms for student support are in place are very much a part of that. But what we have seen from National over the half-decade—the 5 long years—that it has been in Government is it stopping people aged over 55 from accessing the student loan scheme and it did this in the 2011 Budget. 
What this means when you put this together with a period in our history when we are experiencing very high unemployment which the Government is not doing much to address is that not only are these people not going to be able to find jobs but also for many of those aged over 55 their access to go back and retrain has been cut off. The reality is that for many working people they still have quite a long working life ahead of them from the age of 55 onwards but this Government has not put in place the student support in order to ensure that that can happen. The bill that it is considering in the House today does nothing to address this issue of student support. 
Of course one of the most alarming issues around student support for us and one that makes absolutely no logical sense is the removal of allowances for people studying at postgraduate level. If you really do want an economy a future a country and a society that is based on innovation why would you stop people doing postgraduate study? This is the very thing that drives innovation. If you look at any of the countries around the world that excel in the area of innovation they have very high levels of Master’s and PhD students and graduates. This is something that this Government does not believe in and it has stopped access to that level of training. That for us is just an absolute—we cannot understand any of the logic behind that and why it is that you would do that. 
What we are seeing here is a piece of legislation that does tinker around the edges. My colleague Dr David Clark talked about it actually being a bill that is a bit of an embarrassment to this Government because it is coming back and playing fix-up. Not only is it coming back and playing fix-up but also it has tried to play fix-up in areas where the department that has to do this the Inland Revenue Department lacks the capacity to do it. 
If we have a look at the officials’ report to the Finance and Expenditure Committee on the submissions on the bill what they spelt out to members of the committee was that “The bill includes a number of amendments needed to ensure the delivery of the remaining core policy changes enacted in the Student Loan Scheme Act 2011.” But then it goes on to say that it is not able to do this because “the new loan management system proved to be more complicated than expected”—i.e. it did not get it implemented—and “Because of the complexity of the student loan system the detailed analysis has identified that the systems design development and testing required to implement some of the 1 April 2013 changes is significantly greater than originally expected. To ensure timely delivery of the core Government policies contained in the 2011 Act and the policies that have the greatest benefit for borrowers it is proposed to not proceed with some of the measures in the 2011 Act.” 
So I guess the best thing you can say is that at least we did not have another Novopay with a system that was not ready to go. But this is a piece of legislation that does not systemically address a lot of the issues that we need to address around the very complicated issue of student support. We do support the measures that it is taking to redefine income for the purpose of student loan repayment but we do have some cautions against the information sharing and how it is the Government is going to manage this. We would like to see the Government doing more in the area of student support not just this tinkering. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker. Nga mihi nui ki a koutou. Kia ora. First up I would like to wish Roland a very happy birthday. He is one of the very hard-working parliamentary staff and we wish him all the best and I hope you and all the rest of the staff have a fantastic Easter break. I rise to oppose this bill the Student Loan Scheme Amendment Bill (No 2). The Green arguments as to why we and Mana are the only parties opposing it have been laid out very well by my colleagues Holly Walker and Jan Logie so I am going to make a short contribution. 
The Student Loan Scheme Amendment Bill (No 2) is quite a common name. We have had a number of these bills over the last 10-plus years. But although it has a common and maybe boring title I think a more accurate title would be the “Focusing on the Small Things Bill”. Or perhaps it should be the “Tinkering Around the Fringes Bill” or the “Fiddling While Rome Burns Bill” because we really have to question the priorities of this Government at a time when students and graduates are struggling and they really are struggling with the economy under that $12 billion millstone—that $12 billion debt that surrounds those nearly half a million graduates’ and students’ necks. But these Government members would spend their scarce parliamentary time their scarce governmental focus on broadening the definition of “adjusted net income” and “net income” to align with the definition used for Working for Families tax credits and then secondly introducing an information match with the Customs Service. 
There are some huge fundamental questions facing our country and particularly our students and graduates but at the heart this Government is tinkering around the edges. But what it is really doing is focusing its attention on an anti-education stance which we have seen very clearly over the 4 to 5 years that National has been in power. Let us list just some of them. We have seen considerable and significant year-on-year funding cuts. We have seen our universities decline down the international rankings. We have seen lifetime limits to student loans. We have seen restricted access for over-55-year-olds. We have seen the Government—the Government—decide how student levies should be spent not students as it goes ahead and guts our students associations around the country. We have seen the Government restrict access for permanent residents to student loans. We have seen the Government literally lock the door—it has locked the door—to thousands of students with its punitive retroactive rules and incredibly those prospective postgraduate students— 
Mike Sabin 
: How’s that member’s student loan going? 
GARETH HUGHES 
: I have paid off my student loan Mr Sabin thank you very much. But we know that New Zealanders are struggling with that $12 billion because this Government is just not supporting them. This Government is not supporting them. 
Mike Sabin 
: The man is a model—a model student. 
GARETH HUGHES 
: Let us go through that list because we have still got quite a few more of the anti-education initiatives from this Government Mr Sabin. [ 
Interruption 
] 
Metiria Turei 
: I raise a point of order Mr Speaker. It is not appropriate for a member of this House to say that another member of this House is lying. I would ask that you ask the member to apologise for his comments. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member is absolutely right. We do not refer to members lying in this House because it actually brings disrepute to the House of Parliament itself. If the member did that I would ask him to stand withdraw and apologise because it is an infringement against the House. 
David Bennett 
: I apologise. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. And also I might add too—I am sorry Mr Hughes—that when we are on the cross benches it is common courtesy and it is also convention that members do not interject on each other in those positions because there is a muffled effect it can have on the microphones. 
GARETH HUGHES 
: Good stuff Mr Assistant Speaker. Thank you. Just continuing on that list of the anti-education initiatives we have seen under this current Government—you know Government members have locked the door to thousands of students. Unfortunately for them they could not reintroduce interest on student loans because interest-free loans were just so popular to New Zealanders so what they did is introduce it by stealth with the new class of special fees which they have put on student loan graduates and students. They have abolished the loan repayment incentives—the carrots if you will. They have increased the repayment rates to 12 percent of gross salary. 
All in all under National what we have seen is tertiary education become more expensive less accessible and in some cases downright impossible as National locks the door to students who want to study who want to upskill and who want to contribute to our economy. This Government has made it harder more expensive and in some cases impossible. It is not smart economics. We know that across the Ditch the Australians have invested in their tertiary education sector. They have spent $5.7 billion over 4 years— 
David Bennett 
: We spend more than they do. 
GARETH HUGHES 
: We know that the New Zealand spend is in the second half of the OECD average for Mr Bennett’s information. As a percentage we spend less than most of the OECD countries. It is not smart for our economy. 
I struggle to think of a single positive thing this Government particularly under Steven Joyce has done for tertiary education. I seriously do struggle to think of a positive initiative. But in contrast what the Green Party would do is actually prioritise it because it is in our economic interest. We want to support our students. We want to support our graduates. It is in our economic interest and this is what I just do not get from National. You know National is penny-pinching and reducing access to education yet it is finding billions of dollars for motorways to bail out various industries and to subsidise fossil fuel polluters. I think the priorities of this Government are just round the wrong way. 
So we see this as yet another tinkering around the edges bill. This bill does three main things that we have some issues with. The first is the definition of “income”—one of the two main parts of this bill. It is problematic in the way it relates to the Working for Families changes because with the Working for Families calculation your loan repayment which the Government in the Budget last year increased from 10 percent to 12 percent is not taken into account. We would prefer that Working for Families was taking into account student loan repayments because what we do not want to see is our families struggling with those increased repayment thresholds the Government brought in. 
With the Customs Service information sharing we have no issue with that but it is a reminder to this House that just last year we decreased the overseas repayment holiday time. It was 3 years and the Green Party originally supported that. Peter Dunne supported it and spoke very favourably many years ago but Peter Dunne was the Minister who reduced that to 1 year. Again this is going to have perverse incentives because Kiwis who are on their OE and traditionally do spend more than 1 year overseas are going to struggle to return to New Zealand given that the repayment holiday is only a single year now. Lastly and most egregiously is again this trend we see with the National Government in power. It is what I consider the abuse of the Order in Council regulatory-making provision inserted into this bill in the select committee consideration. This Government is abusing this quite considerable powerful tool where we are seeing less parliamentary oversight of important changes being made. 
So in summary this bill tinkers around the edges while $12 billion in debt is still negatively impacting our students and graduates. On top of all the negative initiatives this Government has taken to students it is clear it is not out for students and it is not out for a smarter economy. But that is what the Greens would focus on and it is what we would prioritise because it is in our economic interest. When people are going to the election and thinking about their votes those students will be voting Green. They will not be voting National. People who care about the future of our economy will be voting Green. Kia ora. [ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Have we quite finished? Good. 
JOHN HAYES (National—Wairarapa) 
: 
 Can I join those other colleagues who have wished Roland a very happy birthday today and let us hope he has a very happy Easter celebrating his advancing years. 
I want to address the comments that have come here this afternoon into the House from the Green Party. These are the people who think that money grows on trees and when it does not they find a photocopier and they produce it. They are going to give money to all directions of our community and try to buy the young person’s vote. I say to you Mr Hughes that the young people in this country know that money does not grow on trees and they will not be voting for the Green Party in large numbers because they have got far more sense. 
Apart from the Green Party growing money on trees we have got the Labour member for Dunedin North I think—the “Red Reverend” Mr Clark—saying yes we have got to give more money to everybody and that this is a bad piece of legislation because it is not giving enough money to our students. Can I say this: money does not grow on trees. Money comes out of people’s pockets. It comes out of all of the pockets of those people who work in this country including Roland. He pays his taxes. Money for these students comes from the workers’ pockets and you would say to the workers: “Here’s some money—we’ll take it out of your pocket and give it to the students. And by the way students you don’t have to pay it back.” What nonsense! 
Metiria Turei 
: You did it. You did it. 
JOHN HAYES 
: No we did not do it. No we did not do it. We watch the students sitting on the roofs of their houses in Dunedin burning their couches and saying: “No no no; we don’t want to pay this money back.” Well I have got a lot of taxpayers in my electorate who advance money from their pockets to the Government to advance to students. There is no problem about lending money to students. We want to see them do well we want to see them educated but we will not put up with the knowledge that these people do not need to repay their obligation to our society for using that money interest-free for a period of time while they complete their studies. 
Metiria Turei 
: You pay your loan back—you pay yours back. 
JOHN HAYES 
: I paid my loan back—and my children paid their loans back too to the community. My family has met its obligations unlike you. My family has met its obligations which I suspect is more than is the case for you madam. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. It is a sad thing when a member of the growing experience of the member who is currently speaking has drawn you into debate by speaking to you. He may have been referring to the very eloquent co-leader of the Green Party who was entering into the spirit of the discussion I see but there is no excuse for drawing you into the debate. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you for that and the Assistant Speaker has noted it. 
JOHN HAYES 
: He was the member yesterday in the Shane Jones committee who was sitting there wriggling with great excitement because every time Jones was getting shafted he was benefiting from that—you know using the Audit Office to benefit from that inquiry. 
Let me come back to the Student Loan Scheme Amendment Bill (No 2)— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Using the misrepresentation rules in Standing Orders and Speakers’ rulings I will just clarify that I recused from the matter in which the member was alleging that I was present— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No that is it. That is a debatable issue and there the matter ends. 
JOHN HAYES 
: This is a bit like the BBC programme  
Repetition 
—you know I am sick of it—from that fellow on the other side of the House. He needs to sit and listen and learn and look after his colleague Mr Jones. 
This bill is about repaying money borrowed from taxpayers and used by our children for education. They need to learn that a core policy of this Government—one of the priorities of this term—is building a more productive and competitive economy. It is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide world-class public services that our children and their families need. That is why we are making this student loan scheme sustainable into the future by reducing the need for more Government borrowing and preparing students for jobs for the future. Our interest-free student loan scheme is one of the most generous in the world and we are going to keep it this way. I support this bill totally. 
TRACEY MARTIN (NZ First) 
: 
 Kia ora Mr Assistant Speaker. I rise to speak on the Student Loan Scheme Amendment Bill (No 2). Before I begin on my prewritten comments can I just comment how sad it is—how sad it is—when as some of our members begin to age their minds begin to wander. Let me just remind the House of a few facts. The student loan scheme was introduced in 1992. It is 21 years old. Mr Hayes may no longer be aware of that fact. Mr McClay surprises me also. I understand that Mr McClay has a youthful appearance and that some may think that he is still in his twenties but I have it on very reliable information that he is somewhere in his forties. Mr McClay tried to lay a guilt trip on the younger generation of today by saying—and let us use Mr McClay’s phrase what was the phrase—that they have the “generosity of the taxpayer”. They owe the “generosity of the taxpayer”. Mr McClay does still owe the generosity of the taxpayer as do the 120 other members of this House. But at the time that he went to university— 
David Bennett 
: Like you— 
TRACEY MARTIN 
: I agree Mr Bennett. At least I recognise it and am grateful Mr Bennett unlike the lack of memory Mr McClay apparently now reveals in the fact that when he gained his education he did not have to pay it back. 
Mike Sabin 
: Add some bass. 
TRACEY MARTIN 
: Neither did you Mr Sabin who is well into his forties. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
TRACEY MARTIN 
: Neither did the good-looking Mr Sabin who is also into his forties. Let us put a bit of reality around this shall we? None of the members who have spoken yet apart from the young Mr Hughes have actually had to take out a loan for their education. They have had an obligation to this country— 
Metiria Turei 
: I did. 
TRACEY MARTIN 
: I do beg your pardon madam. There are obviously younger members of this House behind me whom I neglected to mention. But many of the speakers currently from the Government benches got a free education. The speakers to date got a free education. So for them to lay a guilt trip on the young people of today I think is exceptionally disappointing. 
I think the other thing too Mr McClay also mentioned with regard to this Student Loan Scheme Amendment Bill (No 2) is this phrase: “the overwhelming support of this Government”. All I can say is that if this is the overwhelming of support of a National-led Government then Lord help us as we go forward. While we are all going to be away watching Easter bunnies and eating chocolate Easter eggs on 1 April the student loan repayment rate will increase from 10 percent to 12 percent. That is a 2 percent increase out of the pay packets of already struggling people whose income has not risen but the cost of living has risen. So let us bring a little bit of reality back into this shall we? Mr Hayes at the Committee stage of this bill had the audacity to attempt to manufacture a greater divide between the younger generation and our older generation by suggesting that student loans were required because of the introduction of the SuperGold Card separated by at least 10 years in introduction with student loans being introduced in 1992 and the SuperGold Card being introduced in 2008. I worry. I truly truly worry for that member and his ability to retain information for long periods of time. 
I was particularly interested in Mr McClay—again let us come back to “the overwhelming support of this Government” for our young people. Where was the overwhelming support of this Government for fairness when I had Supplementary Order Paper 184 on the Table at the Committee stage which would have brought some fairness into this bill for New Zealand based borrowers—to allow them to be recognised in hard financial times? The Government does not reject the fact that we are in difficult financial times; it uses it often to justify many of its actions. Where was its overwhelming support for New Zealand based borrowers when I had a Supplementary Order Paper on the Table that would have allowed it to provide some of that overwhelming support for New Zealand based borrowers in recognition of a 1-year repayment holiday due to financial duress? Where was that support? It was not to be seen. Somehow—oh that is lovely—that overwhelming support was not obvious at that time. I would hope that possibly in the future—the next time this legislation comes into the House because I do not believe that this Government has finished with the student loan scheme—there might be an opportunity for that to be supported further. 
As a previous credit controller I do support the concept of people paying back their debt. I have worked with people over my professional life and I know the subconscious burden that debt places on an individual. So the faster debt can be addressed if debt must be incurred then the better it is for the individual out the other side. So New Zealand First did support originally in the previous amendment bill the shortening of the repayment holiday for overseas-based borrowers. But we also recognise that we are providing an overwhelming debt burden for our young people with this mechanism of borrowing for education. There needs to be a wider return to the concept of the social contract where you gain from your State your State supports you to educate yourself and then you give back to your country through your skills and your time. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
TRACEY MARTIN 
: I beg your pardon Mr Assistant Speaker. 
I met a young gentleman the other day who is embarking on a short course around coding. I do not personally know much about coding but what I do know about coding is that there is a worldwide shortage of young people expanding that knowledge base particularly in this country around the writing of code for programmes. In this conversation with this young 18-year-old he expressed to me how he was thinking about not following his passion not pursuing that educational pathway because he was looking at approximately $10000 to $20000 worth of debt at the end of it. I hope that I convinced that young man to continue on that pathway because in this country we have just seen the information and communications technology awards and we have just seen five of our game manufacturing companies in the top 10 internationally win awards. I hope that I convinced that young man and even though right now he works under a regime where his State decides that he must borrow to live and he must borrow to actually educate himself that he will continue to pursue that pathway. 
But it is a shame that we have to have those conversations. I think that is what has been tried to be expressed by New Zealand First again and again and again over the years since 1992 since this was introduced. We are putting young people off further education and it is not this high-end tertiary education only that is affected. Every single student who goes on to StudyLink is looking at a student loan and borrowing for their living allowances which gets tacked on at the end of it. They come out in their 20s. We all know. We all had the opportunity to come out in our 20s to go to work to start saving money and to try to get into a home. These young people carry this debt like a millstone around their necks. 
New Zealand First will support this bill because let us be frank it does two little things. It is nothing major. It is not earth-shattering but it does bring it in line with some other relatively practical mechanisms inside the Inland Revenue Department and around information matching with the Customs Service. So of course we are not going to oppose these little practical steps but an opportunity was lost. The continual insistence of members of the Government to try to shame our young people into being grateful for something that they got for nothing is I think disgraceful. 
Debate interrupted.