Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill

I will speak to clauses 1 and 2 in particular. There are things I want to say about the fact that the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill is being progressed under urgency. I do not lay the blame for that at the door of the Minister in charge of the bill, the Hon Peter Dunne. It is clear in clause 2 that the commencement date of some clauses is 1 April 2010, so it is important that the legislation is passed before that date.

The House is sitting under urgency on Tuesday, 23 February, although it is actually 25 February outside this Chamber. Under urgency, of course, time stops on the day that urgency is accorded. The point about urgency is that it should be used sparingly, for matters that really require it, and for matters that are, in fact, urgent. There is time between now and 1 April to address this issue, and to see this bill through to its conclusion, but, no, the Government has chosen to put it through in urgency. This bill was presented to the House for the first time in August last year, and the second time was in November last year. Now we are in the Committee stage of the bill at the end of February—under urgency. It is completely plain to everybody that it has simply been a subterfuge for the Government to excuse itself from at least one question time this week. So urgency was not essential, and it has been applied.

This is one of the few bills that has, in clause 2, a reference to a date that I perfectly understand as being an essential date for the application, particularly, of taxation legislation—1 April 2010. But it could have been managed differently. That is not the fault of the Minister in charge of the bill, but it is directly the fault of the Leader of the House, who determines the agenda of the House at any one time. This is a sign, again, of a deal of incompetence that we have seen coming from the Government in even managing a simple bill, which the Minister introduced to the House in perfectly good time. It was properly considered by the Education and Science Committee and was reported back in November of last year. Since then the Leader of the House has been unable to bring it through in a reasonable and measured way, in time for it to be implemented by 1 April. This is a notice to all Ministers in Cabinet that they need to take the Leader of the House aside and say that they will not be made fools of in this way. They need to weigh up whether being protected from question time is worth being made fools of, in terms of parliamentary procedure. Clause 2, the commencement clause, is apposite, and it is entirely reasonable to make some comment upon the progress and process surrounding this bill in this way.

I want to talk about the title of the bill. When it is enacted, it will be the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2009. It should perhaps be named the “Student Loan Scheme (Exemptions and Miscellaneous Provisions For Now) Amendment Act 2009.” It is not entirely clear whether this legislation will survive subsequent legislation that the Government may have in mind to narrow, restrict, shut down, and make less accessible student loans and allowances. That is what we heard signalled by the Prime Minister in his Prime Minister’s statement at the beginning of this parliamentary year. It is what we have had underscored since then by the new Minister for Tertiary Education, the Hon Steven Joyce. Steven Joyce is a man who does what he says he will do, and he is a man who clearly has plans for his portfolios.

💬 Hon David Cunliffe: Except for telecommunications, where he has no plans.

With the now glaring exception, my colleague reminds us, of telecommunications and the roll-out of broadband. However, let us assume that the Minister does have a plan for student loans, and let us hope that this bill does not run foul of that. Let us hope that what endures after the Minister Steven Joyce has finished with student loans and allowances is access to those loans and allowances still extended to Tokelau, still extended to the Cook Islands, still extended to citizens of Niue, and still extended to those who might one day live on the Ross Dependency—where in the meantime the penguins currently inhabit that part of the realm of New Zealand. Although it says it is a Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act, I would suggest it is in fact an Act for now only.

I want to talk a little about the title clause of the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. We were advised earlier on by Louise Upston, I think when she was speaking in the second reading, that we were not focusing enough on the importance of some of the provisions in this bill. Putting some of them under the title “Miscellaneous Provisions” probably does not adequately reflect the importance of what we are doing here. In particular, I think the clause that increases the deduction rate from 10c in the dollar to 15c in the dollar is potentially a very serious thing for the people who will end up having to pay that additional rate. I would not necessarily see that as a miscellaneous provision.

I think it would be better for us to look at the reality of the bill, and then work out what it should be called, especially given the present environment, which we have already discussed recently. Steven Joyce has come in as the Minister for Tertiary Education, and we know that Mr Joyce has already told us that the support for the interest-free student loan scheme by the National Government is a political call. It has nothing to do with principle, nothing to do with what National thinks is good for education in New Zealand, and nothing to do with what it thinks is right for the economy of New Zealand in ensuring that our graduates stay here and contribute to the economy rather than go overseas—there is nothing about that. He said it was a straight-out political call.

Therefore I think this bill could aptly be renamed the “Student Loan Scheme (Exemptions and Miscellaneous Provisions) Political Call Bill”. That is what is going on here. The National Party members do not want us to really focus on the fact that Steven Joyce has taken over the tertiary education portfolio with a clear instruction from John Key to look at it and look at tightening up the eligibility for student support. That is what Mr Key said in his Prime Minister’s statement to Parliament in early February this year. He said the Government would look at the issue of those people who spent too long in tertiary study and at whether there should be restrictions on their eligibility for student support. He said perhaps there would be something introduced around people having to pass their courses sufficiently quickly.

On this side of the Chamber we are concerned about those potential developments. We see a bill in front of us now that makes some reasonably important but minor changes, and they are useful. But at the same time we face a situation where the Government is hanging on to its belief in interest-free student loans only because it is a political call, not because it thinks they are a good idea and they are delivering for New Zealand. Therefore I think the bill could easily be retitled in that way.

Perhaps another title, though, that would pick up the overall essence of the Government’s policy around interest-free student loans would be the “Student Loan Scheme (Missing Bones) Bill”. This may be confusing for some people who have not been following the story so far. But when Labour introduced interest-free student loans in 2005, John Key was the finance spokesperson for the National Party, and he stood in this Chamber and said the interest-free student loan policy that Labour was bringing in was ridiculous. He said it would be opposed by the National Party members with every bone in their bodies. Well, here we are in 2010, and following on from the 2008 election, when the political call that Steven Joyce mentioned was made, we do not see much in the way of every bone being used. In fact, the bones are missing. There is no attempt by National to turn this scheme round, because politically it knows it cannot. But National is not committed to the scheme. In the long term, we know that National would rather roll back the interest-free student loan scheme. The introduction of Steven Joyce as the Minister for Tertiary Education is a clear sign that National wants to get at interest-free student loans. It wants to restrict the number of people who can take out student loans and restrict the ability of people to take them out over a period of time.

We believe that is a very dangerous path to go down. There is nothing more important, as we come out of the recession, than to have people increase their skills so that they can contribute to the economy. Earlier in the debate I mentioned the fact that the Australian Government responded to the recession by moving quickly to ensure that people who lost their jobs had access to training and tertiary study. It made sure that there were incentives for them to be able to do that, so that they could contribute to the economy when Australia came out of recession. In New Zealand we saw none of that. We saw a continuation of the cap that sees tertiary institutions turning people away, particularly at the polytechnic level, where polytechnics face budget cuts from the National Government. Therefore, we do not see New Zealanders being trained and upskilled to be able to contribute to the economy as we come out of the recession. That is a great shame. This bill and the activity of the National Government around tertiary education could be so much more than they are. We could be sitting here today to work out how to increase the skill level of New Zealanders, but unfortunately we are not doing that. This bill is misnamed; it is actually about National wishing us to look elsewhere.

I am happy to take a call on these clauses, and I, too, have some suggestions for alternative names for this legislation. This legislation, which Labour will be supporting, is, of course, part of a much bigger picture around interest-free student loans. The title could be “Student Loan Scheme (I’m Glad the First Piece of Legislation We’ve Had Come to the House Isn’t Very Bad, But I Worry About the Next Ones) Amendment Bill”. We know, as my colleague Maryan Street has said, that the interest-free student loan scheme is in trouble. We know that National does not like interest-free student loans, because it rallied vociferously against them when the previous Labour Government introduced them. We were told that the interest-free loans were corrupt. In fact, John Key said they were corrupt—

💬 Lynne Pillay: “Irresponsible”.

—“irresponsible”. They were a bribe, says the man who, I bet, never had a student loan. That brings me to my second suggestion for a title: “Student Loan Scheme (Why Don’t You Actually Ask Students Who Have a Loan About What It’s Like to Have a Student Loan) Amendment Bill”. One of the things that concern me is that even in this debate we have been lectured, at length, by people from the Government who have never had a student loan. I have had a student loan. I had it at the worst time to have a student loan, in the 1990s. I had it when I was paying interest while I was studying. It was daily compounding interest. I was working 20 hours a week. I say to Government members that if they are concerned about people who are failing their courses, look at how many hours that students have to work to support themselves, which should be hours spent studying, but they are working long hours to support themselves. I worked 20 hours a week while I was at university, and it was to the detriment of my studies. I did not fail but I could have done an awful lot better if I had been able to focus solely on my studies and not have to worry about how the rent would be paid or how we would be able to afford to pay the power bill that week.

The title “Student Loan Scheme (Why Don’t You Actually Ask Students Who Have a Loan About What’s It’s Like to Have a Student Loan) Amendment Bill” might be a good way to go. We have heard some pretty patronising speeches about how I should just be grateful that I had a student loan. Well, I was not grateful for it. I was grateful that I got to go to university but I was not grateful for the fact that I worked 20 hours a week to keep my loan down. I was at university for 4 years, and I left university with a loan of about $15,000 or $16,000. By the time I had graduated, the loan was already into the $20,000s and I had not even started working yet. I was not grateful for that aspect of the student loan scheme.

I notice that all the members opposite who are chipping away had free university education, and I ask them again why they do not actually talk to people who went through the scheme. If members do not understand the incentives around repayment, then how can they put that into place in the policy? If they do not understand what it is like to have a student loan, what it is like to think that one will never pay it off—

Hon Georgina te Heuheu: She thinks that some of us have never had offspring with student loans. Some of us have.

I say to Minister Te Heuheu that people can think they will never be able to pay it off, because when they graduate the 10 percent that comes out of their income automatically is actually less than the interest for that period, so they are repaying their loan and it is going up and up. So people think they will never be able to repay it. Those members opposite who have never had that experience should talk to people who have, and they will tell them what they need to do—

💬 Hon Paula Bennett: Get the facts.

Paula Bennett, who had the training incentive allowance to help her get off the domestic purposes benefit, and then cut it for every other domestic purposes benefit mother who wanted to get off the benefit, should probably—

💬 Hon Paula Bennett: Look at the facts.

How did the Minister get to university?

💬 Hon Paula Bennett: I had a student loan, actually.

How did the Minister get a student loan to go to university? That Minister cut the tertiary training incentive allowance to every other domestic purposes benefit mother who wanted to get off the benefit. She pulled the ladder up behind her, after that scheme helped her to get off the domestic purposes benefit. Good on her for doing that, but I think it is mildly repugnant when the scheme that that Minister benefited from was cut so that no other domestic purposes benefit mother could climb that same ladder.

But I come back to the bill and suggest the title “Student Loan Scheme (Save Our Interest-free Student Loan) Amendment Bill”. The interest-free student loan scheme is at risk. We can see from the reaction of those on the other side how much they do not like having to listen to us explain about the value of the interest-free student loan scheme. I am proud about Labour’s record in this area. I am proud that the first thing we did when we became the Government was to remove the interest from loans while students were studying, because that was horribly unfair.

I start my speech by congratulating Moana Mackey. It is really good to hear from a relatively young person, and I must say that Moana Mackey is celebrating a birthday very soon. Moana Mackey is very aware of the costs of being a student and the advantages of what happened with the interest-free student loan scheme. The introduction of interest-free loans was one of the proudest moments in Labour’s term in office. Students were absolutely delighted at having some hope of cutting into the principal of the debt they had incurred while they were studying.

As other speakers have said—and I say it again—the previous Labour Government’s interest-free loan scheme was labelled by then National Opposition as “irresponsible”, as “buying votes”, and all sorts of other things. National members were absolutely opposed to it. They said it was the worst thing that the Government could ever do. So I guess the name of this bill could be the “Student Loan Scheme (We Didn’t Actually Get Rid of the Interest Free Student Loan Scheme: We Will Make Some Technical Amendments; There Are Other Ways to Fleece Students in This Country) Amendment Bill”

What would those other ways be? I see Paul Quinn wondering what they could be. Certainly, it would be the ability of students in this environment to pay back their loans. The reality for most students is that they study during the year. They have part-time jobs so they do not have to take on so much of a loan. Maybe they work during their holiday period so they are able to pay off some of the principal of their loan. Well, that cannot happen under this Government. Has this Government done anything to assist in providing jobs and opportunities? Has it done anything to assist our industries to get through these tough times? No, it has not; it has done quite the opposite. Again, students are on the wrong side of that, but they will go out and look for jobs.

I know that many members opposite denigrate students, but we know that students work very hard. They work hard in their studies, and then they try to secure employment to assist them during their study time so they can get rid of some of the principal on their loan. I have spoken to so many students who have said that it just is not possible to get jobs, despite the Minister standing in the Chamber and talking about all the opportunities that the Government will give young people. We know, in the substance of it, that there no jobs or opportunities out there.

This bill is technical, but we also look at what else is on the Government’s agenda. This bill does no harm to students, but what could be on the agenda for students in the future? We know there is a veiled threat, because we heard the Prime Minister talk about lifting the cap on fees’ institutions. So what do we know will happen? When Labour was in Government we took some very responsible moves, which were not supported by the National Opposition at the time, to ensure that student fees did not escalate way out of control as they had done under the previous National Government.

Mr Key has referred to an “inflexible and bureaucratic funding and policy framework”. What does that mean? It means a framework that ensures that student costs do not romp away—that there is a cap on the fees that institutions are able to pay. So Mr Key’s comment tells me that tertiary education will soon move into the National Government’s market approach to things.

Yesterday I was listening to a discussion about language on that great national icon, Radio New Zealand. It was stated that the great American writer Mark Twain was known for his precision in language. He was very critical of adverbs and adjectives, and he wrote in short sentences. Members may be wondering what the relevance of this discussion is to the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. I have been here for a little while avidly listening to some very strong arguments being advanced from members on the other side of the Committee about how the bill could be retitled. I have mulled over in my mind some suggestions from various members. I say to Moana Mackey that she fails the Mark Twain test. Her suggested amendments were far too long.

💬 Hon Maryan Street: I passed.

I will come to Maryan Street in a minute. Lynne Pillay’s amendment seemed to never end. The problem I have in trying to apply the Mark Twain test to this is—

💬 Hon Trevor Mallard: That’s why they couldn’t circumcise Muldoon, isn’t it?

I do not know what he had to do with Mark Twain, but that may be another story.

The point I am making is that this bill’s title is an accurate description of what the bill contains. It might not be the most exciting title, but it is certainly the most accurate and it passes the Mark Twain test. That is why, having heard the arguments put forward from members opposite, I am not persuaded that a change is in order.

I heard the Hon Maryan Street make reference to the timing of this bill in the context of the current urgency. I was grateful for her that I was excluded from her excoriating criticism. However, I am concerned that this bill be passed as soon as possible and I will tell members why. In one of the earlier parts of this bill, we passed some very important provisions relating to students being able to study overseas and access a student loan. Members will be aware that that provision is backdated to 2007. A lot of students have been waiting for this provision to pass because they will now be able to access it and they have been uneasy—I know this from the correspondence I have received from many of them, and in particular from their parents—at the uncertainty that has prevailed.

I am very keen to see the bill passed. I would have loved to see it passed last year, but other circumstances got in the way. I am very pleased that it now will pass and those people will get the benefit. From the bottom of my heart, I thank those members of the Opposition who have taken such a constructive interest in the grammar and construction of the title. I have listened to what they have said, but I think on balance the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill captures it all, really.

I have some ideas for what we could rename the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill, but I will get on to that shortly. I refer to something that Moana Mackey talked about. She said that while she was studying during the 1990s, even though she was not working full time—she was studying part time—every time she got that statement from the Inland Revenue Department she saw that interest had been added on to her student loan. That is something that I saw, that Grant Robertson saw, and that a number of us saw.

We were very thankful when the Labour Government introduced interest-free student loans in 2005, despite opposition from the National Party at that time. National thought that it was corrupt and irresponsible of the Labour Government—

💬 Chris Hipkins: A hoax, they called it.

National called it a hoax and thought it was irresponsible of the Labour Government to bring in a provision that ensured all New Zealanders had the opportunity to have equal access to tertiary education. We know that one of the biggest barriers to participation in tertiary education is the finances. As a person who went through tertiary study during the very, very bad 1990s, all I can say is that I appreciated the fact that, in 2005, student loans were made interest free.

Across the course of this debate we have had a few interjections and comments from the floor. I want to clarify something for Mr Garrett, who interjected earlier and asked whether I had even graduated. That is typical of the attitude from Mr Garrett. I will clarify for him that, yes, I did graduate. I graduated three different times with three different qualifications, so I thank him very much for that query.

If we look at the title of the bill, we see it is the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. I think that when thinking of different titles for this bill, we need to look at the broader picture with regard to the public comments that have been made by National members of Parliament, including the Prime Minister, and some of the actions that National has taken on tertiary education during its term in Government. One possible alternative title for the bill could be the “Student Loan Scheme (Does Not Really Make Up for Paula Bennett’s Training Incentive Allowance Cuts, But Anyway) Amendment Bill”. That goes back to what I was saying before with regard to some of the actions that have been taken with tertiary education and the fact that the National Government does not take seriously the need for a range of different people, particularly those who are marginalised or underrepresented in tertiary education, to have equal access to tertiary education.

Another possible title I think we could add to the mix might be the “Student Loan Scheme (We Will Tutū With It Now But Make the Drastic Changes Later) Amendment Bill”, because that is basically what the Prime Minister and the Minister for Tertiary Education have indicated to the public they will be doing by their recent comments that they will be taking a serious look at the student loan scheme. The Prime Minister has alluded to the fact that some students have taken advantage of the scheme, or he believes that they have been mucking around and not taking it seriously. All of those things indicate that down the track, National will be looking to make drastic changes.

As has been mentioned in this Chamber today, the ones who will be affected by the changes that we anticipate the Government will make down the track are those from lower-income families, Māori and Pasifika, and also, as I mentioned before, women. Already we have received a number of letters and emails from women stating that it would be very difficult for them to study this year, knowing that the training incentive allowance will not be available for them. The Minister for Social Development and Employment said that she would put in a provision so that they could have an extra $500 on their student loan, but, for a student, $500 on a student loan is nothing compared with the $3,800 that was cut from the training incentive allowance. That money was a cut for women who are looking after children by themselves and who are already struggling with things like childcare and even transport with regard to getting to their tertiary institution. Many of them have come out of sometimes tumultuous relationships, and we have this Minister for Social Development and Employment deciding to cut something from them.

I will take a very brief call; this time I will be reasonably brief on this final point. We are debating the title and commencement clause of the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill. I do not intend to suggest a whole raft of alternative titles to the bill, as some of my colleagues have. However, I acknowledge the contribution of the Minister in the chair, the Hon Peter Dunne, in this debate. I have been in the Chamber for most of the Committee stage on this bill, as I know the Minister of Revenue has been, although a little earlier in the day than we might have initially anticipated. I thank him for engaging with the debate. We on this side of the Chamber are not used to having the opportunity to put questions to a Minister in the Committee stage and have the Minister stand up, answer them, and engage in that kind of interaction. That is what the Committee stage of a debate should be all about; I can see the Chair is agreeing with me on that. It is unusual but it is very welcome.

I think the Minister has answered a number of the questions we put forward. I put forward questions to him earlier on about diplomats and about the thresholds. He has engaged with us on those issues and I think that provides some reassurance to people who are listening in on this debate that even though this bill does not necessarily address all of the issues or the technical concerns that exist with the current interest-free student loans scheme, the Government has at least taken on board some of those issues. I was also very pleased to hear the Minister acknowledge the concern around diplomats, and he gave us a commitment that he would look further into that issue. I am more than happy to talk to him about that issue further at any point if he wishes to do so. I am happy to give him some examples of people who have been captured by that particular problem.

That was all I wanted to say on this particular part of the bill. I just wanted to acknowledge the contribution the Minister has made and to thank him for it.

Tēnā koe, Mr Chair. I will take a very short call. I would like to start by saying that urgency does not always bring out the best in us. It sometimes leads to flogging a dead horse or working out just how many ways one can say the same thing as someone else without using or stealing his or her precise words. I do not want to do that. But I would like to disagree with the Minister of Revenue about the title of the bill. I feel that the title, although it has a certain musical ring, is somewhat disingenuous.

“Miscellaneous” is a beautiful word. It is a marvellous, colourful word, but it suggests very, very small random issues, and it is not accurate in terms of the way the Green Party sees this bill. I have also learnt in my brief time in this Chamber that we take on words like “miscellaneous” at face value at our peril. In this place it is essential to read the fine print, and not only to read the fine print but also to get 12 other people to read it and then consult widely, and exhaustively, and extremely—as a result of urgency—with at least the groups who are most affected by the bill, and then after all of that assume the worst.

I like Mark Twain’s idea of brevity and I would like to suggest some brief titles that would satisfy the Green Party. One is “Give With One Hand, Punish with the Other”; the other is “Fifteen Cents in the Dollar or Else”. Kia ora.

The Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill is a relatively—

💬 Hon Member: Was it a good book?

Do not get me sidetracked! This bill is a relatively simple one. I think it is fair to say that the title of the bill reflects the purpose and intent of the bill. I think it is time that members stop wasting the time of this House.