National's debt chickens continue coming home to roost

The Government is welcoming a new report from the Controller and Auditor-General which is heavily critical of the previous Government's failure to investigate the economic and social impact of the student loan scheme, Associate Education (Tertiary Education) Minister Steve Maharey said today.

The Controller and Auditor-General this morning released his report into the availabiity and adequacy of information surrounding the student loan scheme. It finds that there is a lack of information on the long term impact of the student loan scheme, despite studies conducted by outside organisations pointing to the serious consequences of indebtedness on the lives of borrowers.

Mr Maharey said that the report backed up his calls in Opposition for National to conduct proper research on how its loans scheme was affecting the future of borrowers, along with the potential flow-on effects across the economy.

"The Auditor-General has conducted an independent and authoritative study and has come to the same conclusions that many New Zealanders have long held. National's student debt mountain is having serious affects on the lives of borrowers, with an unknown impact on New Zealand's future economic and social circumstances.

"What little evidence the Office of the Auditor-General was able to assemble suggested that borrowers are delaying starting families and entering relationships, taking on mortgages and saving for their retirement, and increasing their fees for the professional services they now provide.

"Labour and the Alliance voiced similar concerns in Opposition and we are acting in Government. The Education and Science Select Committee has accepted our invitation to run an inquiry this year into the effects of the loan scheme and we have invested significant additional resources into addressing its worst aspects.

"I welcome the Auditor-General's report and I intend to take the time to carefully consider the full range of recommendations it makes, in consultation with Cabinet colleagues," Steve Maharey said.

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