Student Loan Scheme Bill, First Reading
Thursday 14th October 2010
Te Ururoa Flavell, MP for Waiariki

Kia ora tātou. Kia ora tātou e te Whare. I say from the very outset that we have advised the Minister for Tertiary Education that the Māori Party will not be supporting the Student Loan Scheme Bill at its first reading. The reasons are fairly straightforward, and I will try to elaborate on them this afternoon.

Philosophically, what we put out in our election manifesto at the last election is the key thrust behind our position in opposing this bill. As others have said, the purpose of the bill appears to be pretty straightforward: it will reform the way student loans are paid, reform the way borrowers can manage their loans, reform the way loans are to be administered, and rewrite the current student loan legislation. But what does all that mean in terms of dollars and cents? For us it will increase the loan establishment fee from $50 to $60, and it will establish an annual $40 Inland Revenue Department administration fee. I put it to the House that for some of us that may not be too much. Fifty dollars is maybe not a lot; it may be neither here nor there—I suppose it could be a bottle of pinot noir, perhaps a meal at Bellamy’s, or whatever.

But for students, in a sense, it is a little bit more than that. In fact, it could be crucial to whether they stay in the game. We are talking about maybe a down payment on course textbooks or a weekly bus pass. I suppose that, in the end, it is all a matter of scale. A student loan covers course fees and/or living expenses for full-time students.

The central policy challenge for the Māori Party is that although we recognise and celebrate the fact that the loan scheme has clearly opened the door to tangata whenua entering tertiary education, the related issue is that they end up with disproportionately high levels of debt. We understand that more Māori have a student loan debt than any other group, although the level of debt held is similar to other groups.

Māori do, however, have the lowest post-study incomes and repay their loans more slowly than other groups. So although we accept the need to review the administration and repayment regime, we are most concerned about the impact of these new, increased fees and loans on students who are already struggling with things like rising food, rent, and petrol costs. Notwithstanding the reduced compliance costs achieved by the introduction of the electronic management system, the introduction of the Inland Revenue Department’s annual administration fee will increase the cost of a Māori student loan by $200-plus or so over a five-year period. We consider that both the annual Inland Revenue Department administration fee and the loan establishment fee will have a negative impact on Māori students who have student loans. Like others, we are absolutely committed towards a key goal of increasing accessibility to tertiary education as a front-end investment in the nation’s future.

To this end we believe that tertiary education should be freely available to all. I want to draw on a case study from Ngā Kete Wānanga Marae at the Manukau Institute of Technology. The Manukau Institute of Technology serves a population base characteristically of people of low socio economic status and high unemployment. It has a high percentage of Māori and Pasifika peoples. It has reported that the immediate pressures of Māori and Pasifika students are financial difficulties and survival within a tertiary institution. They describe the fact that a high number of Māori and Pasifika students rely on a student loan to finance study. Retention of these students is largely dependent on their financial ability to remain studying while family pressures mount. Māori and Pasifika students also tell them that they find it increasingly difficult to remain in study without additional academic, cultural, and personal support.

So at their institution, Te Tari Mātauranga Māori—the Māori education department at the Manukau Institute of Technology—takes an active role in providing some degree of academic and cultural support within the programmes they offer. Central to this support is the institution-based marae that sits near Te Tari Mātauranga Māori on campus. I recall one of my kinsmen, Toby Hapimana Rikihana was appointed as the first Matua Kaiwhakahaere back in 1990, so it is great to know that it is still going strong in 2010.

I tell this story because it reflects where we want to demonstrate our support as a party in terms of helping to ensure that all people have the chance to pursue tertiary education. In line with this policy direction we have always thought that a brave and visionary Government would introduce a fee reduction policy to reduce fees to a nominal level over time. Ideally we would also want to increase access to student allowances by reintroducing a universal student allowance that would be set at the level of the unemployment benefit. This is, of course, if we assume that increasing tertiary participation is something worthwhile and of general value to the nation.

The Māori Party believes that participation in tertiary education is something we should be actively encouraging all of our young people to consider, or our not-so-young. We were very pleased to hear the comment from Dr Roy Sharp, the Chief Executive of the Tertiary Education Commission that they would assume that as the Māori population is, on average, younger, higher Māori participation levels in tertiary education would be desirable. The commission has published performance indicators for the sector showing 9 percent of university students and 20 percent of those at polytechnics are Māori. In the wānanga sector, the population at Te Wānanga o Raukawa and Te Whare Wānanga o Awanuiārangi is more than 90 percent Māori, but only 51 percent of Te Wānanga o Aotearoa’s 36,000 students are Māori.

Our policy focus around student loan repayments has been one of our key platforms. Therefore, in helping to achieve higher Māori participation levels in tertiary education our approach is that debt repayment should start only when one starts earning one and a half times the average wage. In this same policy we advocate for a five-year grace period for repayments after graduation. We are also committed to the concept that student loans will remain interest-free. This then, as members will appreciate, was the policy context with which we have responded to the Government’s intention to repeal the current student loan scheme legislation. This is a massive contrast between our expectations and the reality outlined in this bill. Therefore, we are unable to support this bill at its first reading.

ENDS

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