3. Dr DON BRASH (Leader of the Opposition) Link to this
to the Prime Minister
Does she stand by her answer of 2 August 2005 to my question of whether she had asked Treasury to forecast the long-term fiscal impact of her Government's proposed interest-free student loan policy that: “No, this is a Labour Party policy, not a Government one.”; if not, why not?
Is it not correct that Treasury had been asked to forecast the long-term fiscal impact of her student loan policy, but that she and her Ministers did not find its advice politically palatable because it showed that, on realistic assumptions, the policy would increase student debt by over $5 billion and Government debt by $14 billion?
Rt Hon HELEN CLARK Link to this
This matter was dealt with in the House back on 2 August with a question put to my colleague the Minister of Finance. It was made plain at that time that the student loan policy was Labour Party policy, and that Labour Party policy was not sent off to Treasury.
Does she stand by her statement: “The cost of this policy will grow through time to a maximum of around $300 million.”, or was that just a politically convenient statement designed to deceive voters about the real financial impact of this irresponsible policy?
Rt Hon HELEN CLARK Link to this
Costings were given for the forecast horizon. This is a good policy, and it caught the Opposition napping.
How does she reconcile her statement about the cost of the student loan policy with Treasury advice dated 22 June 2005 showing the policy would cost $390 million annually by its third year, rising to $500 million annually after 6 years and to almost $1 billion annually by 2019?
Rt Hon HELEN CLARK Link to this
Treasury made it plain at the time of the release of its figures that it did not place a great deal of store on them itself, and I am happy to tell the member that its most recent costings are substantially revised down.
Metiria TureiHas the Prime Minister asked Treasury to consider the real, long-term fiscal impact of a generation growing up in debt who cannot afford to buy a house or have a family, and who are forced to seek highly paid jobs rather than going into public services such as teaching and nursing, and is it not time that we stopped point-scoring and considered the real consequences of this $8 billion mortgage against our future?
Rt Hon HELEN CLARK Link to this
It is entirely the real consequences of the student loan policy as introduced around 1991-92 that the Government is seeking to deal with, for the sorts of reasons to which the member has referred, and I thank her.
Can the Prime Minister confirm that her Government’s interest-free student loan policy will result in $2 billion being written off the Crown balance sheet, and if she can confirm that is the case, why was that fact not made known to New Zealand voters before the election?
Rt Hon HELEN CLARK Link to this
In answering questions from the member himself, I said that we were well aware it had balance sheet implications.