2. Dr DON BRASH (Leader of the Opposition) Link to this
to the Minister for Tertiary Education
What is the total value of all voluntary repayments made by student loan borrowers in the last 12 months?
Hon Dr MICHAEL CULLEN (Minister for Tertiary Education) Link to this
The Inland Revenue Department’s latest estimate of voluntary repayments is based on the 2004 income year. For that year, $167.4 million of voluntary repayments were received.
Is the Minister aware that section 56 of the Student Loan Scheme Act 1992 permits student loan borrowers who have made voluntary repayments to request a refund of those repayments, up to 6 months after the Inland Revenue Department issues receipts for them; if so, does he think the Government’s interest-free student loan policy will encourage more students to use this redundant refund mechanism?
Hon Dr MICHAEL CULLEN Link to this
No, I do not think there will be any significant impact in that respect.
Would the Minister be surprised to learn that last week one Thomas Banfield sought to exercise just this provision when he requested that the Inland Revenue Department refund the $15,000 he had voluntarily repaid just a few months earlier so that he could place that $15,000 on interest-bearing deposit; if so, why is he surprised?
Hon Dr MICHAEL CULLEN Link to this
I have no information about the case. By the sound of it, he might be a National Party supporter.
Does the Minister think that Thomas Banfield will be the only student who has made a voluntary repayment on his or her student loan in the last few months who will now request a refund in order to invest his or her money elsewhere; if so, why?
Hon Dr MICHAEL CULLEN Link to this
I doubt that he will be the only one, but I will be discussing this matter with the Inland Revenue Department—[ Interruption]—and I will take up the suggestion from Mr Gerry Brownlee.
Why does the Minister continue to insult the intelligence of tertiary-educated people by suggesting that they are too stupid to take advantage of the interest-free money that the Government is offering them?
Hon Dr MICHAEL CULLEN Link to this
I am not insulting the intelligence of tertiary-educated people. I spent a considerable part of my life helping to train them.
Judy TurnerCan the Minister confirm that in 2004, 50 percent of borrowers used the student loan scheme for living costs, and does that not tell the Minister that living allowances are too restrictive and that eligibility for allowances must be widened?
Hon Dr MICHAEL CULLEN Link to this
Certainly, loans costs are for living costs. The member draws the point, obviously, that a large number of students are eligible for student allowances. It is Labour policy to extend the availability of student allowances, but I note that within the last week, two agencies—both Treasury and the Reserve Bank—have warned against significant further fiscal easing.
If the Minister does make changes to the student loan scheme to prevent refunding repayments on student loans, will the changes be made retrospective?
Hon Dr MICHAEL CULLEN Link to this
I doubt they would be made retrospective in the sense I think the member means. It is not uncommon, of course, in matters relating to the Inland Revenue Department, for them to be prospective from the date of announcement.
Is the Minister aware of the increase in the number of allowance recipients who use the student loan scheme to supplement their allowance to pay for living costs, from 34 percent in 2003 to 49 percent in 2004, and is that not due to the stingy and miserly amount individuals on student allowances get; if not, how does he explain the jump of 15 percent in 1 year?
Hon Dr MICHAEL CULLEN Link to this
It partly reflects broader eligibility, but, of course, in part it substantially reflects the rise in household incomes, which has taken more households out of the net of eligibility for student allowances above forecast.