Banks calls for restoring interest on student loans

John Banks. File photo / Glenn Jeffrey.

Act leader John Banks has made an attack on "middle-class welfare", urging National to bite the bullet and restore interest rates to student loans.

In a hard-hitting speech to Act's annual conference on Saturday - his first as both party member and leader - Mr Banks reconfirmed Act's policy to incrementally raise the age of entitlement for state-funded superannuation from 65 to 67.

He told the 80 or so party members present that Act's role was to provide some "reinforcing steel" to persuade National to make the unpopular decisions needed to restore the vital connection between "effort and reward" which had been undermined by Labour administrations.

The requirement for full-time students to pay interest while studying was dropped in 2001, and in 2006 all borrowers remaining in New Zealand were made exempt. The 91,000 borrowers who have since moved overseas - owing a total of about $2.5 billion - accumulate interest on their loans. Their debt accounts for about 20 per cent of the total loan balance of about $12 billion.

"We stand against middle-class welfare ... We stand against everybody else being taxed for tertiary graduates to have a free ride."

Mr Banks also had harsh words for "tin god council bureaucrats" whose "out-of-control" spending and town planning restrictions had put home ownership out of reach of a whole generation of New Zealanders.

He said Act had an "awesome responsibility" in ensuring it returned MPs in numbers at the 2014 election to ensure the centre-right stayed in power.

Without Act, there would be no such government as the last election had proved National would never be able to govern alone under MMP.

Mr Banks made no mention of the infighting that plagued Act in the last parliamentary term. He instead promised to "rebuild, refocus, retool and relaunch" the party.

Act's single vote in Parliament may prove crucial to National in passing any legislation needed to enact a deal between the Government and SkyCity, which would see the building of a national convention centre in exchange for the company getting more poker machines in its Auckland casino.

Mr Banks would not be drawn on what stance Act might adopt. "Let's look at the whites of the eyes of the deal that's negotiated and make some decisions then."

The conference was also told that trials of Act's controversial plan to set up autonomous charter schools may now occur in other poor towns and suburbs around the country, rather than being restricted solely to south Auckland and Christchurch.

Act secured National's backing for the initiative as part of last December's post-election confidence and supply agreement between the two parties.

That document indicated that pilot schools would initially be set up in disadvantaged areas of south Auckland and Christchurch. Once those schools were successfully established, the scheme would be extended to other regions "as fiscal conditions permit".

However, the chairwoman of the charter school implementation working group and former Act president, Catherine Isaac, said confining the concept to two areas could see a goldfish bowl effect "with everyone in the country staring at what was happening".

That did not mean there would necessarily be more than two pilot schools.

That would be for the Government to decide and would no doubt be based on the likely demand from disadvantaged communities and where the need was greatest.

Charter schools would be free to set their own timetables, school terms and teacher working conditions rather than following Ministry of Education requirements.

The concept has been heavily criticised by teacher unions and academics who point to the failure of some charter schools in the United States to lift educational achievement of pupils above the levels attained by existing state schools.

Catherine Isaac said the working group was looking for a new collective name by which to identify the new schools as the word "charter" had other meanings in New Zealand education law.

- WITH NZHERALD STAFF