Greens bill may see students loans put on back burner in favour of saving for first-home deposit

If a Green Party private member's Bill makes it into law, students would be able to delay compulsory loan payments and divert them into a deposit for a first home. Photo / File

People with student loans would be able to put off their repayments to instead save for a house under a Green Party bill to be debated by Parliament.

But the Government has already disputed the need for the change, saying graduates were in a better position to buy a house than most people.

A bill in the name of Green MP Gareth Hughes was pulled from the private member's ballot today.

If passed into law, students would be able to delay compulsory loan payments and divert them into a deposit for a first home.

Hughes said many young people were struggling to get a house deposit together and his bill would make it easier and faster to get their first home.

If combined with KiwiSaver, a bachelor's graduate on a median wage could save $18,000 over five years by diverting their repayments, he said.

Tertiary Education Minister Steven Joyce disputed the need for Hughes' bill.

"People do pay off their loans quite quickly, they go off and buy houses and there is no indication or any research which suggests they are delaying their house purchases because of student loans."

Asked if it would help young people get into the housing market, he said graduates on average earned 40 to 50 per cent more than those who did not go to university.

"So they get an income benefit out of their tertiary education that lasts their whole lives. So they are more able to buy a house than most other people."

Hughes noted that the policy would apply to any qualification which required a student loan, including trades or polytechnic courses.

Another Green MP, Jan Logie, also had a bill pulled from the ballot today.

It would increase workplace protections for domestic violence victims, partly by allowing victims to request up to 10 days' "domestic violence leave".

Logie said abused women often found it difficult to juggle court, counselling, housing and their children after leaving a violent partner. Some workplaces were already granting leave on domestic violence grounds, but Logie wanted it entrenched in law.

The bill was backed by the Human Rights Commission, which said victims were more likely to be disengaged, less productive or suffer workplace accidents.

A bill the name of Labour MP Kelvin Davis was also drawn, and would introduce Labour's long-held policy of building 10,000 affordable houses a year through a state-run construction programme.

The bill is unlikely to pass its first hurdle. But Davis was putting a brave face today, saying he was expecting a congratulatory call from the Government for solving the housing crisis.