Write off student loan debt, says Harre

By AUDREY YOUNG political reporter

A plan to write off student loan debt and scrap the loan scheme would be the top priority of the Alliance in a new coalition, says leader Laila Harre.

She said that without the Alliance Labour might set tougher conditions for debtors.

In the Coalition Government, the Alliance had twice prevented Labour from increasing interest on student loans.

In a new coalition it would seek an extension of the freeze on interest rates from students who were studying to all those with a student loan debt, at a cost of about $150 million a year.

Within three years the Government would have developed a scheme by which the loan could be written off.

"We are not proposing a specific mechanism. An example might be to write off $1000 of debt every year," Ms Harre said.

The plan would involve discussion about fairness for former borrowers who had repaid their loans or avoided debt by, for example, working at two jobs.

By June last year 314,280 borrowers had outstanding loans and 81,180 had repaid all their loans. The current total debt is $5 billion and the average debt $21,000. By 2020 it is expected to be $20 billion.

"In 1989 Labour introduced the first student fees. It has been all downhill from there," Ms Harre said.

Free tertiary education, including a universal student allowance, was the Alliance's No 1 policy.

She said the impact of student debt should not be underestimated.

"Young people who are putting off having families, putting off buying houses, or leaving the country because they cannot earn the wages here that enable them to pay off their student debt at a fast rate."

It was a huge cost to New Zealand "because we are losing productive young people and we are wasting the investment we have made already".

The problem had to be tackled before the debt increased.

She said anyone whose priority was tertiary education should vote for the Alliance.

"We will require as part of a coalition agreement a significant investment in tertiary education, much more than the $400 million over three years that was committed in the 2002 Budget.

"Each year Labour has tried to raise the interest rate for existing loans and each year the Alliance has stopped them.

"Each year we have successfully insisted on a fees freeze within tertiary institutions.

"This year we wanted to extend student allowances to the 12,000 who have missed out because the parental income threshold is based on 1992 wage rates. Labour said no."

She said the Alliance would pay for the policy from the surplus - from which the superannuation fund is financed.

Projected surpluses meant that it was possible to have a fund and free tertiary education without playing the young off against the old.

Labour's Tertiary Education Minister, Steve Maharey, said the Alliance was "playing the politics of inter-generational envy".

"The Alliance's objectives are laudable but they are more heroic than realistic," he said.

"Because they have little prospect of being represented in the next Parliament they can indulge themselves in sponsoring some kind of fiscal telethon.

"Others may want to play this game. Labour will stand on its record."

University Students Association co-president Charlie Chambers said the Alliance had set a standard for other parties to match in debt-relief policy.

Gimmicks galore

The election gimmicks are starting to roll out thick and fast:

* Bill English has become National's calendar pin-up model.

* Act launched its crime and justice policy at the entrance to Mt Eden prison - carefully timing it outside visiting hours so as not to aggravate inmates' families.

* Jim Anderton called a press conference of cameras to witness him signing an application form to join the party named after him: Jim Anderton's Progressive Coalition.

* And now Laila Harre's Alliance is indulging in fake art in the interests of gaining the student vote.

Laila Harre flourished a neatly designed "cheque" yesterday for $21,000 made out to Every Young New Zealander.

The sum represents the average student debt.

And the message?

"Every party vote you give the Alliance will increase the value of this piece of paper," she said, announcing policy to scrap the student loan scheme.

Full coverage:
nzherald.co.nz/election

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