National to thank for loan loophole closure

new-zealand-national-party

Wed Nov 30 2005 13:00:00 GMT+1300 (New Zealand Daylight Time)

National to thank for loan loophole closure

Wednesday, 30 November 2005, 8:12 am
Press Release: New Zealand National Party

National Party Finance spokesman John Key says the public of New Zealand have National to thank for identifying a student loan loophole which could have seen students profiting off the generosity of the taxpayer.

“This proves beyond any doubt that Labour’s ‘no interest’ loans scheme is rushed and reckless, thrown together in desperation before the election.

“It took National to expose the issue which, until we raised it, had been completely overlooked.

”The Finance Minister’s been shown up by a graduate who’s proved he knows more about the law and the value of interest than Dr Cullen.

“Dr Cullen knows the loophole he’s moving to close will no longer be relevant after his ‘no interest’ policy is introduced - because virtually no one will be making voluntary repayments any more.

“This makes a mockery of Dr Cullen’s claim that the ‘no interest’ policy will not change borrowers’ behaviour. He’s changing the law now only because borrowers are already modifying their behaviour.

“Minimum compulsory payments will still be made, but it’s now clear National was correct in its observation that this policy encourages students to borrow the maximum and repay only the minimum.

“Dr Cullen may have saved taxpayers a few dollars around the fringes, but we remain convinced that he will be unable to deliver the loans policy within budget, without strictly limiting access to tertiary education or making it much tougher to get a loan.

“Which is it?” asks Mr Key.

Ends

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