Hon Bill English MP National Party Associate Finance Spokesman
19 December 2005
Cullen in denial over loans cost
"Michael Cullen's own papers support National's view that the 'no interest' student loan policy will cost $1 billion
next year and more than $400 million each year after that," says National Party Associate Finance spokesman Bill
"National has compared the costings produced by Treasury on the only basis that matters - the impact on the Government's
surplus, or operating balance. Each time the Treasury estimate the effect of this policy on the government books, the
"Some of the increase is due to accounting changes, but most of the increase is because Treasury believes students will
borrow more and repay less.
"Dr Cullen's costings leave out the more than $1 billion loss to taxpayers which will appear on the Government's books
"National has used conservative numbers from Treasury papers. Other Treasury estimates show an even higher cost.
"Labour has no credibility left on this issue. It initially denied Treasury had done any costings and then tried to hide
them until after the election. Labour simply doesn't want people to know how expensive this policy is.
"So, Dr Cullen is clearly choosing to use costings which paint this policy in the best possible light.
"The papers released today do confirm a massive up-front cost of more than a $1 billion. They are at least the fourth
set of costings we have had for this policy.
"The simple fact is that Dr Cullen has an agenda to talk down the impact of this policy. It is in his and Labour's
"What he cannot argue with are the unanimous forecasts which show borrowing will increase, the number of borrowers will
rise, and the level of voluntary repayments will virtually evaporate.
"The Finance Minister is dancing on the head of a pin and he knows it," says Mr English.