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The Outback is no longer safe for asylum-seeking Kiwi students, with tax officials set to crack down on the unpaid student loans of New Zealanders living in Australia.
John Key and Australian Prime Minister Tony Abbott announced on 28 February that tax officials will share up-to-date contact information between New Zealand and Australia in an effort to recoup unpaid student loan debt.
In June 2014, there were 109,477 overseas borrowers. Tertiary Education Minister Steven Joyce said $686 million of student loan defaulted debt is held by borrowers living overseas. He estimated that 65 per cent of these borrowers are in Australia.
Revenue Minister Todd McClay said the agreement was an effective way to recoup money. “We know that when we contact people, they start paying. Approximately 70 per cent of overseas borrowers we contact begin to repay their debt.”
The agreement does not apply to Australians living in New Zealand, who will only be required to repay their student loans whilst living in Australia.
According to Joyce, the Government is also working on arrangements to recoup money owed in other parts of the world, with a particular focus on the UK, another prime location for New Zealanders with unpaid loans.
“We’re still working on further arrangements in the UK and other parts of the world, we’ve set up payment arrangements to make it easier for people to pay off-shore, but we’re just continually working on different ways of making it easier for establishing those contact details.”
Borrowers are considered “overseas-based” if they are away for 184 consecutive days or more (about six months).
In March 2014 an amendment to the student loan scheme made it a criminal offence for “borrowers living overseas in default to knowingly fail or refuse to make reasonable efforts to pay”.
The amendment also allowed IRD to request border arrests for “persistent defaulters returning to or leaving the country”.
New Zealand Union of Students’ Associations (NZUSA) President Rory McCourt—hilariously described as the “leader of New Zealand’s 400,000 students”—said the amount owed by overseas borrowers is a fraction of the $15 billion of student debt held by those in New Zealand.
“Students are taking on too much debt and that’s a concern not only for individuals, being burdened with debt for their lives, but for the country as well.”
McCourt said increasingly tertiary education in New Zealand was a private burden, which was being pushed onto students and their families.