A new tax bill passed through parliament will make it easier for the government to get information from the Australian Tax Office on expats across the ditch who are not paying back their student loans.
The bill also allows the government to report those caught out to the Inland Revenue Department (IRD).
Tertiary Education Minister Steven ‘Dildo Baggins’ Joyce claims the implementation of the Taxation Bill (in regard to, Residential Land Withholding Tax, GST on Online Services, and Student Loans) will allow the IRD to collect a further $100 million from overseas borrowers in order to support the next generation of students who need government loans.
Loans are interest-free until a student lives outside of New Zealand for more than six months.
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For some living in Australia who took out student loans 10–20 years ago, their loans have doubled or almost tripled since they were students as a result of the added interest.
Expats in Australia will now be subject to Australian debt collectors, court action, and could face being arrested at the New Zealand border (aka reaching peak NZ celeb status on Border Patrol).
VUWSA President Jonathan Gee said “the wider issue here is the level of student debt, which reaches $15 billion this year.”
“The government can’t just make plans to rake-in student loan repayments without also planning how they will retain graduates in New Zealand by creating jobs that allow new degreed-professionals to actually pay back their loan.”
Gee added, “students are an easy target when it comes to getting tough on things like student loan repayments. The new bill might scare students into compliance, but it doesn’t solve the problem of retaining skilled graduates in New Zealand.”
NZUSA President Linsey Higgins told Salient “NZUSA believes that there should be less punitive measures in place for students to pay back their loans.”
One third year BA student told Salient that these measures have made her “less inclined to want to move overseas” without paying her loan off. She added that she is worried for her fellow students, also graduating next year, who will want to move overseas and might find themselves in this situation.