How is the Government ensuring overseas-based New Zealanders repay their student loans?
STUART SMITH to the Minister for Tertiary Education, Skills and Employment: How is the Government ensuring overseas-based New Zealanders repay their student loans?
Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): This week the Government passed the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill, which includes an information-sharing agreement with the Australian Taxation Office to provide the Inland Revenue Department (IRD) with the contact details of borrowers living in Australia.
This agreement is an important part of the initiative run by the Government since 2010 to ensure overseas-based student loan borrowers repay their loans. With the majority of overseas-based borrowers living in Australia, this new agreement will be a significant step forward in speeding up the repayment of the estimated $3.25 billion borrowed by those who are now living offshore.
Stuart Smith: What measures are included in the overseas borrowers’ initiative?
Hon STEVEN JOYCE: Before the current initiative began in 2010, overseas-based student loan debt was in the too-hard basket.
We do still have a way to go to get the repayments to the level we want, but in addition to this information-sharing agreement, we have brought in fixed repayment obligations and higher repayment thresholds for overseas-based borrowers, introduced a border arrest system for the most non-compliant overseas-based borrowers with high levels of default on their student loan repayments, and put in place ongoing information-sharing between the IRD and the Department of Internal Affairs, to collect contact details from passport applications.
These are all having a positive impact, with the current target of lifting extra payments by overseas-based borrowers by $100 million a year on track to be met in this financial year.
Stuart Smith: Why is it important for overseas-based borrowers to meet their obligations?
Hon STEVEN JOYCE: It is important that all borrowers meet their obligations to taxpayers, who have supported their tertiary study, and, therefore, allow the same level of support to be available for the next generation of students.
Through this initiative we have made it easier for borrowers to contact the IRD and make payments from overseas. It is really important for borrowers to know that just being overseas does not mean the loan goes away, and they are encouraged to get in touch with the IRD and get on top of their student loans.