You can run from your student loan, but you can no longer hide in Australia

As a third student loan defaulter is arrested at the border comes the news that you can run from your obligations, but hiding in Australia is no longer an option.

Another student loan defaulter has been arrested as part of a government crackdown, with warnings that Kiwis overseas can expect a knock on their door if they don’t pay up.

News of the arrest – the third since the start of the year – comes with the launch of a new information-sharing agreement between New Zealand and Australia to identify student loan borrowers living across the Tasman.

Inland Revenue has been targeting student loan defaulters in an attempt to recoup some of the more than $1 billion which is owed.

And IRD has been particularly effective at finding the ratbags.

An information exchange agreement with the Australian Tax Office (ATO) has carried out its first match, locating 10,400 student loan borrowers living across the Tasman.

Inland Revenue last week sent an initial list of 104,000 names of New Zealand borrowers who are living overseas to the ATO. Those names matched with the contact details of 10,400 people living in Australia.

Tertiary Education, Skills and Employment Minister Steven Joyce says the information sharing agreement is another important tool to help Inland Revenue trace borrowers in default living overseas, and ultimately to get them back on track.

“Inland Revenue has achieved some great results over the past year, including a 32 per cent increase in compliance from defaulting borrowers. I expect this agreement will see a significant improvement in that figure over the next year.”

Inland Revenue will now analyse the information, identify those who are in default and start contacting them to resume repaying their loans. Inland Revenue will continue to work with the ATO to make further matches of the names already provided and will carry out frequent matches throughout the year and ad-hoc matches as required.

“This new information exchange agreement will be a huge boost in enabling Inland Revenue to get in touch with those borrowers who have been hard to track down and those who have been deliberately avoiding their obligations for a number of years.

“My advice to these borrowers is to do the right thing and get in touch with Inland Revenue so they can work out a suitable repayment plan. If they don?t, it?s likely someone will be knocking on their door in the next few months.”

Mr Joyce says Inland Revenue had some tough enforcement measures at its disposal, including legal action and potential arrest at the border if the borrower returned to New Zealand, but those options were only pursued as a last resort. Since January six warrants for arrest have been issued and three people have been arrested and appeared before the court.

The New Zealand taxpayer funded their education but it appears many are actually too stupid to start repayments.

Time to get aggressive with them, the passive approach hasn’t worked.


– Fairfax