You can run but you can’t hide

Student loan defaulters skulking in Australia are in for a rude awakening.

New laws making it easier for the IRD to track Kiwi student loan defaulters living in Australia could help claw back as much as $100 million extra a year.

About 70 per cent of overseas-based borrowers are in default, and about 60 per cent are thought to be in Australia.

Thousands of them now face Australian debt collectors, courts or arrest at the border after a data-sharing swap with the Australian Tax Office gives the IRD access to the contact details of any defaulters who have paid tax in Australia.

Until the latest measures were passed into law earlier this week, it was considered too hard for the IRD to track down defaulters living overseas.  

“This is just going to provide a far larger group of people who have gone to ground,” Tertiary Education Minister Steven Joyce said on Friday.

“It’s important for the sustainability of the [student loan] scheme, and to make sure it’s fair.”

By being able to cast its net wider, IRD would be able to start initial discussions with more defaulters and, if people still aggressively ignored IRD, they could face Australian debt collectors and courts, or arrest if they returned to New Zealand.

The latest measures comes just months after the first arrest of a student loan defaulter, when Ngatokotoru Puna was collared at Auckland Airport in January when he tried to leave.

The 40-year-old nephew of Cook Islands Prime Minister Henry Puna had avoided paying back his loan for 20 years and had racked up $130,000 in student debt after moving to Rarotonga.

Student loan debts remain interest-free while borrowers are in New Zealand. When they leave for more than six months, their loans accrue interest from the day they leave, which can then be compounded by penalty rates if they do not pay.

One gobby bludger reckons he shouldn’t have to pay.

An expat Kiwi defaulter living in Australia, who borrowed $15,000 in the mid-1990s, said penalty interest rates had inflated his loan to about $80,000.

IRD already had his details, but he had told them he had no intention of paying, he said.

“I’m in good company, though. There’s at least of 60,000 of us – at two arrests a year it will take 30,000 years to get everyone. It doesn’t seem like a well thought-out plan … f…ing muppets.”

He said he would return to New Zealand for occasions such as funerals, but “as for holidays, forget about it”.

Last time he was here, he said he spent thousands of dollars on tourism, and he suspected a crackdown on defaulters would cost the tourism industry.

“They are probably losing more money through lost tourism than what they are allegedly recouping in loans.”

He described the student loan scheme, introduced in the early 1990s as “predatory lending” and the IRD as “loan sharks”. “For me it’s political, I’m simply not paying a 20-year-old debt.”

See how far those argument get you in front of a judge. The little coward is too afraid to name himself though. But there is enough information there to start a good search. He is blaming the scheme for his massive debt, but he only has himself to blame by skipping out and not meeting his responsibilities.

It does show though that the media are complicit in hiding a loan dodger. They found him and if they can find then so can IRD.

The arrogance is incredible.

Chris Hipkins thinks that student loans is getting out of hand.

“But the huge mountain of student debt is something we need to rethink. At $15 billion and still growing, it is clearly getting out of hand.”

Young people saddled with huge debt were putting off having children and struggling to buy a home. “A whole generation of Kiwis is getting a pretty rough deal compared to those that came before.”

And which government was it that made student loans interest free and let people skip the country without addressing loan repayments? Oh that’s right it was Helen Clark’s government, who were warned at the time that interest free student loans would balloon massively as people took advantage of free money. No one forced these people to get student loans, they chose to get them. Chris Hipkins just ignores the role his former government played in causing the debt mountain.

 

– Fairfax


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

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