Information-sharing on student loans welcomedTertiary Education, Skills and Employment Revenue
Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Todd McClay have welcomed the announcement of an arrangement that will see Australia and New Zealand share data to assist New Zealand to recoup unpaid student loans of defaulters in Australia.
Prime Minister John Key and Australian Prime Minister Tony Abbott announced the information-sharing arrangement at their annual Leaders’ Meeting today.
“Some $686 million of student loan defaulted debt is held by borrowers living overseas, and an estimated 65 per cent of those people reside in Australia,” says Mr Joyce.
“Our overseas-based borrowers initiative is making good progress in tackling this overdue debt but there is still a mountain of debt to climb, given the lack of interest from past governments in collecting it."
Mr McClay says the key to collecting overdue repayments is up-to-date contact details and the Australian Taxation Office will now be able to supply these.
“We know that when we contact people, they start paying. Approximately 70 per cent of overseas borrowers we contact begin to repay their debt. This new arrangement with Australia will ensure we contact many more borrowers,” says Mr McClay.
“Just because people have left New Zealand, they should not think they have left the debt behind. New Zealand taxpayers helped these students gain a world-class education and we want that debt repaid,” says Mr Joyce.
“This information-sharing arrangement with Australia is very welcome,” the Ministers say.
While the arrangement is reciprocal, Australian student loan borrowers who are based overseas are not obliged to make repayments on a loan they have taken out under the Australian student loan scheme. However, this arrangement will provide a precedent for Australia to call on New Zealand’s Inland Revenue if that policy ever changes.