Tens of millions of dollars could be clawed back from student loan defaulters living in Australia under a new law making information sharing between the two countries easier.
The government says the new law will speed up loan repayments from New Zealanders overseas. Photo: Unknown
The Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans)Bill, passed this week, has provisions for information sharing with the Australian Tax Office.
Tertiary Education Minister Steven Joyce said it would allow contact details of New Zealanders paying tax in Australia to be passed on to the Inland Revenue, making it much easier to track them down.
He said 70 percent of overseas-based borrowers were in default on their loans and and about 75 percent of them live in Australia.
Steven Joyce. Photo: RNZ / Alexander Robertson
Overseas borrowers owe more than $3.5 billion to Inland Revenue and nearly $1b of that is in default.
The agreement would now make it much harder for those owing money, even old debts, to avoid paying up, he said.
"Some of the debt goes back 10 or 15 years and some of it is very substantial. There's many people with debts of tens of thousands.
"It is a serious matter, these people had the benefit of taxpayer support some time ago and in many cases have successful careers," he said.
The new law will help the government reach its target of recouping an extra $100m a year from overseas-based defaulters, Mr Joyce said.
"It's time they repaid their loans so we can provide that to another generation of students," he said.
