Perspective with Heather du Plessis-Allan: We need to get serious about ensuring people pay back their student loans

Why has it taken us so long to get serious about forcing people to pay back their student loans?

Last month, IRD had someone arrested at the border. They have now paid back their loan.

Isn't that amazing?

They had been chased and chased and chased and chased - and you know that they had, because the IRD only arrest you at the border as an absolute last resort, but suddenly they were arrested at the border and despite presumably years of not paying back their loan - they pay it back.

Isn't it incredible what a little bit of pressure can do?

We've got more on this, by the way. The IRD has got in contact with more than 12,000 people who are living overseas who owe money on their student loans.

960 of them have paid back everything that was overdue, 1300 of them have started repayment plans, and 89 people have been warned they will also be arrested at the border if they don't start paying up.

11 of them, as a result of that warning, have started dealing with their debt - either by paying it back or by applying for hardship provisions.

Now, why I'm telling you this is because it's nearly a year since the Government threw extra money at the IRD to chase down these bludgers.

And the IRD has put out a press release with the latest figures to show that actually, yeah, putting that extra money in for the enforcement is bearing fruit.

The only question we now have is - why didn't we do this earlier?

I mean, it is not like this is a new problem, is it? We have complained about this for years, about these people freeloading on the ever-generous New Zealand taxpayer and then getting a free education over here, going off overseas to live their best lives, paying taxes somewhere else, helping out some other country, and then leaving us holding the baby in their debt.

Now, I suspect our lack of action in the past - but I probably can't answer the question on this - comes down to a general attitude towards taxpayers, which is a lack of respect for our money.

It's been treated like it's never-ending for too long. We've simply handed out to all without actually really requiring them to pay it back.

We say you've got to pay it back, but we don't actually mean it.

And this is not a historic problem - it's a current problem. A recent case in point is the small business COVID loans that were handed out by Grant Robertson in 2020. Unsecured, right?

They are now due to be repaid. At least $800 million is outstanding and a lot of that will never be repaid. We have to get used to that idea. We handed it out and we're not gonna get it back.

It is probably too much to wish for - but wouldn't it be great if we could carry on getting money back like the IRD are with student loans at the moment?

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Episode Transcript

Speaker 1 (00:00):
Why has it taken us so long to get serious
about forcing people to pay back their student loans. Eh,
last month, IID had someone arrested at the border. They
have now paid back their loan. Isn't that amazing? They
had been chased and chased and chased and chased, and
you know that they had because IID only arrests you
at the border as an absolute last resort. But suddenly

(00:21):
they are arrested at the border, and despite presumably years
of not paying back their loan, they pay it back.
Isn't it incredible what a little bit of pressure can do.
We've got more on this. By the way, IID has
got in contact with more than twelve thousand people who
are living overseas who owe money on their student loans.
Nine hundred and sixty of them have paid back everything

(00:42):
that was overdue, thirteen hundred of them have started repayment plans.
Eighty nine people have been warned they will also be
arrested at the border if they don't start paying up.
Eleven of them, as a result of that warning, have
started dealing with their debt, either by paying it back
or by applying for hardship provisions. Why I'm telling you.
This is because it's nearly a year since the government

(01:03):
threw extra money at ID to chase down these bludges,
and IID has put out a press release with the
latest figures to show that actually, yeah, putting that extra
money in for the enforcement is bearing fruit. The only
question we now have is why didn't we do this
set earlier? I mean, it is not like this is
a new problem. Is that we have complained about this
for years? Haven't we about these people free loading on

(01:24):
the ever generalist, ever generous New Zealand taxpayer, and then
getting a free education over here, going off overseas to
live their best lives, paying taxes somewhere else, not to us,
not helping us out, helping out some other country, and
then leaving us holding the baby in their debt. Now,
I suspect our lack of action in the past probably
can answer the question on this. I suspect our lack
of action in the past comes down to a general

(01:46):
attitude towards taxpayers, which is a lack of respect for
our money. It's been treated like it's never ending, isn't it?
For too long? Treated like it's never ending, simply handed
out to all and sundry without actually really requiring them
to pay it back. We say you got to pay
it back, but we don't actually mean it. And you know,
this is not something that has been it's not a
historic problem, it's a current problem. A recent case in
point is the small business COVID loans that were handed

(02:09):
out by Grant Robertson in twenty twenty unsecured, right, not
very smart, unsecured. They are now due to be repaid
about I think it's more than eight hundred million is outstanding.
A lot of that will never be repaid. We have
to get used to that idea. We just handed it out.
We're not going to get it back. It is probably
too much to wish for. But wouldn't it be great
if we could carry on getting money back like IIDR

(02:30):
with student loans at the moment. For more from Heather Duplessy,
Allen Drive, listen live to news talks. It'd be from
four pm weekdays, or follow the podcast on iHeartRadio.