Jake Lilley: Fincap Senior Policy Advisor on the IRD's student debt crackdown

A financial policy advisor says he's sceptical IRD's student debt crackdown will work. 

The agency's engaged debt collectors to secure more than $2 billion of outstanding student loans from people who have moved overseas. 

Fincap Senior Policy Adviser Jake Lilley told Mike Hosking those with large student loans shouldn't be expected to pay it back on the spot. 

He says if people don't have the money, it's never going to get paid, and those being chased down should talk to their creditors. 

He says there’s often relief available for those unable to pay their debts.  

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Episode Transcript

Speaker 1 (00:00):
The old overdue bill problem is back. The IID boosting
resources to chase down unpaid student debt, particularly from those overseas.
We've got a record two point three seven billion, oh
to two point two of that is with expats fan capsing.
Your policy advisor, Jake Lily with us Jake Moarning morning.
Can you remember Stephen Joyce. I thought we had all
this sorted out. He was chasing people and if it

(00:20):
was really bad, you got arrested at the border. What
happened to all of that?

Speaker 2 (00:23):
I'm not too sure about that. I was actually in
Australia repaying a student loans and I repaid it.

Speaker 1 (00:28):
So did he chase you? Did you have to? Did
they have to come calling to get you to repay it?

Speaker 2 (00:34):
No? I you know, I knew it was coming up.
I was a bit it was a struggle at times.
I was struggling to work over there initially, but I
was very grateful for the loan towards my studies, so
got it paid back. It would have been good if
they let us know a bit more proactively about you know,
if you are actually deciding whether or not to put
fuit in your mouth.

Speaker 1 (00:52):
Or there is the conundrum where's the personal responsibility, Jake.
If you take on your debt, you've somehow got to
pay it back, and you're ignorant if you don't think
you are, aren't you? Or is that unfair?

Speaker 2 (01:05):
I think you know you take on a debt, you've
got to pay it back. Things also happen, and places
like ID they've got a lot of things to make
sure you know if you're in touch, which is really
the tip there, get in touch if you can't pay,
ask what relief is available, because there often is some
relief available, very daunting to do to if there's a
pay I expected to pay this back, but not going

(01:26):
to plan. And that's really the tip there. And I
would say my colleagues at money Talks, which is a
free helpline, are there if you're not sure about your
options around that or just need to have a chat
about that. It's free and independent support to know what
your options are with that.

Speaker 1 (01:40):
I think their argument, I add these arguments. These are people,
the ones they're cracking down on. These are the people
they have tried to contact, and they're doing through everything
like LinkedIn, Facebook, the whole thing, and you're not replying
and they're going hang on here. This is unfair. I mean,
if you're not cooperating, it's on you, isn't it.

Speaker 2 (01:58):
Yeah, I think it is good to reach out. I
can see situations too, people coming through the door here
and then said where it got away on them? You know,
So that first step, I guess. The other thing that
comes to mind for me is they're engaging debt collectors
to do this in Australia and those debt collectors are
held to a high standard. Then our law holds them
to here in terms of how they treat people, so

(02:19):
they will get a bit more respect than if it
was the other way around, which is a bit weird
in a way, but we are. We're doing a bit
of work with Minister Bailey on that and looking at
next year whether or not we can get some coherent
law and around what that collectors can and cannot do.

Speaker 1 (02:33):
What would be coherent law? I mean, first of all,
it depends on what sort of angle you want to take.
Don't we want the money paid back? I mean, being
two point three seven billion in a country with no
money anyway is quite useful to have it paid back.
So do you want that problem solved or do you
want the problem that, you know, we all treat the
people who owe the money a little bit better than
we currently do.

Speaker 2 (02:51):
I think. I guess with that two point three billion,
if people don't have the money, it's never going to
get paid back. And a debt collector charging fees to
the ID to harass people, well maybe you know, calling
them seven times a day despite already having talked to them,
and that person's been very clear, look, I have no money.
What can I do otherwise? Those are sort of the situations.
You know, is it reasonable to call someone seven times

(03:12):
a day, eight times a day, email them as much,
blow up their phone with text messages when they've already
been in touch with you. They've said they can't pay,
They've asked what relief is available, and they've said no,
you need to pay the full amount. Now, I wouldn't
have been able to pay forty grand on the spot
when I was twenty two trying to find a job
in Australia. So getting those things clearer is much more efficient.

Speaker 1 (03:33):
And then we've got to go over all debate. Then
we've got the overall debate as to taking on debt.
When you go to university, you think, oh, whatever, it's
in the never and never and whether or not that
debt and the subsequent qualification is actually worth it.

Speaker 2 (03:46):
Yeah, I can say for myself, I'm very very grateful
for that opportunity and it has lots of things and
I'm hoping I'm giving back to the country now back
on shore.

Speaker 1 (03:55):
So look at your year on this program, Jake, You go.

Speaker 2 (03:59):
Yeah, yeah, I know. For many though, they come out,
you know, thinking that it'll be easy to get into
a job after university, and sometimes it's not, or not
just university or the other tertiary things too. Things don't
always go to plan. And if you've got this daunting
debt hanging over you, the best thing you can do
is reach out to your creditors. If you don't know
how to reach out to your creditors, or you're feeling

(04:20):
not that confident about it because you know it is
hard to repay debt and you don't know where the
money's coming from for the next meal. Money talks as
your place to start.

Speaker 1 (04:29):
All right, Good on, Jake, go, well, appreciate it very much.
Shake Lily FinCap Senior policy advisor. I quite like him
or is that just me my feeling? But sort of
soften my Old Age on a Friday. For more from
the mic Asking Breakfast, listen live to news talks it'd
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