Inland Revenue says attitudes are shifting among student loan holders living overseas.
More than $200 million has been collected from overseas borrowers since July last year – a big annual increase.
More than 24,000 people are thought to be overseas, collectively owing $1.3 billion on loans going back more than 15 years.
IRD's Jane Elley told Kerre Woodham since they received additional funding they’ve been able to ramp up their workforce, enabling them to be a lot more targeted when chasing debt.
Her advice to anyone struggling with their loan is to get in contact with the IRD – ignoring the problem only makes it bigger.
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Speaker 1 (00:06):
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be more than two hundred million dollars are owed
on student loans and we've been able to collect a
fair bit of that back thanks to a crackdown from
Inland Revenue. They've increased their clawing back of funds owed
to New Zealand is by forty three percent. More than
(00:31):
twenty four thousand people are thought to be overseas collectively
owing one point three billion dollars on loans going back
more than fifteen years, and Land Revenue spokesperson Jane Ali
joins me. Now, a very very good morning to you.
Speaker 3 (00:47):
And Jane carry thanksgiving me.
Speaker 2 (00:49):
Well, thank you for chasing up the money on behalf
of the taxpayers. It's been going trying. But why has
it taken so long to actually come down on student
loan defaulters.
Speaker 3 (01:03):
Yeah, that's a really good question, Carrie in I think
probably we have given additional funding back in twenty eleven
for a time limited period where we did some really
targeted focus over a number of years, and that fund
it then ended because it was time bound, so essentially
we then didn't have the funding and that the resources
to chase it in the same way we are today.
(01:25):
So we've received this additional funding and we've been able
to ramp up our workforce and overseas based providers that
we used to support us to chase that in certain countries,
and that's enabled us to be a lot more targeted
than what we're doing.
Speaker 2 (01:38):
It really has, and it just goes to show what
happens when there is a political will to chase up
the money. It happens. It can be end Yeah, it can.
Speaker 3 (01:48):
Be absolutely can be.
Speaker 2 (01:50):
Somebody else also mentioned by texts that in fact, in
twenty sixteen, Steven Joyce, the then Tertiary Education Minister, got
tough and set up the system in Australia, we're two
thirds of Kiwi's living overseas without standing debt we're based
at the time in twenty sixteen that was three point
two billion owing right now it's two point three billion.
(02:13):
So that must have worked that matching service between the
IRD and New Zealand and the inland revenue service in
Australia for that debt to come down.
Speaker 3 (02:21):
Yeah, it's that they're making a difference and we work
really closely with customs so we can we know when
people are crossing the border and we can get a
really good understanding where they're going as well. So we
know the highest percentage of our overseas based borers are
still in Australia and so we do work quite closely
with the Australian Tax Office as well.
Speaker 2 (02:39):
So that's that's been a success, that's really managed to success.
Speaker 3 (02:45):
Yes, and we've also brought in because we know that's
the largest base. We also have an overseas based that
collection provider that we work with a third party who
supports us to collect Australian overseas lines as well.
Speaker 2 (02:56):
How reasonable are inland revenue if I came to you
ten years after I'd scarpeed to England and fallen in
love with the Hooray Henry and made my life there
and suddenly thought, you know, oh dear god, I've got
a fifty thousand dollars student loan that's grown to one
hundred and fifty thousand, How reasonable are on land revenue
at negotiating down the interest penalty payments?
Speaker 3 (03:17):
Yeah, so we absolutely are. We'll work with people through
their different scenarios, so we have a number of options
with us. We can negotiate on late payment interests, we
can't negotiate on compounding interests against the loans, so we
have no ability under the current legislation to do that,
but we can on late payment interest, and we also
have some hardship provisions which essentially means that we can
(03:39):
take over to amount and capitalize it. Will put it
back on top of the loans so that we can
get your back on track with storm and arrangement options.
So we'd work through everybody's personal situation and their financial
position and then work to the best come to get
them back on trackers. My advice to people would be
to get in touch with us. It's bring the problem.
Absolutely not going to make it go away. It just
(04:00):
makes it bigger and interest and penalties just start piling up.
Speaker 2 (04:05):
There are so many ways you could get the money
back if there was political will. I mean somebody suggested
withholding passports until you've paid it back, you know, when
you get different agencies working together to get the money back,
you know, not being allowed back into the country until
you've got a repayment schedule set set up.
Speaker 3 (04:22):
Yeah, there's a number of different mechanisms that we can
use today, like arrest at the border as one. It
isn't a last resort, but we absolutely do use it
and we are working exploring other options that we could
bring in the future. The better support that while balancing
that with people wanting to go overseas and do their
overseas holidays and things as well, So we don't want
to stop that happening, but we want people to sort
(04:44):
out their loans, get in touch with us so they
don't have to worry when they want to come back
to New Zealand.
Speaker 2 (04:49):
In the story from twenty sixteen, Steven Joyce said that
for every dollar spent chasing down student loan defaulters, you
get back fifteen dollars. Is that about the same or better?
Speaker 3 (05:00):
It's probably at the moment slightly lower than that in
the first year. So we had an objective to achieved
four dollars for every dollar spent this year, and we've
done that already for in the nine months. We've achieved
the sort of twelve month target that ramps up next year.
So the expectation is we collect a minimum of eight
dollars for every dollar spent next year, and we're tracking
quite well towards that as well, so we'll definitely see
(05:22):
that increase now that we've ramped up over this year,
and I'd expect us to sit somewhere in that ballpark grey.
Speaker 2 (05:27):
Because with New Zealand citizens living and working overseas, they've
still got passports, they've still got family, some of them
might have property, as you've discussed in the story, and
some might have investment accounts. There are so many ways
we could get that money back that has owed to us.
That is a hospital in Southland, if there was a.
Speaker 3 (05:47):
Will yep one hundred percent. And so we are doing
some really targeted stuff because we get a lot of
data around property ownership, now, investments, even crypto currency. So
we're doing a lot of work to understand where we
can leverage those people that are choosing not to engage
with us. And we've had seen some real success in
our property campaign in particular and had a number of
(06:09):
that group pay up, and for those that haven't, we're
working through the next steps to take legal recourse if
they don't engage with us. So we're absolutely working really
hard to target and leverage some of those things where
we know where people have assets in the country that
we can work through, and we also can take those
we can go through civil proceedings in Australia, something that
(06:29):
we've done as well, so we do work through that
as a last resort. But where people aren't complying, we
can go through the Australian courts and apply for similar
things over there.
Speaker 2 (06:38):
As how many cases have you taken against New Zealanders
living and working in Australia who owe money?
Speaker 3 (06:45):
I don't have the pogrophotomic head.
Speaker 2 (06:48):
Apologies, carry no, that's okay. That was a tricky one
and you may not be able to answer this one either,
but it may be beyond your purview. But what is
it about student loan defaulters who basically are fraudsters that
makes them think they're an elite and special bunch. There
seems to be this entitled attitude that I am so
bright because I went to university, therefore I don't have
(07:10):
to pay it back.
Speaker 3 (07:12):
It's probably not within my view here is there? We
can't answer that. It's a very good question, but I
can't answer that one. Unfortunately.
Speaker 2 (07:19):
Right then, I also had a mum who called in
and we've had a couple of text saying in land
revenue make it really hard when you're living overseas to
pay the money. Back, do you accept that.
Speaker 3 (07:32):
Look, we have a really wide variety of the ways
people can pay us, So they can pay by credit
card and debit card online, they can play through our
online system or to the City Bank direct debit option.
We have a number of international money transfers options such
as orbit Remit's one of them, for example, and we
currently have another mechanism in Australia at the moment called Payway.
(07:52):
So there are a really wide variety of ways people
can choose to pay us. But we are always exploring
ways to make that easier for people to engage with
us and make payments in an easier way. And the
other thing I'd say to people is with when they
get overseas, they get six monthly obligations, they can pay
those office they're paid fortnightly. There's no reason they couldn't
(08:13):
set up an ongoing fortnightly payment so that when that's
six monthly bill lands, it's all paid up in advance
and they're not having to come up with a significant
lump some amount of money at that time. So there
are a wide variety of options for people to pay us.
Speaker 2 (08:28):
What about those who say I didn't know they kept
sending information to an old email address. They made no
real effort to track me down.
Speaker 3 (08:38):
Look, I think we do everything we can to track
people down. It is quite hard in certain jurisdictions internationally
for us to do that. But if people are registered
for my hour, we will communicate with them through that.
And I guess the other part is people took out
a loan. They went and studied, they signed a loan agreement,
so they are aware they have a loan when they
leave the country.
Speaker 2 (08:58):
Yeah, okay, So say I'm Lorraine's daughter, I'm a teacher.
I'm not getting the money I think I deserve here.
I can make so much more money overseas. I'm going
to go, but I have a fifty thousand dollars loan.
What is the best thing I should do?
Speaker 3 (09:16):
Either reach out to us on have a look online.
So if you think that you need to know and understand,
reach out to us and we can walk you through
the best ways to engage and pay. What your obligations
are when you move overseas, what your interests will look like,
because you start to encouraterus when you leave the country
after six months. So I would say absolutely, if you're
not sure what your obligations would look like reach out
(09:38):
and we can walk through that the best ways to
pay us and all of those different options.
Speaker 2 (09:43):
But Jane, I might have to sit on the phone
on hold for an hour.
Speaker 3 (09:47):
We can contact us online through MAYA and we will
absolutely come back to you, and that would be the.
Speaker 2 (09:52):
Place and courage to start all right then, So yeah,
even that entitled ATAG doesn't work eithough you can get
around that as well, brilliant long may it continues. So
people who have children who are student loaned to f
and those who are student loan defaulters need to understand
that it's even going to it's going to there's going
(10:13):
to be a tougher approach next year as well.
Speaker 3 (10:16):
Yes, one hundred percent. So I would encourage them to
get in touch with us. It's not that we don't
stick here in the sand. We can support and help
get back on track if you engage with us.
Speaker 2 (10:26):
What if I just think, you know what, I'm going
to wait for labor to get back and they won't care.
Speaker 3 (10:32):
Well, we can work through that at the time. But
I suspect if they walk here, it's the money that
we need to get paying back at recording the country.
Speaker 2 (10:41):
Really as Jane, you're a good sport. Thank you very
very much. Jane Ali, Inland Revenue spokesperson.
Speaker 1 (10:47):
For more from carry Wood and Mornings, Listen live to
news talks that'd be from nine am weekdays, or follow
the podcast on iHeartRadio
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be more than two hundred million dollars are owed
on student loans and we've been able to collect a
fair bit of that back thanks to a crackdown from
Inland Revenue. They've increased their clawing back of funds owed
to New Zealand is by forty three percent. More than
(00:31):
twenty four thousand people are thought to be overseas collectively
owing one point three billion dollars on loans going back
more than fifteen years, and Land Revenue spokesperson Jane Ali
joins me. Now, a very very good morning to you.
Speaker 3 (00:47):
And Jane carry thanksgiving me.
Speaker 2 (00:49):
Well, thank you for chasing up the money on behalf
of the taxpayers. It's been going trying. But why has
it taken so long to actually come down on student
loan defaulters.
Speaker 3 (01:03):
Yeah, that's a really good question, Carrie in I think
probably we have given additional funding back in twenty eleven
for a time limited period where we did some really
targeted focus over a number of years, and that fund
it then ended because it was time bound, so essentially
we then didn't have the funding and that the resources
to chase it in the same way we are today.
(01:25):
So we've received this additional funding and we've been able
to ramp up our workforce and overseas based providers that
we used to support us to chase that in certain countries,
and that's enabled us to be a lot more targeted
than what we're doing.
Speaker 2 (01:38):
It really has, and it just goes to show what
happens when there is a political will to chase up
the money. It happens. It can be end Yeah, it can.
Speaker 3 (01:48):
Be absolutely can be.
Speaker 2 (01:50):
Somebody else also mentioned by texts that in fact, in
twenty sixteen, Steven Joyce, the then Tertiary Education Minister, got
tough and set up the system in Australia, we're two
thirds of Kiwi's living overseas without standing debt we're based
at the time in twenty sixteen that was three point
two billion owing right now it's two point three billion.
(02:13):
So that must have worked that matching service between the
IRD and New Zealand and the inland revenue service in
Australia for that debt to come down.
Speaker 3 (02:21):
Yeah, it's that they're making a difference and we work
really closely with customs so we can we know when
people are crossing the border and we can get a
really good understanding where they're going as well. So we
know the highest percentage of our overseas based borers are
still in Australia and so we do work quite closely
with the Australian Tax Office as well.
Speaker 2 (02:39):
So that's that's been a success, that's really managed to success.
Speaker 3 (02:45):
Yes, and we've also brought in because we know that's
the largest base. We also have an overseas based that
collection provider that we work with a third party who
supports us to collect Australian overseas lines as well.
Speaker 2 (02:56):
How reasonable are inland revenue if I came to you
ten years after I'd scarpeed to England and fallen in
love with the Hooray Henry and made my life there
and suddenly thought, you know, oh dear god, I've got
a fifty thousand dollars student loan that's grown to one
hundred and fifty thousand, How reasonable are on land revenue
at negotiating down the interest penalty payments?
Speaker 3 (03:17):
Yeah, so we absolutely are. We'll work with people through
their different scenarios, so we have a number of options
with us. We can negotiate on late payment interests, we
can't negotiate on compounding interests against the loans, so we
have no ability under the current legislation to do that,
but we can on late payment interest, and we also
have some hardship provisions which essentially means that we can
(03:39):
take over to amount and capitalize it. Will put it
back on top of the loans so that we can
get your back on track with storm and arrangement options.
So we'd work through everybody's personal situation and their financial
position and then work to the best come to get
them back on trackers. My advice to people would be
to get in touch with us. It's bring the problem.
Absolutely not going to make it go away. It just
(04:00):
makes it bigger and interest and penalties just start piling up.
Speaker 2 (04:05):
There are so many ways you could get the money
back if there was political will. I mean somebody suggested
withholding passports until you've paid it back, you know, when
you get different agencies working together to get the money back,
you know, not being allowed back into the country until
you've got a repayment schedule set set up.
Speaker 3 (04:22):
Yeah, there's a number of different mechanisms that we can
use today, like arrest at the border as one. It
isn't a last resort, but we absolutely do use it
and we are working exploring other options that we could
bring in the future. The better support that while balancing
that with people wanting to go overseas and do their
overseas holidays and things as well, So we don't want
to stop that happening, but we want people to sort
(04:44):
out their loans, get in touch with us so they
don't have to worry when they want to come back
to New Zealand.
Speaker 2 (04:49):
In the story from twenty sixteen, Steven Joyce said that
for every dollar spent chasing down student loan defaulters, you
get back fifteen dollars. Is that about the same or better?
Speaker 3 (05:00):
It's probably at the moment slightly lower than that in
the first year. So we had an objective to achieved
four dollars for every dollar spent this year, and we've
done that already for in the nine months. We've achieved
the sort of twelve month target that ramps up next year.
So the expectation is we collect a minimum of eight
dollars for every dollar spent next year, and we're tracking
quite well towards that as well, so we'll definitely see
(05:22):
that increase now that we've ramped up over this year,
and I'd expect us to sit somewhere in that ballpark grey.
Speaker 2 (05:27):
Because with New Zealand citizens living and working overseas, they've
still got passports, they've still got family, some of them
might have property, as you've discussed in the story, and
some might have investment accounts. There are so many ways
we could get that money back that has owed to us.
That is a hospital in Southland, if there was a.
Speaker 3 (05:47):
Will yep one hundred percent. And so we are doing
some really targeted stuff because we get a lot of
data around property ownership, now, investments, even crypto currency. So
we're doing a lot of work to understand where we
can leverage those people that are choosing not to engage
with us. And we've had seen some real success in
our property campaign in particular and had a number of
(06:09):
that group pay up, and for those that haven't, we're
working through the next steps to take legal recourse if
they don't engage with us. So we're absolutely working really
hard to target and leverage some of those things where
we know where people have assets in the country that
we can work through, and we also can take those
we can go through civil proceedings in Australia, something that
(06:29):
we've done as well, so we do work through that
as a last resort. But where people aren't complying, we
can go through the Australian courts and apply for similar
things over there.
Speaker 2 (06:38):
As how many cases have you taken against New Zealanders
living and working in Australia who owe money?
Speaker 3 (06:45):
I don't have the pogrophotomic head.
Speaker 2 (06:48):
Apologies, carry no, that's okay. That was a tricky one
and you may not be able to answer this one either,
but it may be beyond your purview. But what is
it about student loan defaulters who basically are fraudsters that
makes them think they're an elite and special bunch. There
seems to be this entitled attitude that I am so
bright because I went to university, therefore I don't have
(07:10):
to pay it back.
Speaker 3 (07:12):
It's probably not within my view here is there? We
can't answer that. It's a very good question, but I
can't answer that one. Unfortunately.
Speaker 2 (07:19):
Right then, I also had a mum who called in
and we've had a couple of text saying in land
revenue make it really hard when you're living overseas to
pay the money. Back, do you accept that.
Speaker 3 (07:32):
Look, we have a really wide variety of the ways
people can pay us, So they can pay by credit
card and debit card online, they can play through our
online system or to the City Bank direct debit option.
We have a number of international money transfers options such
as orbit Remit's one of them, for example, and we
currently have another mechanism in Australia at the moment called Payway.
(07:52):
So there are a really wide variety of ways people
can choose to pay us. But we are always exploring
ways to make that easier for people to engage with
us and make payments in an easier way. And the
other thing I'd say to people is with when they
get overseas, they get six monthly obligations, they can pay
those office they're paid fortnightly. There's no reason they couldn't
(08:13):
set up an ongoing fortnightly payment so that when that's
six monthly bill lands, it's all paid up in advance
and they're not having to come up with a significant
lump some amount of money at that time. So there
are a wide variety of options for people to pay us.
Speaker 2 (08:28):
What about those who say I didn't know they kept
sending information to an old email address. They made no
real effort to track me down.
Speaker 3 (08:38):
Look, I think we do everything we can to track
people down. It is quite hard in certain jurisdictions internationally
for us to do that. But if people are registered
for my hour, we will communicate with them through that.
And I guess the other part is people took out
a loan. They went and studied, they signed a loan agreement,
so they are aware they have a loan when they
leave the country.
Speaker 2 (08:58):
Yeah, okay, So say I'm Lorraine's daughter, I'm a teacher.
I'm not getting the money I think I deserve here.
I can make so much more money overseas. I'm going
to go, but I have a fifty thousand dollars loan.
What is the best thing I should do?
Speaker 3 (09:16):
Either reach out to us on have a look online.
So if you think that you need to know and understand,
reach out to us and we can walk you through
the best ways to engage and pay. What your obligations
are when you move overseas, what your interests will look like,
because you start to encouraterus when you leave the country
after six months. So I would say absolutely, if you're
not sure what your obligations would look like reach out
(09:38):
and we can walk through that the best ways to
pay us and all of those different options.
Speaker 2 (09:43):
But Jane, I might have to sit on the phone
on hold for an hour.
Speaker 3 (09:47):
We can contact us online through MAYA and we will
absolutely come back to you, and that would be the.
Speaker 2 (09:52):
Place and courage to start all right then, So yeah,
even that entitled ATAG doesn't work eithough you can get
around that as well, brilliant long may it continues. So
people who have children who are student loaned to f
and those who are student loan defaulters need to understand
that it's even going to it's going to there's going
(10:13):
to be a tougher approach next year as well.
Speaker 3 (10:16):
Yes, one hundred percent. So I would encourage them to
get in touch with us. It's not that we don't
stick here in the sand. We can support and help
get back on track if you engage with us.
Speaker 2 (10:26):
What if I just think, you know what, I'm going
to wait for labor to get back and they won't care.
Speaker 3 (10:32):
Well, we can work through that at the time. But
I suspect if they walk here, it's the money that
we need to get paying back at recording the country.
Speaker 2 (10:41):
Really as Jane, you're a good sport. Thank you very
very much. Jane Ali, Inland Revenue spokesperson.
Speaker 1 (10:47):
For more from carry Wood and Mornings, Listen live to
news talks that'd be from nine am weekdays, or follow
the podcast on iHeartRadio
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