Kerre Woodham: The more they crack down, the better

I read the Stuff story this morning and thought, "Oh, cry me a river!" Do the student loan evaders who finally get nabbed really expect sympathy when they bleat to the media?

Stuff this morning has the story of Vic, not his real name. He was at Wellington Airport last month heading home to Australia where he's lived and worked as a medical specialist for three, how many Kerry? Three decades, 30 years, when three police officers approached. He was arrested, spent three nights in custody, and at a court hearing had his passport confiscated. He's still here, Stuff writes, a month later, unable to work.

Vic hadn't committed a criminal offence, Stuff writes, but he owes, IRD calculates, student loan arrears of almost $180,000 He's just the 13 th person arrested at the border in the last decade for student loan debts.

Vic's brother Bob, not his real name, has an even bigger bill of about $310,000 a debt he says he'll be paying off until he dies, unless he can negotiate a reduced deal.

The brothers came home to care for an ailing father. They accept they owe the money and they accept they should have responded to IRD's repeated attempts to contact them. Ya think?

But say it's only been in recent years they realised how much they owed, despite the fact that these overseas loan defaulters say they're the best and the brightest. Oh, didn't realise when we signed a contract and when IRD got in touch with us that if we didn't pay it back there'd be interest and penalties on the loan. These are our best and brightest.

That combined from those two brothers is almost half a million dollars, but it's a drop in the ocean compared to the $2.3 billion owed by about 113,000 overseas based borrowers. They signed the contract to borrow the money off the taxpayer, they know they owe the money. When they don't pay it back and IRD contacts them, they refuse to acknowledge they owe the money because they're going through a lot at the time, easier to bury your head in the sand, and then they cry poor me when they realise how much they owe.

Makes my blood boil. Taxpayers already pay 70 to 80 percent of the cost of their degrees. They're asked to contribute a small amount. Can you imagine what that specialist is earning in Australia? According to Google, it starts, a specialist in Australia starts at a quarter of a million Australian, goes up to a million dollars Australian. That moron could have the loan paid back in a couple of years and go and pay his equally dopey brother's debt off as well.

IRD was given extra enforcement funding in the '24 budget and began cracking down on serious debtors last year. Revenue Minister Simon Watts said IRD had exceeded its targets, collecting $544 million in bad debt since then, when the target was $395 million. Long way to go till we get the $2.3 bill back that these shysters have in effect stolen from the New Zealand taxpayers, but it's a start.

One of the reasons why the overseas based borrowers build up such mammoth arrears is because while onshore Kiwis don't pay interest on their loans, someone who's been offshore for 180 days sees the government charge 5.6 interest on their debt. For those in arrears, another 9.6 in penalties is added.

The brothers say, Oh, we only actually borrowed about $60,000 between them in the early 1990 s." By Vic's maths, his debt has gone up 800 percent. Well, his maths should have kicked in earlier, shouldn't it? When he realised how much the loan's arrears and the interest was going to cost him. If he can do the maths, he should have done it a whole lot sooner.

An April law change allows IRD discretion to remit interest. Previously they could only forgive penalties, and that move was opposed by both Treasury and the Ministry of Education, but Simon Watts said the changes were a practical way to recover debt that might otherwise never be repaid. And I think he's probably right. Better to get some of it back than none at all.

Vic says he's had depression and cancer and that meant that he just buried his head in the sand when it came to his debt. You think the people who helped pay for his medical degree don't experience hardship as well? Do you think the people here who helped fund him into his high paying career don't get depression and cancer as well? And maybe, just maybe, if those loan defaulters paid back what they owe the taxpayer, we would have more money to help people who suffer from depression and cancer in this country. I have no sympathy. The more they crack down, the better.

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