New Zealanders generally believe in paying their fair share
as they go through life.
Most regard social welfare as a hand up, not a hand out, and
we pay our tax within the rules set down by the Government
and the Inland Revenue Department.
The issue of fairness around tax arises from a threat by
Inland Revenue to bankrupt former students living in
Australia who are refusing to repay loans.
Tax staff have cracked down on hundreds of student loan
borrowers in New Zealand and are moving their enforcement
across the Tasman.
The plan would mean the IRD could get a New Zealand court
judgement transferred to Australia, where it would be then
enforced. Measures could involve charging orders on a
property, deducting money from a person's salary, seizing
assets such as vehicles, and even forcing them into
The same system is being planned for borrowers living in
For people with student loans living and working in New
Zealand, the system is relatively straight-forward.
The loan is repaid through the PAYE system, with the interest
on the loan being rebated at the end of the year.
Self-employed people get a bill at the end of each year to
Those with loans working overseas are expected to pay off
their bill in instalments four times a year.
However, some are opting not to pay, instead enjoying the
luxury of a taxpayer-funded education in New Zealand without
repaying that generosity by either working in this country or
repaying the loan and interest.
Tax professionals see bankruptcy as a last option; the
ultimate threat, as it were.
The IRD will be more interested in getting the money than
forcing someone into bankruptcy and receiving none of the
It is possible now for a student with a large loan to finish
a degree and declare him or herself bankrupt and, without
assets, have the loan wiped.
But someone working professionally overseas could face
obstacles in continuing employment if they were declared
bankrupt by the IRD.
Therefore it is in their best interests to come to some
agreement with the IRD and repay the loan.
While it may seem a good scheme to chalk up a student loan of
perhaps tens of thousands of dollars for a degree and then
move overseas, it smacks of being ungracious and deceitful to
avoid repaying the faith New Zealanders placed in such
With compounding interest, it is not unreasonable to think
that after 10 years overseas a $100,000 loan could balloon to
more than $250,000.
That in itself will be a disincentive for people to move back
to New Zealand and make their contribution.
It was disappointing New Zealand Union of Students'
Associations president Pete Hodkinson led opposition to the
plans to track down overseas residents with outstanding loans
and make them pay. "Extreme measures about to be taken to
chase down New Zealand graduates who are gaining overseas
experience are symptomatic of a Government that is prepared
to treat graduates as if they were in the same category as
tax-evading criminals or worse," he said.
While those graduates gaining overseas experience are not
criminals, they certainly are - in some cases - tax evading.
The solution for such graduates is simple: pay the money back
so others can enjoy the same benefits you enjoyed.
Lion brewery's planned $29 million investment in Dunedin's
Speight's Brewery as detailed late last week is good news for
It appears the right mix of heritage protection and modern
redevelopment has been found and, in such straitened times,
the employment of (at times) between 60 and 100 workers
during construction, and 27 permanent brewery staff as
compared with 11 before the Christchurch earthquakes, is to
And people worried about emissions from Speight's chimney
during recent months will no doubt also be pleased that
cleaner and greener methods will be adopted - the sooner the