Brash's $70m student loan vote bid

Don Brash is to promise help to the 460,000 New Zealanders with student loans. Picture / Fotopress

National will today unveil its plan to give tax rebates on student loans in an attempt to pre-empt Labour's yet-to-be-announced plans for easing the tertiary debt burden.

In a pitch to the youth market, leader Don Brash will announce the party's plan to provide financial help for the more than 460,000 New Zealanders who have student loans.

The Herald understands the policy will involve tax rebates for interest paid on the loans. The cost of the policy is likely to be $70 million a year.

The student loan rebates are part of National's much-touted tax policy.

Two weeks ago the party announced the first part of that policy when it revealed plans for tax rebates for childcare - up to $1650 to working parents for each child at preschool.

National is expected to release its full tax package early in the election campaign, and says it plans to pay for it through a combination of cutting public-sector "waste", borrowing, running a lower operating surplus and maintaining more disciplined spending in future.

Reducing the $6.91 billion student loan debt is believed to be a concern felt by a wide range of voters; in a recent Herald-DigiPoll survey, education was rated the fourth most important issue for voters.

National has also criticised the Government for failing to stop the "brain drain", in particular the stream of New Zealanders who depart to live in Australia - expected to number 30,000 this year.

Student loan rebates are designed to keep skilled graduates in New Zealand and to lure back those living overseas.

Labour's student loan policy is also expected to contain sweeteners for voters.

Education Minister Trevor Mallard has said he is contemplating a range of options for tertiary students.

In the Government's first term it stopped interest accruing on loans while people were still studying.

Mr Mallard said that as a result of Labour's changes to the student allowance and loan schemes, the average time spent repaying loans had fallen from 14.9 to 9.5 years. He said he was considering measures to further reduce that.

Incentives for people with student loans are not a new idea for National; at the last election the party promised to write off some student debt for graduates who stayed in New Zealand for five years after graduating.

Student loans were introduced by National in 1992.

The average student debt is now about $15,000.