New moves to hunt down student loan avoiders

At the end of September this year, there were approximately 725,000 student loan borrowers. Photo / iStock

Student loan defaulters living across the ditch will be tracked down through their taxes, under a new bill introduced today.

Measures in the bill will allow information about Australian-based borrowers to be shared between Inland Revenue and the Australian Taxation Office, meaning official in New Zealand will have access to up-to-date contact details.

The move is the latest in the government's strategy to hunt down borrowers living overseas and get them to pay up.

At the end of September this year, there were approximately 725,000 student loan borrowers. Fifteen per cent of those live overseas, with the majority in Australia. An estimated $3.2 billion is owed by borrowers living overseas.

The Overseas Based Borrowers Compliance Initiative began in 2010, with approximately $227 million in additional repayments received so far.

Previous stages included extending the border arrest system, and allowing Inland Revenue and Internal Affairs to collect contact details from passport applications.

"We are making steady progress in tracking down student loan defaulters and getting them to pay up," said tertiary education minister Steven Joyce. "However there is still too many who have spent a long time in Australia refusing to meet their obligations. This new initiative will give IRD up to date contact details to track down those deliberately avoiding their payments and being unfair to other taxpayers."

The bill also proposes a small number of technical measures designed to keep the student loan scheme rules clear and current.

They include streamlining the rules applying to borrowers who work overseas but are entitled to interest-free loans because they work for approved charitable organisations, and standardising the treatment of over-deductions from a borrower's salary or wages.