Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

National tables tax plan on student loans

Don Brash
National Party Leader

21 July 2005

National tables tax plan on student loans

National Party Leader Don Brash has announced measures to ease the repayment burden on those with student loans, by making the interest payments on student debt tax deductible.

"A key theme of our tax policy is to ensure that New Zealand remains the first choice for talented young New Zealanders to choose to work and live. We must provide better incentives for our people to build their future in this country.

"I have already signalled that reducing the gap in incomes between New Zealand and Australia will be a key theme of our election campaign. While our full tax policy, when it is released, will address this issue, it is clear to us that student loans, like compliance costs, the RMA, and poor infrastructure are among the list of issues which this country must address if we want to get ahead.

"This measure will facilitate a more rapid repayment of student loans by working New Zealanders. National will make all net interest payments on student loans tax deductible against earned income. This policy will have an initial annual cost of around $70 million.

"This initiative is both fair and principled. Young workers who borrow for the purpose of setting themselves up in their trade or business are able to deduct the cost of interest from their taxable income. Students who borrow to invest in knowledge should be treated the same way. National recognises that individuals who have taken on a student loan have made an investment in their future.

"This tax deduction will only be available to student loan holders who are paying tax on earned income in New Zealand. It will apply from April 1, 2006.

"The deduction will be made automatically by the Inland Revenue Department (IRD) and will require no extra work or form-filling for borrowers. The IRD will credit the tax deduction on interest actually paid to the student loan account of the borrower. It will be automatically directed to lowering the loan balance, thus accelerating the repayment of the loan.

"For a student with a $30,000 loan, earning $45,000 a year, this could reduce their tax liability by up to $693 a year. That money would ensure they are able to pay their loan off faster. At the end of ten years, the tax deduction would cut an extra $7540 from the loan principal, and would reduce the time taken to repay the loan."

For students who invest in long and expensive courses (eg doctors, post-graduate students), and who end up with large loan balances, but usually also higher incomes, the initial annual value of this deduction will be more valuable. National intends to encourage excellence and to assist the investment in advanced skills and knowledge.

"Today's announcement is only one aspect of our overall tertiary policy. In the coming weeks, I will be announcing further policy to ensure that the taxpayer investment in tertiary spending is effective in giving young people the knowledge and skills to build a better future," says Dr Brash.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods ( is the dollar up or down? ) last night’s outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country..>>>More


Reaction

Labour on its agreement |Peters: Post-Election Announcement Speech | Greenpeace “cautiously hopeful” about new Government | ACT - Madman on the loose | E tū ecstatic | Chamber welcomes the outcome | Greens on their joining Govt | EDS welcomes new govt | Immigrant groups worry | Feds ready to engage new coalition government | Labour Ministers of the Crown announced

 

Climate: Increasing Greenhouse Emissions Hit NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate…More>>

ALSO:


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>

ALSO:

Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>

ALSO:

Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>

ALSO:

Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election