Parliament

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

 

Student loan loophole to be closed

29 November 2005

Student loan loophole to be closed

The government will move to close a potential loophole in the transition to interest free student loans when the legislation returns to the House, Minister of Tertiary Education Michael Cullen announced today.

Under current rules, borrowers who have made repayments above the minimum may seek to have the money refunded. A Supplementary Order Paper will be introduced during the committee stages of the bill to:

- Ensure that refunds relating to the 2004-05 and 2005-06 tax years remain subject to interest;

- Prevent refunds being claimed for previous years unless the claims have already been lodged;

- Remove the opportunity to apply for special deduction rates below the standard 10 per cent rate for the balance of the current tax year.

The changes will apply from the time of this announcement. Inland Revenue will have the discretion to exempt from interest refunds made in cases of serious financial hardship.

Dr Cullen said the aim of the SOP was to prevent people from trying to “game” the system. It follows reports of a borrower who, in anticipation of the interest free regime, got a $15,000 voluntary repayment refunded and invested the money in an interest bearing account.

“It is important to the scheme’s integrity that we discourage this sort of gaming.”

The costings for the interest free policy, to be included in the December Economic and Fiscal Update, assume that the volume of voluntary repayments will fall to 20 per cent of their present value over three years.

“But repayment of the principal will still be compulsory above a certain income threshold, currently $16,588 a year, and loans will continue to be available only to cover fees, course-related costs and, in the case of full-time students, living costs to a maximum of $150 a week,” Dr Cullen said.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Perils Of Using PPPs To Meet Auckland’s Roading Needs

More than once, the coalition government has ruled out using public private partnerships (PPPs) to fund the country’s infrastructure needs in health and education – apparently private profiteering in those areas is recognised as being undesirable. Not the same story though with transport, and the reasons for that differential treatment are mystifying. Earlier today, Transport Minister Phil Twyford announced that one of two new roads that the government would be co-financing would be a PPP – namely, the Penlink project that will link the northern motorway to the Whangaparaoa Peninsula.

More>>

 
 

HiveMind: Fair Enough? How Should New Zealanders Be Taxed?

Have Your Say - Scoop and PEP invite you to share your issues, ideas and perspectives on the NZ tax system with other New Zealanders using Scoop’s HiveMind tool. This Tax HiveMind is intended to complement and feed into the review being run by the Government-appointed Tax Working Group (TWG), which is looking at the fairness, balance and structure of the tax system with a 10-year time horizon. More>>

ALSO:

Gordon Campbell: On Thompson + Clark & Russia’s World Cup

Daily, the coalition government keeps running into examples of the toxic legacy left behind by National – and just as regularly, even the simple fixes are proving stubbornly difficult to enact. Take the case of the security firm Thompson + Clark ... More>>

ALSO:

Gordon Campbell: On The GCSB’s Security Hang-Up With Russia

So our GCSB has chimed in, alongside its British, Australian and US allies, with warnings about a “fresh wave” of Russian cyber attacks, although the warning has been curiously framed. More>>

ALSO:

PM's Europe Trip: CHOGM & Bilateral Meetings

Prime Minister Jacinda Ardern is in Europe for the Commonwealth Heads of Government Meeting (CHOGM) in London and meetings with counterparts in Paris and Berlin. More>>

ALSO:


Addressing Climate Change: No New Offshore Exploration Permits

The Coalition Government is taking an important step to address climate change and create a clean, green and sustainable future for New Zealand, Prime Minister Jacinda Ardern announced today. More>>

ALSO:

Road Safety Summit: Actions To Improve Identified

The Local Government Road Safety Summit held last week identified actions that will lead to lasting changes to road safety in New Zealand, says Associate Transport Minister Julie Anne Genter. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages