Scoop has an Ethical Paywall
License needed for work use Register

Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Tax Cuts for Wealthy Results in Tax Increase on Graduates

Blow-out on Tax Cuts for Wealthy Results in Tax Increase on Graduates

Reports that Prime Minister John Key wishes to increase the repayment rate on student loan borrowers has been slammed by the New Zealand Union of Students’ Associations as a tax increase on graduates to pay for a blow-out in the tax-cuts that the government gave to the wealthy.

“Increasing the repayment rate is a tax increase for the 500,000 New Zealanders who have student loans. Student loan repayments are a tax, since they are collected by IRD, straight out of your pay, just the same as PAYE. It’s outrageous that graduates should have to pay higher taxes to pay for a budget short-fall which has been caused by the tax-cuts that the National government gave to high income earners,” said Pete Hodkinson, president of the New Zealand Union of Students’ Associations.

“Many of those with loans are struggling to make their minimum repayments already, since obligations start at such a low level ($19,084 compared with $48,000 in Australia).”

NZUSA points to Inland Revenue Department figures that show that loans are currently being repaid as expected, except for by some people who are overseas. The “cost” that Government claims of the loans scheme is that it takes time to pay them back, and an account is made for the time cost of the money.

“Higher income earners pay back faster, so higher wages improve repayment times. Slower payers ‘cost’ more because they take longer. Therefore, the way to increase repayments is to increase wages and to get graduates into jobs. Better paid graduates pay their loans back faster. More jobs and better pay in New Zealand will reduce the incentive for people to stay overseas, where repayment rates are poor, and encourage New Zealanders who live overseas to come home and contribute to their country,” said Hodkinson.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“The National Government has got themselves into this situation because they gave tax-cuts to the richest New Zealanders. That is what has blown-out the Budget. The implications of a generation of former students carrying onerous huge debt repayment burdens because those who came before them, and had free education, want lower taxes is not fair. It is not sustainable, and will lead to intergenerational frustration and anger.”

NZUSA is the national representative body for tertiary students and has been advocating on student issues since 1929.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The New Government’s Policies Of Yesteryear

Winston Peters is routinely described as the kingmaker who decides whether the centre right or the centre-left has a turn at running this country. He also plays a less heralded, but equally important role as the scapegoat who can be blamed for killing taxes that his senior partners never much wanted in the first place. Neither Ardern nor Robertson for example, really wanted a capital gains tax, for fear of Labour copping the “tax and spend“ label they ended up being saddled with anyway. Usefully though, they could tell the party faithful it was wicked old Winston who killed the CGT. More

Government: National, ACT, & NZ First To Deliver For All Kiwis

The new coalition government of National, ACT, & NZ First will be stable, effective, and will deliver for all Kiwis. "Despite the challenging economic environment, New Zealanders can look forward to a better future because of the changes the new Government will make ... We believe in this country. We are ambitious for it. We know that, with the right leadership, the right policies and the right direction, together New Zealanders can make this an even better country," says incoming PM Christopher Luxon... More


Labour Party: Call For Immediate Ceasefire In Gaza

The Labour Party has called for an urgent ceasefire in Gaza & Israel to halt the appalling attacks and violence so that a journey to a lasting peace can begin. “Along with other New Zealanders we are appalled by the devastation and loss of life. We recognise the grief of communities in New Zealand who have connections with those in the conflict,” says Chris Hipkins. More

PSA: MFAT Must Reverse Decision To Remove Te Reo

MFAT's decision to remove te reo from correspondence before new Ministers are sworn in risks undermining the important progress the public sector has made in honouring te Tiriti. "We are very disappointed in what is a backward decision - it simply seems to be a Ministry bowing to the racist rhetoric we heard on the election campaign trail," says Marcia Puru. More




InfoPages News Channels


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.